Worldwide coronavirus cases surpasses 14.8M with over 612,000 deaths officially reported.
The New Zealand Dollar and the Australian Dollar closed out the week keeping their top spots against the major currencies so far for the month for July.
Victoria coronavirus stole the attention last week when the state clocked 428 new cases on Friday and a further 363 Sunday. The virus has got so bad in the community Premier Daniel Andrews announced masks will be compulsory in Melbourne in a few days’ time. The state has recorded 12 consecutive days of triple digit increases. Consumer confidence in Australia has taken a hit over the past few days with Victoria deteriorating 10% while the rest of Australia is down 4.5%. To make matters worse Australian Unemployment reached 7.4% in June, a 22 year high which will keep the local mood low. Federal government is expected to increase their fiscal stimulus this week which could boost sentiment. This is the first economic statement since the pandemic hit the country in March. The budget will include 90B in the already announced stimulus, and an extra 50B of new measures. The Aussie remains resilient finishing the week just below 0.70c but further coronavirus outbreaks in Victoria should cast doubts over any V shaped recovery momentum. Vaccine hopes and recently buoyant commodity prices, in particular iron ore prices, together with China’s economic rebound have kept the Aussie moving higher. While “risk” mood remains stable, the Australian Dollar should continue to travel north for the moment.
The European Leaders Summit which kicked off Friday saw little substance come from the meeting with recovery talks netting no agreement as yet. The 750B Euro proposal is now at 400B in grants and 340B in loans. German Chancellor Merkel and French President Macron want the fund to be mostly grants. The problem is Austria, Denmark, the Netherlands and Sweden want the funds to be issued in loans. The Dutch Prime Minister Mark Rutte said he sees a less than 50% chance that the European leaders would be able to reach a deal at the Brussels summit. There was however a revised plan Saturday offered by the European Council President Charles Michel to break the deadlock between the 27 bloc countries but clearly his idea was not unanimously agreed. The meeting will reconvene Monday.
Key Points…
• Finance Minister Grant Robertson says the NZ economy is doing better than expected at the moment as the country battle into the third quarter
• Gold has traded to 1818 overnight its highest level since September 2011
• Florida reported over 12,000 new cases of coronavirus on Sunday the fifth day in a row numbers have been over 10,000
• The World Health organisation reports that the average daily rate of new infections for the month of July is over 200,000
• Victoria recorded 273 new coronavirus cases Monday following a whopping 580 new cases over the weekend, meanwhile NSW have reported 20 new cases due to new clusters linked to pubs and restaurants
Major Announcements last week:
- Chinese Industrial Productions spikes higher in June
- Bank of Canada leave rates unchanged at 0.25%
- ECB kept their monetary policy stance unchanged
- Australian Unemployent increases from 7.2% to 7.4% in June