US sentiment falls again; Canada jobs market shrinks; Japanese machine tool orders strong; Malaysia strong; EU & China agree to cut some big Chinese car exports; UST 10yr at 5.25%; gold and oil rise; NZ$1 = 56.1 USc; TWI-5 = 59.9

Here's our summary of key economic events overnight that affect New Zealand, with news it looks like the EU is making headway in its drive to tackle its huge trade deficit with China.

But first, the latest update of the widely-watched University of Michigan consumer sentiment index has it falling again, now down to its second lowest level ever after the record low recorded in May. (Don't forget, this is from monitoring that started in 1946.) Frustration over the cost-of-living continues to mount. Inflation expectations crept higher again.

The September update by the USDA of its WASDE report isn't good news for their own farmers with surging corn production and constrained markets which has seen the corn price fall notably. For us we should note their lower beef production and higher forecasts for imports although much of that will come from South America. Their milk production estimates have been raised, but their export volumes lowered. (The trade dispute with Canada will have a lot to do with that.)

In Canada, and as expected, their jobless rate inched up to 6.5% and they recorded a loss of -68,300 jobs in September, about half of them full-time jobs. It is the second month in a row they have had a net jobs decline, and they have never had three consecutive job-loss months. But it is looking likely that could be the case when the October data is released. And that in turn might reduce any chances of a rate hike there.

Japanese machine tool orders hit a record high in September, underpinned by strong foreign orders, although the growth of domestic orders was strong too. This augers well for their factory sector over the next six months or so.

Malaysia released some positive August data overnight, with manufacturing output rising +9.9% from a year ago, retail sales up +3.8% by volume, and jobs growth of +28,800 in the month - although you might have thought the strong factory activity data would have generated a better labour market expansion. The type of production they are getting in electronics isn't particularly job-heavy.

In Europe, China and the EU have inked a deal to cut Chinese ​exports of hybrid cars by more than half. This comes after an EU negotiator went to Beijing to try an stem their ballooning trade deficit with ‌China. China also agreed to release more rare earths supply to the EU.

The UST 10yr yield is holding, now just on 5.25%, up +1 bp from yesterday, down -3 bps from this time last week. The 30 year yield is at 5.60%, down -2 bps, down -3 bps for the week. The key 2-10 yield curve is now at +45 bps (down -2 bps). Their 1-5 curve is now at +57 bps (-1 bp) and the 3 mth-10yr curve is at +122 bps (-7 bps). The China 10 year bond rate is down -1 bp at 1.68%. The Japanese 10 year bond yield is now at 3.00%, down -9 bps from yesterday, down the same for the week. The Australian 10 year bond yield starts today at 5.38%, down -1 bp from yesterday but up a net +4 bps for the week. The NZ Government 10 year bond rate is now at 5.09%, down -5 bps from yesterday and unchanged for the week

Wall Street is moving firmer today with the S&P500 up +0.7% and up a net +1.1% for the week. The Nasdaq up +0.7% from yesterday, up a net +0.6% for the week. Overnight, European markets were all up about +1.1%. Yesterday, Tokyo ended little-changed for a weekly -0.1% dip. Hong Kong bounced back +1.8% yesterday to end its week up +1.0% and Shanghai closed little-changed to end its short week. Singapore ended down -0.2%, down a massive -4.1% for the week and rattled by new enforcement of Chinese trust fund rules. The ASX200 closed up +0.6 on Friday to end its week essentially unchanged. The NZX50 ended its Friday trade up +0.4% for a weekly +0.5% rise.

The Fear & Greed index is now back in the 'neutral' zone, just, from being in the 'fear' zone a week ago.

The price of gold is at US$4196/oz and up +US$71 from yesterday, up +US$59 from this time last week. Silver is at just under US$61/oz and up almost +US$2.

Oil prices have risen +50 USc/bbl from yesterday to just over US$91.50/bbl in the US, while the international Brent price is up +US$1 to US$104.50/bbl. A week ago these prices were US$91.50 and US$102/bbl respectively. Hormuz transits have reduced again today with just three ships exiting over the past 24 hours, one tanker escorted (1 dark with transponders off) and 5 entering for new loads but no tankers  (0 dark). Iran is now attacking tankers away from the Strait of Hormuz. The Red Sea activity is back at the low 20 vessels in either direction at the Yemen chokepoint.

The North American rig count is rising but the shift higher is minor given the price incentives. It is only back up to 2024 levels and still well below 2022 levels.

The Kiwi dollar is up +10 bps from yesterday, now at just on 56.1 USc and essentially unchanged from this time last week. Against the Aussie we are down -10 bps at 80.4 AUc. Against the euro we are up +10 bps at just on 50.1 euro cents. That all means our TWI-5 starts today at just on 59.9 and up +10 bps from yesterday, unchanged for the week.

The bitcoin price starts today at US$82,623 and up almost + 2.0% from yesterday but down -2.4% from a week ago. Volatility over the past 24 hours has been modest at just over +/-1.7%.

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