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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Some thought-provoking links on Automatic Earth this morning:
https://consortiumnews.com/2021/03/08/patrick-lawrence-enforcing-orthod…
https://www.dailymaverick.co.za/article/2021-03-08-revealed-the-uk-supp…
The first addresses what we are seeing more and more In NZ - so-called journalism just parroting 'terrorist' when quite often you can trace (if you could be bothered) our own demand for things - like oil and lithium - to the repression of others. The avoidance of this unpleasant necessity (to obtain energy and resources to continue our consumption-rates, from somewhere/someone else) is why, in many cases, we need to use the 'terrorist' label.
These are times when truth and fact are going to be really, really important. Time journalism in NZ, took a good look at what it projects. Time it made sure it isn't just a tout.
One man's fact is another's opinion. Scientific papers have to be peer reviewed before they can be accepted as the current 'wisdom'. News is peer reviewed by the public, but determining what is 'truth' or 'fact' is often difficult. Where censorship exists, it more often than not is due to powerful groups driving the direction of information.
Yesterday on RNZ I listened to discussion on the news article about Police photographing young Maori, taking their details and adding all this to their national intelligence data base. In the first instance i was appalled by the Polices actions. I was equally appalled by the Police's denial of racial profiling, when any fool can see that this is clearly what is happening. But i was also appalled by the Maori interest groups who came out very strongly against the Police actions, but who also actively avoided asking the hard questions about why the Police would consider it necessary to take such action in NZ? Both sides are trying to take control of the information flow and tilt it to their favour, and the media were culpable for not only giving them the platform, but in failing to structure the debate to dig in and get some real facts out.
Aye, the nearest they get in the Broadcasting Standards, is 'Balanced'. Nothing about 'ascertaining the truth, as near as possible and damn the consequences'. Then there's click-based income, ratings, advertising nudging things along. I have a formal complaint in re RNZ (I chose them because they should have no advertising pressures) but in reality I could put several in a day, targeting them alone. Interestingly, rather than learn, they have a mechanism to 'deal with complaint' away from the complained-about, the idea presumably being to 'let the reporters get on with their job unimpeded'. It's an arrogance, at the end of the day. I'm also beginning to wonder if there is fear/rejection involved too.... but scratch to any depth, and it's mostly assumption mixed with ignorance.
I didn't get around to mentioning that the ME109 wasn't the first to have automatic leading-edge slats; Santos Dumont did it with the Demoiselle, I think.
It's like that for a lot of organisations PDK, especially Health. Too focussed on dealing with the negatives, preventing them from becoming public knowledge and being held to account for it. The average Kiwi doesn't want to complain, and because of this many organisations get away with some atrocious actions. But have the courage to complain formally, and all of a sudden their attitude changes!
If you're ever dissatisfied with the quality or standard of care at a DHB, try in the first instance to talk to them about it, but the odds are you will normally be fobbed off. Put in a complaint and you'l get action within a week.
I think the OIA is failing us in this space.
One side always has the data. The other side is a collection of personal experiences aka anecdotes.
https://www.stuff.co.nz/national/politics/124076652/official-informatio…
It was amazing the doom porn headlines you could still pull off in January.
'It's scarier, bigger': UK hospitals overwhelmed by second Covid-19 wave
https://www.irishtimes.com/news/world/uk/it-s-scarier-bigger-uk-hospita…
Yorkshire's 500-bed Nightingale Hospital is to close without treating a single Covid-19 patient.
https://www.bbc.com/news/uk-england-york-north-yorkshire-56327555
Established last spring amid fears that the NHS might be overwhelmed, the temporary hospitals in England were largely not needed. Some were used as rehab centres and the sites in London and Sunderland will stay open for vaccinations.
https://www.bbc.com/news/health-56327214
https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarr…
But were they not used because there was no need for them or because they were built so it looked like the govt were doing something but as usual hadn't thought through the fact that they didn't have the extra staff to run them?
https://www.independent.co.uk/news/health/nhs-nightingale-hospitals-cor…
https://www.theguardian.com/commentisfree/2021/jan/27/empty-nightingale…
https://www.thetimes.co.uk/article/nightingale-hospitals-grounded-by-st…
https://www.nursingtimes.net/news/coronavirus/revival-of-nightingale-ho…
Ridiculous. If you look at the data you posted and decide not to cherry pick, the trend has been for falling mortality, plateauing in the last decade to be around 900 per 100,000. In 2020 it jumped up to over 1000, roughly a 10% increase in mortality in a single year.
And the data is provisional, not final as figures are on deaths registered, which can take some time. It is likely to be revised upwards as final figures will come in during summer 2021.
Is it smart to jump on the speculation train?
Telsa shares have a real world value of about $50, Cryptos are real world worthless.
The everything bubble continues, when it bursts, there will be lots of pain but we just need to return to some sort reality.
Its like millennials have taken over the world with their hairbrained "expect everything for nothing mentality" stock markets nuts, housing nuts, made up coins nuts....
Just mental!
Things are feeling a little precarious, although people have been saying that for most of the last decade. Nonetheless, I've been starting to build up my cash after being pretty much fully invested. We can guarantee there'll be pain to come, but the timing could be tomorrow or years away.
Gold is worth about the same as copper/silver if you compare practical value. Otherwise value is a consensus driven paradigm based on utility. If you can't see the value of a real-time global decentralized ledger that is steadily eating golds market share because of it's superior portability, divisibility and fungibility, maybe you also thought that email would never eclipse postal mail? The reality is crypto is at the stage right now, that the internet was back in the late 90's, and in the next 15 years is going to fundamentally change the entire financial system as we know it.
https://news.bitcoin.com/nigeria-to-pay-1-2-cents-for-each-dollar-remit…
well read this article and tell me its useless. Mainly the part where it points out that
"Nigeria’s international remittances inflows plunged towards the end of the year 2020. As the data from Nairalytics shows, the country’s inflows dropped from the January 2020 high of $2.05 billion to $54.4 million by end of September 2020.
Overvalued Exchange Rate
The massive drop in remittances via official corridors comes as more Nigerians switched to companies that use cryptocurrencies when moving funds across borders. Unlike regulated financial institutions that use the “official exchange rate,” the increasingly popular crypto remittance companies reportedly (before the imposition of the directive) used the parallel exchange rate when converting USD to naira. As the gap between the official and parallel exchange rate increased, inflows via official channels declined while the volumes handled by crypto companies surged."
Now tell me a system that works does not have any value..
You're quite wrong. I tend to focus on NZX stocks myself. My point is, I bet there's a handful of penny stocks on the Brazilian exchange that went up or down 20% in the last few days, and I certainly wouldn't expect them to make international news. Likewise, I don't expect to hear about Gamestop. If I wanted to know about it, I'd follow it myself.
Already today, NTL on the NZX is down 20%, and noone cares about that except the poor, long suffering holders.
And similar games are played out in every market every day, and have done through the history of capital markets. The fact that Reddit are interested in this one does not make it particularly important in my book - my comment was that GME is not an important story in an NZ context. At best, it's an interesting 'and finally' story, although I expect it's even less interesting now the shorters have presumably left the building.
I took a little time to look at NTL traded on both the ASX and NZX, market cap 11.1 million, 16 trades today at time of writing , in the grand amount of
$ 1331. Price down 20 percent. Most likely it will regain that before close. In all honesty its a penny stock, thinly traded dished out to novice investors, and Sharesies while management pay fees for dual listing. Its not to say that its price could not move ten fold in a month, at which time there may be some news to entice further investors.
JJ - The pandemic effect on the airline industry has been massive as we all know. Most airlines have mothballed there fleets in some dry atmosphere climate ( Alice Springs is popular with Air NZ ). The airlines have brought forward fleet retirement plans, and brought forward orders for new much more fuel efficient planes as unmothballing some of their fleet that are close to retirement is expensive and makes no sense.
The stimulus package will add wealth to the already wealthy through stock and house price appreciation. Just like our own Govt, another Govt pretending to be on the side of the poor while doing everything to further enrich the wealthy and widen the divisions in society.
In relative terms you are right. In terms of overall, though, we just went even further into unrepayable debt.
Debt isn't a stimulus, it has a negative sign in front of it. So, properly labelled, it's a draw-down package.
And show me the media - particularly the economic media - who pointed this out?
Hmmmmm....Biggest Yield-GDP Gap Since 1966 Shows Room for Bond Pain
Even with the recent spike that saw the 10-year rate top 1.6%, Treasury yields haven’t been this low relative to U.S. economic growth estimates since 1966. That suggests the climb in rates may still have room to run.
Analysts are boosting their growth and inflation forecasts, with Americans on the cusp of getting stimulus checks under President Joe Biden’s $1.9 trillion package. The average projection for nominal gross domestic product hit a 32-year high of 7.6% in Bloomberg surveys. Even after doubling to 1.6% since November, 10-year bond rates can barely keep up with the growth upgrade, leaving the gap between the two likely to be the largest since Lyndon Johnson was president
The Herald is reporting that the Progressive meat works in Hawkes Bay is short of workers, because fruit picking is now competitive with them on pay.
Made me smile. With these business's driving pay rates down over the years, what did they expect? When I was a teenager a job at the meat works was great for kids who left school with no qualifications. Good pay and working conditions and plenty of overtime. There was a waiting list to join them! Even here in Whanganui, the Talleys treat their staff appallingly. I guess pay backs' a bitch when there is real competition available.
murray...about bloody time too. Support our NZ low income workers by putting an end to the rort that is cheap foreign slave labour, enabled through an almost open border policy. Who do we want to look after, greedy business owners looking to cut costs or our low income earning kiwis?
I don't eat a lot of red meat, and we have a veggie garden but I know that the biggest cut is taken by the supermarkets in both these areas. Perhaps though if the workers have to be paid a better wage, more thought might go into productivity?
Plus; With the meat workers getting paid so much in the 70's, why was meat relatively more affordable then than it is now? I guess the same question could be asked about a lot of things.
Wishful thinking though, Those firms heavily embedded with govt lobbyist.. pay is not an issue. No longer profitable? in the red? govt will donate phantom ingredients, no need to cook the account book - the 'forever assurances of subsidy' are there awaiting, different PR name but essentially just sustaining direct number of 'profit'.. the sovereign wealth issuer.
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