Worldwide coronavirus cases surpasses 8.5M with over 455,000 deaths officially reported.
The New Zealand economy shrank by 1.6% in the January to March 2020 quarter, or roughly 310B New Zealand Dollars ending 9 years of growth. Expectations were the economy to shrink by 1.0% in the first quarter missing the mark. Predictions are for the economy to contract around 14.0% in the second quarter. This will mark a formal drop into recession when figures release on 18 September. Compared to first quarter 2019 the economy was down 0.2% y/y but actually grew by 1.5% in the year ending 31 March 2020. Figures show that this is the first contraction in growth since the third quarter of 2009 and the largest first quarter contraction in 29 years highlighting the horrific economic impact coronavirus has and will continue to have on the country’s growth.
Key Points…
- Midweek market trading took on a cautious tone. The recent risk on mood was replaced by “risk off” sentiment as market analysts try to make sense of what’s happening.
- Equity markets faltered coming off recent highs after the market came under pressure in response to last week’s Fed Decision and second wave coronavirus
- The Federal Reserve to purchase individual corporate bonds and the US Govt announce a USD 1T infrastructure spending plan
- Fed’s Mester (President of the Federal Reserve in Cleveland) said she expects US unemployment to end the year at 9.0% with the economy to improve towards the end of 2020, Q2 will show the worst effects of the virus pandemic on economic activity
- 1.5M Americans filed for unemployment to the week ending 13 June exceeding the expected 1.3M forecast
- Beijing has imposed a partial lockdown after dozens of new coronavirus cases emerged linked to a massive wholesale food market- the Xinfadi district has more than 2M residents. A Chinese official said the Virus prevention and control situation in Beijing was “extremely grave” and has “truly rang alarm bells”
- Retail Sales in the US bounced back in May up a massive 17% recovering from recent poor spending falls in April and May, however y/y figures are down by 6.1%
- UK employment numbers dipped by 2.1% or about 612,000 between April and May