US data and confidence weaker; Canada GDP resilient; China rolls out new stimulus; Australia focuses on inflation control; air cargo demand rises; UST 10yr at 5.27%; gold holds and oil falls on strategic release; NZ$1 = 56.3 USc; TWI-5 = 60

Here's our summary of key economic events overnight that affect New Zealand, with news the bond market is shouting louder warnings at US policymakers. And China is rolling out more stimulus and subsidies to counter a growing slowdown there.

First today, the overnight Pulse dairy auction delivered mixed results although both the SMP and WMP prices rose from the prior event, up by about +1.6% in USD terms. But as the NZD took a bit of a thrashing overnight, these prices were up more than +3% in local currency terms.

Also mixed were the August US JOLTS labour market data. While much of it was little-changed, the number of job openings fell by an outsized -256,000 to just over 7 mln, the lowest in five months. Analysts had expected them to rise to 7.23 mln so this is a notable miss. And the fall was broad-based in most sectors and most regions, although the South did manage to book a small rise.

The US Conference Board reported a sharp fall in consumer sentiment in September, in fact taking it to its lowest since 2014. While it isn't as low as the University of Michigan survey yet, it is tracking in the same negative direction, both for its Present, and Expected monitoring of sentiment.

Yesterday we reported a positive Dallas Fed factory survey, even if it is suffering high cost challenges. But today's update on the Texas services sector is not so bright with a 'stall' reported and their first decline in four months. They also reported increased strain in input and selling prices.

Canada reported that their August economic activity rose, their tenth rise in the past twelve months and through a difficult period. That likely puts their GDP up +1.7% real from a year ago. Their 'resilient economy' may be enough for the Bank of Canada to start hiking rates again to contain the inflation pressures building again. The next rate review there is on October 28 (the same as the RBNZ).

In China, businesses there are said to be facing weak demand ahead of their Golden Week holiday. And that has pushed the Chinese central bank to lower a technical interest rate. And Beijing is to start subsidising mortgage interest rates for low income borrowers, aiming to create demand in their housing markets.

EU business and consumer sentiment sagged in September, but to be fair the overall level is still sitting close to its long-run average. The movement is basically due to lower confidence by consumers as they look forward to winter and an uncertain energy outlook.

In Australia, the RBA delivered the expected +25 bps rate change. That raises this rate to its highest in the developed world. They emphasised their strong commitment to the inflation fight and noted that more hikes may be needed before that is won. They are in an "whatever it takes" mindset now, and their new rate levels are 15 year highs.

Meanwhile, global air cargo demand rose +4.4% in August from a year ago, largely on work-arounds from the disrupted seas trade on major routes. International volumes were up +5.3% with Asia/Pacific volumes up +5.5%. But it was the +10.1% jump in North American volumes that is the standout feature, a notable rush to shore up supply lines ahead of more expected policy disruptions.

The UST 10yr yield is now just under 5.27%, up another +3 bps from yesterday and a new high since June 2007. The 30 year yield is at 5.60%, up +6 bps and its highest since January 2001. The key 2-10 yield curve is now at +36 bps (up +3 bps). Their 1-5 curve is now at +55 bps (-3 bps) and the 3 mth-10yr curve is at +136 bps (up +6 bps). The China 10 year bond rate is little-changed at 1.68%. The Japanese 10 year bond yield is now at 3.10%, down -1 bp from yesterday but still a generational 30 year high. The Australian 10 year bond yield starts today at 5.37%, down -7 bps from yesterday after the RBA result. The NZ Government 10 year bond rate is now at 5.15%, down -1 bp.

Wall Street is soft today, down -0.2% in its Tuesday trade. The Nasdaq is down -0.3%. European markets ended their Tuesday trade between London's -0.5% fall and Frankfurt's +0.1% firming. Tokyo ended yesterday down -0.6%. Hong Kong was down -0.5% but Shanghai firmed +0.2%. Singapore ended down -0.2%. The ASX200 ended up +0.3%. But the NZX50 fell a chunky -1.1%.

The price of gold is at US$4148/oz and up +US$11 from yesterday. Silver is at just under US$61.50/oz and almost -US$1.

Oil prices have fallen -US$2.50/bbl from yesterday to just over US$90.50/bbl in the US, while the international Brent price is just under US$103.50/bbl and also down -US$2.50. This is all due to the US releasing more from their strategic reserves, although Saudi Arabia also confirmed that its pipeline repairs are complete too.  Hormuz transits are back lower today with just 5 ships exiting over the past 24 hours, 3 of which are tankers escorted (3 dark with transponders off) and 11 entering for new loads (5 dark). The Red Sea activity is slower at well under 20 vessels in both directions at the Yemen chokepoint.

The Kiwi dollar is down a sharpish +40 bps from yesterday, now at 56.3 USc and that is now a ten month low. Against the Aussie we are unchanged at 80.8 AUc. Against the euro we are down -20 bps at just on 49.7 euro cents. That all means our TWI-5 starts today at just over 60 and down -40 bps yesterday and that takes us down to a level we last had in 2009, a 17 year low.

The bitcoin price starts today at US$82,936 and down -0.8% from yesterday. Volatility over the past 24 hours has been modest at just under +/-1.0%.

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