US mortgage applications fall sharply; Japanese machinery orders drop; Thailand cuts rate; Indian exports lame; British inflation drops; UST 10yr 4.01%; gold up and oil down, NZ$1 = 60.6 USc; TWI = 69.2

Here's our summary of key economic events overnight that affect New Zealand with economic data is light today and we await signals from the building Wall Street earnings season. Markets seem positive about what is ahead.

Meanwhile in the US, mortgage applications fell very sharply last week from the prior week, down -17% and the most in nine years (excluding the pandemic). And that was on top of the more than -5% drop last week. The reason is that benchmark mortgage interest rates have been rising for three weeks and are now at a 2 month high of 6.52% for the standard 30 year mortgage.

Canadian housing starts came in at a 224,000 annual rate in September, 18,806 for the month, less than expected but more than in August.

Japanese machinery orders, excluding those for ships and electric power companies, fell -3.4% in the year to August from the same period a year ago. This is a large miss because they were expected to rise +3.6% on that same basis. It was the fifth drop so far this year. Orders for those excluded items (ships and electric power companies) were quite good however, mitigating the fall.

The Bank of Thailand unexpectedly cut its key interest rate by -25 bps to 2.25% during its October meeting late yesterday, marking the first rate cut since early 2020. It was a move long advocated by the government but it was still not expected. They have a sluggish economy and inflation is now below the lower end of its target range of between 1% to 3%.

Indian exports remained quite lackluster in September at US$34.6 bln and virtually unchanged from a year ago. India is no export powerhouse yet. Imports were US$55.4 bln, so they ran yet another trade deficit and they have been doing that now since 1997 (with one exception in one month in the 2020 pandemic).

British CPI inflation fell to 1.7% in September, its lowest level since April 2021. It was down from 2.2% in August. But much of this sharply lower level came from sharply lower airline ticket prices, something that may be a bit of a one-off.

In Australia, they reported an unusually low birth rate yesterday, with a record low fertility rate. (But it is similar to New Zealand's.) High housing costs are getting the blame.

The UST 10yr yield is now at just on 4.01% and down -3 bps from yesterday. The key 2-10 yield curve is positive, but tightened to +7 bps. Their 1-5 curve inversion is still inverted by -34 bps. And their 3 mth-10yr curve inversion little-changed at -78 bps. The Australian 10 year bond yield starts today at 4.23% and down -3 bps. The China 10 year bond rate is at 2.14% and dipping -1 bp. The NZ Government 10 year bond rate is just under 4.43%, down -2 bps from this time yesterday.

Wall Street has started today with the S&P500 up +0.4% in Wednesday trade. Overnight, European markets were mixed with London up +1.0% and Paris at the other end down -0.4%. Tokyo was down -1.8% yesterday. Hong Kong fell -0.2%. And Shanghai was up a minor +0.1%. Singapore was down -0.1%. The ASX200 ended its Wednesday session down -0.4% and the NZX50 fell a rather sharp -1.6% on the day with a building afternoon slump.

The price of gold will start today at US$2670/oz and up +US$9 from this time yesterday - and a new all-time high.

Oil prices are holding lower at just on US$70.50/bbl in the US while the international Brent price is still just under US$74.50/bbl.

The Kiwi dollar starts today at 60.6 USc and down -20 bps from this time yesterday. Against the Aussie we are up +20 bps at 90.9 AUc. Against the euro we have dipped -10 bps to 55.7 euro cents. That all means our TWI-5 starts today now just under 69.2, and marginally lower that at yesterday at this time.

The bitcoin price starts today at US$67,639 and up another +0.9% from this time yesterday. Volatility over the past 24 hours has been modest at under +/- 1.7%.

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