Here’s a summary of key economic events affecting New Zealand with news on the Israel/Gaza/Lebanon/Yemen flashpoints now impacting global oil prices. It is also hurting global sentiment as fears of a more widespread conflict grow. The shift towards safer currencies hurt the NZD.
But first, overnight Milk Auction A +3.0% rise in WMP brought a +1.2% rise in USD terms. Cheddar cheese also saw good (+3.8%) gains. But many other products have fallen. In NZD terms, overall prices fell -0.3%. Volumes sold are good. But this full auction broadly mirrors last week’s pulse event for SMP and WMP.
In the US, their Retail motivation It bounced back last week, up +5.3% from the same week a year ago.
September ISM Factory PMI Still down slightly from August, little-change. The Dock worker strike Not helping sentiment among American manufacturers. The S&P Global/Market PMI Because the US is more negative. Both reported lower new order levels.
But the Logistics Managers Index (LMI) posted the highest growth rate in two years in the logistics sector. They are seeing increasing demand for these services, but the transportation component has not changed.
Job opportunities increased in August From the July lows, although those increases were higher than expected, they are still on an easing trend, which began in early 2022. Their exit rate has dropped.
Yesterday we reported a soft factory report for the Texas manufacturing sector and its oil patch in September. Today we can observe the region The service sector has expandedAnd a little more than expected.
And we should note Fed boss Powell yesterday emphasized The recent 50 bps rate cut is probably just a one off and after that ‘recalibration’ future changes will be “more neutral”.
China is on holiday now and will be next week.
Eurozone inflation It fell more quickly in September, falling to just 1.8%, its lowest level since April 2021. It runs on very low energy costs.
In Australia, Retail sales increased +3.1% higher than expected in September – their best result in more than a year. But it is not that great as inflation is running at 2.7%. But at least it is better than inflation in the end. Sanguine weather conditions get credit for this improvement
Market confidence in new home construction in Australia has improved in recent months as investors and owner occupiers return to the market. And it’s showing now Residential building compliance dataThis is +3.6% over the year-ago level.
But corelogic They say Their housing market gained momentum in August, with little overall change in prices. Perth’s month-on-month change was also less than 2% and it remains the center of frothy housing prices.
Globally, the corporate bond debt market rose sharply in September. There’s Bloomberg reporting More than 1,200 issuers sold more than US$600 billion worth of bonds during the month, the highest since records began 20 years ago. The rush appears to be driven by low interest rates and growing uncertainty, including the US presidential election.
The UST 10yr yield is now just 3.75% and is down -3 bps from yesterday. The key 2-10 yield curve is lower at +12 bps positive. Their 1-5 curve inversion is now inverted by -50 bps. And their 3 mth-10yr curve inversion now stands at -114 bps. Australian 10-year bond yields open today at 3.95% and down -4 bps. China’s 10-year bond rate was 2.16% and down -2 bps. The NZ Government 10 year bond rate is now just 4.26% and down -2 bps from yesterday.
Wall Street’s S&P500 was down in Tuesday’s session and down -0.6%. But European equity markets mixed with London up +0.5% and Paris down -0.8%. Tokyo bounced back +1.9% yesterday. Both Hong Kong and Shanghai are closed for the public holiday. Singapore Miner declined -0.1%. The ASX200 was down -0.7% on Tuesday. But the NZX50 rose +0.3%.
gold price Today starts at US$2670/oz and is +US$32 higher than yesterday, a new high.
US oil prices rose +US$2.50 above US$71/bbl, while international Brent was still above US$74.50/bbl. The crazy middle-east situation is now affecting this commodity.
And there are especially high movements for many commodity prices Coal And steel. Zinc And Nickel A lot. Some key food prices are also rising.
The Kiwi Dollar opens today at 62.8 USc and is down about -1c from yesterday. Against the Aussie we are -40 bps lower at 91.4 AUc. Against the euro we fell -30 bps to 56.8 euro cents. That means our TWI-5 starts today at just 70.2 and is down -70 bps from yesterday.
Bitcoin price opens today at US$62,020 and is down another -2.3% since yesterday. Volatility over the past 24 hours has been marginal at just +/- 1.9%.
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