Markets cheer Yellen appointment; US retail sags; China bond issues worsen; India hits Chinese digital again; Victoria makes huge stimulus bet; UST 10y at 0.89%; oil firmer but gold drops again; NZ$1 = 69.7 USc; TWI-5 = 72.4

Here's our summary of key economic events overnight that affect New Zealand, with news investors are looking well past the current troubles, trusting the 'new direction' will be better than the 'old direction'.

Everyone from Wall Street to the progressive left of the Democrats is applauding Joe Biden's reported choice of Janet Yellen as Treasury Secretary. There has been a noticeable impact in most financial markets.

But ahead of their important Thanksgiving retail season, the American retail impulse is flat lining. Redbook data shows last week was a tad softer than the same week a month ago.

And that is mirrored by the US Conference Board consumer sentiment survey which dipped in its early November reading that straddled the election and its chaotic aftermath. Consumers are less optimistic about their short-term prospects and that doesn't bode that well for holiday retail levels. And this confidence fall came as American house prices rose at a faster rate.

In China, their bond debt crisis is being described as "historic". The spotlight is on more SOEs at risk. And worse, accusations are flying that some of these companies have deliberately breached their bond covenants. And in the even longer term, it could get worse further as Beijing may not be able to resist a wholesale bailout, something that would set back its plans to regularise this end of their financial markets maybe a decade or more. More here.

While shipping capacity is tight and freight rates are rising ahead of deliveries for end of year holiday retailing, more Chinese companies are complaining of the impact of the higher yuan - and noticing a sharp falloff in orders, especially from European clients. Not only is demand lower, some are shifting orders to other Asian countries.

In South Korea, consumer confidence is rising - or at least was in October before the November surge in the coronavirus and the impending restrictions.

In India, they are making a second strike on Chinese interests, clamping down for a second time on Chinese digital offerings in the country.

In Australia, their October merchandise trade surplus rose to +AU$4.8 bln to AU$30.5 bln for the month, up from +AU$4.0 bln in October 2019. But October 2020 exports declined -AU$0.9 bln (or -3%) on October 2019, driven by gas, down -AU$1.7 bln (-43%), coal down -AU$1.2 bln (-27%) and petroleum down -AU$0.6 bln (-52%). A big increase in iron ore exports saved the day, rising +AU$3.6 bln or +37% year on year. Meanwhile, their October imports fell -10% or down by just under -AU$3.0 bln to AU$25.7 bln. Some of this may come to an abrupt end if China doesn't relent on much of its trade retaliation.

And in Victoria, their State government is cutting stamp duty and will borrow and spend close to AU$50 bln on other concessions, subsidies and projects in a bid to get hundreds of thousands of people back to work and breathe new life into a state economy battered and bruised by the pandemic.

In New York, the S&P500 opened today with another good gain and up +1.6% so far. Overnight in Europe, they posted similar rises of about +1.3%. Yesterday, Tokyo was jumped +2.5%, Hong Kong was up a lesser +0.4%, but Shanghai fell back by -0.3%. In the end, the ASX200 rose +1.3% and the NZX50 rose +0.4%.

The latest global compilation of COVID-19 data is here. The global tally is 59,401,000 and a +581,000 rise overnight. It is still very grim in Russia, the UK, and Italy with great stress on their hospital systems. It does seem to be easing in Belgium, France and Spain. The accelerating rise in Sweden has them worried too although the recent surge in deaths seems to be abating there. And although tiny by comparison with Europeans, both Japan and South Korea are on edge as their clusters grow again. Global deaths reported now exceed 1,401,000 and up +10,000 from yesterday.

The largest number of reported cases globally are still in the US, which rose +196,000 overnight to 12,802,000 and at their higher pace of infection. The US remains the global epicenter of the virus and the consequence of a very bad public health response. The number of active cases is surging at 4,980,000 and that level is up +91,000 in one day, so many more new cases more than recoveries. Hospitalisations are up very sharply, and everywhere now. Their death total now exceeds 264,000. The US now has a COVID death rate that now matches Brazil of 796/mln.

In Australia, they are not getting any major resurgence. There have now been 27,848 COVID-19 cases reported, and that is +13 more cases overnight. Now 96 of their cases are 'active' (+4). Reported deaths remain unchanged at 907.

The UST 10yr yield will start today up +3 bps at 0.89%. Their 2-10 rate curve is steeper at +72 bps, their 1-5 curve is also steeper at +30 bps, with their 3m-10 year curve is steeper too at +82 bps. The Australian Govt 10 year yield is up +5 bps at 0.93%. The China Govt 10 year yield is up +2 bps and now at 3.33%, while the New Zealand Govt 10 year yield is up +10 bps at 0.91%.

The price of gold is has fallen again today, down another -US$33 to US$1804/oz.

Oil prices are higher again today and strongly, up by another +US$2 or so to just on US$45/bbl in the US, while the international price is now just on US$48/bbl.

And the Kiwi dollar has risen firmly to 69.7 USc this morning and a gain since this time yesterday of more than +½c. Against the Australian dollar we are holding at 94.9 AUc. Against the euro we are firmer at 58.7 euro cents. That means our TWI-5 will start today up at 72.4.

The bitcoin price has risen again overnight, now at US$19,255 and a strong +5.0% rise. It is now almost touching the record US$19,343 price it hit on December 16, 2017. 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 ».