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Podcast: Economy Watch
Episode:

Fast V-shaped recovery gathers steam
Category: Business
Duration: 00:03:59
Publish Date: 2021-05-05 19:37:04
Description:

Kia ora,

Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect New Zealand.

I'm David Chaston and this is the International edition from Interest.co.nz.

Today we lead with news of more evidence the pandemic recovery is V-shaped, in fact it may be one of the fastest recoveries from a recession in modern times.

In the US, the ADP Employment Report, the precursor report to their non-farm payrolls report due on Saturday, revealed a good rise in filled jobs, but not as big a rise as was anticipated. The gains however were broad based, across all firm sizes and across all sectors. Only the tech industry shed jobs, and that slip was small. At this time, analysts are expecting the rise in non-farm payrolls to be almost +1 mln for April (+978,000). This ADP report showed a gain of +742,000.

One reason there might be an undershoot is that todays release of the widely-watched ISM services PMI came in under expectations, even if the expansion it was reporting was strong. But the internationally-benchmarked Markit services PMI reported a stronger expansion. Both surveys featured strong rises in new orders, and strong inflationary pressures.

Singapore's retail trade is showing a good recovery.

In the UK, a regulator said there is a strong prudential case for some “floors”, or minimum expectations on risk-weights from in-house models that banks use in their assessment of capital support for mortgage lending.

In Scotland, they are about to have an election tonight that will be a crucial indicator on whether they have a second independence referendum. The polls say the result is too close to call.

In Australia, their services sector is powering out of its funk with strong new order growth, strong rises in employment, and a notable uptick in cost inflation.

And we should note that yesterday the New Zealand Parliament has unanimously declared that “severe human rights abuses” are occurring against the Uighur people in Xinjiang, China. It was unanimous because the Government succeeded in getting the word 'genocide' removed from the declaration. It is a development that will not improve trade relations with China, but so far China seems to have ignored the statement publicly. China is on holiday this week.

The UST 10yr yield starts today at 1.58% and unchanged overnight. 

The price of gold starts today at US$1785/oz and that is up +US$8 since this time yesterday.

Oil prices are up another +US$0.50 today at just under US$65.50/bbl in the US, while the international Brent price is up a bit more at just over US$68.50/bbl.

The Kiwi dollar opens today at 72.1 USc and back up +¾c since this time yesterday. Against the Australian dollar we are up at 93.1 AUc. But against the euro we are up at 60.1 euro cents. With these across the board gains it means our TWI-5 is now back at 74 and where it was this time last week.

The bitcoin price is now at US$57,429 and recovering a very sharp +5.9% since this time yesterday. The yo-yoing continues. Volatility in the past 24 hours has been very high at +/- 4.7%.

You can find links to the articles mentioned today in our show notes.

And get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again tomorrow.
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