The prices of raw materials jump; Inflation expectations in the United States are rising; trucking costs go up; Chinese steelmakers are raising prices; Australian NAB business confidence is high; 10-year UST at 1.60%; stable oil and gold upwards; NZ $ 1 = 72.9 USc; TWI-5 = 74.3
Here is our summary of the main overnight economic events affecting New Zealand with information on commodities and inflation today.
Rising commodity prices are no longer relevant, but the acceleration of their increases is. the iron ore price jumped + 10% yesterday. Copper prices have also risen sharply. The reason for this sudden move is unclear, but it is suspected that central banks have universally signaled that the easy money will be there for a while. These sharp increases are based on fears of inflation.
And this seems to be confirmed by the New York Fed national survey of inflation expectations. That shows them up to 3.4% over the next year, down from 3.1% (and before all the international cost pressures really bite).
US state tax revenues are also swelling. California has ad a huge surplus of + $ 76 billion and a very marked improvement in the economic situation of the Golden State.
A good way to see the recovery of economic activity in the United States is to examine CASS trucking activity index. And when you do, you see the cost of road freight skyrocketing.
In China, the major steelmakers are price of the hike clearly.
In Australia, they are one of the main beneficiaries of the commodity boom. Their stock market is making outsized gains. And the last NAB Business Sentiment Survey was very solid, further improving the strong March survey. Confidence has reached a high level (since 1998). The month’s gain was driven by strong gains in mining and services, with finance, business and real estate now the strongest non-mining sector. Inflationary pressures are not a problem in these results.
On Wall Street, the S & P500 is down -0.7% in afternoon trading with a building sale. Overnight in European markets, most had stable results to start the week. Yesterday, the very large Tokyo market ended up + 0.6%, Hong Kong stagnated for the day and Shanghai grew more modestly by + 0.3%. The ASX200 ended with an impressive + 1.3% while the NZX50 Capital Index struggled under the weight of A2 Milk, Synlait and Fonterra, ending down -0.6%.
The latest global compilation of COVID-19 data is here. The global tally continues to rise, now 158,481,000 people have been infected at any given time, up + 662,000 in one day, again largely due to increases in India and Brazil. The number of reported deaths worldwide now exceeds 3,297,000 and over 11,000 in one day. Vaccinations globally, they are also increasing rapidly, now reaching 1.301 billion (+17 million per day), and in the United States, nearly half of their population (46.3%) received at least one dose while they were continue their rapid deployment. Today, more than a third have been fully immunized (115.8 million people). The number of active cases there has fallen to 6,446,000 with fewer new infections than recent recoveries and improving progress.
The 10-year UST yield starts today at 1.60% and is down +2bp from this hour yesterday. The US 2-10 yield curve is little changed at +144bp. Their 1-5 curve is also little changed at +73 bp, as is their slightly steeper 3m-10 year curve +159 bp. The benchmark ten-year Australian government rate is up + 3bp to 1.63%. The Chinese government’s ten-year loan was down -1bp to 3.17%. And the ten-year New Zealand government is up + 4bp to 1.78%.
The price of gold starts today at US $ 1,837 / oz and is + US $ 6 since yesterday. Chinese gold consumption is recover very clearly.
Oil prices today still start at just under US $ 65 / bbl in the United States, while the international price of Brent is still just over US $ 68 / bbl.
The Kiwi dollar opened today at 72.9 USc and was little changed overnight. Against the Australian dollar we are still at 92.8 AUc. Against the euro, we are at 60 euro cents. This means that our TWI-5 starts today at 74.3.
The price of bitcoin is now at US $ 56,997 and -0.9% lower than yesterday. Volatility over the past 24 hours has been moderate by +/- 2.4%. The bitcoin rate is represented in the exchange rate defined below.
The easiest place to stay on top of event risk today is to follow our Economic calendar here ».