Here’s our summary of key economic events overnight that affect New Zealand, with news the market assumption that Trump’s upcoming meeting with Chinese president Xi would calm trade matters seems up in the air again, with that meeting now suddenly less certain. And a Trump-Putin meeting chance is fading. As well as the Gaza truce holding. Markets are in a wait-and-see mode today. But precious metals prices are giving back some of their recent gains in sharp moves lower.

But first, today’s full dairy auction delivered an average price of US$3881/tonne, down -1.0% from the prior full event two weeks ago. But the key WMP price fell a sharp -4.6% as the derivatives market had signaled, while the SMP price fell -2.1%, only half the derivatives market signal. Butter and the cheeses fell, but there was a big gain for AMF. Apparently. The auction system suffered glitches so these details are interim and are subject to change.

In the US, their Federal Government shutdown is getting ever more toxic, now in its third week. A key White House economic advisor said yesterday the shutdown is “likely to end sometime this week,” though warned that if it doesn’t, the Trump administration may resort to “stronger measures” to pressure Democrats. There seems no resolution in sight amid the partisan standoff. Republicans are pushing for a short-term funding bill to maintain current spending levels (something they railed against when Biden was President), while Democrats insist any deal must include expanded health-care provisions, specifically an extension of Obamacare tax credits set to expire at the end of 2025. Curiously, Obamacare has its deepest hold in Republican states.

In American private sector data released overnight, there was quite a dive in the Redbook retail sales data tracking for last week. As its a one-off, it is not possible to say whether this is an anomaly or an indication of some sharp retail cooling. But it is worth watching. It could well be that tariff-tax price hikes are sapping retail demand.

In Canada, they got an inflation surprise. Their CPI inflation rose to 2.4% in September from 1.9% in the previous month, and higher than analyst expectations of 2.3% and the highest inflation rate since February. It was the first time inflation crossed the Bank of Canada’s 2% threshold in six months. Even their core inflation rate rose more than expected. But some of this jump can be explained by base effects related to their petrol price. The Bank of Canada next reviews their policy rate next week and more than a 50/50 chance of a -25 bps cut is priced in by financial markets. That would take their policy rate to 2.25%.

Across the Pacific in Taiwan, their export prowess actually gained momentum in a spectacular fashion in September. Orders for Taiwanese exports surged by more than +30% year-on-year to an all-time high exceeding US$70 bln in the month, accelerating from a 19.5% increase in the previous month and far surpassing market expectations of a +18% gain. Demand for AI products surged.

In Japan, Sanae Takaichi has won the prime ministership, building a coalition with the Japan Innovation Party, and will now chase spending reforms and expansionary fiscal policies, in the style of ex-PM Shinzo Abe. The Yen weakened sharply as a result.

In Argentina, despite more overt US support, the peso has fallen sharply again.

In Australia, they are glowing after successful Albanese deals with the US. But now delivering meaningful rare earth production become the priority. It will likely reinvigorate an already successful mining sector. If demand from China slows, as some expect, this could keep their mining sector party going for a while longer.

The UST 10yr yield is now at 3.96% and down -3 bps from this time yesterday. The key 2-10 yield curve is now at +50 bps. Their 1-5 curve is now inverted again but only by +1 bp. And their 3 mth-10yr curve is now -6 bps inverted. The China 10 year bond rate is up +1 bp at 1.77%. The Australian 10 year bond yield starts today at 4.12%, down -3 bps from yesterday. The NZ Government 10 year bond rate starts today at just on 4.00%, down -3 bps.

Wall Street marking time with just a +0.1% gain on the S&P500. Good earnings reports continued to flow. Overnight European markets rose between London’s +0.2% and paris’s +0.6%. Yesterday, Tokyo ended its Tuesday session up +0.3%. Hong Kong rose +2.4% and Shanghai gained +1.4%. Singapore was up +1.2%. The ASX200 ended its Tuesday up +0.7%. But the NZX50 only gained +0.2%.

The price of gold will start today very sharply lower at US$4121/oz, down a massive -US$225 from yesterday, a -5.2% correction. Silver has fallen proportionately more, down to US$48.50/oz.

American oil prices are +50 USc firmer at just under US$57.50/bbl, with the international Brent price now just under US$61.50/bbl. But even American plans to refill its strategic reserves with more than 1 mln barrels hasn’t shifted the price.

The Kiwi dollar is at just under 57.5 USc, and little-changed from yesterday. Against the Aussie we are up +20 bps at 88.4 AUc. Against the euro we are also up +20 bps at 49.5 euro cents. That all means our TWI-5 starts today at just over 62 and little-changed.

The bitcoin price starts today at US$113,511 and up +2.7% from this time yesterday. Volatility over the past 24 hours has been moderate at just over +/- 2.7%.

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