US data positive but support for the UST 30yr soft; US farm debt problems jump; Taiwan stars yet again; Aussie inflation expectations rise; WTO raises trade forecasts; UST 10yr at 5.24%; gold holds, oil rises; NZ$1 = 56 USc; TWI-5 = 59.8

Here's our summary of key economic events overnight that affect New Zealand, with news that while the tech industry is driving key parts of global trade, investors are pulling back from funding the splurge.

But first in the US, initial jobless claims came in at 170,300 last week, a +12,000 rise from the previous week but about what seasonal factors would have anticipated. There are now just over +1.5 mln people on these benefits, a notable fall from a year ago (1.68 mln) and largely due to changed qualification criteria.

Demand at today's US Treasury 30yr bond auction was lower than at the prior event and considerably lower than the same event in August. The median yield came in at 5.57% (high 5.62%), up sharply from the 5.25% at the prior event a month ago.

US wholesale inventories rose in August but at a slower pace than in July. Still, when related to sales levels, these inventories are not elevated. They are held down by stocks of computer equipment and fuel, but are elevated for 'farm products'.

The Atlanta Fed's GDP Now update for the Q3-2026 result has come in at +3.5%, lower than any estimate they have made previously but still well above the 'consensus forecasts' of about +2.5%. Either way, these are good levels for the US.

Meanwhile, US consumer debt rose just +1.9% in August, about half than the expected level and even less than the July level. Perhaps it is a sign of exhaustion given that spending has been rising much faster than incomes recently. Borrowing capacity may have been maxed out. As the spending habits of the American middle class is one of the key drivers of the world's economy, the implications of this updated data should not be overlooked.

American farm debt is also causing problems. Reuters is reporting a notable rise in US rural debt along with sharp rises in farm bankruptcies, as a shift to more costly debt sources underlies the struggles American farmers are facing. US-China trade promises sound good when they are made, but the Chinese are using the order flow to keep the pressure on the US Administration. Farmers are caught in this in an ugly way.

Across the Pacific, Taiwan reported another record export result in September, at US$87 bln in the month and a +61% growth from the same month in 2025. They are really cashing in on the AI boom and robust demand for technology products. (Taiwan's exports are more than 20% of China's even though they only have 1.6% of their population.)

In Australia, consumer inflation expectations rose to 5.3% in October, up from 4.9% in both August and September and reaching their highest level since June.

And Australia seems to be ground zero for data-center scepticism by investors. The widely-touted and Nvidia-backed Firmus float will probably fail - and that has rippled all the way to Wall Street where the Nasdaq is down -1.6% so far today. OpenAI's revenues had a huge miss in updated filings out overnight as well. Reality in the tech sector is setting in. Up till now, valuations were based of all the aggressive promises panning out. That was never realistic. Firms like Infratil are taking a hit too. Since they bought into CDC, their share price has fallen -15%. Of course, this example is just on the edge of the whole AI world of overselling.

Global container freight rates eased again this week from the prior week (-2%) but are still up +164% from year ago levels. Longer journeys avoiding the Suez and Panama canals may be a significant factor. Bulk cargo rates eased -4% last week to be +53% higher than year-ago levels. The same journey factors may be at play here too.

And staying global, the World Trade Organisation has raised its forecast of global trading levels in an update out overnight. According to their latest Global Trade Outlook report, merchandise trade volume is now expected to grow by +3.9% in 2026, up from the March forecast of +1.9%, before increasing further by +4.1% in 2027. The revision reflects evidence that global supply chains adapted to disruptions in energy and fertiliser markets, while strong investment in AI-related infrastructure boosted that trade. Services trade growth is expected to remain positive, although prospects have moderated due to the impact of the Middle East conflict on transport and international travel. Services trade volume is expected to grow by +3.3% in 2026, down from +4.8% in the March forecast, before rising by +6.4% in 2027.

The UST 10yr yield is falling, now just on 5.24%, down -5 bps from yesterday. The 30 year yield is at 5.62%, down -4 bps. The key 2-10 yield curve is now at +47 bps (down -5 bps). Their 1-5 curve is now at +58 bps (-3 bps) and the 3 mth-10yr curve is at +129 bps (-9 bps). The China 10 year bond rate is up +1 bp at 1.69%. The Japanese 10 year bond yield is now at 3.09%, down -3 bps from yesterday. The Australian 10 year bond yield starts today at 5.39%, down -1 bp from yesterday. The NZ Government 10 year bond rate is now at 5.14%, unchanged from yesterday and still at a three year high.

Wall Street moving lower with the S&P500 down -0.7% and the Nasdaq down -1.6%. Overnight, European markets were lower too between London's -0.2% fall and Frankfurt's -1.2% drop. Yesterday, Tokyo ended down -1.4%. Hong King was also down -1.4% and Shanghai fell -0.8%. Singapore ended down a very sharp -3.5%, rattled further by new enforcement of Chinese trust fund rules. The ASX200 closed down -0.8%. The NZX50 ended its Thursday trade up +0.1% and the only market we follow to rise.

The price of gold is at US$4125/oz and up +US$14 from yesterday. Silver is at just under US$59/oz and down -US$1.

Oil prices have risen +US$2/bbl from yesterday to just over US$91/bbl in the US, while the international Brent price is up +US$3 to US$103.50/bbl. Hormuz transits have reduced again today with just six ships exiting over the past 24 hours, no tankers escorted (0 dark with transponders off) but 12 entering for new loads including 4 tankers  (1 dark). The Red Sea activity is back up to the low 20 vessels in either direction at the Yemen chokepoint.

The Kiwi dollar is little-changed from yesterday, still at just under 56 USc. Against the Aussie we are up +10 bps at 80.5 AUc. Against the euro we are also little-changed at just on 50 euro cents. That all means our TWI-5 starts today at just on 59.8 and virtually the same as yesterday.

The bitcoin price starts today at US$81,025 and down -2.4% from yesterday. Volatility over the past 24 hours has been modest at just over +/-1.6%.

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