US jobless claims fall; US economic activity rises; debt premiums shrink; ECB far from tapering; big but variable climate commitments; APRA says ditch some clients; UST 10yr at 1.55%; oil flat and gold down; NZ$1 = 71.6 USc; TWI-5 = 73.5

Here's our summary of key economic events overnight that affect New Zealand with news climate controls are very much back on the international agenda, even if some say they are not enough yet.

They will be tougher to win given the economic recovery underway.

Last week there were 566,000 new jobless claims in the US, lower than expected and lower than the prior week. Now there are 3,863,000 people on these benefits, and the good thing is that this decline is being driven primarily by rising employment and no longer just the expiry of benefit qualification.

Supporting that, the Chicago Fed is reporting its National Activity Index rose, and by more than was anticipated. There was a good economic rebound underway in March, making back the unexpected February weakness, and more. April factory activity in the Kansas City Fed region is very strong.

But some steam seems to have gone out of the residential real estate market in the US in March. Still, volumes sold were still +12% higher than a year ago, and prices rose, perhaps indicating the sales volume pullback from February is more related to a lack of supply than demand.

The US Treasury auctioned US$21 bln of 5 year inflation protected bonds earlier today and got US$48 bln in bids. The average yield was -1.69% lower than the CPI.

And the premium cost for non-investment grade corporate debt over US Treasurys has fallen below +3% for the first time since 2007. Debt risk is rising.

In Europe, consumer sentiment 'improved' more than expected in April, although it is still a net negative - just less negative. But it is still not back to its pre-pandemic levels.

This negativity mean't that the ECB held all its policy positions in its latest monetary policy review, including its €20 bln per month of money printing. There is no taper talk in Europe. Its balance sheet is now up to €7.5 tln (US$9.0 tln) and that compares to the US Fed's level of just under US$7.8 tln

In Washington, the new Administration said it will boost public climate finance to help poor countries reduce greenhouse gas emissions and adapt to a changing climate, doubling funding by 2024 from average levels hit during the Obama administration. It was part of a wide range of new commitments by global leaders to restrain emissions, although China and India notably are still prioritising "development" over emissions reductions. China won't even start the process of phasing out coal consumption until 2026. And Australia has refused to set an emissions reduction goal for 2050.

But Aussie regulator APRA says bankers may need to cap their exposure to customers at most risk from climate change or even consider ditching some of these clients.

On Wall Street, the S&P500 has thrown its toys out of the cot after lunch. It is down -0.8% in early afternoon trade as the new Administration prepares to push ahead with its tax hikes for the wealthy, including raising the capital gains tax to 43%. Overnight, European markets rose +0.8% for a second consecutive day. Yesterday, Shanghai ended down -0.2%, Hong Kong ended up +0.5%, but Tokyo roared back, up +2.2% and making back much of its big falls earlier in the week. But it is still down a net -1.7% so far this week. The ASX200 ended yesterday up +0.8%, and the NZX50 Capital Index ended up +0.3%.

The latest global compilation of COVID-19 data is here. The global tally is still rising, now 144,176,000 have been infected at some point, up +919,000 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 3,064,000 and up +15,000 in one day. Vaccinations in the world are also rising fast, now up to 953 mln (+18 mln) and in the US more than half of their population (214 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 a tad lower at 6,853,000 with -7,000 fewer new infections as recoveries.

The UST 10yr yield starts today at 1.55% and a -2 bps dip. The US 2-10 rate curve is flatter at 140 bps. But their 1-5 curve is stable at +74 bps, as is their 3m-10 year curve at +155 bps. The Australian Govt 10 year yield is down -2 bps at 1.67%. The China Govt 10 year yield is also holding at just on 3.18%. But the New Zealand Govt 10 year yield is now at 1.56% and -6 bps lower.

The price of gold starts today at US$1781/oz and that is down -US$13 since this time yesterday, with the yellow metal unable to hold on to yesterday's good rise.

Oil prices are little-changed at just over US$61/bbl in the US, while the international price is just over US$64.50/bbl.

The Kiwi dollar opens today at just under 71.6 USc and softer from this time yesterday. Against the Australian dollar we are marginally softer at 92.9 AUc. Against the euro we are also softer at 59.6 euro cents. That means our TWI-5 is down at 73.5 but that is only back to its Wednesday level.

The bitcoin price will start today lower than this time yesterday, at US$53,730 and down -3.8% to its lowest level in four weeks. Volatility in the past 24 hours has been high at +/- 3.0%. 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 ».