Here’s our summary of key economic events overnight that affect New Zealand, with news in search of short-term riches, the Cook Islands is establishing itself as a haven base for deep sea mining, it be used by both great powers.

But first, American mortgage applications rose last week with a modest +3.1% gain from the prior week attributed to a small fall in benchmark mortgage interest rates. It was the stronger +5% refinance activity that drove the modest gain rather than new home purchases.

Those benchmark rates may keep falling. There was slightly softer demand for the latest overnight US Treasury 10yr Note auction, but the resulting median yield came in at 4.20%, down from 4.31% at the prior equivalent event a month ago. However the yield is up on more recent levels.

Separately, the NY Fed monitoring of global supply chain pressure eased again in July.

In Canada, they are seeing residential real estate markets operating like we see here. For example Toronto sales transactions are rising (+13% in July from a year ago), but prices falling (-5.4% on the same basis).

The Reserve Bank of India kept its key policy rate at 5.50% during its August meeting, now holding a neutral stance, following a larger-than-expected -50 bps decrease in June. There were no surprises here and the rate remains at its lowest level since August 2022. Easing inflation and the recent US tariff challenges were key considerations.

Meanwhile, the US has doubled its tariffs on India to 50% as ‘punishment’ for buying Russian oil. Interestingly it has boosted Modi’s standing at home in India and brought bi-partisan support for him in resisting the US.

In China, they have brought in a ¥3,600 (NZ$845) per year child care subsidy for under threes, designed to boost household consumption and ease pressure on family budgets. Encouraging childbirth is probably the core motivation for this subsidy. It is just another is a broadening range of consumer subsidies China is rolling out to support its economy and build domestic demand.

EU retail sales volumes impressed in an overnight data release for June. They were up +3.1% on a volume basis, the best increase since September 2024. German gains were particularly strong, up +4.8% on the same volume basis.

But new German factory orders again disappointed in June, down -1.0% in volume terms. Although this was twisted by some lumpy ‘large’ orders. Excluding those, the change is a gain of +0.5% in volume terms. (Large-scale items include aircraft, ships, trains, military vehicles).

Australia said living costs rose for all type of households in June. Over the past year, all LCIs rose between +1.7% and +3.1%, slowing from annual rises of between +2.4% and +3.5% to the March 2025 quarter. Housing, Food and Beverages were the main contributors to annual living cost increases across the household types. Smaller annual rises in living costs came with a continued slowing in growth for Insurance and financial services and a larger annual fall in Transport compared to the March quarter. The interest rate cut by the RBA was a key reason the “financial services” category retreated in the quarter.

In the South Pacific, the Cook Islands is becoming a renegade state. Its deal with China allows the Chinese to use it as a base for deepsea mining. Now the US is keen to use it in the same way. These great powers see “one of the most promising regions for deep-sea mineral deposits.” These nations are keen to plunder as far away from themselves as possible.

The UST 10yr yield is now at 4.22%, up +2 bps from yesterday. The key 2-10 yield curve is a little steeper at +52 bps. Their 1-5 curve is flatter at -13 bps. And their 3 mth-10yr curve is much less inverted at -12 bps. The Australian 10 year bond yield starts today at 4.26% and up +5 bps from yesterday. The China 10 year bond rate is firm at 1.72%. The NZ Government 10 year bond rate starts today at just over 4.47% and up +3 bps.

Wall Street is firm today, up +0.7% from yesterday and reversing the Tuesday dip. Overnight, European markets were up about +0.2% again. Tokyo ended its Wednesday session up +0.6%. Hong Kong was essentially unchanged, Shanghai was up +0.5% and Singapore was also up +0.5%. The ASX200 closed its Wednesday session up another good +0.8%. But the NZX50 ended essentially unchanged.

The price of gold will start today at US$3,374/oz, down -US$5 from yesterday.

American oil prices have slipped back again, down another -50 USc to just under US$65/bbl with the international Brent price holding at just over US$67.50/bbl.

The Kiwi dollar is at 59.4 USc and up +40 bps from yesterday. Against the Aussie we are unchanged at 91.3 AUc. Against the euro we are also unchanged at 51 euro cents. That all means our TWI-5 starts today at just on 67.1, up +20 bps.

The bitcoin price started today at US$115,465 and up +1.6% from this time yesterday. Volatility over the past 24 hours has been low at just under +/-0.9%.

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