Equity markets in sharp falls; US jobs growth wanes; WTO ruling invokes more tariffs; Japan consumers gloomy; Aussie rate cut contested; UST 10yr yield at 1.59%; oil down and gold up; NZ$1 = 62.6 USc; TWI-5 = 68.2

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Here's our summary of key events overnight that affect New Zealand, with news there is blood on the equities trading floors.

Wall Street is having a very bad day. In early afternoon trade the S&P500 is down almost -2% and falling. Benchmark bond yields are falling sharply too.

The US ADP employment report has come in weak, undershooting analysts expected results and far less than for August. This is the precursor report for this weekend's American non-farm payrolls report and recall last month the ADP data (+157,000) was more positive than the official data (+130,000). This slowing of hiring is a key source of market gloom.

The US service sector is also losing its mojo.

And the trade wars are getting worse. The US is about to tariff EU goods and especially Airbus products. A new tit-for-tat round is about to start and American factories will be affected as much as EU ones. Interestingly, this decision is a WTO one, and comes before the EU case decision against Boeing and the subsidies it receives from the US government.

In Europe, they took even greater fright overnight with equities there falling more than 2.5%, and London was the hardest hit, down -3.2%.

In Japan, consumer sentiment weakened for the 12th straight month in September, hitting its lowest level since the survey started in April 2013.

Markets know all this trade war stuff is counterproductive and recession-inducing; it is just nationalist politicians who can't see the damage that is being done and it may now be too late to stop a global recession no matter what the monetary and fiscal authorities do. World trade is worth about the same as the GDP of the world's largest economy (about US$20 tln) and about a quarter of global GDP, and even small reductions involve huge flows, flow changes that overwhelm most economies. For example, if the US economy grows +2% this year (which now seems unlikely), a -5% fall in world trade (which is now possible) will wipe out all the growth they may have been expecting from their share of the fall. Worse for them, their largest multinationals and the source of their huge investment flows inward, are likely to be the hardest hit.

In Vancouver, housing sales were up more than +40% in September from a year ago, now back to normal historical levels.

In Hong Kong, retail sales tumbled -23% in August from the same month last year as the massive anti-government protests take their toll on their economy. Street protests continued overnight in reaction to police shootings of demonstrators.

In Australia, all four majors have announced that only a portion of the RBA rate cut will flow through to mortgage borrowers, about -15 bps of the -25 bps RBA benchmark cut. The rest will be retained for savers who won't get the full cut to their interest rate. Bank-bashers including most politicians are having a field-day, although conveniently ignoring the saver-benefits.

The UST 10yr yield is down -5 bps to 1.59%. Their 2-10 curve positive at +11 bps. Their negative 1-5 curve is wider at -26 bps. But their 3m-10yr curve is narrower at -17 bps. The Aussie Govt 10yr is firmer at 0.95%, an rise of +3 bps. The China Govt 10yr is unchanged at 3.16%. The NZ Govt 10 yr is at 1.06%, a -5 bps fall from yesterday.

Gold has risen further today, up another +US$19 after yesterday's +US$13 rise and is now back up to US$1,501/oz.

US oil prices are lower yet again today, down another -US$1 and now just over US$52.50/bbl. The Brent benchmark is just over US$57.50. Weak demand views are behind the reductions.

The Kiwi dollar is firmer today, now at 62.6 USc and off its decade lows. On the cross rates we are back up to 93.4 AUc. Against the euro we are at 57.2 euro cents. That puts the TWI-5 back to just on 68.2.

Bitcoin is now at US$8,215 and -2.8% lower than this time yesterday. The bitcoin rate is charted in the exchange rate set below.

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