Here's our summary of key economic events overnight that affect New Zealand with news of increasing signs of drift rather than progress.
The large US$29 bln US Treasury 20yr bond auction today went at a yield of 2.144% pa, down from the 2.29% at the March auction for this same bond. US$62 bln was bid and that was the lowest level of support since the 20yr term was relaunched in May 2020 after a 34 year hiatus. Market observers called today's auction evidence of struggling demand.
In Canada their inflation rate is rising, now at 2.2% but the gain was not as much as was expected.
The Canadian central bank held its policy rate unchanged in an overnight review, still at 0.25%. But they did taper their bond buying, reflecting "progress made in the economic recovery". And markets now expect them to start raising their policy interest rate in the second half of next year.
In the Middle-East, Emirates airline may need to raise more cash this year, possibly through another equity injection from the Dubai government, if demand for air travel does not pick up soon, it confirmed overnight.
The spot price of iron ore surged higher yesterday and today, resetting at its highest in more than a decade, on strong Chinese steel mill margins and continuing supply concerns from Brazil. China is frustrated at "being milked". Coal prices are rising in China too. China sees these rises and pressures are short-term however, and expects to cope with them without too much problem.
Meanwhile in Australia, Canberra has torn up Victoria’s controversial Belt and Road agreement with China, saying it falls foul of the country’s national interest, in a move that will further inflame tensions between the two countries.
And staying in Australia, retail sales were up +2.5% in March from the same month a year ago, and rising at a rate slightly above what was expected. This is a bounce back from the February snap lock downs.
On Wall Street, the S&P500 is staging a small recovery after a string of declines. It is up +0.7% in early afternoon trade, but this is really just more drift. Overnight, European markets also rose about +0.7% on average. Yesterday, Shanghai ended unchanged, Hong Kong ended down a chunky -1.8%, and Tokyo was down another -2.0%. The ASX200 ended yesterday down -0.3%, and the NZX50 Capital Index ended down -1.1%.
The latest global compilation of COVID-19 data is here. The global tally is still rising, now 143,257,000 have been infected at some point, up +953,000 in just one day, largely driven by rises in India where new lockdowns and super spreading events are underway. Turkey and Iran have awful problems too. Global deaths reported now exceed 3,049,000 and up +15,000 in one day. Vaccinations in the world are also rising fast, now up to 935 mln (+14 mln) and in the US more than half of their population (212 mln) have had at least one dose as they keep up their fast rollout. More than a quarter have been fully vaccinated. The number of active cases there is unchanged at 6,860,000 with as many new infections as recoveries.
In New Zealand, 183,400 vaccine doses have been given, but only 0.9% of our population is fully vaccinated. This is on the official target. In Australia, they have given 1.7 mln doses, but it is unclear what proportion have been fully vaccinated there. But they are miles behind their original target, and well behind their revised targets.
The UST 10yr yield starts today at 1.57% and a small +1 bp rise. The US 2-10 rate curve is little-changed at 142 bps. Their 1-5 curve is also stable at +74 bps, as is their 3m-10 year curve at +156 bps. The Australian Govt 10 year yield is little-changed at 1.69%. The China Govt 10 year yield is also holding at just on 3.17%. But the New Zealand Govt 10 year yield is now at 1.61% and -4 bps lower.
The price of gold starts today at US$1794/oz and that is up +US$16 since this time yesterday, and that takes it to its highest level since late February. Silver is rising too, but only to a one month high.
Oil prices are much softer, down -US$1.50 at just over US$61/bbl in the US, while the international price is just under US$65/bbl. There are rumours of an imminent deal for Iran to export crude oil again.
The Kiwi dollar opens today at just under 72.1 USc and firmer from this time yesterday and in fact its highest in more than a month. Against the Australian dollar we are marginally firmer at 93 AUc. Against the euro we are also a little firmer at 59.9 euro cents. That means our TWI-5 is up at 73.9 and also a one month high.
The bitcoin price will start today at a marginally lower level than this time yesterday, at US$55,852 and a mere -0.4% lower. Volatility in the past 24 hours has been moderate at +/- 2.5%. 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 ».