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Episode 371 of 722

Bad policy decisions bite everywhere

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Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news bad policy decisions are coming back to bite in ruthless ways.The weekly new jobless claims level came in higher than expected for last week at 742,000, and the prior week was also revised up. Worse, the number of people falling off this support rose sharply and exceeded 300,000 to be down to 6.3 mln. Few will have found work as the pandemic bites very hard now. The November labour force results are going to be very ugly.The Philly Fed survey factory survey was a positive one even though most scores slipped, but the Kansas City Fed survey wasn't and remains well below year-ago levels.But the US real estate market is buoyant. Sales volumes are high and prices are rising sharply, up more than +15% in a year. Buyers want 'space' if they are going to be locked down and demand for suburban homes is very strong. This has driven sales levels to their highest since 2005. And helping are mortgage interest rates which are again at new record lows.Canadian housing sales were similarly strong.And staying in Canada, the ADP employment report for October shows then still shedding jobs (-80,000) even if not as quickly as in September (-564,000).In China, their corporate bond market stress is widening, with now a real estate developer in default. Total onshore bond defaults now exceed ¥100 bln across all companies. Offshore bond defaults (defaults on funds raised in overseas markets) are fewer but they are starting to happen as well. Chinese companies are now racing to cancel or postpone bond issues. More than 50 issues worth a combined €40 bln were cancelled or postponed between November 10 and 19. Many more are being shelved. It is now a market emitting strong negative odours.In Turkey, a strongman-ruled country that more than a year ago fired its central bank chief for not cutting interest rates in the way the President wanted because of the risk to their currency, and they installed a family member in that position. It has been a disaster, and today they backtracked sharply, raising interest rates by +4.75% to 15% in an effort to stabilise a sharply worsening financial situation. The country is heading into some tough times, made much worse by those really bad policy mistakes by the President.Australia's jobless rate rose to 7.0% in October data released late yesterday, from 6.9% (NZ = 5.9% in September.) Full-time employment increased by +97,000 and part-time employment increased by +81,800. Their participation rate rose to 65.8%And staying in Australia, the NSW Court of Appeal has ruled that pandemic exclusions in business interruption policies are invalid.In New York, the S&P500 is down -0.2% in early afternoon trade today. Overnight, European markets were down -0.8%. Yesterday, Tokyo ended its session down -0.4%, Hong Kong was down -0.7%, but Shanghai closed up +0.5%. The ASX200 was up +0.2%, but the NZX50 Capital Index also closed lower, down another -0.4% and heading for a flat weekly result.The latest global compilation of COVID-19 data is here. The global tally is 56,498,000 and a +670,000 rise from yesterday. The largest number of reported cases globally are still in the US, which rose