US data stops weakening; the IMF cheers Canada's resilience; India cuts its policy rate; global food prices dip; wheat and copper in focus; UST 10yr at 4.14%; gold firmish but silver jumps again, oil firms; NZ$1 = 57.7 USc; TWI-5 = 61.9

Here's our summary of key economic events overnight that affect New Zealand, with news bond markets keep on pushing up long term yields. The rise of Japanese long bond yields has this market concerned. But that just comes on top of where US fiscal stability is heading.

In the US, personal income data is in catchup mode with September details released overnight. Income was up +1.9% from a year ago while personal expenditures were up +2.1% on the same basis. Their PCE version of inflation was up +2.8% from a year ago. There are no real surprises in this now-old data. But because it is among the few items out in the US today, it did generate a minor relief rally on Wall Street.

Meanwhile, the University of Michigan December consumer sentiment survey reported it didn't fall from November, posting a tiny, probably insignificant, gain. That leaves it -28% lower than a year ago. Year-ahead inflation expectations decreased from 4.5% last month to 4.1% this month. Despite the nominal improvements, the overall levels across the board remain quite dismal for most.

Canada reported payroll data for November overnight and rather than the expected -5000 dip, they got a +53.600 gain in overall employment. But unfortunately for them, all the gains were in part-time employment (+63,000) with full time jobs shrinking -9,400. That caps three consecutive months of jobs gains for them, even if overall part-time employment is rising faster than full-time over these three months. At least employment is rising.

This better than expected labour market report is one of the reasons the IMF's latest review of Canada was quite positive. They are impressed about how Canada is handling the attempted-trashing it has been getting from the US.

Perhaps oddly, markets are shifting their view so that a rate hike by the Bank of Canada is now the more likely scenario.

In India, and as expected, their central bank cut its key repo rate by -25 bps to 5.25% at its overnight meeting. They claim confidence in a softer inflation outlook. The RBI has now cut rates by a total of -125 bps since the beginning of the year, bringing the repo rate to its lowest level since July 2022.

In Japan, household personal spending fell unexpectedly in October, and quite hard. It was down -2.9% from a year ago, way different to the market expectations of a +1.0% rise, and reversing a +1.8% gain in September. It was the first decline since April. From September, personal spending fell -3.5%, and starkly different from the expected +0.7% rise.

In Germany, factory orders rose +1.5% in October from September, better than the expected +0.5% gain but slowing from an upwardly revised 2.0% gain in the previous month. From a year ago, their factory orders are down -0.7% however. The latest data was boosted by a very large (+87%) jump in orders for large equipment like aircraft, ships, and trains. There was also a +12% rise in metal production and processing. In contrast, demand for electrical equipment fell -16%. These are all quite big moves with the overall change.

In Australia, regulator ASIC has made an interim stop order preventing Stratos Trading (trading as FXCM) from issuing contracts for difference to retail clients because of deficiencies in its target market determination.

Globally, the FAO says its Food Price Index declined for the third consecutive month in November, with all indices but cereals down. Dairy prices were down -1.6% from a year ago, down -11.5% from their June peak. Meat prices were up +5.0% from a year ago but down -2.7% from their recent September peak.

It is probably worth noting that the Argentine wheat crop is going to be huge this year, one that will have global impacts. In Australia, the winter wheat crop will be the second largest ever too.

And we should also probably note that the copper price is moving up sharply again, back toward its US-tariff-induced July heights.

The UST 10yr yield is now at 4.14%, up +4 bps from this time yesterday, up +12 bps for the week. The key 2-10 yield curve is still at +58 bps. Their 1-5 curve is now positive by +10 bps and the 3 mth-10yr curve is positive by +42 bps. A week ago the 3 mth-10yr curve was just +3 bps. The China 10 year bond rate is -1 bp softer at 1.84%. The Japanese 10 year bond yield is up a very sharp +12 bps for the week to 1.95%. The Australian 10 year bond yield starts today at 4.71%, up +2 bps, up +18 bps for the week. The NZ Government 10 year bond rate starts today at 4.48%, up +7 bps from yesterday, up +9 bps for the week.

Wall Street has started its Friday with the S&P500 up +0.2% to be up +0.9% for the week. See this. Overnight, European markets were mixed between London's -0.5% and Frankfurt's +0.6%. Yesterday, Tokyo closed down -1.1% for a weekly gain of +0.3%. Hong Kong was up +0.6% for a weekly gain of +0.5%. but Shanghai ended up +0.7% for a weekly gain of +0.2%. Singapore closed down -0.1%. The ASX200 ended its Friday session up +0.2% to ca[p the week with a similar gain. The NZX50 ended down -0.2% resulting in no change for the week.

The Fear & Greed index has eased to the 'fear' zone from the 'extreme fear' zone last week.

The price of gold will start today at US$4215/oz, and up +US$6 from yesterday, up +US$4 for the week. Silver is back on a tear, back at over US$58.50/oz and near its record high.

American oil prices are again +50 USc firmer at just over US$60/bbl, while the international Brent price is now at just under US$64/bbl, and up about +US$1 for the week.

The Kiwi dollar is little-changed from yesterday, now at just over 57.7 USc, up +40 bps for the week. Against the Aussie though we are down -30 bps at just on 87 AUc. Against the euro we are up +10 bps at 49.6 euro cents. That all means our TWI-5 starts today at 61.9, and down -30 bps from yesterday but little-changed for the week.

The bitcoin price starts today at US$88,859 and down -4.0% from this time yesterday. Volatility over the past 24 hours has been moderate, at just on +/- 2.3%.

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