Big Tech takes hits as investors seek safety; US jobless claims fall; Canada PPI jumps; China FDI in doldrums; EU sentiment retreats; freight rates rise; UST 10yr at 4.95%; gold holds and oil rises; NZ$1 = 56.8 USc; TWI-5 = 60.6

Here's our summary of key economic events overnight that affect New Zealand, with news tech equity wobbles is driving a sudden, sharp flight to the relative short-term 'safety' of government bonds.

The Nasdaq is down -2.5% so far today with Meta down -7.2% (see below), SpaceX is down -8.5%, Google is down -9.6%, and many other FANGS are down about -4.4%.

But first in the US, there was a notable drop in initial jobless claims last week, more than accounted for by seasonal factors. It is hard to know whether this indicates  a freer labour market or just much tighter qualification standards. Probably the latter, based on the weekly ADP data. There are now 1.48 mln people on this out-of-work support, the lowest level since late 2022 - and prior to that, the 1970s. The new qualification standards are very tough.

The Kansas City Fed's factory survey eased in October to its lowest level since May although it remains quite positive. New order levels eased and new export order levels fell sharply. That is likely because costs are rising faster again with raw material costs rising much faster than price growth.

Overnight there was a US Treasury 5yr TIPS auction and investors are signaling and getting a much higher risk premium over an above inflation. In this latest result, the premium was 2.30% (median), up from 1.91% at the prior equivalent event four months ago.

In Canada, producer prices were up +14.5% in September from a year ago, a larger rise than was expected and accelerating from August's high +13.2%. Raw materials were up +27% on that same basis. Fuel is the core reason of course, but this cost pressure is spreading.

China said that foreign direct investment fell by -4.3% in September to ¥549 bln (or NZ$145 bln) in the first nine months of the year, compared to a -5.3% drop in the first eight months of 2026. For September alone it was up +1.6% from the same month in 2025. However both benchmarks are unusually low, the lowest in at least 12 years. From the recent peak in 2022, the current September FDI is a remarkable -47% lower.

The Bank of Korea left its key policy rate unchanged at 3% in its review yesterday, as widely anticipated. This came after two rate back-to-back increases earlier in the year because they have CPI running at 3.4% and a 2% policy target. But they claim the rate will fall back into line under the current settings.

In Japan, the expectation now is that their central bank will hold its policy rate at 1.25% at its meeting next week.

In the EU, consumer sentiment is retreating again and more sharply than anticipated. Cost of living issues are at the heart of this deterioration.

In Australia, their reserve bank is in a tough spot with inflation up +4.0% in August and forecast consensus is rise to 4.1% in September when it is reported next Wednesday, while their housing markets retreats rather fast, and their labour market seems topped out. Markets currently price in a 55% chance of a hike on Tuesday, November 3. Analysts are more certain one will come on the expectations the September CPI will overshoot.

Global container freight rates rose +2% last week to be +163% higher than year ago levels, rising mainly on the China to EU routes. Meanwhile bulk cargo rates were up +4% in the past week to end their recent easing period. They are now +28% higher than year-ago levels.

The UST 10yr yield is down -16 bps from yesterday to 4.95% in a major defensive move. The 30 year yield is at 5.30%, down -11 bps. The key 2-10 yield curve is now at +32 bps (unchanged). Their 1-5 curve is now at +42 bps (-2 bps) and the 3 mth-10yr curve is at +101 bps (-11 bps). The French 10 year has now topped 5.08%, up +6 bps and a new 24 year high. The China 10 year bond rate is unchanged at 1.63%. The Japanese 10 year bond yield is now at 2.82%, down -7 bps from yesterday. The Australian 10 year bond yield starts today at 5.18%, down -10 bps from yesterday. The NZ Government 10 year bond rate is now at 5.01%, down -5 bps.

Wall Street is down -1.3% on the S&P500 while the Nasdaq is down -2.5% and following the shifts to a risk-off mood in rest of the world on Thursday. Overnight European markets were all lower between Paris's -1.4% and London's -0.3%. Yesterday Tokyo ended its Thursday session down -2.7%. Hong Kong was down -3.0% and Shanghai fell -1.5%. Singapore ended down -0.4%. The ASX200 was down -0.4% as well in its Thursday session. However the NZX50 ended down just -0.1%.

One trigger is the trial loss by Meta who a jury found guilty of fraud on their users. For most of us, our eyes glaze over when we need to read court judgements. But skip to just after para 19 in this one. The judge imposed a US$25 bln penalty with interest accruing at 15% pa. Of course Meta will appeal. That is what grifters do. But more trouble is brewing for Meta and its tolerance/promotion of scam ads. This dodgy behaviour is raising the chance that California's Proposition 40 will pass on November 3.

The price of gold is little-changed at US$4137/oz and up +US$5 from yesterday. Silver is just over US$55/oz and down -US$2.50/oz.

Oil prices have risen +US$3 from yesterday to just under US$99.50/bbl in the US, while the international Brent price is up +US$4 at US$112.50/bbl which is now just US$2 off its early May peak and closer to its June 2022 US$119/bbl high point. Hormuz transits have dropped to a trickle today with just five ships exiting over the past 24 hours, no tankers escorted (0 dark with transponders off) and 9 entering for new loads, no tankers (2 dark). The Red Sea activity features a rise in outbound traffic at the Yemen chokepoint but much less inbound. There were no reported attacks on shipping, but there have been significant attacks on Saudi oilfields.

The Kiwi dollar is -20 bps lower from yesterday, at just over 56.8 USc. Against the Aussie we are down -10 bps at 81 AUc. Against the euro we are down -20 bps as well at 50.6 euro cents. That all means our TWI-5 starts today at just under 60.6 and down -10 bps from yesterday.

The bitcoin price starts today at US$81,129 and down -3.9% from yesterday at this time. Volatility over the past 24 hours has been moderate at +/-2.4%.

Finally, remember it is a holiday in New Zealand on Monday, Labour Day, and ahead of Wednesday's key RBNZ OCR review.

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