US inflation expectations stable; SME pessimism lifts; US budget shutdown threat again; Japan data weak; India CPI slips; China new yuan loans soft; RBA sees bumpy road; UST 10yr 4.64%; gold and oil firmer; NZ$1 = 58.9 USc; TWI-5 = 68.8

Here's our summary of key economic events overnight that affect New Zealand, with news the Americans face yet another government shutdown threat from disorganised partisans in Congress.

But first today, the respected NY Fed American inflation expectations survey was actually little changed. Consumers said in October that inflation for the year ahead will be to 3.6%, down from 3.7% in September. Inflation expectations remained high but unchanged for rent (at 9.1%) and food (at 5.6%). They were much lower for many other items. Essentially, inflation expectations declined slightly at the short- and longer-term horizons while remaining unchanged at the medium-term horizon. For three years they see +3.0% inflation. Labour market expectations and household expectations of future income and spending growth were largely stable.

And small businesses were much less pessimistic in October. The RealClearMarkets/TIPP Economic Optimism Index rose to 44.5 in November, the highest in seven months.

That may get challenged again soon as chaos in the US Congress (specifically by the Republicans in the House of Representatives) yet again are threatening a shutdown because they can't agree a way forward in their factions. The key date now is Saturday, November 18 (NZT). Meanwhile all eyes on on the US October CPI data due out tomorrow. Expect a 3.3% rate.

Across the Pacific, Japanese producer prices rose by just +0.8% in October from a year ago, slowing from an upwardly revised +2.2% annual gain in the prior month and coming slightly less than market forecasts of +0.9%. This was the lowest producer inflation since a deflation in February 2021 and was the tenth straight month of a slowdown.

And staying in Japan, October levels of machine tool orders took quite a hammering, after being quite strong in September. It was the largest fall since June and was affected by retreats from both domestic and international buyers.

Annual retail price inflation in India fell to 4.9% in October, the lowest in four months, but actually little-changed from the 5.0% in September or the forecasts of 4.8%. The month-on-month change was a rise and more than expected.

In China, banks extended ¥738 bln in new loans in October, the least in three months, compared to ¥2.31 tln in September. The amount of loans usually falls in October due to seasonal factors, but this year's figures came above ¥615 bln in October 2022 and forecasts of ¥665 bln. But this is just the latest in a set of data that suggests the Chinese economy hasn't found any momentum yet.

In Australia, via a speech by their acting chief economist, the RBA says "the road ahead could be bumpy" in their fight to control inflation and bring it back into target ranges. Certainly they see it now as a long struggle against domestic price pressures and higher wage expectations. No-one should expect the RBA to be cutting its policy rate any time soon. Perhaps the opposite.

And we should note that the four large Australian ports are now back on line and operating again after the big cyber attack. In the end it was only a weekend shutdown and the recovery seems to have been effective.

The UST 10yr yield is down -1 bp from yesterday, now at 4.64%. And their key 2-10 yield curve is now inverted by -40 bps. Their 1-5 curve is now inverted by -72 bps which also little-changed. Their 3 mth-10yr curve inversion is now -76 bps and unchanged. The Australian 10 year bond yield is now at 4.68% and up +5 bps from yesterday. The China 10 year bond rate is unchanged at 2.67%. The NZ Government 10 year bond rate is up +5 bps at 5.27%.

Wall Street started its Monday session lower but has recovered all of that now. Overnight, European markets closed up about +0.7% on average, Yesterday, Tokyo ended its Monday session unchanged. Hong Kong rose +1.3% however, and Shanghai ended up +0.3%. The ASX200 ended Monday down -0.4% as did the NZX50.

The price of gold will start today at US$1945/oz and up +US$6/oz from yesterday.

Oil prices have firmed +50 USc overnight, to be just over US$78/bbl in the US. The international Brent price is up +US$1 to just on US$82.50/bbl.

The Kiwi dollar starts today at 58.9 USc and unchanged from yesterday. Against the Aussie we are a -½c weaker at 92.2 AUc. Against the euro we are a touch softer at 55.1 euro cents. That all means our TWI-5 starts today at just on at 68.8, and a little lower.

The bitcoin price starts today at US$36,871 and down -0.7% from this time yesterday. Volatility over the past 24 hours has also been modest at just on +/- 1.1%.

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