US retail sales sizzle; American job claims plummet; Canada's economy struggling; UST 10yr at 1.55%; oil steady, gold up; NZ$1 = 71.7 USc; TWI-5 = 73.7

Here's our summary of key economic events overnight with news that things are on the up in the United States, with very strong retail sales figures and much lower job loss figures.

The stimulus cheques have been in mail from the US government and Americans are spending them. US retail sales bounced a whopping 9.8% last month to US$619 billion. Compared with the pandemic-hit March 2020 the sales were up a mammoth 27.7%. The rise for March 2021 was the biggest in 10 months. The big rebound was felt right across the retail sector. Standouts included: Motor vehicles up 15.1%, sales at clothing stores up 18.3% and restaurants and bars were up 13.4%. This comes of course as many households have received additional U$1,400 payments, part the massive stimulus package approved in early March.

And after a surprise rise in the number of official jobless in the US last week, the number of people making initial unemployment claims this week dropped a stunning 193,000, to 576,000. That's the lowest level for initial claims since March 2020. The previous week's level was revised up by 25,000 from 744,000 to 769,000. The four-week moving average was 683,000, a decrease of 47,250 from the previous week's revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The four-week moving average for total claims is now 3,763,000, a decrease of 98,000 from the previous week's revised average. This is the lowest level for this average since March 28, 2020 when it was 3,611,750. The previous week's average was revised down by 1,000 from 3,862,000 to 3,861,000.

In March, total industrial production in the US increased 1.4%. The gain in March followed a drop of 2.6% in February, which largely resulted from widespread outages related to severe winter weather in the south central region of the country.

For the first quarter as a whole, total industrial production rose at an annual rate of 2.5%. In March, manufacturing production and mining output increased 2.7% and 5.7% respectively. The output of utilities dropped a record 11.4%, as the demand for heating fell because of a swing in temperatures from an unseasonably cold February to an unseasonably warm March.

And, separately, the US has imposed a broad array of sanctions on Russia, including curbs to its sovereign debt market, to punish it for interfering in last year's US election, cyber-hacking, bullying Ukraine and other alleged "malign" actions.

In Canada, it's officially estimated that the economy shrank a record 9% in March from February as the coronavirus outbreak forced the shutdown of economic activity during the course of the month, Statistics Canada said in a flash estimate on Wednesday. The monthly decline in gross domestic product (GDP) would be the most since the series started in 1961, Statscan said in its first-ever release of a flash estimate for growth. “Economic disruptions have been both deep and widespread in the month of March,” Statscan said. “Overall for the quarter, this flash estimate of GDP leads to an approximate decline of 2.6% for the first quarter of 2020,” Statscan said without specifying whether the decline was from the previous quarter or a year earlier.

Also in Canada manufacturing sales fell in February, after enjoying the largest increase observed in seven months in January (+3.4%), manufacturing sales fell 1.6% to $55.4 billion in February on lower sales of transportation equipment. The declines were partially offset by higher sales in the petroleum and coal product, chemical, and wood product industries. Since January, motor vehicle and motor vehicle parts manufacturers have faced a semiconductor shortage, which has led to production slowdowns or shutdowns at several auto assembly plants. The tight supply of semiconductors also impacted plastics and rubber products manufacturing in February as a result of lower demand for plastic products from the auto industry. These declines brought total manufacturing sales down 0.8% year over year in February.

China needs to halve carbon dioxide emissions from its coal-fired power plants by the end of the decade if it is to remain on course to become carbon neutral by 2060, according to new research published by British-based climate data provider TransitionZero. It believes the carbon neutral target is achievable, but says the "implementation gap" between the China government’s net zero target and what is happening on the ground "is a cause for concern from both a climate and economic perspective". The report recommends China: Cancels all new coal immediately and issues guidance on a net zero aligned phase out; uses satellite imagery and machine learning to help reduce its Emissions Trading System enforcement costs; and reforms the ETS to drive abatement consistent with their net zero goal.

In Japan, their central bank Governor Haruhiko Haroda says their economy continues to be in a difficult situation due to the effects of new coronavirus infections both inside and outside Japan, "but the trend is picking up". He says the economic outlook is expected to improve, supported by recovering external demand - but the pace of improvement will be moderate while caution continues about the pandemic.

In Australia, the economic news just keeps getting better. Following on from some stunning business and consumer survey results, Australia's March employment figures have beaten forecasts by a long way.

The number of jobs added (71,000) was about double that expected, while the unemployment rate also fell more than expected to 5.6% from 5.8% in February. Some 27,000 fewer people were unemployed. It's worth noting though that there seems to be quite a shift in work and employment patterns as in March full-time employment actually decreased by 20,800 to 8,874,200 people, and part-time employment increased by 91,500 to 4,203,400 people. The participation rate increased by 0.2 percentage points to a historic high of 66.3%. Employment and hours worked were both higher than the March 2020 start of the pandemic crisis.

On Wall Street, the S&P500 is up a strong +1.0% in early afternoon trade. Major European markets were up an average of +0.4% overnight. Yesterday, the Shanghai market ended down -0.4%, Hong Kong was also down -0.4%, while the very large Tokyo market closed up +0.1%. The ASX200 rose +0.5% yesterday, and the NZX50 Capital Index dropped -0.8%.

The latest global compilation of COVID-19 data is here. The global tally is still rising, now 138,581,000 have been infected at some point, up +769,000 in just one day. Global deaths reported now exceed 2,977,000 and up +12,000 in one day. Vaccinations in the world are also rising fast, now up to 844 mln (+19 mln) and in the US more than half of their population (193 mln) have had at least one dose as they achieve a very fast rollout. However, the number of active cases there rose again to 6,888,000 and up another +9,000 overnight as new pockets of infection variants take hold.

The UST 10yr yield is down a sharp -10 bps at 1.55% and its lowest in more than a month. The US 2-10 rate curve is much flatter than yesterday at 139 bps. Their 1-5 curve is flatter too at +74 bps, as is their 3m-10 year curve at +154 bps. The Australian Govt 10 year yield is also down -10 bps at 1.64%. The China Govt 10 year yield is holding lower at just on 3.19%. And the New Zealand Govt 10 year yield is also holding at 1.69%, unaffected yet by the benchmark bond price rally.

The price of gold starts today at US$1765/oz and up +US$29 in a day.

Oil prices are holding their higher level at US$63.50/bbl in the US, while the international price is still at US$66.50/bbl.

The Kiwi dollar opens today a little higher again as the risk-on mood stays, now at 71.7 USc. Against the Australian dollar we are unchanged at 92.5 AUc. Against the euro we are firm at 59.9 euro cents. That means our TWI-5 is just under 73.7 and its highest since March 22, 2021.

The bitcoin price will start today at US$62,564 and very marginally lower from this time yesterday, essentially holding on to its recent rise. Volatility in the past 24 hours has been moderate at +/- 1.7%. 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 ».