US data improves; Trump blind to election message; Canada jobs data weak; Canada Budget aggressive; China struggles; EU retail makes real gains; global food prices edge down; UST 10yr at 4.85%; gold rises and oil stabilises; NZ$1 = 55.4 USc; TWI-5 = 59.4

Here's our summary of key economic events overnight that affect New Zealand, with news New Zealand and other commodity currencies are taking it on the chin.

But first, the October US non-farm payrolls surprised overnight with a headline seasonally adjusted rise of +165,000 jobs and very much higher than what was expected or indicated in parallel non-official monitoring. On an actual basis, they say payrolls rose a bit more than +1 mln in October.

The wider population survey results were very positive too, recording employment up +744,000. The curious thing is that no-one else noticed these surges happening. 

Meanwhile the rise in average earnings cooled, average hours worked marginally fell, and the participation rate was unchanged. None of these metrics back up the strong employment rises claimed.

Best to wait a month or two to see if they are sustained. On their own they give the Fed room to fight inflation harder as their labour market is apparently rising fast. 

And also better than expected was the November release of the widely watched University of Michigan sentiment survey, which was less pessimistic than in October. It shifted back to its August levels and off its all-time lows to be little-changed from year-ago levels. Inflation expectations fell back too, now at 4.3% and a better improvement than expected. This survey pre-dated the election but perhaps there was a sense of the impending outcome; the wealthy got notably grumpier in these results; the less well off saw upsides in the future.

And today President Trump has replaced his chief of staff with a full-on MAGA zealot, Stephen Miller. The next two years are going to be even rockier in the US. US ties to Russia, North Korea and China are likely to 'improve' and the backlash fights ramped up.

Canada also released October labour market data overnight and while the total number of jobs dipped only very slightly (-4,700), it would have been worse without the +13,400 gain in part-time jobs. Their jobless rate rose to 6.7% and giving up the gains since April. The expected December rate hike there is now probably in doubt.

The Canadian government released its 2026 Budget with a clear focus on building resilience and independence from the US. It is a transition that will cost them large public sector investment and longer deficits. They have had to slow their defense budget growth to accommodate what they plan. But in the age where "everything is national security" they probably don't see it that way.

In China, their demographic problem isn't improving, with marriages (and therefor births) still falling sharply.

And China has passed 'anti-corruption' laws that tries to expands its jurisdiction to overseas countries. And at the same time their law requires foreign companies to provide information involving graft cases, while barring overseas law enforcement from conducting anti-corruption investigations in China. Chinese exceptionalism is on the rise.

And we should note that there is a US-China summit meeting between their two presidents in about ten days time in Shenzhen (population 18.5 mln), their tech powerhouse center just across the border from Hong Kong (population 7.5 mln). There are more tech billionaires in Shenzhen (130+) than in Silicon Valley (80+).

EU retail sales slipped in September from August to be only +0.9% higher than year ago levels, by volume. But at least that is still a real rise. And it might be better than it looks because all the retail volume fall is due to buying less fuels. Eastern and Nordic Europe saw strong retail gains. It was falls in Germany, Spain and Italy that capped the gains. Interestingly, retail sales volumes were strong in France in September.

Global food prices edged lower in October, although dairy prices held most of their levels. Meat prices dipped, mostly on falling Chinese pork prices.

The UST 10yr yield is up +2 bps from yesterday, now at 4.85% but that is down -8 bps from this time last week. The 30 year yield is at 5.24%, down -1 bp from yesterday. The key 2-10 yield curve is now at +34 bps (up +2 bps). Their 1-5 curve is at +29 bps (+1 bp) and the 3 mth-10yr curve is at +89 bps (-3 bps). The China 10 year bond rate is down another -2 bps at just over 1.57%, down -6 bps for the week (a large move for them) and now easily at a new record low.. The Japanese 10 year bond yield is down -8 bps at 2.67%, down -11 bps for the week. The Australian 10 year bond yield starts today at 5.00%, unchanged from Friday, down -13 bps for the week. The NZ Government 10 year bond rate is now at 4.79%, up +2 bps from Friday but down -5 bps for the week.

Wall Street is bouncing back slightly today with the S&P500 up +0.7% to limit the weekly loss to -2.8%. The Nasdaq up +1.0% today for a -4.1% weekly drubbing. Overnight, European markets were all lower with Paris down -0.8% and Frankfurt down -1.9%. Tokyo closed yesterday with a huge -6.0% fall to cap a massive -10.7% weekly rout. Hong Kong fell -1.3% but they actually had a +5.1% weekly rise. Shanghai fell -1.1% on Friday for a +1.0% weekly rise. Singapore ended down -2.2% for a -3.7% weekly dump. The ASX200 dipped -0.5% in its Friday trade and that limited its weekly rise to +1.7%. The NZX50 fell -0.7% on Friday for a weekly rise of +1.5%.

The Fear & Greed index is still in the 'extreme fear' zone where it was a week ago.

The price of gold is up +US$39 at US$4159/oz and up +4.7% for the week. Silver is now just under US$52/oz and down -50 USc from yesterday. A week ago these prices were US$3876/oz and US$52/oz.

Oil prices have held today, to just on US$90/bbl in the US, while the international Brent price is up +US$1 at just on US$97.50/bbl. A week ago these prices were US$104/bbl and US$113.50/bbl respectively so they are down -14% in that time. Hormuz transits have picked up slightly today with eight ships exiting over the past 24 hours, two tanker escorted (1 dark with transponders off) and eight entering for new loads, no tankers (2 dark). The Red Sea activity features much lower traffic at the Yemen chokepoint.

The Kiwi dollar is down -70 bps from yesterday at just on 55.4 USc which makes the weekly drop -90 bps and which we make as its lowest since 2009. Against the Aussie we are up +10c at 80.8 AUc. Against the euro we are down -30 bps at 49.7 euro cents. That all means our TWI-5 starts today at just over 59.4 and down -50 bps from yesterday to its lowest in 17 years as well..

The bitcoin price starts today at US$75,601 and down -1.0% from this time yesterday to be down -2.1% for the week. Volatility over the past 24 hours has been moderate at +/-2.2%.

Vote.

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