Here's our summary of key economic events overnight that affect New Zealand with news the old-normal service seems to be been resumed with the giant American economy regaining its role as the engine of global growth.
In the US, the number of recorded job layoffs in May is now down to about -25,000 among large reporting companies and very much back to pre-pandemic levels.
The level of initial jobless claims came in lower than expected, but only slightly so. There are now 3.5 mln people on these benefits, still more than pre-pandemic, but far far less than a year ago when there were 19 mln people dependent on them.
Tomorrow we get the official non-farm payrolls report for May and it is expected to show a modest improvement (+650,000) from the unexpectedly weak April result (+266,000). Today we got the precursor ADP Employment Report and it came in much better than expected with a +978,000 rise in jobs with gains across the board, except in the IT industry. Half those overall gains were in the hospitality sector.
The two large PMI surveys reported their May data for the large services sector and both describe booming conditions. The ISM one and the Markit one have the expansion pegged at its strongest since these surveys were started.
These results feed into a global PMI and that shows the international economy expanding across all sectors at a 15 year high.
And so is Australia. In addition, Australia recorded a strong trade surplus of +AU$8.0 bln in April (for both goods and services), due to an increase in exports and a decrease in imports. The export strength was on the back of rises in commodity and rural exports. Services exports increased, partly due to the trans-Tasman travel bubble, which opened in mid-April. This April result is the third highest surplus in their history, and better than expected for the month.
Today is the anniversary of the 1989 Tiananmen Square massacre in Beijing. It is no longer being marked in Hong Kong with a vigil as Chinese authorities crack down worldwide on remembrances of the brutal crushing of a student protest. Beijing has used those 32 years to rewrite history. But one photo and thousands of records at the time can never erase the crime.
Meanwhile, China has reportedly reached out recently to both New Zealand and Singapore to try and find a way to join the TPP. Of equal interest is whether the US will attempt to revive its interest in joining the trade zone it initiated.
Wall Street opened today's session sharply lower but all but -0.2% of those losses have been recovered on the S&P500. European markets closed mixed with Frankfurt up +0.2% but London down -0.6%. The others were in between. Yesterday, Tokyo closed yesterday +0.4% higher, Hong Kong closed a sharp -1.1% lower and Shanghai closed down another -0.4%. The ASX200 ended its session up +0.6% and a new record high, but the NZX50 Capital Index ended down a minor -0.1%.
The latest global compilation of COVID-19 data is here. The global tally is still rising, now 171,794,000 people have been infected at some point, up +471,000 in one day. Global deaths reported now exceed 3,694,000 and up +9,000 in one day. Vaccinations in the world are still rising but at a slower pace, now up to over 2 bln. In the US half of their population (51.4%) have had at least one dose. More than 40% of Americans have been fully vaccinated (138.1 mln people). The number of active cases there has fallen to 5,558,000 with fewer new infections than recoveries recently and steady progress. We are retiring this daily COVID update next week, and will replace it with the occasional newsworthy events relating to the pandemic. The pandemic is far from over globally, but it has now become normalised from a news perspective.
The UST 10yr yield starts today up +3 bps at 1.62%. The US 2-10 rate curve is a little steeper at +147 bps. Their 1-5 curve is at +79 bps and also steeper, while their 3m-10 year curve is steeper at +162 bps The Australian Govt ten year benchmark rate is little-changed at 1.63%. The China Govt ten year bond is unchanged at 3.11%. However, the New Zealand Govt ten year is up +1 bp at 1.80%.
The price of gold starts today at US$1872/oz, a sharp -US$36 drop from this time yesterday. Silver prices fell even harder, down -2.6% in a day.
Oil prices start today unchanged at yesterday's higher US$68.50/bbl in the US, while the international Brent price is still at US$71/bbl, and holding at a two year high.
The Kiwi dollar opens today at 71.3 USc and a full -1c drop overnight. About half of this is greenback strength and about half a flight from commodity currencies. Against the Australian dollar we are down marginally to 93.2 AUc. But against the euro we are almost -½c lower at 58.8 euro cents. That means our TWI-5 starts today at 73.2 but this is only back to where it was two weeks ago.
The bitcoin price is now at US$38,813 and another +2.1% rise from this time yesterday. Volatility in the past 24 hours has still been high again at +/- 3.0%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».