beijingwalker
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US deficit surges; Canada jobs jump; China's service sector rises; India contracts sharply; Japan struggles
10th Oct 20, 8:41am
Here's our summary of key economic events overnight that affect New Zealand, with news China is extending its economic lead in the pandemic recovery race.
In the US, their budget deficit tripled in the fiscal year ended September. It widened to -US$3.1 tln from just under -US$1 tln a year earlier. Four years ago this Administration inherited an annual deficit of -$585 bln. This is the largest and fastest deterioration ever. As a share of GDP, the annual 2020 deficit reached -15.2%, the largest since World War II.
The latest USDA WASDE report indicates that despite rising output they expect dairy prices to rise from here on good international demand. Also their beef import forecast has been raised for this year and next, despite noting that their beef exports are likely to fall. That is because their local prices are higher and less competitive internationally.
Canada released its September jobs data overnight and it came in much better than expected. They reported a gain of +378,000 jobs, +344,000 of them full-time positions. Their jobless rate fell but only to +9.0%. Their participation rate eased up.
The Chinese services sector reported another solid increase in business activity in September, cementing in a fifth straight month of expansion. They seem well past the pandemic struggle. This growth was backed up by a good rise in new orders, though new export work continued to decline. Still, payrolls rose for the second month in a row amid increased capacity pressures. It is a trend many other countries will envy at this time. (Their factory sector earlier reported an good expansion too, but exports there were stronger than for services.)
The buoyant Chinese economic mood has seen their currency appreciate its most in 15 years. It is all driven by an expanding domestic economy.
In India, official forecasts are that the Indian economy will contract -9.5% in the current fiscal year through March 2021 as the fallout from the coronavirus pandemic severely curtails economic activity there.
In Japan, household spending fell for an 11th straight month in August and real wages have fallen for six straight months as consumers struggled to return to their pre-pandemic consumption levels.
The latest household data out of Sweden indicates that their households are in a tough spot with consumption down -3.7% year-on-year. That is similar to Norway and to Denmark. There is no evidence yet that the Swedish tolerance for its high pandemic death toll (583/million) gives it some sort of economic advantage. (Norway = 51/mln, Denmark = 115/mln.)
In Australia, the RBA's latest financial stability review is somber reading. Business failures and household financial stress will rise significantly over the coming months when loan repayment deferrals and government income supports end, they say.
And in the same report, the central bank warns trading banks about 'culture' issues when they come to "the challenging task of dealing with customers' loan repayment deferrals". (p44)
The UN World Food Program was awarded the Nobel Peace Prize for its efforts to combat hunger and prevent it from being used as a weapon of war.
www.interest.co.nz
10th Oct 20, 8:41am
Here's our summary of key economic events overnight that affect New Zealand, with news China is extending its economic lead in the pandemic recovery race.
In the US, their budget deficit tripled in the fiscal year ended September. It widened to -US$3.1 tln from just under -US$1 tln a year earlier. Four years ago this Administration inherited an annual deficit of -$585 bln. This is the largest and fastest deterioration ever. As a share of GDP, the annual 2020 deficit reached -15.2%, the largest since World War II.
The latest USDA WASDE report indicates that despite rising output they expect dairy prices to rise from here on good international demand. Also their beef import forecast has been raised for this year and next, despite noting that their beef exports are likely to fall. That is because their local prices are higher and less competitive internationally.
Canada released its September jobs data overnight and it came in much better than expected. They reported a gain of +378,000 jobs, +344,000 of them full-time positions. Their jobless rate fell but only to +9.0%. Their participation rate eased up.
The Chinese services sector reported another solid increase in business activity in September, cementing in a fifth straight month of expansion. They seem well past the pandemic struggle. This growth was backed up by a good rise in new orders, though new export work continued to decline. Still, payrolls rose for the second month in a row amid increased capacity pressures. It is a trend many other countries will envy at this time. (Their factory sector earlier reported an good expansion too, but exports there were stronger than for services.)
The buoyant Chinese economic mood has seen their currency appreciate its most in 15 years. It is all driven by an expanding domestic economy.
In India, official forecasts are that the Indian economy will contract -9.5% in the current fiscal year through March 2021 as the fallout from the coronavirus pandemic severely curtails economic activity there.
In Japan, household spending fell for an 11th straight month in August and real wages have fallen for six straight months as consumers struggled to return to their pre-pandemic consumption levels.
The latest household data out of Sweden indicates that their households are in a tough spot with consumption down -3.7% year-on-year. That is similar to Norway and to Denmark. There is no evidence yet that the Swedish tolerance for its high pandemic death toll (583/million) gives it some sort of economic advantage. (Norway = 51/mln, Denmark = 115/mln.)
In Australia, the RBA's latest financial stability review is somber reading. Business failures and household financial stress will rise significantly over the coming months when loan repayment deferrals and government income supports end, they say.
And in the same report, the central bank warns trading banks about 'culture' issues when they come to "the challenging task of dealing with customers' loan repayment deferrals". (p44)
The UN World Food Program was awarded the Nobel Peace Prize for its efforts to combat hunger and prevent it from being used as a weapon of war.
Weekend briefing: China extends its economic lead
US deficit surges; Canada jobs jump; China's service sector rises; India contracts sharply; Japan struggles; RBA issues warnings; UST 10y at 0.78%; oil down and gold up sharply; NZ$1 = 66.7 USc; TWI-5 = 69.7
