Here's our summary of key economic events overnight with news the focus might be going back on to global house price distortions as both Canadian and Australian regulators show signs they, like New Zealand, are worried about what their pandemic QE has done to these asset prices.
But first, the overnight dairy auction was essentially unchanged by holding on to most of the gains from the sharp jump two events ago. Recall, it rose +15% then, then corrected down by -3.8% at the prior event. But this time those net gains have been held. This justifies the raising of the farm gate milk price forecasts over this period. Over this period, the net rise is +11.5% in US dollars, but with the retreating NZ dollar, it is +14% in local currency. This time the key WMP price was unchanged, and the SMP price rose +0.6%. Butter and cheese prices were up about +2% from the prior event.
The IMF has upgraded its global growth forecasts, based on new large fiscal support in a few large economies, especially the US. Global growth is now projected at +6% in 2021, moderating to +4.4% in 2022. The projections for 2021 and 2022 are stronger than in the ones they released in October 2020. The vaccine-powered recovery in the second half of 2021 is also a big factor, and they point to "continued adaptation of economic activity to subdued mobility". They also say "high uncertainty surrounds this outlook", so perhaps we shouldn't rely too much on these guestimates.
They now say the US will expand +6.4% in 2021, the EU +4.4%, which China will expand an impressive +8.4%. Japan is a laggard at +3.3%. They expect Australia to expand by +4.4% and New Zealand by +4.0% this year.
In the US, job openings in February surprised on the high side, not only coming in higher than for January, but higher than analysts were expecting as well, and a two year high. It was a faster hiring rate that brought the gains, with quits and separation rates unchanged.
After dipping worryingly in February, the private Caixin services PMI for China improved in March with a solid rise. Even so, it is not a vigorous expansion and lower than what we are seeing elsewhere. And unlike elsewhere, this report isn't highlighting cost increases.
The RBA has left its key interest rates at a record low 0.1% at its monthly board meeting, while warning it is monitoring developments in the heated housing market.
And staying in Australia, the number of job ads jumped +7.4% in March from February, and those February levels were revised higher. (Year-on-year they are up +40%.) This data is now highest level in more than twelve years (since before the GFC) and is pointing to further sharp declines in the Australian unemployment rate.
On Wall Street, the S&P500 is flat in early afternoon trade. European markets were up an average of +0.7% overnight, but London was the outlier, rising a very strong +1.3%. Yesterday, the Shanghai market ended flat, Hong Kong was up a very strong +2.0% while the very large Tokyo market closed down -1.3%. The ASX200 rose +0.8% yesterday, but the NZX50 Capital Index fell -0.7%.
The latest global compilation of COVID-19 data is here. The global tally is still rising, now 132,024,000 have been infected at some point, up +476,000 in one day. Global deaths reported now exceed 2,865,000 and +9,000 in one day. Vaccinations in the world are still rising fast, now up to 679 mln and in the US almost 50% of their population (165.8 mln and up +2.2 mln in one day) have now had this protection as they achieve a very fast rollout. The number of active cases there fell to 6,870,000 and down -34,000 overnight.
The UST 10yr yield is down -6 bps at 1.66%. The US 2-10 rate curve has flattened noticeably to 150 bps. Their 1-5 curve is flatter at +82 bps, while their 3m-10 year curve is flatter at +164 bps. The Australian Govt 10 year yield is down by -6 bps at 1.71%. The China Govt 10 year yield is unchanged at 3.23%. And the New Zealand Govt 10 year yield is down by -3 bps at 1.80%.
The price of gold starts today up +US$17 from this time yesterday at US$1743/oz.
Oil prices have risen overnight by about +US$1 and are now at just under US$59.50/bbl in the US, while the international price is now just under US$63/bbl.
The Kiwi dollar opens today marginally firmer at just on 70.4 USc. Against the Australian dollar we are softer at 92 AUc. Against the euro we are also weaker at 59.4 euro cents. That means our TWI-5 opens today a little lower at 72.8.
The bitcoin price will start today at US$58,262 and down -1.2% from this time yesterday. Volatility in the past 24 hours has been modest at +/- 1.8%. 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 ».