Here's our summary of key economic events overnight that affect New Zealand, with news gold is soaring on US missteps, and oil is falling as demand falters while supply is rising fast.
Overnight US data was mixed. August pending home sales came in a little better than expected, up +4.0% from July, but only up +3.8% from year ago levels which themselves were relatively stunted. Less than 20% of American realtors expect the next three months to improve.
But the Dallas Fed factory survey reported a sharpish turn lower, a second consecutive monthly contraction in manufacturing activity and the steepest since June. But they still have growth, just far less. New orders dipped again. Costs continue to rise faster than selling prices.
The chances of a US federal government shutdown are rising with compromise no longer in anyone's vocabulary. Trump thinks no-one will blame him for his intransigence.
And apparently, the next US tariff target is movie production - something both Australian and New Zealand creative industries will look at with trepidation.
Singapore reported their producer prices rose. They grew by +1.1% in August from a year ago, after a -2.4% drop in the previous month. And this was their first producer price inflation since March 2025.
Later today, China will release its August PMI data, the key releases before their Golden Week holiday break that starts tomorrow.
In India, industrial production rose +4.0% in August from a year ago, slowing slightly from the upwardly revised 4.3% growth rate in July, but less than the expected +5% increase. Still, the result continued a reasonable first half of the year, showing that initial tariffs by the Americans did not have a significant immediate impact on their industrial activity.
But today's big news will be the RBA's upcoming rate review. Analysts expect no change at 3.6%. Financial markets are of the same view with nothing priced in to secondary market wholesale rates. But the RBA will be weighing the impact of relatively strong labour markets, good economic growth, low budget deficits and a strong fiscal impulse, along with rising CPI inflation touching 3.0% in August. Waiting could leave them with a harder-to-control inflation problem, although to be fair, no-one expects a rise today even if many think it would be warranted and wise.
The UST 10yr yield is now at 4.14%, down -5 bps from yesterday. The key 2-10 yield curve is now at +51 bps. Their 1-5 curve is positive by +10 bps. But their 3 mth-10yr curve is now only +1 bp positive. The China 10 year bond rate is down -3 bps at 1.88%. The Australian 10 year bond yield starts today at 4.32%, dowen -7 bps from yesterday. The NZ Government 10 year bond rate starts today at just under 4.24%, down -2 bps from yesterday.
Wall Street has started its week little-changed, with the S&P500 up just +0.2% and far less than the +1% the futures market had indicated. Overnight, European markets had a similar modest start. Tokyo ended its Monday session down -0.7%. However Hong Kong rose a sharp +1.9% while Shanghai was up +0.9%. Singapore rose +0.1%. The ASX200 ended its Monday up +0.9% while the NZX50 managed just a +0.2% gain.
The price of gold will start today at US$3830/oz, up +US$72 from yesterday and a new all-time high. Silver had yet another big spurt, now almost at US$47/oz. This latest surge puts the US gold stockpile at Fort Knox and the NY Fed now worth more than US$1 tln.
American oil prices are down a sharpish -US$2 at just over US$63/bbl, with the international Brent price now just over US$67.50/bbl. With global demand wavering, the planned OPEC increase, plus the resumption of Iraqi oil from their Kurdistan region has traders talking about a glut.
The Kiwi dollar is at just over 57.8 USc and up +10 bps from yesterday. Against the Aussie however we are down -25 bps at 87.9 AUc and that is the lowest in three years. Against the euro we are little-changed at 49.3 euro cents. That all means our TWI-5 starts today at just on 65.1, down -10 bps.
The bitcoin price starts today at US$113,795 and up +3.2% from yesterday. Volatility over the past 24 hours has been modest at under +/- 1.8%.
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10 Comments
Takeover offer for Restaurant Brands, majority shareholder wants the last 25% of the company. $5 offered, ~$3 share price recently. They bought the other 75% for $9.45 back in 2019...
For those unaware, RBD runs KFC, Pizza Hut, Taco Bell and Carl's Jr restaurants in NZ, and some brands in Australia and a few other territories. Another NZX company bites the dust.
Good time to buy it seems
Uneven transfer pricing put the kibosh on profits.
'This latest surge puts the US gold stockpile at Fort Knox and the NY Fed now worth more than US$1 tln.'
Yeah, but what's a USD worth?
And apparently, the next US tariff target is movie production - something both Australian and New Zealand creative industries will look at with trepidation.
As will the American creative industries. Witness the Jimmy Kimmel saga. It is the artists and creatives who often step in to lead in the face of immoral behaviour.
https://www.msn.com/en-us/entertainment/news/jane-fonda-says-friend-rob…
It is the artists and creatives who often step in to lead in the face of immoral behaviour.
Reminds me of Ricky Gervias warning at the Golden Globes. Part humor, part truth:
“If you do win an award tonight, don’t use it as a platform to make a political speech. You’re in no position to lecture the public about anything. You know nothing about the real world. Most of you spent less time in school than Greta Thunberg”.
The price of gold will start today at US$3830/oz, up +US$72 from yesterday and a new all-time high.
I mentioned gold revaluation quite some time ago. At the water coolers and BBQs, it's seen as little more than conspiracy. ZH has an absolute pearler on this.
That is more than 90 times what's stated on the government's balance sheet and is reigniting speculation that Treasury Secretary Bessent could revalue (mark to market) the massive pile of precious metal
Unlike most countries, the US’s gold is held by the government directly, rather than the central bank.
The Fed instead holds gold certificates corresponding to the value of the Treasury’s holdings, and credits the government with dollars in return.
That means, as we detailed previously, that an update of the reserves' value in line with today's prices would unleash roughly $990 billion into the Treasury’s coffers, dramatically reducing the need to issue quite so many Treasury bonds this year.
While Treasury Secretary Bessent initially dismissed the suggestion, a trillion dollars here and a trillion dollars there adds up and it would be by no means unprecedented. As Bloomberg reports, Germany, Italy and South Africa all have taken the decision to revalue their reserves in recent decades, as an August note from an economist at the Federal Reserve discussed.
https://www.zerohedge.com/precious-metals/gold-revaluation-imminent-us-…
The hypocrisy is starting to show. I remember that I suggested that China could flood Aussie and Aotearoa with cheap consumer goods. The Age reports on Aussie's support for a global crackdown on the oversupply of goods such as electric vehicles and steel from China. The article discusses growing concerns in Australia and other Western nations that China's rapid manufacturing expansion could undermine Western competitors and provide Beijing with increased influence in critical industries through aggressive price competition.
https://www.theage.com.au/politics/federal/as-chinese-cars-flood-the-ma…
The problem is that that is where mindless 'market economics' ends up - 5-minutes-to-breaking crap which cost little and ends in landfills.
That's the bigger issue.
It is, but for some reason we persist.
Sapiens?
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