Here's our summary of key economic events overnight that affect New Zealand, with news the US Fed is meeting but flying blind on both inflation and jobs data. But other indications suggests the US economy is fading faster than previously assumed.
In the US oil patch, the Dallas Fed said service sector activity contracted further in October with the revenue index, a key measure of service sector conditions, falling to its lowest reading since July 2020. Employers are shedding jobs, they noted.
Things weren't great in the mid-Atlantic states region but not as tough as in Texas. The Richmond Fed's factory survey contracted less in October than September, but they also reported employers shedding jobs.
Despite those two reports, the ADP Employment Report indicated that private payrolls rose an average of +14,000 jobs per week in the four weeks ending on October 11, as they move to fill the labour market data void because of the BLS shutdown. If that pace holds for October, US jobs growth in the month will be about +57,000 and better than the -32,000 in September decline. Both are unusually low levels. (In October 2023, the US reported +186,000 job gains, so they have fallen a long way since then.)
Also not as negative as expected is US consumer sentiment as measured by the Conference Board. It did ease lower in October, but not as low as some had feared although it is now at a six month low. Those on low incomes (under US$75,000/year) or over 55 years were more negative than those 35-55 and on higher incomes.
But overnight a range of large employers announced job cuts. UPS said it has shed -48,000 jobs, Amazon -14,000. They aren't the only ones. On top of the US Federal Government furloughs, they are facing some significant labour market strain.
The Fed will likely deliver a -25 bps rate cut tomorrow.
Across the Pacific, South Korea said its economy grew +1.7% real in Q3-2025 from the same quarter in 2024, building on a widening expansion. Over the past year, all of their growth has come in Q2 and Q3-2025.
Chinese president Xi and US president Trump are due to meet to try and work out a trade accommodation. It will be ironic that Trump can compromise with another dictator, but not with elected representatives in his own country.
In India, they reported that their expansion of industrial production held up better than expected. It rose +4.1% in August and that was expected to ease to +2.6% in September. But in fact their fast expansion rolled on with a +4.0% gain last month. Their factory sector rose +4.8% on the same basis. This is a very good result for them.
In Europe, inflation expectations dipped slightly to 2.7% in October.
Later today, Australia will report its September inflation results, both their quarterly CPI and their monthly inflation indicator. Both are expected to rise to the 3% level. Recent comments by the RBA governor suggest they are in no hurry to cut their policy rate, given inflation remains high and their labour market is still expanding. They next review their cash rate target on Tuesday, November 4, 2025.
The UST 10yr yield is now at 3.99%, dipping another -1 bp from yesterday. The key 2-10 yield curve is now at +48 bps. Their 1-5 curve is now flat as its the 3 mth-10yr curve. The China 10 year bond rate is down -4 bps at 1.75%. The Australian 10 year bond yield starts today at 4.18%, up +1 bp from yesterday. The NZ Government 10 year bond rate starts today at just on 4.04%, up +2 bps from yesterday.
Wal Street is up +0.4% on the S&P500 after an initial hesitation break. Overnight, European markets were mixed between London's +0.4$ rise and Paris's -0.3% fall. Yesterday Tokyo ended down -0.6% a small dip after the prior day's very strong rise. Hong Kong dipped -0.3% and Shanghai was down -0.2%. Singapore rose +0.2%. The ASX200 was down -0.5% in Tuesday trade. The NZX50 rose +0.1% in its trade yesterday.
The price of gold will start today at US$3956/oz, down another -US$37 overnight.
American oil prices are down -US$1.50 from yesterday at just on US$60/bbl, with the international Brent price just under US$64.50/bbl.
The Kiwi dollar is now at just on 57.8 USc, and up +10 bps from this time yesterday. Against the Aussie we are down -10 bps at 87.8 AUc. Against the euro we are up +10 bps at 49.6 euro cents. That all means our TWI-5 starts today at just under 62.3 and up +10 bps from yesterday.
The bitcoin price starts today at US$115,406 and down a minor -0.2% from this time yesterday. Volatility over the past 24 hours has again been modest at just on +/- 1.0%.
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8 Comments
David you may want to fix UST 10yr at 33.99%
or full your boots, better then NZ Housing
Maybe he’s looked forward a few years…
It will be ironic that Trump can compromise with another dictator, but not with elected representatives in his own country.
Not really, Trump is a bully, so he will bully those he can, and he will try to reach an agreement with those he can't bully. This tells us clearly that China is more than a match for the US.
At that level politically yes. I do agree with your summary of Trump, but would add that he is an immature bully.
Worse he is utterly blind to how others see him (not all that uncommon) which essentially results in him understanding few if any, restraints in the way he behaves and acts towards and treats others. He doesn't seem to understand that behind his back, he is a laughing stock amongst world leaders, but those who have to, suck up to him to his face because their nation is vulnerable to him in some way. Those that can are build resilience that doesn't depend on the US, and he will find over time those cowtowing to him will reduce. Xi is not alone in standing up to him; Mark Carney in Canada is demonstrating a high level of calm leadership in the face of Trump's chaos. Potentially the best PM they've had for a very long time.
Agreed on all counts, and I stand corrected, he's an immature bully.
Regardless of Trump himself, his characteristics, the most disturbing and damning feature is how the political system firstly allowed him to rise and secondly, then inexplicably feed him such unbridled power.
Absolutely. The architects of the political systems across most if not all democratic societies always seem to fail to anticipate the corruption of those within allowing less than salubrious individuals to rise. In the US though, their system has got built in checks and balances, but the partisan political system has corrupted the process so much that they have turned those checks and balances on their ear, some gradually, others by design.
The electoral colleges were an aspect that astounded me. My queries and few articles have confirmed that the laws do not require the colleges to vote in accordance with the electoral results of their states. This in effect means that they can be co-opted to vote in a direction other than the will of the people. The whole democratic electoral system is fraught and in danger.
"The whole democratic electoral system is fraught and in danger."
Assuming a democratic system existed to destroy....at best the US was a flawed democracy.
https://www.democracymatrix.com/ranking
https://worldpopulationreview.com/country-rankings/democracy-countries
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