Albanese and Xi meet; Aussie inflation stabilises; RBA expected to raise rates; German factory orders rise; UST 10yr 4.65%; gold down and oil up; NZ$1 = 59.8 USc; TWI-5 = 69.2

Here's our summary of key economic events overnight that affect New Zealand, with news mostly about Australia today.

The Australian prime minister is in Beijing meeting with President Xi. Trade is the main topic, and that needs improved relations after a period of bilateral tension. These latest meetings bring a notable thaw, ahead of the US-China meetings at the upcoming APEC conference. Xi said China's relationship with Australia is now on "the right path". Albanese pointed out that an improvement will be beneficial for both countries. But Australia is negotiating trade restriction rollbacks that should never have been imposed in the first place. However, Albanese invited Xi to Australia.

Back in Australia, ASIC data for October shows company bankruptcies were -16% lower in October than the same month a year ago. But this is a rare bit of good news on this front because year on year these bankruptcies are running +38% higher.

The Melbourne Institute's Monthly Inflation Gauge fell -0.1% in October after a flat reading in September, showing declining prices for the first time in fourteen months and clouding the outlook for the RBA monetary policy. The annual growth rate also eased to 5.1% in October from 5.7% in September.

Later today the Reserve Bank of Australia delivers its monthly monetary policy review and increasing numbers of observers are expecting them to raise its policy rate from the current 4.10% to 4.35%. If they do, parts of Australia will be 'shocked' but they shouldn't be because inflation is rising and their housing markets are becoming sharply less affordable. A rise could give blowback on the NZD and our interest rates, although to be fair some of that will already be priced in. Oh, and there is a horse race in Australia today too.

German factory orders rose unexpectedly in September. While it wasn't a large rise, a correcting fall was expected after the rather large jump in August. Foreign orders were the driver here, up +4.2%, with new orders from the EU rising +6.2% and orders from the rest of the world rising +2.9%. It is an impressive signal, especially as it is more than just for one month.

Also later today, the winner of the 2023 Earthshot prize will be announced in Singapore. So far, more show than substance, but the five winners do take away more than $2 mln as seed money for a major environmental project. So far none of the ten prior winners have gone on to make a global impact, but it is early days yet. Hopefully this initiative isn't an irrelevancy, and more than just grandstanding.

The UST 10yr yield is up today from yesterday in a small recovery to 4.65%, a gain of +7 bps. But their key 2-10 yield curve is little-changed, sill inverted by -26 bps. Their 1-5 curve is now inverted by -75 bps and that is a little less. Their 3 mth-10yr curve inversion is now -76 bps and also less than yesterday. The Australian 10 year bond yield is now at 4.74% and up +6 bps from yesterday. The China 10 year bond rate is unchanged at 2.68%. The NZ Government 10 year bond rate is lower at 5.28%, down -7 bps.

Wall Street has opened modestly with the S&P500 unchanged in its Monday trade. Overnight European markets closed lower by about -0.4%, excpet London which was largely unchanged. Yesterday Tokyo ended its Monday session up a very strong +2.4%. Hong Kong ended up +1.7% and Shanghai rose +0.9%. The ASX200 ended its Monday session up +0.3% while the NZX50 rose a strong +1.3%.

The price of gold will start the week at US$1982/oz and down -US$10/oz from this time yesterday.

Oil prices have risen overnight, up about +US$1 to be just over US$81.50/bbl in the US. The international Brent price is now just under US$86/bbl.

The Kiwi dollar starts today at 59.8 USc and down almost -¼c from this time yesterday. Against the Aussie we are similarly softer at 92 AUc. Against the euro we are a bit more softer at 55.6 euro cents. That all means our TWI-5 starts today at just on at 69.2, down about -20 bps.

The bitcoin price starts today at US$34,946 and virtually unchanged from this time yesterday, down a mere -0.1%. Volatility over the past 24 hours has been modest at just on +/- 1.2%.

The easiest place to stay up with event risk is by following our Economic Calendar here ».