S&P warns on scores downgrades; China reduces UST holdings; China blocks cotton from Australia; US retail higher, manufacturing facility manufacturing worse; UST 10y at 0.75%; oil agency and gold decrease; NZ$1 = 66.1 USc; TWI-5 = 69.6

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This is our abstract of key financial occasions in a single day that have an effect on New Zealand, with information the pressures of weighing in opposition to the pandemic is about to convey a ‘blizzard’ of sovereign scores downgrades.

Commonplace & Poor’s is saying that the immense prices of supporting well being applications, companies and employees by means of the pandemic was essentially undermining most international locations’ funds. And so there are about to be a raft of scores downgrades to be introduced, with most main nations in danger.

A kind of downgrades will not be China. They’re set for a bumper grain harvest will go away the nation with greater than a years consumption in stock, and cap the current rise in grain costs, they declare.

After barley, wine, beef and coal, the following commerce China is punishing Australia with is apparently going to be cotton, as farmers there brace for a Chinese language announcement of a 40% tariff imposed by Beijing. The screws are tightening and Canberra has change into way more circumspect very lately. Two thirds of all Aussie cotton is exported to China.

South Korea has posted a worsening jobless fee in September, however it’s nonetheless a low 3.9% even when it is not bettering. Many international locations will look with envy at that stage.

And Singapore’s exports fell sharply in September, in an sudden worsening of their commerce steadiness.

In a constructive shock, American retail gross sales for September ended a bit higher than most analysts have been anticipating. They rose from August and have been up +5.4% from the identical month a yr in the past. On-line (non-store) retailing is powering the good points, up +27% from a yr in the past. Used automotive gross sales powered the car retailing trade, up +14.4% year-on-year.

However these good points should not being seen in American industrial manufacturing. The newest information fell greater than anticipated in September when truly an increase was anticipated. This manufacturing is now -7.3% decrease than in the identical month in 2019. Imports (from China) are filling the product calls for in a spectacular failure of their avowed industrial technique.

Shopper sentiment would not appear to care. It’s up in October from September, though nonetheless an enormous -15% decrease than this time final yr. Perhaps the ‘do not care’ description is not totally truthful – the views on ‘present situations’ declined in October from September. However future expectations rose. So maybe American shoppers are simply ready for a management change.

And it’s now official; the US posted a -US$3.1 tln price range deficit of their fiscal yr ended September 2020 – thrice greater than for the earlier yr’s horrible end result.

And worldwide holdings of US Treasuries fell for the primary time in 4 months in August, with China’s holdings of American authorities debt falling to the bottom in almost 4 years.

The newest international compilation of COVID-19 information is right here. The worldwide tally is 39,792,000 and up a median of +356,000 per day. The case development is concentrated in Russia, the UK, Iran, France and Italy. International deaths reported now exceed 1,111,000 (+5,000 per day) however clearly many are going unreported.

The biggest variety of reported circumstances globally are nonetheless within the US, which rose +106,000 in two days to eight,354,000. They’re clearly now in a 3rd wave (preliminary was in April, then a bigger one in July, and this new one threatens to be bigger once more). The variety of lively circumstances is at 2,690,000 in order many extra new circumstances as recoveries. Their loss of life complete is over 224,000 and nonetheless rising at +1000 per day. By the tip of 2020 their loss of life toll will prime 300,000+.

In Australia, there have now been 27,390 COVID-19 circumstances reported, and that’s simply +19 extra circumstances than we reported on Saturday. Most states reported new circumstances. Deaths are unchanged at 904 nevertheless.

The UST 10yr yield is little-changed this morning at simply on 0.75%. Their 2-10 fee curve is unchanged at +60 bps, their 1-5 curve is just a little steeper at +20 bps, whereas their 3m-10 yr curve can also be marginally steeper at +66 bps. The Australian Govt 10 yr yield will begin the week unchanged at 0.73%. The China Govt 10 yr yield can also be unchanged at 3.25%. The New Zealand Govt 10 yr yield stays at 0.54% as properly.

The value of gold is down -US$2 from the place we left it Saturday at US$1900/oz even.

Oil costs are marginally firmer to start out the week, now just below US$41/bbl within the US, whereas the worldwide value remains to be just below US$43/bbl.

The Kiwi greenback begins immediately little-changed at just below 66.1 USc. In opposition to the Australian greenback we’re additionally unchanged at 93.3 AUc and holding on to the current good points. In opposition to the euro we’re holding at 56.4 euro cents. And meaning our TWI-5 remains to be at 69.6 and little-changed over the previous seven days.

The bitcoin value is +1.1% greater immediately than this time Saturday, now at US$11,469. The bitcoin fee is charted within the trade fee set under.

The best place to remain up with occasion danger immediately is by following our Financial Calendar right here ».

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