Worldwide coronavirus cases surpass 21.08 million with over 753,000 official deaths.
New Zealand has locked down Auckland after a run of 102 days without community infection. Auckland recorded 4 new community spread cases Wednesday of coronavirus, locking down the city for 3 days from midday Wednesday. The 4 cases are all from the same family. Prime Minister Ardern was swift to bring in level 3 late Wednesday night with the rest of NZ in lockdown level 2. The issue authorities have is the 4 new cases are from an unknown source and work is being done to trace where the virus originated. New Zealanders will find out later today if the country/Auckland will stay in level 3 lockdown or go into a stricter level 4 from tomorrow. Meanwhile National leader Judith Collins has called for the 19 September election to be postponed due to new outbreak concerns.
The Reserve Bank of New Zealand kept the Cash Rate unchanged at 0.25% today and increased its asset purchase program. The (LSAP) Large Scale Purchase Program has been expanded from 60 Billion to 100Billion NZD. Buying more LSAP enables the RBNZ to keep downward pressures on wholesale and retail rates. This is a significant boost as estimates had been between 75B and 90B. The RBNZ also agreed that additional monetary instruments remain active such as the deployment of negative interest rates and possible purchase of foreign assets. Implementing these tools will depend largely on the outlook for inflation and employment.
Worldwide coronavirus cases surpass 20.23 million with over 737,000 official deaths.
The US economy added 1.8M jobs in the month of July, indicating a recovery of sorts even though they have experienced a surge in coronavirus over the summer months. The 1.8M was slower than the prior two months when roughly 2.5M in May and 4.8M in June were added with many states lifted coronavirus lockdown restrictions. The official unemployment rate fell to 10.2% after peaking at 14.7% in April highlighting people are returning to work with the greatest number of people returning to the hospitality, retail, government and Health Care sectors. This marks a fairly decent rebound but following a hefty downturn which skews the figures somewhat. It will still take until 2022 for the economy to fully recover according to reports, depending on how quick a vaccine is introduced to the masses. Remembering the US economy was at its lowest unemployment rate of 3.5% in 50 years pre coronavirus. The US economy entered a recession in February and has shown a decent comeback as early as April, but the speed of the ongoing recovery will depend on the course of coronavirus. The government wage subsidy of $600.00 per week expired at the end of July and congress has not managed to agree on its next steps, although President Trump has over the weekend signed presidential orders to expand the unemployment benefit scheme, defer taxes and provide student loan relief.
Worldwide coronavirus cases surpass 19.2 million with over 716,000 official deaths.
Analysts overwhelmingly ignored Wednesday’s New Zealand Unemployment rate when it published at 4.0%, down from the 5.5% markets were predicting. Putting it down to a large margin of error based on inadequate statistical data over the second quarter. I suppose due to the lockdown in April and some of May those unemployed couldn’t look for work thus weren’t included in the figures. April was the worst month when 35,000 filed for unemployment benefits followed by May’s turnaround increase of 14,400 jobs and further increases in June, almost putting the quarter back to pre- covid levels. The problem is this, the wage subsidy was in place for nearly all of the March, April and May (second quarter) of which the NZ government paid out a total of 13 Billion in wages to individuals and businesses.
Worldwide coronavirus cases surpass 17.36 million with over 695,000 official deaths.
New Zealand unemployment numbers print this week on Wednesday and are expected to show that the rate will jump from 4.2% to around 5.0% for the second quarter. If we stop and think about this for a second, this number is a monumental achievement for the NZ economy in light of recent and ongoing coronavirus. The new Statistics NZ labour force indicator confirms these extraordinary numbers with jobless claims hitting a high in April of 35,000 and the June number which released last week reflecting that filled jobs had recovered almost all of the prior decline. The result is a resoundingly positive result for the country as businesses and individuals have mostly returned to work. The main reason for the labour force’s resilience has been the government’s wage subsidy program with 1.7M employees covered by the scheme. The wage subsidy extension ends on the 1st of September 2020 which will no doubt influence 3rd quarter jobs figures and unemployment after the program has finished.
Worldwide coronavirus cases surpass 17.45million with over 675,000 official deaths.
There was no change Thursday morning from the US Federal Reserve as they kept their main rate at 0.25%. With Covid-19 still at large and far from beaten the outlook for the US economy is not looking good. The general view from the central bank was that of a dovish stance with chances of a strategy shift in September’s policy meeting high. With the Fed extending emergency lending and focus on further fiscal stimulus we were not going to see any significant changes. Fed chairman Powell seems confident the economy is pulling out of recent coronavirus affected times and is on track to expect full employment post 2022. Only two fed members expect the refinancing rate to increase before 2022. The US Dollar moved lower post decision against the major currencies earning it the weakest currency over the course of the week and well below the gain line for July.
Worldwide coronavirus cases surpass 16.4M with over 651,000 deaths officially reported.
The New Zealand Dollar and the Australian Dollar held top positions midweek but lost ground to the Euro and Pound towards the weekly close as “risk markets” took on water. The US Dollar traded flat at the bottom of the pile in the major group of currencies and never really kicked on. US politicians are still trying to come to an agreement as to the next support package to support the local economy as coronavirus cases continue to rise. Tensions between China and the US are still tender with the US ordering the Chinese consulate in Texas to be closed. China has retaliated by ordering the US to close its Chengdu consulate. This strained risk and spooked markets as equities dropped in Asia and the US. US Jobless claims rose for the first time since March confirming the jobs situation in the US is starting to deteriorate again. 1.4M people filed for unemployment in the week ending 18 July vs 1.3M predicted representing an astonishing number of newly laid off workers. This marks the total number of people who have filed for unemployment since March 21 at 53 million in the US.