Investors eye China equity market openings; Japan data disappoints; EU retail up; US eyes new Cat 5 storm; UST 10yr 4.02%; gold down and oil up, NZ$1 = 61.2 USc; TWI = 69.3

Here's our summary of key economic events overnight that affect New Zealand with news of powerful forces at work in both the US and China.

All eyes today will be on the opening of the Shanghai equity markets after their week-long holiday. Many think outsized gains are likely. Over that same period the Hong Kong index rose +12%. And those changes will be in anticipation of the yet-to-be announced fiscal stimulus program that Beijing has signaled. There are high expectations. But investors are probably sensing they can't lose with the central bank's logic-changing ¥800 bln (US$115 bln) capital market support measure in place.

But with 'buy-the-rumour-sell-the-fact' mentality of many investors, who knows what will happen. Some fund managers will feel they don't want to miss a unique profit opportunity, others are more sceptical the economic fundamentals are not getting proper attention.

China can afford to throw money at their issues. Their foreign exchange reserves rose by +US$28 bln to US$3.316 tln (¥23 tln) in September, slightly more than expected. And it built to its highest level since late 2015. Their gold holding rose in value too, but only because of the rising price.

Japan's leading economic index, which was expected to rise slightly, in fact fell and by quite a dip. In fact it was their lowest reading since 2020. They will be hoping this is a rogue result.

European retail sales were expected to rise in August and they did, coming in +0.8% higher in 'real' terms than a year ago for the Euro Area. But that undershot expectations of a +1.0% rise. For the wider EU bloc, things were slightly better.

German factory orders were weak in August, down -3.9% from a year ago. But that was a correction from the +4.6% rise in July.

In the US, Hurricane Milton strengthened into a monster Category 5 hurricane as races towards Florida’s west coast. Cat 5 storms are rare. Given what Helene did recently (Cat 4), residents have begun to flee inland in large numbers. Hopefully it will lose strength before it hits Florida. It is still deep in the western Caribbean Sea about 1000 kms from landfall.

After a +US$25 bln rise in July, American consumer debt was expected to rise another +US$12 bln in August. Update: In fact it only rose +US$9 bln with unexpected weakness in revolving debt (mainly credit cards).

The UST 10yr yield is now at just on 4.02% and up +5 bps from yesterday. The key 2-10 yield curve is still positive, but lesser at +4 bps. Their 1-5 curve inversion is now inverted by -38 bps. And their 3 mth-10yr curve inversion is now at -83 bps. The Australian 10 year bond yield starts today at 4.27% and up +21 bps. The China 10 year bond rate is at 2.16% and unchanged. The NZ Government 10 year bond rate is now just on 4.35% and up +6 bps from this time yesterday.

Wall Street is hesitant starting its week, down -0.6% and ignoring the weekend futures market. Overnight European markets ended mixed with Frankfurt down -0.1% but Paris up +0.5%. Yesterday Tokyo ended its Monday session up +1.8%, and nearly matched by Hong Kong which was up +1.6%. Shanghai was on holiday but returns today. Singapore was up +0.3%. The ASX200 rose +0.7% but the NZX50 dipped -0.2% ( which involved a small late session recovery).

The price of gold will start today at US$2644/oz and down -US$9 from this time yesterday.

Oil prices are up +US$2.50 at just on US$77/bbl in the US while the international Brent price is still just on US$80.50/bbl.

The Kiwi dollar starts today at 61.2 USc and down -40 bps from yesterday. Against the Aussie we are still at 90.6 AUc. Against the euro we are down -30 bps to 55.8 euro cents. That all means our TWI-5 starts today still just over 69.3, and down -30 bps from yesterday at this time.

The bitcoin price starts today at US$63,601 and up +1.3% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.7%.

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