Here’s our summary of key economic events overnight that affect New Zealand, with news markets now universally expect the American central bank to cut rates tomorrow by -25 bps.

But today, the overnight dairy auction brought a much better result than expected with the declines for both WMP and SMP nowhere near as sharp as indicated by the earlier derivatives pricing. That will very much ease the pressure on any farm gate payout forecasts. The detail is interesting. There was notably softer demand from China for WMP, but that was countered by stronger SE Asian demand. Cheddar cheese prices rose because of some unexpected demand from North America, But mozzarella prices dived -9.6% on weak Chinese demand. Overall prices slipped just -0.8% in USD, but there were down a sharpish -2.9% in NZD as the greenback took a tumble overnight.

Meanwhile, US retail sales rose in August and by a little more than expected. They were up +5.0% after a +4.1% rise in July. But this data is not inflation-adjusted in the way that other countries report. We will have to wait for sales volume data later in the month.

And US industrial production rose in August too, but only up +0.1% from the prior month and only after a -0.4% revised fall in July. Year-on-year it is up +0.9%, about average for 2025, but hardly evidence of manufacturing reshoring.

Homebuilder sentiment was flat in August as reported by the NAHB survey. It is remaining at the very low levels we have seen since May, and very much lower than this time last year. They are pinning their hopes on Fed rate cut(s) delivering a changed outlook.

And staying in the US, crypto giant Binance looks like its lobbying and support of Trump will see the US Justice Department drop a key oversight requirement in its US$4.3 bln settlement of allegations that it didn’t do enough to prevent money laundering. So, pay the money, get no oversight, and go back to enabling money laundering. A real Trump-type deal.

Meanwhile, Canadian CPI inflation rose from 1.7% in July to 1.9% in August, a lesser rise than was anticipated. Meanwhile there was a rather sharp fall in housing starts there in August, down -16% from July to 245,791 units from a revised 293,537 in July and well below market expectations of 277,500. But they were still +10% higher than year-ago levels. A rate cut is coming in Canada tomorrow too.

In China, there are some signs that Beijing’s stimulus could be working. Steel output not only stopped falling, it actually picked up in the first two weeks of September, defying downbeat expectations. And iron ore prices rose too recently.

In the EU, industrial production rose more than anticipated in July, although the expectations aren’t high.

The UST 10yr yield is now at 4.03%, down -1 bp from yesterday at this time. The key 2-10 yield curve is still at +51 bps. Their 1-5 curve is still inverted by -4 bps. And their 3 mth-10yr curve is now inverted -10 bps. The China 10 year bond rate is down -1 bp at 1.86% and off its six month high. The Australian 10 year bond yield starts today at 4.22%, down -3 bps from yesterday. The NZ Government 10 year bond rate starts today at just on 4.31%, down -4 bps from yesterday.

Wall Street is a touch lower today, down -0.1% on the S&P500. Overnight, European markets were lower with Paris and London down -1.0% and Frankfurt down -1.8% in Tuesday trade. Tokyo rose +0.3% in its Tuesday session. Hong Kong and Shanghai were both little-changed, as was Singapore, The ASX200 rose +0.3%. The NZX50 was up +0.2%.

The price of gold will start today at US$3,686/oz, up +US$7 from yesterday.

American oil prices are up +US$1 at just over US$64.50/bbl, with the international Brent price firmish just over US$68.50/bbl.

The Kiwi dollar is at just on 59.9 USc and up +20 bps from yesterday. Against the Aussie we are up +10 bps at 89.6 AUc. Against the euro we are down -20 bps at 50.5 euro cents. That all means our TWI-5 starts today at just over 66.7, little-changed from yesterday.

The bitcoin price starts today at US$116,480 and up +1.3% from this time yesterday. Volatility over the past 24 hours has again been low at just under +/- 0.8%.

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