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Day 10-  Level 2 NZ lockdown.

Worldwide coronavirus cases surpasses 5,900,000 with over 361,000 deaths officially reported.

New Zealand Job numbers fell by a record 37,500 in April showing the fallout of lockdown throughout most of April and the impact of Covid-19. This represents the largest drop since records began in 1999. The biggest decline was in the service and primary industries with significant drops in accommodation and food services. The alarming aspect of these numbers is that we won’t know the true extent of the damage to the economy until well after the wage subsidy ends with a further dire outlook to transpire. In recent weeks we have seen many large companies chop jobs such as Air New Zealand, Fletcher Buildings, Sky City and Copthorne Hotels with the Reserve Bank of New Zealand expecting the unemployment rate to top out at 10.0% by the end of 2020.

The European Union (EU) has unveiled a massive 750B EUR recovery package plan. 500B EUR in grants would be allocated for neighbouring states and 250B EUR would be available for loans. The EU is trying to provide support to the struggling economies while avoiding fragmentation. The proposal will be discussed at the next leader summit on June 19th. Merkel said negotiations will be tough with the split between grants and loans difficult to agree on.    

  • Global equity markets track higher, with optimism on economies reopening outweighing current US-China tensions
  • New Zealand Business Confidence for May printed at -41.8 with a net 39% of businesses expecting business to sink well below 2008/2009 levels
  • Governor Lowe repeated that prospects of negative rates are extremely unlikely with fiscal policy to play a bigger part in the economic recovery
  • Head of the Central Bank of France & ECB Member Villeroy, signalled further potential easing, saying the ECB “will very probably need to go even further”
  • President Trump has threatened legal suit against Media giant twitter for placing a fact-checking mark on his tweet about mailing voting 
  • Federal Reserve’s Kaplan has come out saying he thinks the US economy has bottomed out and they should start to see growth in the second quarter of 2021, this is a bold statement 
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