US confidence rises, home ownership rising; NZ wins World Bank review; China PMIs sag; EU growth up; Swiss make huge profit speculating; Medcraft rips into auditors; UST 10yr yield at 2.37%; oil up and gold down; NZ$1 = 68.4 US¢, TWI-5 = 71.6

Here's my summary of the key events overnight that affect New Zealand with news the outgoing head of ASIC has ripped into the auditing firms.

But first, there was an impressive consumer confidence survey out earlier today in the US. That showed confidence increased to its highest level in almost 17 years in October after remaining relatively flat in September. Consumers’ assessment of current conditions improved, boosted by the job market which had not received such favourable ratings since the summer of 2001. Consumers were also considerably more upbeat about the short-term outlook, with the prospect of improving business conditions as the primary driver. Confidence remains high among American consumers, and their expectations suggest their economy will continue expanding at a solid pace for the remainder of the year.

And new data out today shows the American home ownership rate rising again, and for the fifth quarter in a row. It is now at 63.9%. (The equivalent NZ rate is 62.9%.)

The World Bank has released its "Doing Business 2018" report and New Zealand tops the rankings for the second year in a row, ahead of Singapore and Denmark. Interestingly, our score in this survey is miles ahead of second place Singapore. (see p 11).

In China, there is hint of drag in their latest official PMI reports. Both slipped for the period ahead of the Communist Party congress. The manufacturing index fell to 51.6 in October from 52.4 in September. The services index fell to 54.3. Both are still showing good levels of expansion, despite the slippage. Their pollution crackdown may be the cause.

The EU released data that shows it growing at the rate of +2.5% in the year to September.

Here is a lesson in the cost of trying to manipulate your own currency for political purposes. Switzerland wanted to reduce the value of its currency which it thought was being marked by the market "too high". So it bet the store. At first the policy was a dud. The Swiss franc rose even though they had poured billions into the effort. But they kept going, eventually pouring an incredible US$750 bln (NZ$1.1 tln) into the effort. And that has finally worked. In fact the Swiss National Bank has just reported a profit from the exercise of NZ$44 bln, a +4% return. But it is trapped. It can't cash in any of that result because to do so would require it to buy its own currency, reversing the effort.

In Australia, the outgoing head of ASIC said in an interview with the AFR that the quality of Australian corporate audits is appalling and getting worse, potentially leading to an Enron-style corporate collapse. It is so bad, he said, government intervention in the audit market – assigning auditors to jobs and setting the fees they can charge – should be seriously considered. He claimed declining audit quality was a "sleeper" issue, with his staff finding serious issues with a quarter of key audit areas within reviewed reports. And he claimed the big four accounting and consulting firms – Deloitte, EY, KPMG and PwC – have privately acknowledged the problem, but publicly wanted to keep a lid on questions about the quality of their auditing service. These firms have disputed that.

In New York, the UST 10yr yield is unchanged at 2.37%. Across the Pacific, Chinese Govt bond yields rose further with their 10 yr now up to 3.92% - and their 5 year is now now at 3.96%.

The price of crude oil is higher again today, now just under US$54.50 / barrel, while the Brent benchmark is just under US$61.50.

The price of gold is down -US$7 at US$1,267 oz.

The Kiwi dollar is lower today. We are now at 68.4 US¢. And on the cross rates we are at 89.3 AU¢, and against the euro at 58.7 euro cents. Against the British pound, we are at 51.5 pence, the lowest since June 2016. That puts the TWI-5 index just under 71.6.

If you want to catch up with all the changes yesterday, we have an update here.

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