No US election result yet; jobs gains peter out; US trade deficit worse; air cargo volumes rise modestly; China services PMI expands; Aussie retail strong; UST 10y at 0.78%; oil up and gold down; NZ$1 = 66.9 USc; TWI-5 = 70.1

Here's our summary of key economic events overnight that affect New Zealand, with news that while all eyes are focused on the US election, their pandemic is eating away at them more aggressively now.

But first, despite aggressive claims, there is still no election result in the US even though the incumbent seems to be in the better position. And again, this is despite the challenger winning more votes and by an increased margin. 98 electoral college 'votes' are yet to be decided.

Markets have reacted to the non-result in a schizophrenic way. Equity markets are up, but bond markets are signaling longer term fears.

Meanwhile, there is a US non-farm payrolls report out this weekend and a +600,000 jobs recovery is expected for October, which will still leave them with more than -10 mln jobs lost since February. Today we got the ADP precursor report and it anticipated a +650,000 gain after a +753,000 gain in September. But it disappointed by recording only +365,000 more jobs in the rebound from the huge losses earlier in the year. It is a disappointing signal.

One election consequence is that there is now much less chance those who have become jobless will find any more public financial support. Inequality and poverty is expected to rise sharply.

Although we have reported the US merchandise trade deficit for September earlier, today the full result including services is out, and for the year to September and including their services surplus, they have an overall deficit of -US$615 bln. While the goods deficit is worse, the American services surplus is shrinking faster, down to +$16.8 bln in September and down from +$24.1 in that month in 2019. Services exports have fallen much faster than services imports. American competitiveness is worsening across the board as they turn insular.

The widely-watched ISM services PMI slipped in October from its moderate expansion in September. The internationally benchmarked Markit one recorded a similar moderate expansion.

International air cargo volumes improved in September from August, but are still -10% lower than the same month in 2019. In the Asia/Pacific region it is a steeper -14% year-on-year decline. But there is no material improvement being recorded in passenger travel. Most airlines are in a critical fight for survival and the North American and European virus resurgence just makes things worse.

China's private survey of their services companies is reporting a stronger expanding sector, and much above the levels that they have had for the past ten years.

In Australia, they reported some good retail sales both for September, and the year ended September. And this was despite some tough results out of Victoria (-10%) which was in lockdown for much of the month. Overall, retail sales were up +6.6% in the month compared to the same month in 2019, bolstered by impressive gains in Queensland (+14%), Western Australia (+16%) and NSW (+10%).

After yesterday's RBA rate cut, two banks there, CBA and Westpac, cut fixed mortgage rates to below 2% (although hefty fees still apply and raise the effective rate above equivalent NZ fixed rates).

The latest global compilation of COVID-19 data is here. The global tally is 47,656,000 and a +325,000 rise overnight. It is still grim in Russia and Western Europe with serious stress on their hospital systems (and especially in Belgium). Global deaths reported now exceed 1,218,000.

The largest number of reported cases globally are still in the US, which rose a very worrying +125,000 since yesterday to 9,704,000 as the momentum in their surge rises and the US returns as the epicenter of the virus. The pandemic is now particularly sever in Midwest states. The number of active cases is higher at 3,227,000 so many more new cases more than recoveries. Their death total now exceeds 239,000 and up by almost +2000 in one day.

In Australia, they are not getting any resurgence. There have now been 27,622 COVID-19 cases reported, and that is just +12 more cases than we reported yesterday, mostly in NSW. Reported deaths are unchanged at 907.

The US bond markets are flashing fear signals. The UST 10yr yield has crashed -11 bps today to just 0.78% and that is a sudden reversal of its steady rise since mid-July. Their 2-10 rate curve has flattened sharply back to +63 bps in an unusually big move, their 1-5 curve is also much flatter at under +20 bps, while with their 3m-10 year curve is significantly flatter at +69 bps. The Australian Govt 10 year yield will start today down -7 bps at 0.77%. The China Govt 10 year yield is little-changed at 3.20%. But the New Zealand Govt 10 year yield is up +4 bps at 0.58% and ignoring the US bond market's risk move.

The price of gold has fallen overnight, down -US$13 at US$1894/oz.

Oil prices have firmed again and by about +US$1.50 and are now at just under US$39/bbl in the US, while the international price is now just on US$41/bbl.

And the Kiwi dollar is slightly softer this morning from this time yesterday at 66.9 USc but has held on to most of yesterday's rise. Against the Australian dollar we are a little softer too at 93.2 AUc. Against the euro we little-changed at 57.1 euro cents. That means our TWI-5 has dipped to 70.1. It is well with the narrow range it has been since June.

The bitcoin price starts today at US$14,002 and+3.6% higher than where we left it yesterday. It was last at this level almost three years ago. The bitcoin rate is charted in the exchange rate set below.

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