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Day 6-  Level 2 NZ lockdown.

Worldwide coronavirus cases surpasses 5,000,000 

New Zealand’s growth rate (GDP) is forecast to decline from the 2.8% year ending June 2019 to -4.6% to the year ending June 2020. This is driven by a massive fall in the second quarter 2020 coronavirus fuelled downturn of somewhere around 20.0%. The RBNZ are forecasting growth to return into the positives in the 3rd quarter (September) 2021. So that’s 5 economic quarters we could see the New Zealand Economy weighed down by the virus implications before a proper recovery. Unemployment is expected to rise to over 8.0% in the June quarter 2020 peaking around 10.0% in the 3rd quarter 2021. This is in comparison to Australian economic growth (GDP) which is expected to decline by around -12.0% in the June 2020 quarter followed by -7.0% in the third quarter and -6% in the fourth quarter 2020. A rebound of 6.0% growth is forecast in the third quarter 2021. Australian Treasury Secretary Kennedy said when asked about an Australian recession- “we’ve gone well past” a recession. I’m not sure if he is looking at the same balance sheet with Australia expected to formally slip into recession later this year.

  • Wuhan (China) has officially banned the eating of Wild animals
  • Dozens of new coronavirus cases around the the Northern Chinese city of Jilin have prompted authorities to lock down the area returning to strict controls at a time when the government is trying to open up the economy- Jilin has around 4M people residing there of which every person may be tested 
  • US Retail Sales for April plummeted 16.4% worse than the -12% expected by analysts, this follows the March decline of -8.4% 
  • Canadian CPI fell by 0.2% y/y in April down from 0.9% in March, the first y/y decline since September 2009
  • Japanese exports declined at a faster pace in April – down 21.9% from the same time last year which follows falls of 11.7% in the month of March
  • After last week’s RBNZ QE increase from 33B to 60B – ANZ now predict the RBNZ will increase the package to 90B in the second half of this year
  • Expectation that the RBNZ may again drop the cash rate lower than the current 0.25% were put to rest during last week’s statement reading by Adrian Orr, saying he would leave the rate unchanged until at least March 2021
  • The lowest number of Americans filed for Unemployment at 2.44M for the week ending 17 May since the pandemic coronavirus started 2 months ago, this brings the total number of Americans to lose their jobs in the past 9 weeks to around 39M 
  • Crude Oil prices continue to lift though 34.00 per barrel – some are picking a demand shortage in the coming weeks and prices to go higher

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