US housing market tanks; US Fed speakers worried; Japanese PPI surge remains; high India inflation returns; Aussie inflation expectations stay very high; UST 10yr at 5.11%; Nvidia boss quits; gold falls and oil dips; NZ$1 = 55.5 USc; TWI-5 = 59.6

Here's our summary of key economic events overnight that affect New Zealand, with news we should note that US benchmark bond yields are moving up and are now at a three-week high on expectations that the Federal Reserve will deliver multiple rate hikes in the current tightening cycle.

But first, US initial jobless claims rose last week to 207,000 which was notably more than seasonal factors would have expected. There are now 1.504 mln people on these benefits. Apart from the pandemic recovery, these have been driven down by tighter qualification criteria to levels last seen in the 1970s. On a population-adjusted basis, this is the lowest ever.

Also falling to very low levels, US existing home sales fell in October sharply and are now at a 16 year low. This is far below what was expected, a -5.5% fall in just one month. Over the whole country, there is now one year's unsold inventory at the current sales rate.

Overnight there were a number of Fed speakers out, and most with the same message. The Chicago Fed boss said the October CPI result was 'borderline disturbing'. Meanwhile Michael Barr was talking about AI and inequality. And the Cleveland Fed boss said she wanted to see more frequent rate moves to stay on top of the inflation threat.

US crude oil stocks jumped by more than +4 mln barrels last week, the first meaningful rise since mid-August. But their strategic petroleum reserves fell again last week, now down at critical levels and touching lowest-ever levels. Meanwhile OPEC updated their assessment of oil markets and you can find that here.

Across the Pacific, Japanese producer prices have been increasing at above a +7% rate since since May and June. They were expected to start trending lower with analysts expecting an October rise of +6.5% (year-on-year, +0.3% from September). But in fact they rose, up +7.1% from a year ago, up +0.7% from the prior month. This is not a good signal.

Inflation has returned to India at a high level, and for them that means food inflation. They said their October CPI was up 6.1% from a year ago. Remember a year ago it was only up 0.3% from the prior year. This year food prices are up 8.5%, This year's monsoon rains have been erratic, attributed to the impact of El Nino. And the prospects for reliable rainfall are low with the year-to-date national deficit approaching -10%.

Australian inflation expectations stayed a very high 5.3% in November according to the widely respected Melbourne Institute survey. (The same survey showed wage expectations weak at +1.3%.)

Global container freight rates dipped last week (-2%) to be +132% higher than year-ago levels still. But bulk freight rates rose +13% in the past week to be +43% higher than year-ago levels.

The UST 10yr yield is up +10 bps from yesterday, now at 5.11%. The 30 year yield is at 5.43%, up +7 bps. The key 2-10 yield curve is now at +25 bps (down -2 bps). Their 1-5 curve is at +32 bps (+4 bps) and the 3 mth-10yr curve is at +115 bps (up +8 bps). The China 10 year bond rate is up +3 bps at just on 1.62%. The Japanese 10 year bond yield is up +5 bps at 2.85%. The Australian 10 year bond yield starts today at 5.07%, up +2 bps from yesterday. The NZ Government 10 year bond rate is now at 4.76%, down -4 bps from yesterday.

Wall Street has been undermined by the Nvdia drama (-4.7%) with the S&P500 up +0.1% today and the Nasdaq down -0.1%. Overnight, European markets were mixed, between Paris's +0.3% rise and Frankfurt's +0.6% gain. Yesterday Tokyo fell -0.7%. Hong Kong fell -1.3% and Shanghai was down -0.7%. Singapore dipped -0.1%. The ASX200 also ended down -0.1%. The NZX50 managed a +0.6% gain which was better than most.

The price of gold is down sharply, down -US$124 at just on US$3876/oz even. Silver is now just on US$50/oz and down -US$2 from yesterday.

Oil prices have dipped -50 USc today, to just under US$87.50/bbl in the US, while the international Brent price is little-changed at just on US$94/bbl. Hormuz transits have stayed very low today with just three ships exiting over the past 24 hours, one tanker escorted (1 dark with transponders off) and six entering for new loads, no tankers (2 dark). However, the Red Sea activity features a sharp drop in crossings at the Yemen chokepoint.

The Kiwi dollar has dipped overnight, down another -10 bps to be just on 55.5 USc. Against the Aussie however we are up +30c at 81.5 AUc. Against the euro we are little-changed at just under 50.2 euro cents. That all means our TWI-5 starts today at just under 59.6 and down -10 bps.

The bitcoin price starts today at US$71,789 and down -3.2% from this time yesterday. Volatility over the past 24 hours has again been moderate at +/-2.3%.

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