Here's our summary of key economic events overnight that affect New Zealand, with news optimism is flooding in about 2021 economic prospects.
The OECD is saying that the Biden stimulus plan will effectively add +1% to the global economic growth outcomes, as it releases its forecast that the world's economy will expand by +5.6% in 2021. This will be led by the US (+6.5%), China (+7.8%) and India (+12%). This latest forecast is hugely more optimistic than the one they released at the end of 2020.
Boeing is saying orders for its aircraft are rising again. It had 82 orders in February, compared to just 4 in January. A year ago in February it only took orders for 18 aircraft; in February 2019, just 5.
US retail sales were down sharply last week from the week prior in an unexpected result. But year-on-year they are up +8%, a valid comparison as the pandemic shutdown reactions hadn't started yet in 2020.
The latest US WASDE Report notes that Australian beef exports to the US are softening, and as are US milk production volumes. Neither is major, but enough for them to suggest prices are holding at recent higher levels or rising.
In China, they sold 1.18 mln cars in February, a lower sales rate than they were expecting and have been achieving recently. A feature of the slowdown is the sharp falloff in electric and NEV car sales.
Their excavator sales trebled in February. Much of this was the low base a year ago, but current market demand is strong amid their huge infrastructure push, and the growing impact of tougher emission rules.
Japanese machine tool orders were up a very strong +37% year-on-year in February, and that is after their almost +10% rise in January. This is being powered by very strong rises in export demand.
And staying in Japan, they have decided that there will be no foreign visitors to this year's Olympic Games as a COVID precaution.
Taiwanese exports rose +9.7% in February and that was less than expected and well below the January surge.
Despite the +3% growth expectations the OECD released today for Europe in 2021, their Q4-2020 GDP result was negative, a decline that may wee them back in recession as the Q1-2021 probably hasn't started well either. A lot depends for them on the pulling power of the US and Chinese stimulus plans.
In Australia, business confidence has risen to its highest level in eleven years, driven by better business conditions as companies begin to hire and invest in new capacity. The OECD sees Australia expand by +4.5% in 2021.
Eyes are on insurer IAG after the British Greensill Capital meltdown. Echoes may be felt in New Zealand.
In New York, the S&P500 has opened today with a +2.0% rise in early afternoon trade. Essentially this is a tech stock recovery. But we should note yesterday's +1.0% strong start withered as the day progressed and it ended lower. Overnight European markets closed with +0.5% gains. Yesterday in Asian markets Tokyo rose +1.0%, and Hong Kong was up +0.8%. But Shanghai was down another -1.8% and that takes its decline since the February 19 five-year high to -7.1%. That's a -US$1 tln decline. The 'home team' is now active in this market, buying to prevent a further fall. The ASX200 ended its session yesterday up +0.5% and that was matched by the NZX50 Capital Index.
The latest global compilation of COVID-19 data is here. The global tally is still rising and at a fast pace, now at 117,286,000 and up +319,000 in one day, so no let-up globally. Global deaths reported now exceed 2,603,000 and +7,000 in a day. Vaccinations in the first world are rising however and in the US more than a quarter (91 mln) have now had this protection. That is quelling their daily death rate (under +1000 yesterday) and the number of active cases there is down to 8,756,000 (-66,000 fewer in one day).
The UST 10yr yield is down -6 bps at 1.54% and off its recent highs. The US 2-10 rate curve is flatter at 138 bps. Their 1-5 curve is also flatter at +74 bps, while their 3m-10 year curve is flatter too at +152 bps. The Australian Govt 10 year yield is down -6 bps at 1.75%. The China Govt 10 year yield is unchanged at 3.27%. The New Zealand Govt 10 year yield has only slipped -1 bp overnight, down to 1.89%.
The price of gold starts today recovering strongly in New York and up by +US$37 from yesterday, now just on US$1717/oz. Most of this rise has happened after the London market closed.
Oil prices have settled back further overnight to just under US$64.50/bbl in the US, while the international price is up more to just over US$67.50/bbl.
The Kiwi dollar opens today at 71.5 USc and a small rise overnight. Against the Australian dollar we are softer at 92.9 AUc. Against the euro we are little-changed at 60.2 euro cents. That means our TWI-5 is at 73.7 and little different overnight.
The bitcoin price will start today much firmer at US$54,258 and up +6.9% since than this time yesterday. Volatility in the past 24 hours is high at +/- 4.1%. 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 ».
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