Here's our summary of key economic events overnight that affect New Zealand, with news the G7 has agreed to a major release of strategic fuel reserves to keep a lid on energy prices. But so far the news hasn't really moved the cost of crude.
And there has been disappointing data out in the world's largest economy.
US non-farm payrolls were expected to rise +90,000 in September following the August +162,000 gain - a level that lacked confirmation from just about every other labour market metric. The actual September data is out today and that involves some embarrassing reversals. Not only was the August level revised sharply lower (-19%), the September headline gain was reported at just +29,000. Regular gains in this headline number above +200,000 ended when Trump took office in early 2024.
But we also look at the actual data behind these seasonally adjusted headline numbers. and that reveals a much more stable situation with a gain of +333,000 from August, about the same gain in each of the prior two years from July to August although these gains were very much larger in the years 2019 to 2023. That is the payroll data. But the wider situation that includes all people working, there was an even better improvement in September from August, but the seasonal patterns here gotten very random. That throws the veracity of this data into question, especially as it coincides with the change in leadership of this agency from proper statisticians to political appointees. We should all regard BLS data with caution these days - even the poor results.
US vehicle sales fell to a 16.0 mln annual rate in September, well lower than expected 16.6 mln rate and the lowest sales rate since February.
New factory orders were little-changed in August from July which was a fast slowing but what was expected. However they are now +8.8% higher than August a year ago following gains earlier in the year. Much of that is data center buildout because computer equipment orders were up +17.5% on that year-on-year basis.
Staying in the US, some senior Fed members seem more relaxed about inflation's threat, with two key Warsh deputies giving a clear guidance in a way Warsh said he dislikes. The next meeting is just before the US mid-term elections. New York Fed boss John Williams ended a recent speech saying "With the policy action we took at our September meeting, there is no need for urgency, and we have time to gather more information." This was enough of a signal to bond markets to assume a rate hike is not coming at the end of this month. Despite that jawboning, bond yields have risen back today.
It is not something we normally follow, but the Japanese reported yesterday that inflation in Tokyo jumped sharply in August to 2.7%, far higher than the 1.9% in August. Excluding food and fuel it was 3.0% so on that basis, inflation is embedding fast there. The Bank of Japan will have noticed as will financial markets.
In China, which is on its week-long holiday, there is some encouraging data about internal activity and spending emerging. Their railway network handled 25.2 mln passenger trips on Friday, the first day of the holiday, setting a new single-day record.
There was some interesting data out overnight from the EU, who reported Euro Area CPI inflation at 3.8% in September, far higher than August's already high 3.2% and above the expected 3.5%.
They also reported a lower current account surplus of +1.6% of GDP in Q2-2026, down from +2.0% in Q1-2026. It was also lower than for Q2-2025.
The FAO is reporting that global food prices are rising again, up +5.8% in September from year-ago levels and back to levels last seen in 2011 (excluding the pandemic distortions). But meat prices are essentially unchanged from a year ago. Dairy prices are down -19% on that same basis. The rising impetus is from cereals and vegetable oils. also sugar.
The UST 10yr yield is now just on 5.28%, up +4 bps from yesterday, up +12 bps for the week. The 30 year yield is at 5.63%, up +5 bps for a weekly rise of +14 bps. The key 2-10 yield curve is now at +44 bps (down -2 bps). Their 1-5 curve is now at +60 bps (+4 bps) and the 3 mth-10yr curve is at +135 bps (-1 bp). The China 10 year bond rate is little-changed at 1.68%. The Japanese 10 year bond yield is now at 3.09%, unchanged from yesterday, up just +1 bp for the week. The Australian 10 year bond yield starts today at 5.34%, down -3 bps from yesterday, down -5 bps for the week. The NZ Government 10 year bond rate is now at 5.09%, down -4 bps, down -5 bps for the week.
Wall Street is holding firm today, with the S&P500 up +0.7% in Friday trade, but essentially unchanged for the week. The Nasdaq is up +1.2% today, up +1.9% for the week European markets ended their Friday trade positive between London's +0.3% fall and Frankfurt's +1.2% gain. Tokyo ended yesterday down -0.9% for a weekly gain of +2.7%. Hong Kong and Shanghai were both closed for a national holiday so they ended their shortened weeks down -2.2% and -1.2% respectively. Singapore ended down -0.6%. The ASX200 ended up +0.8% on Friday for a weekly dip of -0.1%. The NZX50 fell -0.9% on Friday to end its week down -1.0%.
The Fear & Greed index is now still firmly in the 'fear' zone from being in the same position a week ago.
The price of gold is at US$4137/oz and down -US$29 from yesterday, down -US$152 for the week. Silver is at just over US$60/oz and down -50 USc today, down -US$4.50/oz for the week..
Oil prices have dipped -50 USc/bbl from yesterday to just under US$91.50/bbl in the US, while the international Brent price is up +US$1 to US$102/bbl. A week ago these prices were US$92.50 and US$104.50/bbl respectively. The G7 has agreed to release more from their strategic reserves. It is a deal that removes the threat of the US banning diesel exports. Hormuz transits have reduced today with just four ships exiting over the past 24 hours, 2 of which are tankers escorted (3 dark with transponders off) and 4 entering for new loads (1 dark). Looming new conflict clouds the situation again. The Red Sea activity is down to 15 vessels in either direction at the Yemen chokepoint, reduced on the same rise in tension.
The Kiwi dollar is up +10 bps from yesterday, now at just on 56.1 USc and still a ten month low. It is down -60 bps from a week ago. Against the Aussie we are down -30 bps at 80.7 AUc. Against the euro we are down -10 bps at just on 49.8 euro cents. That all means our TWI-5 starts today at 59.9 and unchanged from yesterday and still close to a 17 year low. It is down -40 bps from this time last week.
The bitcoin price starts today at US$84,679 and up +0.5% from yesterday, up +0.9% from a week ago. Volatility over the past 24 hours has been modest at just on +/-1.5%.
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