Here's our summary of key economic events overnight that affect New Zealand, with news the market assumption that Trump's upcoming meeting with Chinese president Xi would calm trade matters seems up in the air again, with that meeting now suddenly less certain. And a Trump-Putin meeting chance is fading. As well as the Gaza truce holding. Markets are in a wait-and-see mode today. But precious metals prices are giving back some of their recent gains in sharp moves lower.
But first, today's full dairy auction delivered an average price of US$3881/tonne, down -1.0% from the prior full event two weeks ago. But the key WMP price fell a sharp -4.6% as the derivatives market had signaled, while the SMP price fell -2.1%, only half the derivatives market signal. Butter and the cheeses fell, but there was a big gain for AMF. Apparently. The auction system suffered glitches so these details are interim and are subject to change.
In the US, their Federal Government shutdown is getting ever more toxic, now in its third week. A key White House economic advisor said yesterday the shutdown is “likely to end sometime this week,” though warned that if it doesn’t, the Trump administration may resort to “stronger measures” to pressure Democrats. There seems no resolution in sight amid the partisan standoff. Republicans are pushing for a short-term funding bill to maintain current spending levels (something they railed against when Biden was President), while Democrats insist any deal must include expanded health-care provisions, specifically an extension of Obamacare tax credits set to expire at the end of 2025. Curiously, Obamacare has its deepest hold in Republican states.
In American private sector data released overnight, there was quite a dive in the Redbook retail sales data tracking for last week. As its a one-off, it is not possible to say whether this is an anomaly or an indication of some sharp retail cooling. But it is worth watching. It could well be that tariff-tax price hikes are sapping retail demand.
In Canada, they got an inflation surprise. Their CPI inflation rose to 2.4% in September from 1.9% in the previous month, and higher than analyst expectations of 2.3% and the highest inflation rate since February. It was the first time inflation crossed the Bank of Canada's 2% threshold in six months. Even their core inflation rate rose more than expected. But some of this jump can be explained by base effects related to their petrol price. The Bank of Canada next reviews their policy rate next week and more than a 50/50 chance of a -25 bps cut is priced in by financial markets. That would take their policy rate to 2.25%.
Across the Pacific in Taiwan, their export prowess actually gained momentum in a spectacular fashion in September. Orders for Taiwanese exports surged by more than +30% year-on-year to an all-time high exceeding US$70 bln in the month, accelerating from a 19.5% increase in the previous month and far surpassing market expectations of a +18% gain. Demand for AI products surged.
In Japan, Sanae Takaichi has won the prime ministership, building a coalition with the Japan Innovation Party, and will now chase spending reforms and expansionary fiscal policies, in the style of ex-PM Shinzo Abe. The Yen weakened sharply as a result.
In Argentina, despite more overt US support, the peso has fallen sharply again.
In Australia, they are glowing after successful Albanese deals with the US. But now delivering meaningful rare earth production become the priority. It will likely reinvigorate an already successful mining sector. If demand from China slows, as some expect, this could keep their mining sector party going for a while longer.
The UST 10yr yield is now at 3.96% and down -3 bps from this time yesterday. The key 2-10 yield curve is now at +50 bps. Their 1-5 curve is now inverted again but only by +1 bp. And their 3 mth-10yr curve is now -6 bps inverted. The China 10 year bond rate is up +1 bp at 1.77%. The Australian 10 year bond yield starts today at 4.12%, down -3 bps from yesterday. The NZ Government 10 year bond rate starts today at just on 4.00%, down -3 bps.
Wall Street marking time with just a +0.1% gain on the S&P500. Good earnings reports continued to flow. Overnight European markets rose between London's +0.2% and paris's +0.6%. Yesterday, Tokyo ended its Tuesday session up +0.3%. Hong Kong rose +2.4% and Shanghai gained +1.4%. Singapore was up +1.2%. The ASX200 ended its Tuesday up +0.7%. But the NZX50 only gained +0.2%.
The price of gold will start today very sharply lower at US$4121/oz, down a massive -US$225 from yesterday, a -5.2% correction. Silver has fallen proportionately more, down to US$48.50/oz.
American oil prices are +50 USc firmer at just under US$57.50/bbl, with the international Brent price now just under US$61.50/bbl. But even American plans to refill its strategic reserves with more than 1 mln barrels hasn't shifted the price.
The Kiwi dollar is at just under 57.5 USc, and little-changed from yesterday. Against the Aussie we are up +20 bps at 88.4 AUc. Against the euro we are also up +20 bps at 49.5 euro cents. That all means our TWI-5 starts today at just over 62 and little-changed.
The bitcoin price starts today at US$113,511 and up +2.7% from this time yesterday. Volatility over the past 24 hours has been moderate at just over +/- 2.7%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
22 Comments
Gold and Silver down very significantly, but without any news to justify this pullback (please correct me if you know better). It seems this is profit taking after an incredible run. Any opposing thoughts ?
I think it’s people shopping around for better returns after an amazing run. BTC pumped briefly at the same time gold and silver pulled back.
Better returns ??? Gold is up about 60% this year!
The run-up in prices over the last 2-3 months on the futures market attracted attention from traders interested in short-term profits (by buying long contracts). When the prices had gone up dramatically it was relatively easy for the bullion banks (who are interested in price stability) to issue a large number of short contracts and get the above traders to sell their long contracts.
A copy & paste from Alasdair Macleod below if interested..
Market makers and bullion banks have been badly squeezed by the recent rise in gold and silver. In theory, they are long in London and short on Comex so have even books. We cannot know if this is true of all of them (unlikely) and we are talking about derivatives, not bullion. No financial institution wants to hold bullion unnecessarily, because it ties up capital. But it is bullion which is now demanded in London.
Whether market makers and bullion banks are acting in concert to bash the market matters not. The commencement of a market correction would have been spotted by all of them, and they would have withdrawn their bids and even sold some positions to help push prices lower. And as nervousness spreads on falling prices, buyers just stand back. Given the enormous rises in price since mid-August, sudden falls of 5—10% are normal in this context, but it is likely to have shaken out a few panicking sellers allowing the shorts to close some of their positions.
For them, the last two days have been very profitable both on trading volumes and mark-to-market wise.
Furthermore, unless you are running a book in London or Comex and have the valuable information to hand which goes with it, it would be foolhardy to try to call the turn. Leave that to someone else.
Long experience of being whipsawed in various financial markets has educated me to a) not make specific price forecasts, and b) buy or sell if it is right to do so and not rely on gut feel, forms of analysis, or your personal ouija board. Traders more sophisticated than you lose money in these markets.
Given that this volatility is aimed at dislodging weak bulls, you must have a good reason for holding gold and silver, if indeed you do so. Providing that knowledge is the objective of MacleodFinance.com.
I’m aware. I meant they think the run may be over and time to try other options. Nothing pumps forever. Time to pivot. Just a theory..
Brief crypto crash leading to many flocking to gold and silver. It is slowly passing and the panic money is starting to treacle back out when rationale thought and anaylsis comes in.
This is well worth the read:
The Daily: 17 October 2025 – By My Solitary Hearth
Well worth the read; more importantly it demonstrates clear thinking (not always done).
'But this is also just how a profit-driven economy works. Those seeking to take more than they put into a system may have the best intentions, may seek to minimize the harm and spread the benefits, but it will do no good in the long run. The end is the same no matter the beginning intent. And it’s a not-so-long run when parasites fueled by dense energy sources run the system. This is a finite planet. This is a zero-sum game. In these conditions, real wealth will quickly concentrate in fewer and fewer hands. More and more people will find themselves pushed out of the system. The center will, inevitably, not hold.'
And we have lunatics in charge of nukes.
That's an oxymoron - or something like one.
To have nukes in the first place, was lunatic.
Lol, it may well be.....but then we are not a terribly prescient species.
An article to cheer you up....
Climate disaster science gets huge coverage. When it's found to be wrong... crickets
You didn't read my link.
How do I know?
:)
Edit - Lonborg is one of a genre who make very good money slewing the truth. They appeal to folk who need to believe (one such is very close by). The critical-literacy approach (my better-half did research in that area) is to ask where the switch is? From truth to spin. Because there's always a switch.
'We need to embrace data-driven solutions that address climate challenges without torching the global economy.' Peddling AI to keep the global Ponzi going, then? Read my link - and compare.
He is reporting on the research of others. Instead of speaking like the Riddler, perhaps, if you disagree, point out where the research is flawed?
Just did.
Read my link please.
Oh and - when you learn to stop self-reinforcement and replace it with critical thinking:
'Dr Lomborg provides a masterclass in the use of inaccurate and misleading sources to construct a bogus narrative.' (exactly what I said to DC, a long, long time ago).
Fact-Checking Climate Articles: Dr. Lomborg in the Wall Street Journal - The Oxford Blue
But I'm guessing you will find a way not to read that link, any more than the one I posted above.
LOL - communications troll Bob Ward of the uber green Grantham billionaires "institute"! Birds of a feather PDK?.
https://lomborg.com/response-bob-ward
"Let me give you a flavour of the sort of thing he says in a complaint. My article had said “A study in rural Kenya found that eating eggs made children grow five per cent faster.” Ward complained that “although the study did find that ‘a child who ate eggs once per day during the recall period grew 5% more in height than a child who ate no eggs’”, Ward thought the “claim was misleading because the study was not making a comparison with children on vegan diet”. But I had not claimed that it was. This is a very clear example of somebody being purely vexatious, not even expecting to win the point, just to waste my time. Indeed Ward’s aim seems to be never to win the point – that would be a bonus – but to tie us down in a time-consuming process of defending ourselves, in the hope that it deters us from offering similar articles to editors in the future, and deters editors from commissioning them. It works. He has frightened away some journalists and editors from the vital topic of climate change, leaving the catastrophists with a clear field to scare children to their hearts content."
https://www.nzherald.co.nz/business/economy/inside-economics-nzs-missin…
no more mojo, liam a gd read.
"Air New Zealand is expected to make a first half loss of up to $55 million amid weaker-than-expected passenger numbers and higher costs.
The national carrier's pre-tax loss was expected to land somewhere between $30m and $55m for the six months ending in December against an earlier forecast of a net profit of up to $34m"
https://www.rnz.co.nz/news/business/576618/air-nz-heading-for-first-hal…
I haven't used AirNZ for many years since work stopped paying them for my business travel: usually 2x alternative airline price & slack customer service
Too much of a small fish in a big pond. In my travelling days I too tried to avoid them, especially on long hauls. Flight deck and stewardesses were ok but some of the stewards were arrogant beyond description.
The Air NZ product is ok, but they have been very badly disrupted by the engine issues. I have had enough cancelled flights with them to avoid wherever possible.
They'll cancel if numbers are too low, but hey you'll get told 'engineering issues'. IYKYK
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.