Here's our summary of key economic events overnight that affect New Zealand, with news financial markets have been quiet overnight but the dairy market has signalled a boom.
Dairy prices leapt a spectacular +15% in the overnight auction, their biggest jump in 6½ years to their highest level in 7 years. The sharp shift higher was led by a spectacular rise for WMP which was up +21%, and butter which was up +13.7%. Other products only had modest lifts in comparison. This auction was an unusually long one, taking 2:53 hh:mm to complete and although a regular number of bidders competed (180), only 86 won any product (the fewest in eight years). That is an unusually large set of bidders who left with no product at this auction.
This is the type of change that will have an impact on farm gate payout prices if it is sustained over the next few auctions. But you won't see dairy companies or analysts changing their tune just yet.
Meanwhile, US retail sales slipped last week compared to the week before. Now that it is March, we are going to find year-on-year comparisons less meaningful as in 2020 activity was starting to be severely distorted by unusual pandemic and lockdown activity. But understanding that, last week's sales were +4.6% higher than the same week in 2020.
In New York City, there has been a very sharp contraction in sentiment among businesses, moving from a good expansion to a sharp pullback. One special feature of this survey is the reporting of sharp rises in prices businesses are paying there for their inputs.
Canada reported its Q4-2020 economic growth overnight and that came in with a much better rebound than analysts were expecting, up +9.6% on top of the +40% rebound in Q3-2020. But that means their economic output was down a net -4.5% in 2020 compared to 2019 and that is its largest contraction since the 1930s.
Yesterday the RBA left its interest rate settings unchanged but it did extend its bond-buying commitments by another AU$100 bln and said it is prepared to do more "if necessary". It is trying to keep its three year Government bond yield at a target rate even in the face of the international reflation trade. It might need an even larger commitment and is pledging "whatever it takes".
And staying in Australia, NSW is to lift its ban on genetically modified crops grown in the state. It was announced that the 18-year moratorium on GM crops would be lifted in July and was expected to deliver a multi-billion-dollar boost to its primary industry.
On Wall Street, they are marking time today with the S&P500 down a minor -0.2% in mid-day trade. That follows European markets which gained +0.2% overnight. Yesterday the very large Tokyo market fell -0.9%, while both Hong Kong and Shanghai each fell -1.2%. The ASX200 shed -0.4% yesterday but the NZX50 Capital Index was up +0.4%.
The latest global compilation of COVID-19 data is here. The global tally is still rising and at a faster pace, now at 114,619,000 and up +378,000 in one day, so no letup globally. Global deaths reported now exceed 2,543,000 and +10,000 since yesterday.
More countries (122) have started their vaccination programs. About 244.3 mln doses have been given so far.
The largest number of reported cases globally are still in the US, which rose +62,000 over the past day for their tally to reach 29,321,000. The number of active cases fell overnight and is now just on 8,975,000 and -64,000 fewer in a day, so many more recoveries that new infections again. Their death total is rising slower, now at 528,000 (+2000).
The UST 10yr yield is back down -3 bps at 1.42% and continuing the yo-yoing pattern of the past few days. The US 2-10 rate curve is flatter at 129 bps. Their 1-5 curve is flatter still at +60 bps, while their 3m-10 year curve is also flatter at +137 bps. The Australian Govt 10 year yield is up +4 bps at 1.70% following the RBA statement. The China Govt 10 year yield is down -1 bp at 3.27%. It has been an island of stability during this recent international bond price instability. The New Zealand Govt 10 year yield is unusually unchanged at 1.76%.
The price of gold starts today little-changed from yesterday at US$1735/oz but making back some of the fall that happened over the past 24 hours. Still, it is languishing at a nine month low.
Oil prices are weaker and are now at just under US$61/bbl in the US, while the international price is just under US$64/bbl.
And the Kiwi dollar opens at 72.8 USc and little-changed from this time yesterday. Against the Australian dollar we are lower at 93.3 AUc. Against the euro we are unchanged at 60.3 euro cents. That means our TWI-5 is still at 74.3.
The bitcoin price is now at US$47,889 and -1.9% lower than at this time yesterday. Volatility in the past 24 hours is high at +/- 3.1%. 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 ».