Here's our summary of key economic events overnight that affect New Zealand with news Wall Street thinks yesterday's drop was overdone, but there has been little positive data released overnight to support that view.
First up today however is the overnight dairy auction which saw prices fall again, this time down -2.9% in US dollar terms led by SMP which fell -5.2% from the prior event two weeks ago, and WMP which fell -3.8%. The only saving grace has been the devaluation of the NZ dollar, and in local currency todays declines are 'only' -1.5%. Since the big +15% jump in early March, overall prices have fallen -9.3% although they are still +20% above year-ago levels. Analysts will be re-running their payout forecast assessments as today's results represent the seventh consecutive auction where prices have fallen.
US housing starts and building permits issued are remaining quite elevated, but oddly, completions haven't caught up yet and are just +1.5% higher in June than May, and only marginally above the June 2019 levels. The March jump hasn't been extended and it is unclear why given the continuing surge in starts. The low completion rate is adding to the perceptions of a 'housing shortage' in the US.
In Canada, house prices are rising at their fastest pace on record. They were up +16% year on year in June, faster than the +14.2% rise which was the previous record in June 2017 - and after which the Bank of Canada brought in new cooling measures. None seem imminent this time however.
In China, the weather is playing havoc with parts of its economy. Many cities have been warned they may face power outages ahead as the system strains under surging electricity consumption amid rising temperatures. China's power consumption hit an all-time high last week – up more than +10% from last summer’s record. And very heavy rainfall in the Yellow River basin in Henan province has millions scrambling for safety. Heavy rain at this time of year isn't that unusual, but at this level (200mm in an hour) it is.
Taiwanese export orders are still rising very strongly. They are up +31% from a year ago, and up +39% from June 2019. Strong order levels are coming from all corners of the globe.
German producer prices were up +8.5% in June from a year ago and that beat estimates, and were well above the +7.2% rise in May.
In Australia, there were 78 new community cases in NSW yesterday, and another 13 community in Victoria where their lockdown has been extended for another 7 days. Queensland and South Australia are now also reporting cases in the community, prompting a new SA lockdown. All this is knocking consumer confidence in Australia. None of this gives hope the Trans-Tasman travel bubble will re-open anytime soon. There were 5 new cases in New Zealand, all caught at the border, none in the community.
Wall Street has decided that its Monday slump was overdone, and is up +1.7% in early afternoon trade today. Overnight, European markets rose about +0.5%, a bit more in Paris. Yesterday, Tokyo was down on yesterday's bad mood, shedding almost -1.0%. Honk Kong had similar vibes, down -0.8%. But Shanghai didn't catch that cold, and ended flat. The ASX200 ended yesterday down -0.5% but the NZX50 Capital Index avoided the selloff, ending unchanged.
The UST 10yr yield starts today at just on 1.22% and a +4 bps partial recovery. The US 2-10 rate curve has steeper by 5 bps to now be at +102 bps. Their 1-5 curve is now at +61 bps little-changed, while their 3m-10 year curve is now at +117 bps and 3 bps steeper. The Australian Govt ten year benchmark rate starts today at 1.19% and up +2 bps. The China Govt ten year bond is at 2.96% and little-changed. The New Zealand Govt ten year is now at 1.53% and down -10 bps from this time yesterday.
The price of gold is now just on US$1810/oz which is up +US$2/oz from this time yesterday.
Oil prices have stopped falling, and stabilised by +US$1 so in the US they are now just over US$67/bbl, while the international Brent price is now just over US$69/bbl.
The Kiwi dollar opens today just under 69.2 USc as the greenback continues its rise. Against the Australian dollar we are softish at 94.4 AUc. Against the euro we are little-changed at 58.7 euro cents. That means our TWI-5 starts today down marginally at 72.3.
The bitcoin price is now at US$29,649 and down another -3.2% from this time on yesterday. Volatility in the past 24 hours has been moderate at just under +/- 3.0%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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30 Comments
I'm impressed with how well the vaccine is holding up in the UK and Israel. In the UK, for example, cases are nearing all-time highs but hospitalisation are just a fraction of what they where last time and that's with only 69% of the population fully vaccinated.
Pity the Australian government have played such a risky game by relying on isolation policies instead of expediting their vaccine rollout.
Some studies going on to understand "long COVID" too, HERE. The long term effects are a real concern, with some reporting quite debilitating impacts. So those who think the only goal is survival are mistaken. The real goal, for me at least is to not catch it at all!
I also note that a number of athletes at the Olympics are catching it. Sort of makes Scarfie's early assertions about health and fitness look somewhat weaker. But to be fair, there are always a few people with what seems to be bullet proof immune systems, who don't catch anything. I am envious of them, but I also know a few who are fit, carefully watch their diets and fitness regimes, but still seem to catch everything that is going around.
The UK has done some research on this. Under 14% of people who get Covid-19 experience symptons more than one month after contracting the virus which is what the UK defines as 'long Covid' in their sample of 20,000 people who contracted the virus.
However among the fully vaccinated that no statistically meaningful conclusion could be drawn on long Covid despite the large sample size. We'll have to wait for much larger datasets because it's just so rare among the fully vaccinated.
Murray there are many logical flaws in what you say. Perhaps it is easier for me to put it this way, I've been called a polymath 3x in the last ten years. This is based on outputs, things I have done. I suspect that won't genuinely understand what that means. However if you are arguing with a polymath it is quite likely you are the one that is wrong.
Do you really understand terrain theory?
One thing is you seem to be confusing health with fitness, they are two quite separate pieces of the pie that makes overall well being. You really need to sort your logic out there if you are going to invoke my name in your statements. I often cringe at what people call healthy as it is so far from the mark, particularly with diet.
You are also confusing a case of Covid with a positive PCR test. There are many experts calling into question this test, saying it is like taking an eyesight test to see if you have eyes. How many athletes in hospital? How many are symptomatic?
We have known from the cruise ship experience early on that approximate 40% of people have no symptoms, and a further 40% have trifling symptions. That is far from just a "few people with what seems to be bullet proof immune systems". It really highlights that most people can easily deal with Covid. You are just fear mongering with those comments.
You seem to also be short on your research and don't know about "long vaccine". Yep, the adverse effects are also long and debilitating.
I have mentioned the USA mortality displacement a few times here now. The numbers there prove both the vaccine had no impact on the death rate and that lockdowns were unnecessary due to this really not being as bad as portrayed. It really is just a bad flu, about twice the death rate as a normal flu. That is life, get on with it.
Not sure I've mentioned to you, I got a heart rate monitor this early this year and have a snapshot from the app showing a low of 44 and a high of 199.
Scarfie, I get that you like to think you are always right. You can use whatever justification for how good you think you are if it makes you feel better. Certainly seems to make you think that is positions yourself well to pass judgement on others.
I have read your piece quoting your friend from the US on mortality and noted the omission of peripheral data such as people staying home, and not catching the usual seasonal bugs, which also have a death toll, and don't appear to have considered that the COVID death rate may have been roughly similar. I note that that discussion was had in NZ. Taking bits out of context doesn't serve your perspective very well either. Understanding that some seem to have "bullet proof" immune systems, also means that the rest have variations from close to that to virtually none at all. And this provides a very reasonable explanation for your case from the cruise ship. There is much about COVID that is not fully understood yet. As to the negative impact of vaccines - there has always been this for most if not all vaccines, and has been openly acknowledged as a risk. As to your comment on the athletes at the Olymipics, are you saying they have an unhealthy diet, or aspects of their lifestyle? Or are you just making an assumption based on your superior brain?
The think that makes me feel better is staying away from stupid people, hence why I'm not posted so much on interest.co these days. It is ceased being a place in which to learn thanks to the prolification of those who lack learning.
Why exactly are you here Murray? I came here to find you why the GFC. I was lucky in that there were some really good minds here to learn from. Only a few are still around.
Peripheral data doesn't matter in regard to overall mortality, I figured out early on that all the other data was bullshit assumption and only mortality in total would tell the total picture. That is why "for the greater good" is anti science, it can't be proven in any way. If you don't get this you have no place commenting on matters of science.
Why is it such a big leap for differences in immune systems being down to lifestyle choices? It is better than your absence of any explanation. Choices in aggregate, not single factors (which science usually only focusses on). The document I have in regards to a Dr of Science I had the pleasure to attend lectures from has four factors to longevity in the title. Nutrition (not just diet, nutrition is the end result), exercise, spirituality and meditation. His PhD was in longevity.
I asked you questions about the athletes that you didn't answer. Surely you should know the answer to those questions before you make comment.
Thing about being a polymath is you have more pieces of the puzzle than others. Doesn't mean I state the minutae everytime I post. The smart people ask questions rather than continuing with their usually flawed opinions. I don't mind mine being challenged, but give me some good logic and something resembling facts.
"significant portion of these populations have already had covid-19". This is an incredibly good question? I would be watching Israel with a keen interest. They used the Pfizer vaccine & the number of deaths recorded by COVID prior to vaccinations means that only about 20% of their population ever caught Covid pre vaccination. This means they have adopted the "herd immunity though vaccination" strategy similar to us. Unlike the UK/USA where 60+% of the population caught the virus prior to vaccinations. If Israel maintains low levels of hospitalizations & deaths with the delta variant then our "vaccinate the population then open back up strategy should be sound". If Israel see's a significantly relatively higher per capita number of hospitalizations/deaths relative to UK/USA then we are in trouble.
Sweden seems to be doing OK - despite the Media (& medical experts) heavily criticizing its no-lockdown/herd immunity strategy originally.
https://www.reuters.com/world/europe/sweden-ease-pandemic-curbs-despite…
I think we need to be clear, there is no immunity from this even with the "vaccine". All the vaccine does is reduce the impact of it on your body at best and reduce the hospitalization rate. Delta is a whole new ball game and some vaccines are not effective against it. Personally I doubt we will ever get on top of this, there are to many people in the world that need to be simultaneously vaccinated just to try and stop variants popping up. Vaccination rates in 3rd world countries are simply never going to get to the levels required so we are simply awaiting the next variant to arrive.
UK covid deaths typically lag case numbers by around 15 days - and they are running at around 10% of the rate from the first wave (1:500 vs 1:50 deaths to case ratio). So, 50,000 cases per day suggests 100 deaths per day in a couple of weeks. Around 60% of hospitalisations are unvaccinated (meaning 4 in 10 have had at least one dose).
"Pity the Australian government have played such a risky game by relying on isolation policies instead of expediting their vaccine rollout."
They were relying on the vaccine they produce within their own borders first and foremost, which makes sense given the crap that Europe started pulling to keep vaccines within the EU. But if you want to talk about pursuing isolationist policies instead of expediting a vaccine rollout, wait until you hear about...
someone posted this yesterday
shows ho at risk our housing market is
72% overvalued compared to rents
50% overvalued to incomes
https://www.economist.com/graphic-detail/global-house-prices
How can we keep this ponzi going...
Thegic, Ponzi or Economy.
Being only real economy in NZ and with full support / assurance to protect at any cost by prime minister Jacinda Arden, do not expect anything unless nature take it's own course.
Two more years to election so will be near election that empathy queen will come out with concern to get votes.
So chill as RBNZ and government have got the biggest opportunity and will not let it go. FHB and average KIWI can go f$#@ themselves as both Jacinda and Orr care a damn as they and their children are set for life.
Taiwan carries on regardless. Read NZ Herald & others that China, a la CCP,has threatened any intervention by Japan into a Chinese invasion of Taiwan will justify China using nuclear weapons against both. Blimey! That takes it up a notch or two.Human life or anything else is not all that important to them is it.
No the only thing important to them is obeisance at the altar of the CCP. Disagreement or worse, disobedience is intolerable and must be squashed. If China ever gets to the point where it believes it can actually take Taiwan without a consequence it cannot afford, we are all in trouble! And they are working to put truth to Mao's quote that "power comes from the barrel of a gun".
It's never that simple, but the only way to avoid a war is to prepare for one.
If China is to seriously test global reaction, beyond border skirmishes, then annexation of Mongolia fits that purpose. After all it was part of their territory up until the early 20th century. Stalin though moved into that void in the 1930s and therefore Russia would have to have a point of view about that. Still in 1979 China deliberately provoked conflict with Vietnam to illustrate that Russia would not be able to support them as they had done against the USA. Mongolia though, is made to order for China’s military, wide open land manoeuvres etc etc.
To some degree I agree, but it would also put a large and very capable military on Russia's borders, particularly across an area which would make it difficult for Russia to prepare an adequate response. So no, I don't think so. China will not see Mongolia as a threat in any way - too small, too small economy, virtually non-existent military (despite being active in international, UN sanctioned operations), and provides a buffer to keep Russia happy.
Who knows, perhaps, maybe! Russia stole a march with the annexation of Crimea, a similar proposition. Yes a neutral Mongolia is a buffer if it suits both China & Russia to maintain that status. The West would watch with interest surely if either moved to alter that balance. And if conflict should arise from that between the two? Well, that would be of even more interest wouldn’t it.
'In Canada, house prices are rising at their fastest pace on record. They were up +16% year on year in June,.."
If 16% is a concerned ....What about 30%......should note that when prices were rising by 10% as ....16%... Even 23% .......RBNZ and government were both watching and let it happen (Prime Minister and RBNZ governor were partying when FHB dreams were burning) and it was only when it touched 30%, they realised that is looking bad so need to tweak a little - apply bandaid and continue with the party.
This band aid would have been fine when price rose by 10% in matter of weeks but not when needed surgery - 30% rise and still debating what to do with hope that God will intervene but in democracy and with absolute power PM has more power.
DTI will help or not can be debated but what happened to it beside lip service as pressure was too much and had to potray that are concern, why silence on DTI (DTI is more to protect from over stretching) but silver bullet Interest Only loan that is like blood money financing speculative activity is not even talked about...WHY ?......Know the answer as will actually stop the ponzi.
Government and RBNZ should have been alarmed when it shot up by 16% instead of waiting on sideline and blaiminin everything on corona virus instead accepting their blunder and trying to rectify.
Even now is Wait and Watch .....once a while news will come that expecting house market to cool though data coming out suggest otherwise.
If both have to face public, will not be able to without ........ This is the direction, where both are leading this laid back country to .....
Wasn't money supply a historical measure of inflation? (so its one and the same?) If so, we've experienced exceptionally high inflation in recent decades, with a trend towards hyperinflation. But we only talk about 'consumer inflation' and in our age of buying cheap consumption products from China...what inflation is there to be measured....(but of course now its gone into asset prices as you can see the correlation in the money supply charts).
https://tradingeconomics.com/new-zealand/money-supply-m3
(put this chart to max time period)
When people tell me their house has gone up in 'value' I ask if it has grown any new rooms, or if the land area has grown.
So if the house stays the same but the amount of currency units changes, could be the currency that is changing, after all it now take more to buy exactly the same house.
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