Here’s our summary of key economic events overnight that affect New Zealand, with news the US is moving to end its government shutdown.

First, Wall Street has started its week positively with the S&P 500 rising, the Nasdaq rising even more, and the Dow Jones gaining over 240 points as optimism grew that the US Federal government shutdown could soon end. In a procedural vote yesterday, the Senate advanced the first stage of a deal to reopen the government, securing the minimum 60 votes required. Eight Democratic senators broke with party leadership, dropping their key demand for a guaranteed extension of healthcare subsidies. The proposal must still be debated and passed by the Senate and approved by the Republican-controlled House of Representatives, where its passage remains quite uncertain.

There was a three year US Treasury bond auction earlier today and that delivered a median yield of 3.54%, essentially unchanged from the 3.53% at the prior equivalent event a month ago.

In Canada, their market participants survey showed that trade tensions with the US are the key issue driving financial market. Despite that, those surveyed reckoned 2025 will deliver a +1% economic expansion this year and more next year.

In Indonesia, there was a good bounce back in consumer sentiment in October after five months of angst. The affordability crisis that played out on some streets seems to have faded somewhat.

The UST 10yr yield is now at 4.11%, up +2 bps from yesterday at this time. The key 2-10 yield curve is now at +52 bps. Their 1-5 curve is now +5 bps positive and the 3 mth-10yr curve is now +17 bps positive. The China 10 year bond rate is up +4 bps at 1.80%. The Australian 10 year bond yield starts today at 4.38%, up +2 bps from yesterday. The NZ Government 10 year bond rate starts today at just on 4.14%, up +2 bps.

Wall Street liked the Federal government re-opening so the S&P500 is up +1.3% in their Monday trade. European markets did too, and they rose more than +1% everywhere there, some to record highs. Tokyo ended yesterday up +1.3%. Hong Kong was up +1.6% and Shanghai was up +0.5%. However Singapore dipped a minor -0.1%. The ASX200 ended its Monday session up +0.8%, while the NZX50 only managed a +0.1% gain.

The price of gold will start today at US$4092/oz, up +US$92 from this time yesterday and a +2.3% gain on bets the Fed will cut its rates after weak US data. Silver surged +3% to US$50/oz, its highest level since October 20. Precious metals pricing indicates some market participants aren’t impressed by the US shutdown progress.

American oil prices are down -50 USc from yesterday at just on US$59.50/bbl, with the international Brent price unchanged at US$63.50/bbl. Fundamentally low expected demand is keeping this price low. It is holding at 4 year lows and at levels first seen in 2017.

The Kiwi dollar is now at just on 56.3 USc, and unchanged from yesterday. Against the Aussie we are -10 bps lower at 86.4 AUc and a new 12 year low. Against the euro we are up +10 bps at 48.8 euro cents. That all means our TWI-5 starts today at just under 60.9 and up +10 bps from yesterday.

The bitcoin price starts today at US$105,120 and up +1.4% from yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.5%.

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