US jobs data soft, but Amazon hiring fast; global PMIs expanding, but not in EMs; Aussie grows faster than expected; UST 10yr 1.31%, oil and gold soft; NZ$1 = 70.7 USc; TWI-5 = 73.7

Here's our summary of key economic events overnight that affect New Zealand with news that while emerging economies are doing it tough, the main first-world ones are still expanding at a healthy clip.

We get the US non farms payroll report for August this weekend (NZT) and today's pre-cursor ADP Employment Report disappointed. The delta surge is taking the top off their labour market expansion. Analysts expect the official non-farm payrolls report to deliver +750,000 extra jobs. But they had expected the ADP report to deliver +613,000 - but it only delivered +374,000. So those non-farm payrolls estimates are very likely to be downgraded.

However, we should also note that online retail behemoth Amazon said it is currently trying to hire 40,000 corporate and tech roles across the US as well as tens of thousands of hourly positions. It claims to be the US's largest 'job creator'. Plus it is on a hiring spree internationally as well, another 15,000 plus.

There was also some final PMI data released for August. The ISM report came in with a good expansion and marginally better than expected. The internationally benchmarked Markit one was just a little bit weaker in its final version. But both record healthy expansions. Both recorded strong new order inflows. And both noted severe input price inflation.

Canada also turned in a good PMI result. As did Japan. And the EU, even if it was at a six month low.

But the private Caixin PMI survey in China has reported a contracting factory sector. Yesterday, the official version suggested it has stalled. The differences between the two surveys are minor and both record a downward trend.

Globally, factory PMIs eased to a six month low, although there is still a moderate-to-good expansion underway overall. But things are getting quite tough in emerging economies from Vietnam to Russia to China.

German retail sales fell in July from June and were barely above year-ago levels.

Much to everyone's surprise, the Australian Q2 GDP recorded better-than-expected economic activity. (Some analysts had earlier in August even feared a retreat.) This has powered wholesale rates and exchange rates up, and the Kiwi is along for the ride. By any measure, this is a very good result. The key surprise – a curveball from “other” inventories – accounted for 70% of growth in the Q2 period. For the full year to June 2021, nominal GDP now exceeds AU$2.067 tln, up +4.2% above the equivalent June year in 2020, and +5.9% higher than the pre-pandemic June year to 2019. New Zealand releases its Q2 GDP results on September 16, 2021.

But the August PMI for Australia is one of rapid deceleration. Its factory sector is barely expanding now, mainly because of sharp lockdown output falls. Of course, it is unlikely to be any different in New Zealand.

And staying in Australia, there were another 1116 new community cases in NSW yesterday with another 967 not assigned to known clusters, so they remain completely out of control. They now have 18,960 locally acquired cases. Victoria reported another 120 new cases yesterday, so it is bad there too. Queensland is now reporting one new case. The ACT has 23 new cases. Overall in Australia, more than 35% of eligible Aussies are fully vaccinated, plus 24% have now had one shot so far.

Wall Street has started its Wednesday session with the S&P500 up +0.3% in afternoon trade. Overnight, European markets were very mixed and in a wide range. Frankfurt dipped -0.1% while Paris rose a sharp +1.2%. All other major markets also rose. Yesterday, Tokyo closed up another +1.3%, Hong Kong closed up +0.6%. Shanghai closed up +0.7%. The ASX200 ended its session down -0.1% but the NZX50 ended up +0.2%.

The UST 10yr yield opens today at just under 1.31% which is unchanged from this time yesterday. The US 2-10 rate curve is now at +110 bps and unchanged. Their 1-5 curve is also unchanged at +71 bps, and their 3m-10 year curve is still at +127 bps. The Australian Govt ten year benchmark rate starts today at 1.22% and up +2 bps. The China Govt ten year bond is at 2.84% and down -3 bps. And the New Zealand Govt ten year is now at 1.82% which is up +9 bps from this time yesterday.

The price of gold is down a minor -US$2 from this time yesterday, now at US$1813/oz.

Oil prices have fallen back by another -50 USc so in the US they are now just over US$68/bbl, while the international Brent price is just over US$71/bbl.

The Kiwi dollar opens today firmer at just on 70.7 USc. Against the Australian dollar we are softer at 95.9 AUc. Against the euro we are unchanged at 59.7 euro cents. That means our TWI-5 starts today also unchanged at 73.7 and still near the top of the 72-74 range of the past ten months.

The bitcoin price has risen back +3.6% from this time yesterday to US$48,762. Volatility in the past 24 hours has been moderate at just over +/- 2.5%. In the EU, the US SEC boss has warned that the US$2.1 tln crypto sector is just too big to exist outside of the ‘public policy framework’.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».