Here's our summary of key economic events overnight that affect New Zealand, with news bond markets are ramping up their defensive posture, especially in the US, as American economic data fades further.
But first up today, there was a GlobalDairyTrade Pulse powder auction today and prices slipped again. They were down -1% from the prior full event a week ago for SMP and dived a rather sharp -4% for WMP. This will keep downward pressure on payout forecasts for the current season, especially the WMP result.
In the US, the ADP weekly employment report said a net -13,500 US jobs were lost last week, the largest weekly drop since ADP started releasing their weekly data. The pace of payroll shrinkage seems to be rising in the US.
American retail sales growth slowed to +4.3% in September from the + 5.0% rise in August. On a monthly basis, retail sales rose +0.2%, half the expected +0.4% increase and suggesting the weakness is concentrated recently. Observers will be watching the weak car sales component, especially.
Producer prices rose +2.7% in September from a year earlier, exactly as expected.
Pending home sales fell -0.4% in October from year-ago levels, the second consecutive monthly dip, and the eighth of 2025. However they did record a seasonal rise from September.
The latest factory survey from the Richmond Fed covering the mid-Atlantic states was quite negative.
And the Dallas Fed services survey was downbeat too, although the contraction there was at a slower pace than in October.
So it will be no surprise to learn that the Conference Board's consumer sentiment survey was also quite negative, falling sharply and mirroring the similar University of Michigan survey. Perceptions of inflation rose, to 4.8%.
And traditional Thanksgiving travel plans are being scaled back. They were expecting a rise this year, but the economic situation and uncertainties about disruptions are seeing an unexpected rise in cancellations, so a decline is now anticipated.
Across the Pacific in South Korea, consumer sentiment is rising. Their central bank's survey revealed a Composite Consumer Sentiment Index at the highest reading since November 2017. Their renewed confidence follows a major trade agreement with the US and stronger-than-expected economic growth.
In Taiwan, retail sales rose +1.9% in October from the same month a year ago, a bounce-back from the -1.6% dip in September. Meanwhile their industrial production expanded sharply again, up another +14.5% on that same year-on-year basis, although the pace of expansion seems to be slowing a bit even if it is strong.
The UST 10yr yield is now under 4.00%, down -5 bps from this time yesterday to 3.99% as a defensive mood takes hold. The key 2-10 yield curve is now at +52 bps. Their 1-5 curve is now inverted by -4 bps and the 3 mth-10yr curve is now +5 bps positive. The China 10 year bond rate is little-changed at 1.82%. The Australian 10 year bond yield starts today at 4.43%, down -2 bps from yesterday at this time. The NZ Government 10 year bond rate starts today at 4.29%, down -2 bps from yesterday.
Wall Street is firmish with the S&P500 up +0.3% in Tuesday trade. European markets were all up +0.9% overnight. Tokyo ended up just +0.1% yesterday. However Hong Kong rose +0.7% in Tuesday trade and Shanghai ended up +0.9%. Singapore slipped -0.2%. The ASX200 ended its Tuesday trade up +0.1% while the NZX50 ended down -0.1%.
The price of gold will start today at US$4138/oz, and up +US$42 from yesterday.
American oil prices have fallen -US$1 from yesterday to be just on US$57.50/bbl, with the international Brent price now just on US$62/bbl.
The Kiwi dollar is holding at just under 56.1 USc, and little-changed from yesterday. Against the Aussie we are up +10 bps at just under 87 AUc. Against the euro we have dropped -20 bps to 48.5 euro cents. That all means our TWI-5 starts today at just under 60.8, and little-changed if soft.
The bitcoin price starts today at US$86,996 and down -0.3% from yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.2%.
Today, the RBNZ will review the OCR and issue its final Monetary Policy Statement of the year. Join us from 2pm when we will start our full coverage.
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7 Comments
"SpaceX has now launched more mass to orbit since their first flight in 2006 than the rest of the US combined has for its entire history."
https://x.com/ApoStructura/status/1989794100074484196/photo/1
Listening to two representatives of the biggest political parties on rnz. Why does anyone vote for these ideological idiots. Neither have anything to offer and yet still voters persist.
They try to be centre but their real agendas always shine through. For example I wish National had spent money on infrastructure of all forms instead of cancelling hospitals, ferries, public transport and state housing and going roads only. I align with their personal responsibility ideals, I like that they are tackling crime, retirement and education, but otherwise a bunch of numpties. Then if I vote Labour, the handouts and crime will take off.
In the past I've been very interested in politics but I really don't know who I'm going to vote for. They are all just so bad. I was thinking of TOP just cause they are relatively new and might add something different
This lot do though appear to be pushing things out in front of them in the way of reforms and/or attempts to lighten the dead hand of bureaucracy whereas the last lot could only seem able to react after the event, once something happened. The present government really only got underway in January 2024 and straightening things always takes up time and effort. For instance even Grant Robertson had appeared to acknowledge that the initial proposal for ferry replacement was not practicable so obviously that first needed to be disengaged before another option could be formulated.
The cost difference in the ferry options was about half a years $20 tax cut. I’d rather they did it properly, the current solution seems like a band aid.
One term of tax cuts has cost us $9 billion of infrastructure. Plus all the jobs, economic activity, and tax money that infrastructure would produce. It’s silly to be looking at the cost only, National cut a load of local jobs with that ferry change too.
Was the first effort an attempt to provide a solid future foundation?
The cancellation seem like ideology to me. Future needs, if growth is a goal, would suggest a bigger ferry, but existing infrastructure would be a constraint. What were the long term perspectives of the first option v the current one?
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