US data mixed but leading indicators weaken; many more central banks review rates; Australian labour market stumbles; container freight rates fall; UST 10yr at 4.10%; gold soft, oil lower; NZ$1 = 58.8 USc; TWI-5 = 66

Here's our summary of key economic events overnight that affect New Zealand, with news the New Zealand dollar has been re-rated sharply lower overnight, although to be fair only back to levels it was at in April. US benchmark interest rates are rising but the new weaker New Zealand economy is expected to drive the OCR lower than earlier expected.

But first in the US, initial jobless claims came in lower than expected at +194,500, a decrease of 10,400 from the prior week when an increase of about that was indicated by seasonal factors. There are now 1.75 mln people on these benefits, +81,000 more than at this time last year.

Meanwhile, the Conference Board Leading Economic Index (LEI) retreated in August. A retreat was expected but it came in more than twice the expected decline. That means the LEI fell by -2.8% over the six months between February and August, a faster rate of decline than its -0.9% contraction over the previous six-month period. They noted persistently weak manufacturing new order levels and consumer expectations, and warn of increased headwinds ahead.

But it is not weak everywhere. The Philly Fed factory survey for September picked up a modest rise in new orders. But firms in the region remain under sharp price pressure unable to pass on the higher prices they are paying.

On the farm, the giant American soybean crop is about ready for harvest, and farmers are glum. The Chinese aren't buying and the Washington isn't coming to the rescue with subsidy support. Prices are back to 2016-2018 levels and the rural concern is palpable.

In Financial markets, there was a notable less well-supported US Treasury inflation protected (TIPS) bond tender today that resulted in a median yield of 1.65% plus CPI inflation, compared to 1.93% plus CPI at the prior equivalent event three months ago.

There were more central bank rate reviews overnight. Taiwan kept its policy rate unchanged at 2.0%. They have an inflation target of 2.0% and their CPI is currently running at 1.6%. Norway cut theirs by -25 bps to 4.0% in what has been called a "hawkish cut". They have inflation at 3.0% with their target at 2.0%. And the Bank of England held theirs at 4% as expected. They have inflation at inflation at 3.8% when their target is 2%. South Africa held at 7%. Inflation there is 3.3% with a preferred rate of 3.0%.

China announced that its Boeing and Airbus-competing C919 aircraft has now received more than 1000 orders, mostly domestic but some international orders as well.

Australian labour markets stumbled somewhat in August, falling -5,400 when a small +22,000 rise was expected. And the detail is even less positive because full-time employment fell by -40,900 to 10,077,300 people while part-time employment rose by +35,500 to 4,549,200 people. None of these changes were enough to materially change their 4.2% unemployment rate.

And staying in Australia, coal mines are closing as coal prices have retreated and are now back to 2016 levels. Companies are trying to blame 'state royalty levels' but the real driver are the low global prices.

Container freight rates fell -6% last week from the prior week with all the weakness coming from outbound rates from China. But bulk freight rates rose +3.4% last week to be +14.6% higher than year ago levels.

The UST 10yr yield is now at 4.11%, up +4 bps from yesterday at this time in a steady rise. The key 2-10 yield curve is now at +53 bps. Their 1-5 curve is no longer inverted and positive by +5 bps. And their 3 mth-10yr curve is now positive by +2 bps. The China 10 year bond rate is up +1 bp at 1.86%. The Australian 10 year bond yield starts today at 4.24%, up +1 bp from yesterday. The NZ Government 10 year bond rate starts today at just on 4.25%, down -5 bps from yesterday.

Wall Street is now up +0.6% on the S&P500 on expectations more US rate cuts are coming as the US economy weakens. Overnight, European markets were all up in Thursday trade between London's +0.2% and Frankfurt's +1.4% spurt. Tokyo rose +1.1% yesterday. Hong Kong however fell -1.4% and Shanghai fell -1.2%. Singapore fell -0.3%. The ASX200 fell -0.8% in Thursday trade. And that was matched by the NZX50.

The price of gold will start today at US$3,643/oz, down -US$15 from yesterday's post Fed dip.

American oil prices are down -US$1 at just under US$63.50/bbl, with the international Brent price at just under US$67.50/bbl.

The Kiwi dollar is at just on 58.8 USc and down -90 bps from yesterday. Against the Aussie we are down -70 bps at 88.9 AUc. Against the euro we are down -50 bps at 49.9 euro cents. That all means our TWI-5 starts today at just under 66, down -50 bps from yesterday.

The bitcoin price starts today at US$117,553 and up +1.3% from this time yesterday. Volatility over the past 24 hours has again been modest at just on +/- 1.2%.

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