US data turns defensive, Fed minutes awaited; Japanese machine orders rise along with bond yields; stunning demand for China bonds; Malaysia exports star; UST 10yr at 4.11%; gold firm and oil soft; NZ$1 = 56 USc; TWI-5 = 60.7

Here's our summary of key economic events overnight that affect New Zealand, with news markets are even more skittish today, with key activity moving into bond markets even at higher yields.

First, American mortgage applications fell back last week and by their most since late September. Fears about rising interest rates are getting the blame as it sinks in that highish inflation isn't going away. Refinance activity was the hardest hit. Still, it and purchase application levels remain well above year-ago levels.

There was also official data released overnight, old catchup data for the US trade balance for both goods and services. That came in at the expected -US$50 bln deficit for August, exports flat, imports also flat. That was slightly better than August 2024 but almost identical to August 2023.

And there will be no October jobs report from the US. It has been cancelled, officially because they "couldn't collect some data", but more likely because it would have delivered news the White House didn't want.

Meanwhile reports circulate that the US is not only rolling back tariff-taxes on food imports, it is also close to rolling them back on steel and aluminium, maybe like the food rollback, somewhat selectively.

The latest US Treasury 20 year bond auction raised US$17.8 bln at a median yield of 4.65%, up from 4.46% at the prior equivalent auction a month ago.

The US Fed minutes of their last meeting on October 30 are due to be released at 8AM NZT. There is intense interest in these, more so because Trump as one acolyte in on the meetings pushing for [dangerous] rate cuts. If there is important stuff that emerges, we will update this item here.

Update: The release of the minutes for the last US Fed meeting exposed the tensions at that meeting. Those minutes noted "strongly differing views". You will recall they cut by -25 bps at that meeting, but the inside push for more cuts generated equally strong pushback for the same at the December meeting, most opting for no change over the medium term because of the inflation risks.

In Japan, September machinery orders rose a better-than-expected +11.6% from the same month a year earlier, up an impressive +4.2% from August. (This result is not twisted by large, volatile items like for ships or major infrastructure machinery such as electric power plants. That would have pushed the rise even higher.) Export orders were particularly notable.

And Japan’s 10-year government bond yield rose above 1.77% on Wednesday, a 17-year high. A year ago it was at 1.06%. The recent climb comes ahead of a crucial ¥800 bln debt auction (US$5.1 bln) that could indicate investor appetite signals. That is important because the new Takaichi government plans major debt-financed stimulus which is raising fiscal concerns.

Meanwhile, China has raised US$8.6 bln in USD and EUR bonds. While that is a lot for them, it pales compared to the US$234 bln that was bid.

In Malaysia, they are still an export powerhouse with October exports up +15.7% from a year ago and to a record high, imports up +11.2%, also a record high, resulting in a larger positive trade balance than expected. In fact, they haven't run a trade deficit in any month since the pandemic.

As expected, the Indonesian central bank left its policy rate unchanged yesterday at 4.75%.

In Australia, payroll costs rose pretty much as expected in the September quarter. They were up +3.4% year-on-year in Q3 2025, unchanged from the previous quarter. Public sector wages increased +3.8%, slightly above the +3.7% rise in Q2, while private sector wages grew by +3.2%, easing from +3.4% previously. (Overall, total wages and salaries for all employees rose +5.3% for the year to September, boosted by an expanding workforce.)

The UST 10yr yield is now at 4.11%, down -3 bps from this time yesterday. The key 2-10 yield curve is still at +54 bps. Their 1-5 curve is +2 bps positive and the 3 mth-10yr curve is still +18 bps positive. The China 10 year bond rate is little-changed at 1.81%. The Australian 10 year bond yield starts today at 4.44%, essentially unchanged. The NZ Government 10 year bond rate starts today at 4.25%, down -6 bps.

Wall Street is ending today with the S&P500 little-changed after starting up sharply, currently up +0.3%. Overnight, European markets were mixed between London's -0.5% and Frankfurt's +0.1%. Yesterday, Tokyo closed is Wednesday session down -0.3%. Hong Kong was down -0.4% and Shanghai was up +0.2%. Singapore was essentially unchanged. The ASX200 was down -0.3% in its Wednesday trade. And the NZX50 dipped a minor -0.1%.

The price of gold will start today at US$4071/oz, and up +US$10 from this time yesterday.

American oil prices have softened -50 USc from yesterday to be just under US$59.50/bbl, with the international Brent price down to under US$63.50/bbl.

The Kiwi dollar is now at just on 56 USc, and down -60 bps from yesterday. Against the Aussie we are down -30 bps at 86.7 AUc. Against the euro we are down -40 bps at 48.5 euro cents. That all means our TWI-5 starts today at just over 60.7, and down -50 bps from yesterday, to its lowest since July 2009.

And we probably should note that the NZD has now fallen below 4 Chinese renminbi for the first time in three years.

The bitcoin price starts today at US$89,524 and down a sharp -4.2% from yesterday and well lower than year-ago levels. In fact, it is falling as we publish. Volatility over the past 24 hours has been moderate at just on +/- 2.4%.

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