Here’s our summary of key economic events overnight that affect New Zealand, with news of some really large and important economic news out of China.

But first up today, Canada released some September data overnight and it was quite positive. Their manufacturing sales rose +2.7% real, and their wholesale trade rose +0.6% real, both from August. Year-on-year it isn’t so positive although manufacturing sales are almost back to those levels (-0.8%) after being down -4.1% in May. Both data indicate both remarkable resilience, and fast transition even after being dumped on capriciously by the US.

Indian bank loan growth stayed very high in October to easily a new record, even if the percentage rise wasn’t as high as September. That is now three consecutive months where new debt has risen by more than +11% from the same month a year ago.

China’s new home prices in October across their 70 major cities were unchanged from September but dropped -2.2% from the same month a year ago. This was the same year-on-year decline they had in September. Most analysts expected a lesser decline of -2.0%. Seven of the 70 cities posited modest year-on-year price gains. None posted any gains for resales.

Meanwhile, China’s retail sales held up better than expected, up +2.9% from a year ago with better holiday spending. Their official industrial production was up +4.9% from a year ago in October, a rather large easing in their 6.0% September growth rate.

China’s electricity production fell in October, but that was less than expected and less that the usual seasonal pattern so it was up an unusually large +7.9% from a year ago. That may have something to do with the electricity appetite by AI infrastructure.

But the really big news from China as been for their fixed asset investment data. They said it fell -1.7% for the year to October. But that belies a huge -11% drop in the month from the same month a year earlier. For a country as large as China, that is a mammoth and sudden shift. The really large decrease was in the industrial northeast region. And it is puzzling analysts, especially in the light of the electricity data surge. Perhaps a clue is in this factoid in their data release: “fixed asset investment by foreign-invested enterprises decreased by 12.1%”. The slump raises important questions about the health of domestic demand which is still over-reliant on exporting. The internal economy still hasn’t gotten over the real estate slump and the defensive change in attitudes by their consumers.

In the West African nation of Guinea, a huge Chinese iron ore project has started production, aiming to wean China off Australian supply. Chinese firms have ordered dozens of giant ore carriers in a multibillion-dollar rush to transport the material from the world’s largest new iron ore project, one that will upend control over the global supply chain. The impact on Australia could now come quite quickly and be far from trivial.

There was some interesting data out overnight from the EU, where their trade surplus rose to +€19 bln in September. That was its best in five months and +50% better that year ago results. Driving the gains were exports to the US and the UK, offset somewhat by imports from India and Mexico. Imports from the US rose too but at a slower pace than the export activity. Imports from South Korea fell sharply. Trade activity with China was little-changed although it remains deeply negative (that is, more imports from China than exports to China).

In Australia, dementia, including Alzheimer’s disease, accounted for over 17,500 deaths in 2024 and is now the nation’s leading cause of death, overtaking ischaemic heart diseases, according to data released yesterday by the Australian Bureau of Statistics.

On the trade war front, global supplies of the rare earth element yttrium are running dangerously low due to Chinese export restrictions. That is sharply escalating costs in aerospace, energy and semiconductor production. Although it can be mined in many places, including Australia, it isn’t, and 94% of all mining and processing is in China.

The UST 10yr yield is now at 4.14%, up another +4 bps from yesterday at this time up +6 bps for the week. The key 2-10 yield curve is now at +53 bps. Their 1-5 curve is +3 bps positive and the 3 mth-10yr curve is now +18 bps positive. The China 10 year bond rate is unchanged at 1.81%, up +6 bps for the week. The Australian 10 year bond yield starts today at 4.47%, up +3 bps from yesterday, up +14 bps for the week driven by the labour market data which has changed financial market views. The NZ Government 10 year bond rate starts today down -1 bp at 4.19%, up +7 bps for the week.

Wall Street’s is holding lower with the S&P6500 up +0.2% in their Friday trade. If it ends there that will be a -0.5% loss for the week. European markets were lower, between Frankfurt’s -0.7% and London’s -1.1%. Tokyo ended yesterday down -1.8% for a weekly -0.5% retreat. Hong Kong was also down -1.8% yesterday for a weekly +1.0% gain. Shanghai fell -1.0% in Friday trade with a sharp late selloff to be -0.3% lower for the week. Singapore fell -0.7%. The ASX200 ended its Friday session down -1.4% for a weekly -1.8% loss, while the NZX50 fell -1.0% on Friday which was also its weekly retreat.

The Fear & Greed index is still in the ‘extreme fear’ zone as it was last week.

The price of gold will start today at US$4098/oz, and down -US$101 from this time yesterday. That is up +US$93 for the week. Silver has moved sharply back too, now just under US$51.50/oz.

American oil prices have recovered another +US$1 from yesterday to be just over US$60/bbl, with the international Brent price now on US$64.50/bbl. A week ago these prices were US$59.50 and US$63.50/bbl.

The Kiwi dollar is now at just on 56.8 USc, and up +10 bps from yesterday, up +60 bps from a week ago. Against the Aussie we are also up +20 bps at 86.8 AUc. Against the euro we are up +20 bps as well at 48.9 euro cents. That all means our TWI-5 starts today at just under 61.4, up +20 bps from yesterday, up +60 bps for the week.

The bitcoin price starts today at US$95,780 and down another -5.2% from yesterday. That is its lowest since May 2025 and down -6.2% for the week. Volatility over the past 24 hours has been moderate at just on +/- 2.9%.

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