Markets position for Fed decision; another US factory survey weak; China data below expectations; Indonesia splashes stimulus; climate risk in focus; UST 10yr at 4.04%; gold rises, oil up; NZ$1 = 59.7 USc; TWI-5 = 66.7

Here's our summary of key economic events overnight that affect New Zealand, with news both the US and China are eyeing rate cuts to bolster wavering economies.

While all financial market attention is on the US Fed and its Thursday rate review - and market positioning is underway relative to the expected -25 bps cut - there is other economic news being released.

The New York Empire factory survey delivered a negative surprise with new order levels falling sharply when they were expected to rise. That drove their overall survey negative when an expansion was anticipated.

Across the Pacific, and in an unexpected result, China's retail sales data was released and were expected to have grown faster in August by +3.8%, up from +3.7% in July. Some anticipated a +5% rise. But in the end the rise was only +3.4%, and that was an eight month low.

China's August industrial production was up +5.2%, a one year low, good but less than the +5.7% in July and also less than the expected +5.8%. All this was done with only a +1.6% rise in electricity production, and -3.2% fall in the production of fossil fuels, according to these official stats.

China's house prices were generally stable in August. There were a few more signs of marginally higher prices in a few more cities for new developments. But the sales prices of pre-owned housing continues its slow droop and the trend is becoming ever more embedded as pressures mount.

But probably worse from China was that fixed asset investment hardly rose, up just +0.5% for the eight months from the same period a year ago. It was expected to have risen +1.4% on this ytd basis. August 2025 alone actually came in lower than August 2024, a worrying sign.

It is possible that the upcoming review on China's Loan Prime Rates may be cut to bolster their wobbly economic position. These are due for official review at the weekend.

In Indonesia, they launched a new US$1 bln economic stimulus package to boost economic growth as a way of stabilising widespread unease about the country's direction.

Indian exports softened in August, and their imports did too and by a bit more. That meant the expected -US$30 bln trade deficit for the month was lower than in July and lower than expected.

India also had good labour market news with their jobless rate falling to a record low of 5.2% when a small rise was anticipated.

In Australia, their National Climate Risk Assessment was released yesterday. They are trying to prioritise and plan how they will adapt and respond. The report says that while the world is already 1.2ºC hotter than during pre-industrial times, because of its sheer land size Australia is warming faster and is 1.5ºC hotter. Australia is experiencing more intense heatwaves on land and sea, rising seas and more frequent coastal flooding. Although the usual suspects remain in denial, a surprising number are now accepting it has become an urgent issue. Insurance premiums, even availability, will be how it will affect most people in Australia.

But back with the headline financial market news. Ahead of the US Fed decision, equity markets are buoyant and all-in on optimism, but bond markets are wary, the USD is wavering, and commodity prices are little changed except for precious metals.

The UST 10yr yield is now at 4.04%, down -2 bps from yesterday at this time. The key 2-10 yield curve is still at +50 bps. Their 1-5 curve is still inverted by -4 bps. And their 3 mth-10yr curve is now inverted -11 bps. The China 10 year bond rate is up +5 bps at 1.87% and a six month high. The Australian 10 year bond yield starts today at 4.25%, up +2 bps from yesterday. The NZ Government 10 year bond rate starts today at just over 4.35%, up +4 bps from yesterday.

Wall Street has started its week up +0.4% on the S&P500 and a new record high. Overnight, European markets were mixed with London down -0.1% in Monday trade, but Paris up +0.9%. Tokyo also rose +0.9% in its Monday session. Hong Kong was up +0.2% with Shanghai down -0.3%. Singapore slipped a minor -0.1% which is the result for the ASX200, and the NZX50.

The price of gold will start today at US$3,679/oz, up +US$38 from yesterday.

American oil prices are up +US$1 at just under US$63.50/bbl, with the international Brent price firmish just on US$67.50/bbl.

The Kiwi dollar is at just under 59.7 USc and up +10 bps from yesterday. Against the Aussie we are down -10 bps at 89.5 AUc. Against the euro we are also down -10 bps at 50.7 euro cents. That all means our TWI-5 starts today at just over 66.7, little-changed from yesterday.

The bitcoin price starts today at US$114,938 and down -0.6% from this time yesterday. Volatility over the past 24 hours has been low at just under +/- 1%.

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