US data hesitant; Canadian data mixed; Japan sentiment rises; China data weak; Hong Kong trashes its democracy; India exports rise; UST 10yr at 4.18%; gold hovers near record; oil lower; NZ$1 = 57.9 USc; TWI-5 = 62

Here's our summary of key economic events overnight that affect New Zealand, with news the US Fed is struggling with its diverging views ahead of tomorrow's catch up non-farm payrolls report. Wall Street is dipping in anticipation. The oil price is falling on concerns demand is weakening.

Overnight, two Fed speakers were out delivering different views. Trump insert Stephen Miran essentially called affordability concerns overblown and reckoned the data doesn't show an affordability problem. Whereas NY Fed boss John Williams sees 'resilience' and on-going price pressures.

Meanwhile, the latest regional Fed factory survey is from the New York region and it turned into a contraction in December after two months of expansion. It was an unexpected turn lower. New orders held steady, and inflation pressures eased, but activity declined noticeably.

On the home building front, the widely watched national survey of home builders remained glum, even if it did improve marginally. This measure stayed in contraction for the 20th consecutive month. Builders are contending with higher construction costs, economic and tariff risks, and muted demand from buyers who cite affordability concerns.

In Canada, their CPI inflation came in at 2.2% in the year to November, unchanged from October. However, food prices rose 4.2%. Meanwhile, Canadian housing starts rose in November, consistent with the building permit trend we have noted before. But there are questions about whether that will last because November real estate sales were lower on volume and lower in price.

In Japan, a series of Q4-2025 business sentiment surveys show good or rising confidence levels, now up to a four year high. This is true for large firms (recall our reports of how they are winning against the Trump tariff-taxes), the local services sector, and now a good jump for small businesses.

In China, new home prices across their 70 major cities dropped -2.4% in November from a year ago, deepening from a 2.2% decline in the previous two months. The latest results are the 29th consecutive month of price drops and the steepest pace since August. Beijing is involved in a long struggle to overcome the seemingly endless weakness in their property sector. The price declines for housing resales are deeper, but not more sharp even if they are just relentless.

China's retail sales were notably weak in November, rising just +1.3% from a year ago and far below the expected +2.9% (with some expecting a +3.3% gain). This is a real cold-water moment for the Chinese economy and will undoubtedly bring emergency actions from Beijing. One reason for the weakness may have been the end of consumer goods subsidies, and the widespread expectation that they would be reinstated. Such subsidies are a trap on public finances.

Chinese industrial production rose +4.8% in November, below the expected +5.0% rise and near the lowest growth level since late 2023. Despite its lowish level, there are reasons to be sceptical of even this level. (See next item.)

But November electricity production in China was up only +2.7% from the same month a year ago, showing up the October year-on-year surge as an outlier.

We should note that Hong Kong has distinguished itself with a very dodgy election, and the jailing of someone who dared to criticise the authorities. The election was marked by a very low turnout and record high spoiled votes, both trends infuriating authorities. But they still called it a "success", probably because they are now free to clamp down even harder on dissent.

In India, their November exports rose while their imports fell, delivering a much smaller trade deficit for the month than was expected; in fact their lowest since June. And the November shifts were true for both goods and services.

The UST 10yr yield is now at 4.18%, down -2 bps from this time yesterday. The key 2-10 yield curve is still at +67 bps. Their 1-5 curve is still positive by +21 bps and the 3 mth-10yr curve is now positive by +50 bps. The China 10 year bond rate is holding at 1.84%. The Japanese 10 year bond yield is up +1 bp at 1.96%. The Australian 10 year bond yield starts today at 4.73%, down -1 bp from yesterday. The NZ Government 10 year bond rate starts today at 4.61%, down -2 bps from yesterday..

Wall Street has opened its week with a small dip so far in Monday trade with the S&P500 down -0.2%. Overnight, European markets were all positive between Frankfurt's +0.3% and London's +1.1%. Yesterday Tokyo ended down -1.3%. Hong Kong was also down -1.3%. Shanghai ended its Monday down -0.6%. But Singapore was up +0.1%. The ASX200 retreated -0.7%. However the NZX50 ended unchanged with a good late-session rally.

The price of gold will start today at US$4295/oz, and down -US$4 from yesterday. And we should note that silver is up +US$1 at just over US$62/oz.

American oil prices are down another -US$1 at just on US$56.50/bbl and a five year low, while the international Brent price is now just over US$60/bbl.

The Kiwi dollar is -10 bps softer from yesterday, now at just over 57.9 USc. Against the Aussie we are unchanged at 87.2 AUc. Against the euro we are down -10 bps at 49.3 euro cents. That all means our TWI-5 starts today at just over 62, and down -20 bps from yesterday, shifted by a fall against the Japanese yen.

The bitcoin price starts today at US$86,357 and down -2.8% from this time yesterday. Volatility over the past 24 hours has been moderate, at just on +/- 2.1%.

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