Divergence of Fed views on display again; Canada attracts investment, restricts people; more strong Japanese data; eyes on more central banks; UST 10yr at 4.16%; gold up near new record; oil stays low; NZ$1 = 57.8 USc; TWI-5 = 62

Here's our summary of key economic events overnight that affect New Zealand, with news we are entering the end of year shadow of economic releases, but there are still some important things to come. And the upcoming sentiment signals as the holidays approach are not overly optimistic. Today tech industry concerns are weighing on equity markets.

Elsewhere, US mortgage applications fell -3.8% last week, the biggest dip in a month. Applications to purchase a home declined -2.8% while home loan refinance fell -3.6%. Benchmark mortgage interest rates were little-changed.

More Fed speakers were out overnight, with a Trump favourite (Christopher Waller) saying US rates can be cut by -1%. Waller is a candidate for a Trump nomination to replace Powell. But Atlanta Fed boss Bostic says any rate cuts now will just fuel inflation which he sees as already too high.

In Canada, foreign investment in Canadian securities in October rose to their highest level since March 2022, a sharp rise from the high September level and far above what analysts were expecting.

And we should note that the Bank of Canada is moving ahead with its plan to support an official stablecoin.

Also in Canada, we should note they had their biggest dip in population in Q3-2025 as they effectively shut their doors to immigrants. It was their first-ever drop (outside the pandemic)

In Japan, machinery orders, (but excluding volatile sectors such like ships and electric power systems), jumped +7.0% in October from September's good 4.2% gain. This is even better than expected, because a -2.3% decline was anticipated. The October level was also the highest since March.

So it won't be a surprise to know that Japan’s exports rose +6.1% in November from a year ago, the third consecutive monthly gain and better than the expected rise. In fact, it was the fastest pace in export shipments since February, and was driven by demand from the US who have just accepted that they have to pay their tariff-taxes. This gain pushed Japan back into a trade surplus.

In Indonesia, their central bank left its policy rate unchanged in its meeting yesterday at 4.75%, as expected. They see inflation holding in its +/-1% target around 2.5%. In Europe there will be monetary policy decisions tonight, with the ECB expected to hold and the Bank of England to cut.

The UST 10yr yield is now at 4.16%, little-changed from this time yesterday. The key 2-10 yield curve is still at +65 bps. Their 1-5 curve is now positive by +19 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 +3 bps at 1.98% which we think is its highest since 1998. The Australian 10 year bond yield starts today at 4.76%, up +3 bps from yesterday. The NZ Government 10 year bond rate starts today at 4.58%, up +1 bp from yesterday..

Wall Street has fallen so far in Wednesday trade with the S&P500 down another -0.8%. Overnight, European markets were mixed between Frankfurt's -0.5% dip and London's +0.9% rise. Yesterday Tokyo ended up +0.3%. Hong Kong was up +0.9%. Shanghai ended its Wednesday up +1.2%. Singapore dipped -0.1%. The ASX200 retreated -0.2%. And the NZX50 ended down a full -1.0%.

The price of gold will start today at US$4332/oz, and up +US$35 from yesterday, and touching its record highs. Silver is at US$66.50/oz and a new record high. We should also keep an eye on platinum too, also near its recent record highs. 2026 could be "interesting" for precious metals.

American oil prices are up +50 USc from yesterday at just over US$56/bbl, while the international Brent price is up +US$1 at just on US$60/bbl.

The Kiwi dollar is down -10 bps from yesterday, at just on 57.8 USc. Against the Aussie we are +20 bps firmer at 87.5 AUc. Against the euro we are unchanged at 49.2 euro cents. That all means our TWI-5 starts today still just on 62, and little-changed from yesterday.

The bitcoin price starts today at US$86,671 and down -1.0% from this time yesterday. Volatility over the past 24 hours has been moderate, at just on +/- 2.1%.

Join us at 10:45am this morning when we will be reporting the Q3-2025 change in economic activity (GDP). Markets are expecting a +1.3% rise from a year ago, a +0.9% from Q2. And they are expecting Q2 to be revised up. Material variations from that will have financial market implications.

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