Here's our summary of key economic events overnight that affect New Zealand, with news notable data in both Australia and New Zealand yesterday has reset our currencies and our benchmark interest rates.
In New Zealand of course it was the market reaction to the RBNZ OCR cut, in Australia it was the unexpected rise in their CPI inflation. Both had a cumulative impact in both countries.
But first, American mortgage applications last week were little-changed, but refinance activity softened noticeably while new purchase activity was firm, despite mortgage interest rates creeping up.
Actual US initial jobless claims rose to 244,000 last week from the prior week's 218,300, but that puts them almost identical to year-ago levels. Continuing claims are now 1,796,000, +4.3% higher than year-ago levels.
Catchup data for US durable goods orders for September was mildly positive from August but were a good +9.6% higher than year-ago levels. Excluding aircraft and defence orders, capital goods orders were little-changed from a year ago.
More current, the Chicago PMI came in much more negative in November than the weak October level with weakness building in new order levels, production, and employment. It is now down approaching ten-year lows.
We get the Fed's Beige Book later this morning and it too is expected to report weaker conditions. Of special interest will be what they found in these surveys on inflation pressures.
Across the Pacific, Singapore reported strong rises in industrial production, rising +29% from a year ago and that was their largest gain in over ten years.
In Hong Kong we should note a tragedy. A massive fire has engulfed multiple high-rise residential blocks in Hong Kong's northern Tai Po district overnight, killing at least 36 people with hundreds still missing They struggled to bring the blaze under control.
In Australia, CPI inflation accelerated to 3.8% in October, up from 3.6% in September and above expectations of a 3.6% increase. It is well above the RBA’s 2-3% target range. This is the highest inflation reading since the monthly data series began in April 2025. They are likely to get rate hikes in 2026 now.
And staying in Australia, total construction work fell -0.7% in Q3-2025 from the prior quarter, missing expectations for a +0.4% rise. But it held its year-on-year +2.9% growth in Q3. The quarterly downturn was driven primarily by a sharp drop in engineering work based around infrastructure projects.
Here in New Zealand, yesterday's Monetary Policy Statement brought a more hawkish tone than financial markets were expecting and that caused a rethink in how interest rate pricing was set, resulting in a rise across the board in rates.
The UST 10yr yield is now just on 4.00%, up +1 bp from this time yesterday. The key 2-10 yield curve is still at +52 bps. Their 1-5 curve is now inverted by -3 bps and the 3 mth-10yr curve is now only +1 bp positive. The China 10 year bond rate is up +1 bp at 1.83%. The Australian 10 year bond yield starts today at 4.49%, up +6 bps from yesterday at this time. The NZ Government 10 year bond rate starts today at 4.36%, up +7 bps from yesterday.
Wall Street is firm again with the S&P500 up +0.9% in Wednesday pre-holiday trade. European markets were all up another +0.9% overnight. Tokyo ended up +1.8% yesterday. However Hong Kong rose only +0.1% in Wednesday trade and Shanghai ended down -0.2%. Singapore firmed +0.4%. The ASX200 ended its Wednesday trade up +0.8% while the NZX50 ended up +0.6%.
The price of gold will start today at US$4166/oz, and up +US$29 from yesterday.
American oil prices have risen +50 USc from yesterday to be just on US$58/bbl, while the international Brent price is now just on US$62.50/bbl.
The Kiwi dollar is up a sharpish +80 bps from yesterday, now at just over 56.9 USc. Against the Aussie we are up +40 bps at just under 87.4 AUc. Against the euro we have risen +60 bps to 49.1 euro cents. That all means our TWI-5 starts today at just under 61.6, and up a significant +80 bps.
The bitcoin price starts today at US$87,560 and up +0.6% from yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.0%.
In the US, S&P Ratings has downgraded its stability rating of stablecoin Tether to 'Weak", concerned it is undercollateralised - that is, it no longer has the backing to maintain is USD peg.
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