Here's our summary of key economic events overnight that affect New Zealand, with news China's Spring Festival migrations will be very muted this year.
But first in the US, they reported 813,000 actual new jobless claims for last week, higher and above what was expected. The prior week's tally was revised up too. However, on a seasonally adjusted basis they can report a small decline. There are now 5.0 mln people on these benefits, a drop of -167,000 as qualifications expire for more than the number getting support.
The US President and the Chinese Party boss had their first official phone call. Nothing eventuated of course, but at least they have now talked.
China is now on its week-long Spring Festival holiday. Its the Year of the Ox. Markets are closed until Thursday next week, although the break in Hong Kong will be shorter. Huge numbers of people will be traveling, most from cities to their home regions. This is despite official urging to stay put this year because of the COVID spreading risks. But as this is the only holiday break migrant workers get in a year (and the only chance for many to see their children who are being looked after by grandparents), the pressure to travel is very strong. But as far as international travel this year is concerned, it will be dead from China.
In Europe, the Brexit consequences are starting to hit London as a financial center. Firms are leaving or shifting trading to either Frankfurt, Amsterdam or even New York. The amounts of business involved is huge. And there are signs the EU is about to cut London even further. Britain has even larger issues with its across-channel goods trade as well.
In Australia, consumer inflation expectations jumped to 3.7% in February and are now far above actual inflation at 0.9% pa. The RBA's survey of economists see it rising by 1.6%.
On Wall Street the S&P500 is little changed in early afternoon trade, down just -0.2% as this market meanders at its all-time top for a third straight day. Overnight European markets were very mixed with Frankfurt up +0.8%, Paris unchanged, and the others in between. Yesterday Shanghai was closed and will be for the next week for its New Year holiday, Hong Kong was up +0.5% but it too is taking a few days holiday. The Tokyo market was up +0.2% yesterday. The ASX200 fell -0.1% while the NZX50 Capital Index fell -0.5%.
The latest global compilation of COVID-19 data is here. The global tally is still rising, now at 107,482,000 and up +434,000 in one day. The pandemic seems to be easing in many places now. Global deaths reported now exceed 2,358,000 and +12,000 since yesterday.
More countries (84) have started their vaccination programs. About 151.7 mln doses have been given so far (+15.6 mln more overnight), and there is clear evidence the vaccines are working to reduce or even eliminate deaths for those who have taken it.
The largest number of reported cases globally are still in the US, which rose +96,000 overnight for their tally to reach 27,907,000. The US remains the global epicentre of the virus although there is some easing. The number of active cases fell sharply overnight and is now just on 9,593,000 and -94,000 less in one day, so many more recoveries than new infections. Their death total is up however as 483,000 (+3000) as the vaccination program kicks in. The US now has a COVID death rate of 1455/mln, and that compares to the disastrous UK level (1686) where deaths are also still rising (115,000 but no update overnight).
In Australia, their community control is impressive. Their all-time cases reported is now 28,879 and only +8 more cases overnight, two more in the community and the rest are new arrivals and all in managed isolation. 49 of these cases are 'active' (+4). Reported deaths are unchanged at 909.
The UST 10yr yield is up +2 bps from yesterday at just on 1.16%. Their 2-10 rate curve is steeper at 105 bps, their 1-5 curve is unchanged at +39 bps, while their 3m-10 year curve is also steeper at +113 bps. The Australian Govt 10 year yield is down -2 bps at 1.20%. The China Govt 10 year yield is unchanged at 3.26%, while the New Zealand Govt 10 year yield is sharply lower by -9 bps at 1.31% having got way ahead of itself earlier in the week.
The price of gold will start today down -US$12 at US$1828/oz.
Oil prices are little-changed for a second day in a row at US$58/bbl in the US, while the international price is at US$61/bbl.
And the Kiwi dollar will open today marginally firmer at 72.3 USc. And against the Australian dollar we are marginally softer at 93.3 AUc. Against the euro we are up slightly to at 59.7 euro cents. That means our TWI-5 is a little firmer at 73.7.
The bitcoin price has risen strongly overnight and is now at US$47,658 and up by +6.4% in a day. At one point it hit a new all-time high of US$48,317. Volatility remains high at +/- 4.8%. 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 ».
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22 Comments
Murray86....No it won't. The USA will blindly support Israel for eternity regardless of state sponsored racism, segregation and imprisonment of children without trial etc, etc. We saw with Obama how futile it is to try to be even somewhat balanced towards Israel. I doubt Biden will even move the US embassy back to Tel Aviv. The Jewish lobby and the threat of being labelled anti-semitic (and being cancelled) lays heavy over peoples views and even Govt positions. Our own NZ Govt is one of many countries that has been beaten into silence on Israel in general. Let's spring to action on the Saudi blockade but don't you dare mention the Israeli blockade that has been going on for decades.
It is indeed criminal the way Israel's continuing oppression of the Palestinians is ignored. Any scrutiny is labelled as "anti-Semitic" and immediately swept under the carpet. The world in general is far too forgiving of Israeli transgressions and the US in particular far too supportive.
GV27
Can you please explain for me:
. . . . holding two "based on their merits". Clearly you have reasons for doing so as you are holding "BTT for some inexplicable reason".
Having invested widely for near on 50 years, I have always invested on a sound rationale based on the factors likely to influence that investment.
It is just that other than a gamble or herd mentality, I really can't see the factors influencing cryptocurrencies - and especially one over the other other which you seem to appreciate. Perhaps you can illustrate your rationale with examples of $VET/$NANO compared to BTT.
I put this as a serious question for me.
So NANO/VET both have points of difference (Nano transactions are feeless and instant at an individual-to-individual which is unusual at the moment in Crypto and VET is underpinned by Vechain which has some big-name supply-chain buy-in). Nano also has no mining element to it, which means the energy consumed is a fraction of, say, BTC, which is getting some commentary at the moment. There's so many altcoins out there I don't have time to look at them all but I could vaguely understand why these ones have some purpose and what makes them interesting, so I feel OK in put some money down on them.
BTT was more a 'I sorted the list from lowest to highest and BTT was the cheapest thing and I put beer money towards it and ended up with 100K of them' to see if it would be pumped by people looking for a cheap win over the volume I held, but I've decided to swap it for Nano. That one was pure speculation on where the current hype might get directed.
Nano pumping this morning as energy concerns about BTC start to get some attention.
Alt coins have been roaring upwards this year, all the signs of a mania approaching a major correction.
There's a lot of worthless $ALTS but solutions that are solving efficiency are still a good long term bet especially second and third layer solutions. Efficiencies I'm focused on are:
* Energy consumption (PoS solutions are doing well here)
* Throughput/TPS (No solution that can't do more than Visa at 8000TPS will ultimately succeed)
* Transaction fees (The pile on Etherium has shown gas fees are unsustainable in their current state)
* Interoperability (How ubiquitous can it be)
* Network ability (Sharding, Validator count, Resilience, Persistence - much more variables but good indicators)
Using the rise of the web as a blueprint, it has a history of second and third generation solutions becoming King. Think MySpace -> Bebo -> Facebook as just one example.
I think you mean king at the time. Facebook will be replaced/overcome as well.
Your example essentially occurred over a period of 10 years. Cryptos appear to be moving faster.
I think this is one of the issues I have with crypto. Without Govt backing/regulation it simply is not be stable enough for widespread adoption as a currency. As an example it should be perfect to eliminate shares. But not for transactional everyday currency.
The timelines for crypto and the web are almost identical. HTTP was invented in 1989 by Tim Berners-Lee, while Blockchain was invented in 2008. That means that we're currently in the equivalent year 2002 tracking the technologies together. Blockchain in 2021 feels a lot like the web did in 2002, from the promise to the hype.
Government regulation is definitely an incoming issue, but there's good indications of how it might go right now with Nigeria. Then you've got countries like Iran and Venezuela who are actively engaging. And today the mayor of New York publicly stated:
As mayor of NYC - the world’s financial capital - I would invest in making the city a hub for BTC and other cryptocurrencies.
Regulation is still a thorny issue, but with large corporates like Tesla driving BTC adoption in this bull cycle there's no way governments can just shut crypto down (not that they could anyway). Any that do will be left behind in the 3rd world.
Blockchain will eventually touch or replace everything in finance from Gold to Bonds to Stocks to Transactional Currency. The same way email replaced 99% of paper based correspondence.
Big Mac index. Overnight we looked at median priced US homes/New Zealand median price in USD from 1987-2020, on a yearly basis as of each January. On that basis the median priced New Zealand home only became more expensive than its US equivalent in 2007, becoming 100,000 USD more expensive in 2012 and currently at its peak variation of 215,000 USD . Burger for thought.
We here in NZ pay the highest proportion out of our lower than average household incomes for overcrowded and subpar quality houses in the OECD.
Things have gotten much worse since 2017, back when this index was published.
In Australia, consumer inflation expectations jumped to 3.7% in February and are now far above actual inflation at 0.9% pa. The RBA's survey of economists see it rising by 1.6%.
LOL - RBA could curb consumer inflation expectations with an unexpected rate hike to douse the hopes of those desperately wishing to see their debt mountain deflated by any means possible.
Millions of dollars of Treasury contracts may have been awarded without proper tender or conflict of interest declarations, raising questions about whether those contracts were appropriately awarded
Treasury is a small fish in the contracting world ($8m in 2018/19). Health, NZTA, education, KO, etc. are much larger spenders in this space.
If the agency responsible for monitoring the Crown's financial resources doesn't follow protocol, how much non-compliance would one find in all-of-government audit.
One of the better theories on why QE is bad for the economy:
The Endangered Inflationary Species: Gazelles
Here in NZ, how many small businesses are we going to miss out on because the next generation can't secure the required housing collateral (or takes a decade or two longer to gain this) to start one ?
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