Here is our summary of the main overnight economic events affecting New Zealand with news that central banks can keep the crisis relaunched and a view that this recovery is fragile, but the world’s largest economies are experiencing a downturn. V-shaped boom like we don’t have. seen for two generations.
American’s latest May updates Factory PMI shows them expanding faster, in fact at a high series. And their service sector grows faster than that. Both are in full recovery mode. With all key categories on the rise (new orders, employment, etc.), the main focus of these surveys is on price pressures. The survey noted: âThe sharp rise in costs has translated into the largest increase in production costs since data collection began in October 2009, with record inflation rates recorded for both goods and services. services as growing demand has boosted the pricing power of firms. The inflation genie may be out of the bottle.
But some Fed officials are now Warning that a milder period may be ahead – especially for employment.
Consumers can shave and buy, and factories roar – but there has been a surprise in their residential real estate market. April’s sales volumes are expected to increase + 2%, but data shows they are actually down -2.7%. April was expected to rebound from the -3.7% decline in March, but it compounded the drop from the previous month. That is to say six consecutive months of declining sales since October 2020. It’s as if Americans are avoiding their real estate market as mortgage rates start to rise – even if the hikes are quite minor. âSupplyâ has been the excuse for a while now and maybe it is. Median prices are + 19% higher than a year ago. Further, mega business owners take over many homes before the public can see them.
Retail sales in Canada in March were stronger, up at an annual rate of + 3.6% while an increase of + 2.3% was expected. (Year-over-year gains are of course affected by the pandemic.) As of March 2019, they are up 8.6%.
In China, their tax levies increased sharply in 2021, mainly distributed between Beijing and local governments. Income taxes are up an impressive 27%, and their GST is up + 24% year over year. This is clear proof that the Chinese economy is on a good recovery.
In Japan, there are also proof that consumers feel more optimistic than they have been for a long time.
In Europe, we may also be seeing a recovery in their global economy. the Can flash PMIs shows that demand has grown at its fastest rate in 15 years. Industry and services are benefiting, with strong increases in new orders, and job growth appears to follow. They also recorded their largest increase in producer price inflation on record. the German ascension is at the heart of these gains, although other countries are now showing faster expansions. the UK and France also grow faster.
All this prospect positivity is improve consumer sentiment – but they have not yet reached the stage where optimists outnumber pessimists. Clear skepticism still pervades European consumers.
Overall, iron-ore and copper the prices seem to have exceeded. And shipping price show the same. After hitting an index level of 3200 and its highest in over ten years, it has returned to over 2800.
The latest global compilation of COVID-19 data is here. The global tally continues to rise, now 165,694,000 people have been infected at any given time, up from + 644,000 in one day, or +3.3 million in the past week and still largely due to increases in India and Brazil. And a black fungus epidemic is building up on misery in India. The number of reported deaths worldwide now exceeds 3,434,000 and over 14,000 in a day and + 85,000 in a week. Vaccinations worldwide continue to increase but at a slower rate, now reaching 1.59 billion with only +180 million doses administered last week. In the United States, nearly half of its population (48.8%) have received at least one dose as they struggle to keep up with the pace of vaccinations. Almost 40% of Americans have been fully immunized (128.4 million people). The number of active cases there has fallen to 5,874,000 with fewer new infections than recent recoveries and steady progress.
Wall Street was little changed, with the S&P up + 0.1% in afternoon trading. For the week, it is -0.3% lower. Overnight, European markets all rose by around + 0.5% – except London which recorded a slight loss. Yesterday, Tokyo ended its session up + 0.8% on the day giving it a similar weekly gain. Hong Kong was flat yesterday. Shanghai closed down -0.6% and ended the week it started. The ASX200 finished with just + 0.2% more and the same net gain for the week. The NZX50 Capital index which also ended up + 0.2% on the day with the weekly increase was + 0.7%.
The UST 10 year yield starts today unchanged at 1.63% from this time yesterday and unchanged in one week. The US 2-10 yield curve is at +147 bps and a little flatter. Their 1-5 curve is unchanged at +78 bp, while their 3m-10 year curve is also unchanged at +163 bp. The 30-day UST invoice has returned to 0%. The Australian government’s ten-year benchmark rate was down -1bp to 1.68%. The 10-year Chinese government bond is down -4bp to 3.09% and is creating an unusual flattening trend. And the ten-year New Zealand government is also down -4bp to 1.84%, making it a -7bp drop in one week.
The price of gold starts today + US $ 6 compared to this hour yesterday at US $ 1,880 / oz. This is an increase of + US $ 38 in one week.
Oil prices today start to recover all of yesterday’s US $ 1.50 drop and now just over US $ 63.50 / bbl in the US, while the international Brent price is just at US $ 66.50 / bbl. But that’s a drop of -2 US $ over the week.
The Kiwi dollar opened today at 71.7 USc and lower since yesterday at this time. Against the Aussie we are slightly firmer at 92.7 AUc. Against the euro, we are unchanged at 58.9 euro cents. This means that our TWI-5 today still starts at 73.2 and this is -84 bps lower than at that time last week, a devaluation of -1.1%.
The price of bitcoin is now at US $ 35,686 and -10.3% lower than yesterday. The volatility over the last 24 hours is however still extreme at +/- 10.8%. Over the past week, bitcoin has fallen by -26% or -US $ 14,372. Janet Yellen’s US Treasury Department ad that it is taking action to crack down on cryptocurrency markets and transactions, and said it will require any transfers of $ 10,000 or more to be reported to the U.S. IRS. This will likely lead to a further leak of international crypto holders from US crypto exchanges. The bitcoin rate is represented in the exchange rate defined below.
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