Here's our summary of key economic events overnight that affect New Zealand with news all eyes are turning to an upcoming briefing by Chinese Ministry of Finance officials of the next stage of their economic support program. Markets have treated the previous announcements so far with growing scepticism.
But first today, American producer prices hardly rose in September. US factory gate prices were flat in the month from August and missing expectations of a 0.1% rise. On an annual basis, PPI inflation eased to a 7-month low of 1.8%.
US consumer sentiment was little-changed in October according to the University of Michigan survey, holding at a level it was broadly been at since May. There was a slight dip from the prior month, something that is probably just related to election uncertainties.
For those who follow such things, we can report no surprises in the October update of the USDA WASDE report. But they did raise their beef import forecasts marginally again, and lowered their US milk production forecasts, again.
The UST 30yr bond auction yesterday was again well supported, delivering a median yield of 4.32%. That was up from 3.95% at the prior equivalent event a month ago.
It might be worth noting that the Tesla share price took a tumble today, down -8% on the day that it launched it Robotaxi to underwhelming reviews. That share price is down -11% for the week, and down -46% since its peak in 2021. SpaceX may be Musk's last good business. He has lost his midas touch at X/Twitter and Tesla.
Canada reported a good +47,000 rise in employment in September, almost double what was expected. Better still, full-time jobs rose +112,000 while part-time roles shrank -65,000. Their jobless rate slipped to 6.5% when a rise was anticipated
China's Ministry of Finance will hold a public briefing at about 2 pm today (NZT) and markets expect them to announce a ¥2 tln yuan boost in fresh fiscal stimulus (money printing via a huge bond issue program). Tomorrow (Sunday) they will release their normal data set for September lending activity and it is expected to be quite ho-hum.
New data shows China's giant car market barely expanding, up +2% in September from the same month a year ago. They are making a very big deal about the growth of NEVs (up +51%), but the overall expansion is quite weak. And they are getting gains in a segment (NEVs) where resale values are awful, essential a use-and-throw-away segment. Worse, the gains are only coming as a result of vehicle trade-in policies and car scrapping allowances.
In South Korea, they have started cutting their policy rates too, although not as aggressively as New Zealand. The Bank of Korea policy rate is now 3.25% after its first rate cut (-25 bps) since May 2020. That came after data showed their GDP shrank in Q2-2024 and their September inflation slowed to 1.6%, the lowest since February 2021.
India's industrial production took a surprise drop in August from a year ago, its first retreat since October 2022. Few saw that coming. And they downwardly revised the +4.7% rise in July.
Interestingly, the Indian currency is under pressure, and outflow levels have been high. The Indian rupee has hit a record low against the US Dollar, (but against the NZD it has been pretty flat since 2020).
The UST 10yr yield is now at just on 4.07% and down -3 bps from yesterday. A week ago it was at 3.99% so up +8 bps since then. The key 2-10 yield curve is more positive, now by +13 bps. Their 1-5 curve inversion is now inverted by -31 bps. And their 3 mth-10yr curve inversion is less, now at -77 bps. The Australian 10 year bond yield starts today at 4.30% and up +2 bps. The China 10 year bond rate is at 2.15% and down -3 bps. The NZ Government 10 year bond rate is just under 4.43% and up +4 bps from this time yesterday, but up +14 bps from a week ago.
Wall Street is firmer in its Friday session, up +0.5% to be up +1.3% for the week and at yet another all-time high. Overnight European markets ended mostly +0.5% higher as well. Yesterday Tokyo ended its Friday session up +0.6%, to be up +0.9% for the week.Hong Kong was closed for a holiday and ended its week down -6.5%. Shanghai fell -2.5% yesterday to end the week up +0.7%. Singapore was down -0.3%. The ASX200 slipped -0.1% on Friday to be up +0.8% for the week. And the NZX50 was up +0.7% on Friday and was up +1.8% for the week and the best of the markets we follow.
The Fear & Greed Index ends the week hard over on the 'greed' range, just kike last week. Overall markets are comfortable with their risk appetite.
The price of gold will start today at US$2660/oz and up +US$29 from this time yesterday. That is up +US11 from a week ago.
Oil prices are -50 USc softer at just under US$75.50/bbl in the US while the international Brent price is still at US$79/bbl. A week ago these prices were at these same levels, so no-change in a week.
The Kiwi dollar starts today at 61.2 USc and up +40 bps from this time yesterday but -40 bps lower than at this time last week. Against the Aussie we are up +10 bps at 90.5 AUc. Against the euro we are up +20 bps at 55.9 euro cents. That all means our TWI-5 starts today now at 69.3, and up +20 bps from yesterday at this time. But that is -40 bps lower than a week ago.
The bitcoin price starts today at US$62,279 and up +3.1% from this time yesterday. A week ago it was at US$62,254, so virtually no change since then. Volatility over the past 24 hours has been high at just on +/- 3.0%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
52 Comments
Yep... the ship will hit the fan sooner or later.....bluridge having reliability probs as well... 'Row row row your boat gently down the stream....merrily merrily merrily , life is but a dream'...unless you need to get your product or vehicle somewhere in NZ....lol
I talked to a guy close to the build of the new ferries a few weekends ago. He was saying all the electrics were delivered, but because NZ uses 240v and is fairly unique, it all just got thrown away. The ship building service there is now booked up for like 6 years or something now too.
What an abysmal failure of leadership to cancel a project we were getting for cheap and will be replaced with something half as good, but likely the same price or more expensive. Remember anything they announce now has to be less than $2.5b, given what we have spent cancelling already... its likely the ships will be around $1-1.5b themselves, despite just being "corollas" and being much less capable than what we were going to get.
Like I said before, Luxon is holding up the rug, Willis is furiously sweeping.
My suggestion a few months back was for the government to scrap/sell the existing rust buckets and do nothing. Turns out what is going to happen is just that, with a little add on deal that will see the Chinese supplying and operating Cook Strait inter island ferries.
Let me guess NZ pays to upgrade the port facilities to enable your idea Frank...visionary.
Sitting here watching the ocean a stone's throw away from beach . Train line (electric), cycle lanes, runners, pedestrians and lots of dogs bring walked. Triathlon just started, No cars allowed other than service.
In NZ would be a busy Rd ..
"Canada reported a good +47,000 rise in employment in September, almost double what was expected. Better still, full-time jobs rose +112,000 while part-time roles shrank -65,000. Their jobless rate slipped to 6.5% when a rise was anticipated"
One should note the Canada's central bank hit peak-rate (i.e. maximum contraction) of 5% on July 12, 2023 and made their first cut on June 5, 2024. That's just 11 months.
Meanwhile, our RBNZ hit peak-rate in May 23 at 5.5% and made their first cut Aug 24. That's 15 months at peak, with the longest ever tightening cycle (since the Banking (Prudential Supervision) Act 1989) which lasted from Oct '21 to Aug 24.
And, the RBNZ's first cut was 6 months after Canada's first cut.
You can compare both banks here by typing "Canada Interest Rate" into the 'Compare+' box.
Edited: Added "since the Banking (Prudential Supervision) Act 1989". This changed the RBNZ's focus to inflation targeting using a central bank "interest rate". Comparisons on interest rates in isolation pre-1989 and post-1989 (as some have done in the comments) are idiotic without also addressing the tools that were thrown out with the baby in the bathwater in 1989.
I'm not too sure it's the longest ever? The OCR was 4.75% in Nov 2001 and kept being ramped up until it hit 8.25% in July 07. Arguably it could have gone even higher, but then the GFC hit, and we did what we always do when a financial crisis threatens the notional wealth of the few - cut rates to protect asset prices.
Also a 20 year tightening cycle mid 1960’s - 1980’s.
And it’s possible the current tightening cycle may not be over yet - some indicators (core inflation/latest PPI data) showing inflation maybe rising again in the US and longer term bonds went up not down when the Fed cut last month.
Yes, I've been watching this too. As the war machines start revving up, the recent FED cut looks more and more akin to election year timing than anything. Post election, will they live to regret it and resume tightening? As for those like us who are cutting, it could leave us in a worsening situation. The risks are clearly rising.
@I_O & @RP, it does seem that domestic demand pull inflation is beaten, insurance & rates might not stop but that can’t be controlled with monetary policy, if the govt is determined to carry on with austerity then the RBNZ has to cut, regardless of whether we see increased global risks doesn’t it? Surely pulling up the ladder now would just absolutely destroy our economy?
Risks are rising for oil, but even then it is looking like $80(ish) a barrel so still lower than what we’ve seen over the last couple of years, guess could get a lot worse. Just can’t see how stopping easing/hiking again would help.
A 'tightening cycle' is from when rates start from a lower point and hike to peak-rate, and end when rates start falling, without a stable period in between.
Rates went up and down between 2001 and 2004.
Between 2004 and 2008 there was a short stable period that lasted 6 month. Did this break the tightening cycle? I'd say probably. Others may say probably not.
In any event, the GFC ended that tightening cycle, and the phase "central banks are too slow to react, and when they do, they hold rates too high, for too long" was born.
The long tail of covid:
An eye surgeon has been forced into a mid-life career change after losing his profession and his business through taking a stand against a Covid-19 vaccination mandate.
I realise he is technically guilty of the charges. But at what point is it okay not to follow orders...if the mandates were so critical, then where are they now Medical Council? Why not offer him back his registration if the mandates were why it lapsed?
The boorish control freak behaviour of Jacinda Ardern's government ought to be expunged for all time ... they were wrong on every front when it came to Covid19 & their response to it ... their misuse of it for political gain ... hang your head in shame Chris Hipkins , you were a key part in this travesty against the rights & freedoms of private NZ citizens ...
Chippie doing his very best to memory hole the whole period, cover his tracks and his part in it, with Jamie McKay on Friday - "It's interesting now, of course everybody has a bit of COVID amnesia. Nobody wants to talk about that. I think we've all got repressed memories and we just don't want to think about it or talk about it."
Meanwhile, doctors and other professionals are still being persecuted for standing up to groupthink tyranny and the erosion of basic human rights.
https://omny.fm/shows/the-country/the-country-10-10-24-chris-hipkins-ta…
.. exactly ... Hipkins is an incompetent buffoon ... I'm sure that many within his party realise that too ... they're just biding their time , sharpening their knives , waiting until after he loses another general election , 2026 ... SPLURRRRRK!!! ... game over Chippie , R.I.P. ... where's the mop & bucket ?
Really? Plenty of people, including qualified disease experts, were suggesting following Sweden's lead and keeping the kids in school, not having mask mandates and lockdowns and letting people make their own decisions. How governments managed it had a huge difference in outcomes.
"Using the Human Mortality Database on 34 countries, excess deaths were calculated for 2020–2023 (to week 29, 2023) using 2017–2019 as reference, with adjustment for 5 age strata. ...Half the analyzed countries witnessed no substantial excess deaths versus prepandemic levels, while the others suffered major death tolls. ...The United States of America would have had 1.60 million fewer deaths if it had the performance of Sweden"'
https://www.pnas.org/doi/10.1073/pnas.2309557120
No learning loss in Sweden during the pandemic: Evidence from primary school reading assessments
https://www.sciencedirect.com/science/article/pii/S0883035522000891
https://stanfordreview.org/dr-scott-atlas-on-censorship-academic-freedo…
Lucky he wasn't in the Lucky Country. The establishment is relentless.
"How is that fair?’: Anti-lockdown protester Monica Smit ordered to pay $200,000 after winning unlawful arrest case
A court found that a prominent activist was unlawfully arrested during anti-lockdown protests in Melbourne in 2020 but was ordered to pay substantial costs."
https://www.news.com.au/lifestyle/real-life/news-life/melbourne-activis…
I don’t know I’m quite excited to see the next rocket launch coming up the next few days which is twice as powerful as the SaturnV rockets they sent to the moon and they are going to try to catch the booster using a pair of giant chopsticks!
Sounds pretty exciting to me.
Are you doing anything close to scale to this to advance humanity or have you been reading too many hit pieces constructed by the MSM who suddenly hate Musk because he’s gone from centre left to centre right in his political views?
No purely comment arising from the 6th paragraph as above and with a view to recent antics by said personality. An independent observation if you like, which this site readily encourages and which obviously can unwittingly attract personal argument beyond the actual point being made.
Fair enough - I wish Musk well for his various projects as they generally have the best interests of humanity in mind. Others seem to be cheering for his downfall at the nearest opportunity - more recently and primarily because he decided to choose the red team instead of the blue team.
The elephant in the room is that the real dicks might be the people who are pro censorship and dislike that Musk has opened up X/Twitter and no longer allows the Democratic Party to throttle the flow of information across that platform - ie anything positive about Trump used to be viewed as ‘far right hate speech’ so would get silenced or removed entirely from the platform (something crazy like 95% of Twitter content moderators were hard core Democrat supporters living in California - hardly a politically representative platform for the flow of information from all political points of view) . Facebook were also saying the Dems/Feds the last 4 years had been mandating what could and could not be allowed on the social media platforms.
But now that voters on both sides can speak freely on the Twitter platform, the left labels X/Twitter as a platform of dangerous misinformation! (Biden, Harris, Clinton etc all coming out and saying this in recent weeks).
The way the Democrats have controlled MSM and social media until very recently (with Musks Twitter takeover) has been similar to the way the ministry of truth operated in Orwells 1984. And they see this as a big threat they want to regain control of once more - only they get to decide what is true - anything else anyone of any other political affiliation may think must be silenced as it’s ‘mis’ or ‘disinformation’. Only the Democrats get to determine the truth - and that is what is beneficial for themselves and not necessarily what is true to all Americans (across the political spectrum)..
Then people wonder why 50% of the population are pro Trump - perhaps it’s because they like to protect the first amendment and their right to free speech and to not be told that their opinions are mis or disinformation by a Dem government that suddenly looks pro censorship mob with what end goal? To throttle the views of half the population when it doesn’t suit their self serving political narrative?
Having seen some of Trump's recent rambling speeches , the Democrats would benefit from encouraging him to speak freely ... he's making a complete fool of himself ...there's nothing like the bright lights of openness and freedom of speech to show up a jackass for what he or she is ...
You exactly highlight my above points Baywatch.
As you say ‘he’s a bit of a dick NOW’. And now meaning he no longer aligns with your left wing political views (which are very obvious in your comments). He’s a dick now because he’s gone with Trump (Red team) but he wasn’t a dick before that when he was on the blue (Dem) team ie when he used to be in alignment with your leftist political views.
People fail to see issues and make fair assessments of judgement and character beyond their own political bias.
Your comment is another example of this.
ps I wouldn’t say he’s a dick but he’s got some mental health stuff going on - Walter Isaacsons biography is a very good read and a fair/unbiased take on his character - most MSM are heavily skewed to the left and are constantly writing unfair and biased hit pieces against him the last 12-24 months (and probably the information you have been using to form an opinion of him - the moment Musk appeared to stop supporting Biden the MSM started trashing him and his companies/projects in whatever ways they could).
Thanks goodness for X. We would be living under "don't be evil" Google censorship otherwise.
"“The Committee may also be surprised to know that Google also uses this control of the ad tech ecosystem to censor content that appears on news media websites. For example, as recently as October 2023, Google flagged (without explanation) content on Stuff's news website homepage as being in violation of Google's policies, and therefore as justification for Google to cease serving programmatic advertising on http://stuff.co.nz. Such unilateral moves by Google causes Stuff to lose advertising revenue, and without any explanation of the content that purportedly triggered the "violation", Stuff needs to conduct a "needle in a haystack" search of removing content until it is able to have its advertisements served again. Not only does this unilateral (and opaque) power give rise to serious commercial concerns for NZ News Media, it also gives rise to serious concerns about Google's ability to censor news content and to seek to control editorial decisions.”
Looking like a bull market in PMs (12-month returns to end of Sept) relative to everything else:
Spot silver - +40.49%
Silver miner ETFs (SIL) - +47.5%
Spot gold - +42.5%
Gold miners (GDX) - + 50.3%
S&P 500 - +36.3%
Vanguard Real Estate ETF - +36.3%
10-Year Treasury (SPBDU1BT) - +10.6%
Bloomie Commodity Index - -4.2%
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.