Here's our summary of key economic events overnight that affect New Zealand with news that perhaps there is a 'long covid' problem for economies too.
But first, in the US jobless claims fell more than expected last week to +258,900 (actual) and a weekly drop of more than -40,000. That takes the total number of people on these programs to under 2.4 mln, the lowest since the start of the pandemic, and back closer to the 'normal' level before the coronavirus crisis.
There was a small uptick in layoffs in September from August, but the quarter end totals were actually the lowest quarter since 1997.
All eyes are now on tomorrow's US non-farm payrolls report. Analysts see a rise of +500,000, taking the total employed level to 147.4 mln and a gain of +7 mln in a year, but still -2.3 mln fewer than just before the onset of the current crisis.
In Congress, a deal to kick the can along to December relieves their debt ceiling problems for a few more weeks. This involves a US$480 bln increase to the limit.
China's FX reserves were pretty stable in September at just on US$3.2 tln even though that was fractionally lower than expected.
But Asia’s junk-bond market suffered through another wave of selling, which pushed prices of many Chinese developers’ bonds further into distressed territory.
A new study of long Covid found even people who were never sick enough to need hospitalisation are in danger of developing heart failure and deadly blood clots a year later.
And now economists are wondering whether there will be a long Covid effect in what they will see as nations struggle to regain what they lost. That is particularly the view from China.
For the first time since April, the cost of container shipping freight has fallen, but it is still double what it was back then. Prices from China are now about ten times the rate than prices to China. For bulk cargoes, the Baltic Dry Index continues to rise however and is now at a 13 year high.
And in Australia, the explosion of Delta cases in Victoria has risen to 1638 cases reported there yesterday in a "very serious jump". There are now 15,074 active cases in the state. In NSW there were another 587 new community cases reported yesterday with another 458 not assigned to known clusters. They now have 7,853 active locally acquired cases which is lower, but they had 8 deaths yesterday, now featuring younger patients. Queensland is now reporting zero new cases. The ACT has 41 new cases, including babies. Overall in Australia, more than 58% of eligible Aussies are fully vaccinated, plus 22% have now had one shot so far.
The UST 10yr yield opens today at just over 1.57% and up +4 bps from this time yesterday. The US 2-10 rate curve is steeper at +125 bps. Their 1-5 curve is also steeper at +92 bps, while their 3m-10 year curve is much steeper at +153 bps. The Australian Govt ten year benchmark rate is +1 bp firmer at 1.57%. The China Govt ten year bond remains unchanged at 2.89%. And the New Zealand Govt ten year is also little-changed at 2.00%.
Equity markets started up on Wall Street and have stayed up, with the S&P500 up +1.2% in early afternoon trade in the Thursday session and taking the weekly gain to +1.5% so far. Overnight, European markets rose +1.6% on average across the board. Yesterday, the very large Tokyo market rose +0.5% while the Hong Kong had a very strong day, gaining +3.1% to be now +0.7% ahead for the week. Shanghai will reopen later today and their catchup will be of interest. The ASX200 ended yesterday up +0.7% to just make back the prior day's drop. The NZX50 fell another -0.5% yesterday to be down -1.3% so far this week.
The price of gold will start today little-changed again, down -US$4 at US$1758/oz.
And oil prices are firmish today, up +US$1 to just under US$78/bbl in the US, while the international Brent price is just over US$81.50/bbl.
The Kiwi dollar opens today firmer at just on 69.3 USc. Against the Australian dollar we are down another -40 bps to 94.8 AUc. Against the euro we firm at 60 euro cents. That means our TWI-5 starts today down just on 73, and right in the middle of the 72-74 range of the past eleven months.
The bitcoin price is marginally lower than this time yesterday, down -1.1% to be now at US$54,162. Volatility in the past 24 hours has been moderate at just over +/-2.2%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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