Here's our summary of key economic events overnight that affect New Zealand with news the global bull market defies the 'peaking' talk.
The closely-watched US non-farm payrolls report topped estimates at +943,000 added jobs in July, its largest monthly rise since . Their jobless rate fell to 5.4%. This is a good result, but it has to be noted that the data is from the first half of July and before the delta virus started biting. There are now 147 mln people employed in their workforce, still -5.7 mln less than before the pandemic started. Still, the pace of hiring has been picking up and wages rose again (up +4.0% and more than expected). The results for both May and June were revised up. This is a very solid result for them with only the hospitality sector still struggling to get back anywhere near its pre-pandemic employment levels. Higher paid industries like construction, manufacturing, business, education, and government can all now see a recovery in job levels to February 2020 levels on the horizon - but hospitality is still -1.7 mln behind.
Wall Street has greeted the data with little fanfare, but the US dollar has risen sharply and the bond market has bid yields higher as it senses the US Fed is closer to its next tapering moves.
Also revised higher has been the levels of US consumer borrowing, which grew +4.1% in June from a year ago, and is up +5.3% from June 2019. But the rate of growth in June activity from May rose to an annualised +10.4% pace. The +US$39.7 bln monthly increase is the largest they have ever recorded.
Canada also released labour market data overnight for July and that came in underwhelming. Their payrolls grew just +94,000 when a +178,000 gain was expected and June delivered +231,000 more jobs. So a definite loss of momentum there. Their jobless rate is stuck at 7.5%.
It is probably also worth noting again the loss of momentum in Canada's two key housing markets. In Toronto sales levels and average prices slipped again in July. In Vancouver markets there is a noted 'moderation' going on there.
In China, anxiety is rising as the delta variant of the pandemic is now a risk in half the country's provinces. It is not clear that the tough measures in some are actually stemming its spread.
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Global shipping container rates rose again last week, even if only marginally. But it has raised rates by a massive +370% in a year. Some routes like Los Angeles to Shanghai are still rising sharply, up +5% last week alone, but the route the other way actually fell -3% last week. Industry insiders however think the rise will keep coming, even if at a slightly slower rate of increase. So no decreases in sight yet.
Prices for tin, aluminium and copper are all high and rising, although copper's recent move up could be more about an impending strike at the world's largest mine in Chile. Despite that, the number of new projects attracting investment is impressive. China is taking huge positions in Africa and some of those will come on stream fairly soon. However, yesterday the iron ore price fell again, taking the four-week drop to -24%. And this is despite metallurgical coal rising +22% over the same period, a key commodity buffeted by varying politics in both China and elsewhere. China is acting deliberately to lower the cost of many raw materials.
But the Baltic Dry Index is back up near its recent highs.
And global equity markets are remaining upbeat. Reported results for Q2 have been exceptionally strong so far. At nearly 90%, the proportion of firms that have reported earnings above analysts’ consensus forecasts has been one of the highest since just after the GFC. Future earnings expectations are high too. Analysts project still expect earnings of companies in the S&P 500 to exceed their 2019 levels by around 30% this year and to be around 55% higher than before the pandemic by the end of 2023. Expectations like this will keep valuations up even in the face of rising interest rates.
In Australia, their central bank has cut back its year-on-year growth forecasts. It was expecting 4.75% for 2021 but now expects 4.0%. It did upgrade its 2023 forecast slightly however.
There were 291 new community cases in NSW yesterday with another 161 not assigned to known clusters, so still going backwards there. Victoria is reporting six new cases. Queensland is reporting 10 new cases. Overall in Australia, nearly 21% of Aussies are fully vaccinated, 42% have now had at least one shot. Aussie corporates are now starting to insist on 'no jab, no job' policies.
On Wall Street, the S&P500 is firmer today by only +0.2% but that is a record high. It is heading for a weekly rise of +0.7%. Overnight, European markets were up another +0.3% on average, led by Paris, trailed by London. Over the past week Paris has gained +2.4%. Yesterday the very large Tokyo market rose +0.3% to cap a weekly gain of +1.2%, But Hong Kong fell -0.1% to book a weekly gain of +0.5%. Shanghai fell -0.2% on the day by ended the week +2.1% higher. The ASX200 rose +0.4% yesterday taking the week's rise to +1.7%. The NZX50 Capital Index fended yesterday little-changed (+0.1%) for a weekly rise of +1.4%.
The UST 10yr yield starts today at 1.30% and up another +8 bps overnight. For the week it is up +7 bps. The US 2-10 rate curve is to now at just on +107 bps and quite a bit steeper. Their 1-5 curve is steeper at +71 bps, and their 3m-10 year curve is also sharply steeper at +124 bps. The Australian Govt ten year benchmark rate starts today at 1.23% and up another +6 bps. The China Govt ten year bond is at 2.83% and down -1 bp. The New Zealand Govt ten year is now at 1.63% and up +3 bps in its push higher. A week ago it was 1.53%.
The price of gold is taking a bit of a hit today, down -US$41 to US$1764/oz behaving like some other non-precious metals.
Oil prices are lower by -US$1 from this time yesterday so in the US they are under US$68/bbl, while the international Brent price is just on US$70.50/bbl.
The Kiwi dollar opens today just on 70.1 USc and down a full -½c as the greenback moves higher. Against the Australian dollar we are little-changed at 95.4 AUc. Against the euro we are also unchanged at 59.6 euro cents. That means our TWI-5 starts today at 73.2 and marginally lower. In the past week we are -35 bps lower. But these shifts are minor. We have been in a narrow range of between 72 and 74 for our TWI for ten months now.
The bitcoin price is now at US$42,786 and up +6.2% from this time yesterday and up +3.9% from this time last week. Volatility in the past 24 hours has been very high at +/- 4.3%. Volatility over the past week has been off the scale at +/- 7.5%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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13 Comments
https://www.newshub.co.nz/home/politics/2021/08/jacinda-ardern-accused-…
" Choosing not to perpetuate the notion it's ok to do politics in this way - to treat it as a game in saying whatever's required in competing for power and then continuing to perpetuate existing colonial ideologies that shape our policies when they get it.
"How about we introduce a new way of practising politics - to stay true to what you say. As Jacinda herself says to treat the cause (of all our societal ills), not the symptom?"
When asked if Ardern still stands by the comments, a spokesperson for the Prime Minister said the post "was made when she was in opposition"
The above sums up Jacinda Arden's personality / greed to be in power.
Vote Bank Politics should end.
Your comment is neither unfair nor astray. These were her words and to puff out an excuse of being in opposition then, is weak going on facile. The trouble though is that this identity is hardly alone. Our parliament is overrun with career politicians, academics with little worldly experience but plenty of self interest. I made a mistake when I voted for MMP. For all its faults at least the previous system had MPs harnessed and accountable to their electorates, one on one. MMP is simply not working. For example in the last election, the electorate used MMP tactically, to defeat the very nature of MMP & return a single party majority.
Nope. What isn't happening is electorate maturity-of-thinking. This is fuelled, in turn, by the MSM merely peddling economics, and economics (the vast majority of them, anyway; bar Nicolai Georgescu-Roegen, Herman Daly, Steve Keen, Diane Coyle by the sound of it, Kate Raworth and?) peddling a 200-year-old bible.
No politician can push any move beyond what the electorate (a) understand and (b) will tolerate. Our present PM has been pretty honest, albeit somewhat media-controlling. The previous one was total snake-oil. The one before that, a believer-type. But at the bottom line, if society has gotten its head around something, politics can facilitate but only just lead, and no more. The problem now, is a great need to move faster, further, that society is aware. MMP can be faster than 51% societal awareness, it can also be slower. The difference is in who is kingmaker, as per; Jeanette Fitzsimmons or Winston Peters.
One thing is for sure; those arguing for status-quo-ness or slowth of movement, are 'wrong', and getting wronger, faster. Hence National. Doesn't mean Labor are going in the right direction fast enough, but they're better than going 'wrong'. Nobody is pointing out where we really have to go, MSM included.
Your comment is neither unfair nor astray.
Taima has pretty much quoted a report. It is not his or her comments.
You are correct in that most polliies are career cowards and will say whatever to garner popularity. The problem is that Ardern has positioned herself as being deeply principled and has won popularity based on her principles and "transformation." The govt and Ardern are behaving in a manner that deserves strong criticism, particularly from those who defend her actions. Personally, I'm not a fan of Seymour, buy he is 100% correct about this. What good is a leader who speaks with a forked tongue and will not accept accountability?
But isn’t that the whole point? Politicians acting far more principled in opposition than they do in power. Left or Right, they are all pretty similar. Remember perk buster Rodney Hide who found the trough a little too tempting while in power, or David Garret’s do as I say, not as I do? The best politicians are those not in power.
Your point is important. I have little faith in the ability of Seymour beyond yelling from the sidelines. It doesn't detract from the premise that Ardern is duplicitous and is not what she professes to be. That doesn't mean she is lacking in empathy and all the traits that her brand has been built on. I would not include 'trustworthy' in her brand DNA. It's obvious that her main motivation is to be popular as opposed to authentic.
At the end of the day, she is giving us what most New Zealanders want.
Right. But she should be honest about it. Perhaps she thinks that most Kiwis want to be this kind of 'socialist' and caring / kind on the surface, but at the end of the day, everyone is out for their own interests. I think that's not a bad summation of where she's at and how many NZers behave.
Earlier Politicians could get away with lies and manipulation but not today with internet and social media, they stand exposed.
Empathy Queen stands exposed as everything they do is to garner power and may be even this empathy is a farce and nothing more than a photo opportunity.
Why was she reluctant to say that housing crisis is a human crisis, only because conscious is not clear and know that are guilty .
Best is that facing criticism from everyone and are also aware but still are hell bent to support the ponzi earlier by action and now by their inaction.
Wonder what is thier compulsion for ignoring human crisis.
Well I was fooled by the quotation marks undoubtedly. Yes principles. In this regard I prefer the candidness of Groucho Marx, something like “you will enjoy doing business with me because I have principles. And should you not like these, well then, I have others” That was of course from a comedy long ago. Not so funny today though, when it is a common modus operandi to be found amongst our politicians
Any positive USA job figures are BS, they just had to extend rent moratorium by another 60 days to prevent thousands from being thrown into the street. Now Delta will kick in, its going to be no fun over there. We have to keep Delta out of NZ or the party here is over.
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