Here's our summary of key economic events overnight that affect New Zealand, with news bond prices and equity prices are falling as oil prices have jumped, and markets now see a much larger chance the US Fed will have to raise rates when it meets on Thursday next week (NZT). Bond yields have jumped today in an outsized shift. Inflation risks are mounting everywhere now.
Copper, silver and gold prices are sliding today.
Adding to anxiety, Iran-backed Houthis have seized another Red Sea port in a defeat for Saudi Arabia, putting more pressure on the Red Sea shipping lanes.
And in the US, at a sparsely attended 'convention', Trump has added to his cash promises to American voters if they keep a Republican Congress after the November elections that now exceed US$1 tln.
In the US, producer prices rose in August more than expected and more than in July. They were up +5.4% from a year ago, faster than the July +4.8% rise. Clearly inflation is embedding in the US economy and is likely to spill out to consumer prices very soon - though the risks of that for their service economy seem much less.
US fuel prices have risen sharply too with diesel now almost averaging US$6/bal, petrol up at US$4.27/gal. These are both quite big rises just from yesterday.
US initial jobless claims rose last week to 176,500, about what seasonal factors would have indicated. There are now 1.675 mln people on these benefits, much lower than last week as qualification standards bite very much harder now.
US crude oil stocks fell again last week but by less than expected and by less than the prior week.
US existing home sales fell -2% in August to under a 4 mln annual rate. Unsold inventories rose. These dynamics are unlikely to get better because benchmark mortgage rates are about to jump.
After declining for all of 2026, the US inventory-to-sales ratio jumped unexpectedly in July with wholesale inventories up +1.3% from June to be +5.7% higher than year-ago levels.
So it will be no surprise to know that the median yield for today's US 30yr bond auction rose to 5.25% (hi 5.31%), from 5.15% at the prior equivalent event a month ago.
As expected, the European Central Bank raised its policy rate by +25 bps to 2.65% saying that they expect inflation to be elevated and this required pushback.
Australian inflation expectations have remained unchanged at 4.9% in September as they were in August. That is far above the July 3.5% official CPI rate and the August CPI update won't come until the end of this month. And last month’s spike in wage expectations appears to have been a temporary blip, with expectations about year-ahead pay growth falling to just +1.2%. The squeeze is on and quite hard now.
OPEC's monthly report showed that overall output rose by almost +350,000/bbl/day in the month led by Iraq. But they lowered their demand expectations for 2026 on the trajectory of the global economy. It is not often you see rising out put, lower demand, and a sharp jump in prices. That Trump guy is something 'special'.
Global container freight rates were little-changed last week, staying at unusually high levels and up +119% from a year ago. Rises in China-to-US rates were offset by falls in China-to-EU rates. Meanwhile bulk cargo rates rose +12% last week, and are now +175% higher than year-ago levels.
The UST 10yr yield is now just on 4.96%, a jump of +12 bps from yesterday at this time. The 30 year yield is at 5.36%, up +73 bps. The key 2-10 yield curve is now at +39 bps (down -3 bps). Their 1-5 curve is now at +47 bps (up +3 bps) and the 3 mth-10yr curve is at +118 bps (+7 bps). The China 10 year bond rate is holding at 1.68%. The Japanese 10 year bond yield is now at 2.92%, up +3 bps. The Australian 10 year bond yield starts today at 5.31%, up +8 bps from yesterday. The NZ Government 10 year bond rate is now at 4.91%, up +9 bps.
Wall Street is lower again today with the S&P500 down -0.6% and the Nasdaq down -0.7%. Overnight European markets were all down about -0.6%. Yesterday Tokyo closed dup +0.2%. Hong Kong was down -1.3% while Shanghai fell -0.4%. Singapore ended down -0.7%. The ASX200 ended its Thursday trade down a full -1.0%. The NZX50 ended down -0.8%.
The price of gold is now at US$4337/oz, and down -US$81 from yesterday at this time. Silver is down -US$4 at just under US$64/oz.
Oil prices are up +US$6 at a very high US$102/bbl in the US, while the international Brent price has risen +US$6.50 to just over US$107.50/bbl. Hormuz transits are still very low today with just seven ships exiting over the past 24 hours, just one tanker escorted (0 dark with transponders off) and six entering for new loads (2 dark). The Red Sea activity is little-changed from yesterday with about 20 each way at the Yemen chokepoint.
The Kiwi dollar is down -40 bps from yesterday, now just under 58 USc and a six week low. Against the Aussie we are up +10 bps at just under 81 AUc. Against the euro we are down -30 bps as well at 49.9 euro cents. That all means our TWI-5 starts today at just over 61.3, down -30 bps from yesterday.
The bitcoin price starts today at US$77,113 and down -2.1% from yesterday at this time. Volatility over the past 24 hours has again been modest at just under +/-1.2%.
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