Here's our summary of key economic events overnight that affect New Zealand with more indications price rises are spreading.
But first in the US, they reported a good reduction in the number of jobless claims for last week, even less than the decline expected. There are now 3.7 mln people on these benefits and back to a similar level a year ago, just as the pandemic was threatening to bite. But it is still twice as high as the pre-pandemic levels.
And staying in the US, producer prices are up +6.2% in April from a year ago, a sharp rise from the already-high +4.2% gain they reported for March. Prices are rising fast, in ways that seem temporary, yet this could change expectations in ways that are self-reinforcing.
Consumer prices are getting no respite in the US following the oil pipeline hack there. Temporary sure, but it is feeding rising price expectations. Still, Fed officials don't see the pressures embedding.
There was another big US Treasury bond issue today, this time for US$44 bln for their 30 year maturity. US$14 bln was allocated to the US Fed. The median yield was 2.315% compared to the same issue a month ago at 2.23% pa. This one wasn't quite as popular with 'only' US$74 bln being bid.
In Canada, they reported their producer price data for April as well, and it was up an eye-watering +14% from a year ago. That leap is their largest in more than 40 years and was driven primarily by lumber prices, itself driven by housebuilding demand in the US. Dairy, meat and fish prices also rose sharply but nothing like the timber prices.
The iron ore price is taking a breather, falling from US$230/tonne yesterday to US$218/tonne today. Obviously it can't keep rising at the vertical rate track it has been on. Copper is showing the same sign.
In Australia, the expectations for inflation are quite different, and no-one sees it on the horizon. The RBA survey of economists see it at +1.7% in a year. The same survey of union officials pegs it at just +1.5%. The Melbourne Institute consumer survey has it up at +3.2% but that is unchanged from a year ago. Current CPI inflation in Australia is +1.1% pa.
On Wall Street, the S&P500 is no longer falling, up +0.7% in afternoon trade from the prior day, but the impetus is leaking away as the session progresses. Overnight in European markets rose +0.2% although London fell another -0.6%. Yesterday, the very large Tokyo market fell by another -2.5%, but Hong Kong was down -1.8% for the day, and Shanghai was down -1.0%. The ASX200 ended down another -0.9% while the NZX50 Capital Index fell another -1.1%.
The latest global compilation of COVID-19 data is here. The global tally is still rising, now 160,621,000 people have been infected at some point, up +776,000 in one day, still largely driven by rises in India and Brazil. Global deaths reported now exceed 3,335,000 and up +14,000 in one day. Vaccinations in the world are also rising fast, now up to 1.373 bln (+28 mln per day), and in the US almost half of their population (46.9%) have had at least one dose as they keep up their fast rollout. Now more than one third have been fully vaccinated (119.1 mln people). The number of active cases there has fallen to 6,371,000 (-30,000) with fewer new infections than recoveries recently and steadily improving progress.
The UST 10yr yield starts today at 1.67% and down -1 bp from this time yesterday. The US 2-10 rate curve is marginally flatter at +151 bps. Their 1-5 curve is also slightly flatter at +79 bps, while their 3m-10 year curve is now at +167 bps. The Australian Govt ten year benchmark rate is down -1 bp at 1.75%. The China Govt ten year bond is up +1 bp at 3.16%. And the New Zealand Govt ten year is up +4 bps at 1.89%.
The price of gold starts today virtually unchanged at US$1823/oz.
Oil prices start today giving up all of yesterday's rise, and more, down -US$3 at just over US$63.50/bbl in the US, while the international Brent price is just under US$67/bbl.
The Kiwi dollar opens today stable at 71.7 USc. Against the Australian dollar we are back up to 93 AUc. Against the euro we are marginally firmer at 59.4 euro cents. That means our TWI-5 starts today at 73.6.
The bitcoin price is now at US$48,183 and a huge -12.3% lower than this time yesterday. Volatility in the past 24 hours has been a extreme +/- 9.6%. 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 ».