Information breakfast; American resilience defies bears so far

Here’s our roundup of the weekend’s main economic events affecting New Zealand with news that the US economy is showing continued signs of resilience, although more and more analysts believe they may see a slowdown. arrive soon.

The US job market continues to grow, defying those who thought it was going to reverse now. They added 428,000 jobs in April, the same as in March and above the forecast of 391,000. This was the 12th consecutive month of employment gains above 400,000, but down from a gain of 714,000 in February in an increasingly tight labor market. Employment has increased across all sectors, but that still leaves their economy down -1.2 million jobs from its pre-pandemic level.

Compensation levels rose, but more modestly this month to be up +5.5% year on year, and well below the bite of inflation.

New data for America consumer credit demand showed a surge in March, well above what was expected – double in fact. In fact, it was the strongest monthly increase in more than eleven years, driven across the board by strong increases in both revolving credit (such as credit cards) and non-revolving credit (such as loans automobiles and personal). It doesn’t get much attention, but the jump is something. Data for February was also revised upwards. Inflation will be part of it, but so is improving sentiment.

Meanwhile, US mortgage rates accelerated their ascent, reaching 5.27% for their 30-year benchmark mortgage and the highest level since August 2009.

the April jobs in Canada report was not positive this time, after a series of good monthly results. This time, full-time employment fell and part-time employment rose, partially reversing months of opposing gains. We do not know if this is simply an aberration or a turning point.

China’s foreign exchange reserves have plummeted for a fourth consecutive month at $3.120 billion in April, the lowest value in a year, although this latest drop was small. Their gold reserves also fell.

It’s hard to see them coming back up anytime soon. Over the weekend, Chinese Premier Li warned of a “complicated and serious” employment situation in the country. The shockwaves of prolonged shutdowns in Shanghai and Beijing are now reverberating through their economies. The central government has asked all regions to prioritize measures to help businesses “retain jobs and overcome the current difficulties”.

World food prices fell -0.8% month-over-month in April, but still remained close to the March record. Vegetable oil prices fell significantly and grain prices fell slightly. Meanwhile, dairy prices rose for the eighth straight month on sluggish production in Western Europe and New Zealand, and rising demand for butter amid a shortage of sunflower oil. and margarine in Western Europe. Finally, meat prices rose solidly (+2.2%) due to supply tensions in the northern hemisphere and disturbances in Ukraine.

The war in Eastern Europe is suppress air cargo trade. In March, international volumes fell -5.4% compared to the same month a year ago. However, Asia/Pacific volumes only fell -2.7% on the same basis.

the freight container shipping cost by sea slipped again, mainly due to lower rates from China. But interestingly, rates to China are now showing a certain firmness that hasn’t been there for a long time. The cost of shipping bulk cargo increased stronger, and are now at their highest of the year, in a rise worth watching.

A presidential election in the Philippines is underway and could bring the family of a former dictator back to power as amnesia grips the country.

In Australia, they are in the last two weeks of their election campaign and recent survey shows a growing appetite for change. Other recent polls show a similar bend. Even the Murdoch press poll concede the change.

The 10-year UST yield starts today up +2 basis points since this time Friday at 3.14%. The UST 2-10 yield curve is steeper at +41 bps. And their 1-5 curve is much steeper at +1077 bps. Their 30-day-10-year curve is also steeper at +265 basis points. The Australian 10-year bond is now at 3.56% and up another +7 basis points. The ten-year Chinese government bond is up +1 bp to 2.84%. And the New Zealand 10-year government is also up +1 bps to 3.82%.

The price of gold today starts up +US$6 since this time Friday at US$1,883/oz.

And oil prices are almost +2% higher today at just over US$109.50/bbl in the US, while the international Brent price is now just above $112.50 US/bbl. After only minor gains for many months despite high prices, the number of US rigs is starting to rise again now and is back above 700 for the first time in two years.

The Kiwi Dollar will open again today at 64.1 USc and close to a two-year low. This represents a -7.5% devaluation since early April. Against the Australian dollar, we are slightly firmer at 90.6 AUc. And against the euro, we are unchanged at 60.8 euro cents. All of this means that our TWI-5 starts today at 71.5 and its lowest since late February. On a TWI-5 basis, the devaluation since early April is -4.4%.

Bitcoin price is down -5.4% from this time Saturday at US$34,057. In early April, it was at US$47,294, so it’s down -28% since then. Volatility over the past 24 hours has been elevated to just over +/- 3.3%.

The easiest place to stay on top of the risks associated with today’s events is to follow our Economic calendar here ».

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