Here's our summary of key economic events overnight that affect New Zealand, with news the US labour market is struggling to regain some momentum.
US jobless claims were actually little-changed from the previous week, although on the more usually-reported seasonally adjusted basis they were up and the prior week was revised higher. There are now 4.9 mln people on these benefits, a fall of almost -100,000 but mainly because qualification periods expired. In addition, more than +500,000 people applied for the Pandemic Unemployment Assistance benefit last week. There is likely to be another burst of applications from the storm-hit states this coming week.
The next regional factory survey, this one from the Philly Fed, is positive reporting good new order levels, but also rising input prices.
New residential construction data is staying quite elevated in the US, with new housing starts high and a surge in building permits granted to an all-time record high. This pipeline is building.
American household debt climbed to US$14.6 tln at the end of 2020 in the latest update, 71.4% of it in mortgages compared to 70.3% at the end of 2019. (New Zealand is 95% on this same basis.) US household debt is now at 67.8% of US GDP. (New Zealand is at 97.0% on the same basis.)
And American life expectancy retreated by a full year in the first half of 2020, the biggest drop since World War II, down to 77.8 years from 78.8 in 2019. (The equivalent New Zealand level is 82.0 years.)
The latest January reading of Canadian jobs growth for January reports a sharp loss, and much more than expected.
In China, their central bank is letting liquidity tighten sharply. They let ¥280 bln of reverse repo agreements expire yesterday but only added ¥20 bln in new ones. That involves a tightening of NZ$55 bln overnight, and the markets noticed.
And resumption of iron ore trading in China has seen prices rise from already high levels.
Hong Kong reported employment data overnight, in this case for December, and they lost jobs too, down -17,100 when a small rise was expected. Their jobless rate ticked up to 7.0%.
The Indonesian central bank cut its official interest rate by -25 bps to 3.50% in an expected change. They downgraded their 2021 growth forecast to under +5% and eased lending rules. However they also said this rate cut may be the last for a while there.
The latest update of EU consumer sentiment is very unencouraging for them, languishing at a dismal level.
The OECD released its Q4 economic growth comparisons for its G7 and it was Japan that topped this list of major developed countries. The EU is really struggling but there was growth elsewhere.
German bond yields hit a new eight-month high after a hefty sell-off earlier in the week driven by expectations of rising inflation, and the relentless progress of the reflation trade. Worldwide, there is increasing nervousness about what this trend will mean. Don't forget the global bond markets are more than twice as large as equity markets.
The Australian unemployment rate has fallen to 6.4% and a two year low (from 6.6%), surprising economists and leaving their labour market just shy of its pre-COVID-19 level. (The New Zealand jobless rate is 4.9%.)
New York equity markets are lower with the S&P500 down -0.9% in early afternoon trade. Overnight European markets were generally lower by -0.5% but London fell -1.4%. Yesterday, Hong Kong posted a -1.6% fall and wiping out all of Wednesday's rise. Tokyo was down another -0.2%. Shanghai was back open after their week-long holiday and gained +0.6% in conviction-less trading. The ASX200 was little-changed yesterday while the NZX50 Capital Index was down -0.3%.
The latest global compilation of COVID-19 data is here. The global tally is still rising at a little-changed pace, now at 110,065,000 and up +406,000 in one day. But the pandemic seems to be easing in some notable places in the first world. Global deaths reported now exceed 2,434,000 and +11,000 since yesterday.
More countries (97) have started their vaccination programs. About 188.5 mln doses have been given so far (+10.4 in the past three days). There is clear evidence the vaccines are working to reduce or even eliminate deaths for those who have taken it.
The largest number of reported cases globally are still in the US, which rose +73,000 over the past day for their tally to reach 28,459,000. The US remains the global epicentre of the virus although there is clearly some easing. The number of active cases fell sharply overnight and is now just on 9,357,000 and -47,000 fewer overnight, so less new infections again than recoveries. Their death total is not falling however and is up at 503,000 (+3000) in one day. The US now has a COVID death rate of 1513/mln, and that compares to the disastrous UK level (1753) where deaths are also still rising (119,000 and +1000) but a bit more slowly now their vaccinations are rolling out.
In Australia, their community control remains impressive. Their all-time cases reported is now 28,912 and only +1 more case overnight, zero new cases in the community and the rest new arrivals and all in managed isolation. 41 of these cases are 'active' (-1). Reported deaths are unchanged at 909.
The UST 10yr yield is up +1 bp at 1.29% today. And their 2-10 rate curve is marginally steeper at 118 bps, their 1-5 curve is little-changed at +49 bps, while their 3m-10 year curve is steeper at +126 bps. The Australian Govt 10 year yield is unchanged at 1.40%. The China Govt 10 year yield is still up +5 bps at 3.31%, while the New Zealand Govt 10 year yield is down -3 bps at just under 1.50%.
The price of gold will start today little-changed, but down a minor -US$2 at US$1776/oz.
Oil prices are up about +US$0.50 and are now at just over US$61/bbl in the US, while the international price is just under US$63.50/bbl.
And the Kiwi dollar opens a little firmer than at this time yesterday, back at 72 USc. Against the Australian dollar we are firmer at 93 AUc. Against the euro we are at 59.7 euro cents and little-changed. That means our TWI-5 is up at just over 73.5.
The bitcoin price is now at US$51,954 and +1.1% higher than this time yesterday. In between it reached US$52,622 as a new record high. At no time in the past 24 hours did it fall below US$50,000. Volatility was a relatively low +/- 1.6%. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».