Meanwhile, US business growth surged<\/a> to its fastest for over five years and job gains accelerated according to the S&P Global PMI. Both their service sector and their factory sector are sharing in the gains. But at the same time price pressures are also intensifying with a sharp spike in costs. Input costs surged to their highest since October 2022; selling prices jumped too but at a lesser rate.<\/p>\n US crude oil stocks<\/a> were expected to fall again last week, but instead they rose and by much more than expected. However that didn’t stop their strategic reserve holdings from falling again, staying at dangerously low levels. Nor has it curtailed retail pump prices<\/a>. More generally, the world is running down its crude oil buffers – and the price signals seem to be ignoring that risk.<\/p>\n There was a fall in support for the US Treasury 5 year bond auction<\/a> overnight which delivered a 4.95% median yield (5.04% high) which was up sharply from 4.34% at the prior equivalent event<\/a> a month ago. Bessent’s yield management is failing to deliver and restraint.<\/p>\n Fed governor Barr was speaking<\/a> overnight and he reiterated the view that higher rates will be needed to bring inflation back to target. Without much threat on the jobs front and their labour market mandate, markets see the Fed unconstrained in taking sharper action against inflation. He said “risks to achieving our inflation target have increased, while risks to the labor market have receded.”<\/p>\n In the US all eyes will now turn to Trump’s hosting of Chinese president Xi – who incidentally is coming with no Chinese business leaders.<\/p>\n Taiwan’s August industrial production<\/a> (+23.5%) and August retail sales<\/a> (+6.5%) data both delivered the strong year-on-year gains we have come to expect from them.<\/p>\n Singapore’s inflation<\/a> rate came in at 2.3% in August, up marginally from July but the increase expected.<\/p>\n Indonesia’s central bank reviewed its 5.75% policy rate overnight but left it unchanged<\/a>.<\/p>\n In India,<\/a> their flash PMI data for September pointed to a better improvement in business conditions. Output growth was higher in both manufacturing and services companies, with goods producers leading the latest upturn. New orders also rose at a quicker pace, prompting a solid expansion in jobs. Meanwhile, inflationary pressures faded and business confidence strengthened.<\/p>\n The flash S&P Global factory PMI<\/a> in Australia saw a shift from a moderate expansion in August (52.0) to a minor contraction in September (49.3). Their services sector eased as well but is still expanding in September. On the prices front, the rate of input price inflation picked up to its highest in three months, but remained weaker than seen through the second quarter. Meanwhile, output charges rose at a strong rate that was more pronounced than in August.\u00a0<\/p>\n The UST 10yr yield<\/a> is now just on 5.13%, up +16 bp from yesterday. The 30 year yield is at 5.40%, up +11 bps. The key 2-10 yield curve<\/a> is now at +20 bps (down -1 bp). Their 1-5 curve is now at +55 bps (up +11 bps) and the 3 mth-10yr curve is at +124 bps (up +15 bps). The China 10 year bond rate is little-changed at 1.67%. The Japanese 10 year bond yield is still at 2.98%, unchanged. The Australian 10 year bond yield starts today at 5.32%, up +5 bps and a 16 year high. The NZ Government 10 year bond rate is now at 4.95%, down -3 bps.<\/p>\n Wall Street is lower today with the S&P500 down -0.7%, and the Nasdaq is down -1.1%. Overnight European markets were mixed between London’s no-change and Frankfurt’s -0.7%. Tokyo was on holiday but will be back today. Hong Kong ended its Wednesday down -1.0% while Shanghai was down -0.4%. Singapore dipped -0.2%. The ASX200 ended its Wednesday session up a minor +0.1%. The NZX50 fell -0.4%.<\/p>\n The price of gold<\/a> is at US$4294\/oz, and down -US$58 from yesterday. Silver is at just over US$64.50\/oz and down -US$2.<\/p>\n Oil prices have firmed +50 USc to just on US$91.50\/bbl in the US, while the international Brent price is up +US$3 to US$102.50\/bbl. Hormuz transits<\/a> are still very low today with just four ships exiting over the past 24 hours, three tankers escorted (0 dark with transponders off) but eight entering for new loads (6 dark). The Red Sea activity is still noticeably lower in both directions at the Yemen chokepoint.<\/p>\n The Kiwi dollar is down -50 bps from yesterday, now at 56.7 USc. Against the Aussie we are up +10 bps at 80.6 AUc. Against the euro we are down -20 bps at just over 49.8 euro cents. That all means our TWI-5 starts today at just on 60.4 and down -30 bps.<\/p>\n The bitcoin price starts today at US$84,343 and down -2.4% from yesterday. Volatility over the past 24 hours has been moderate at just over +\/-2.4%.<\/p>\n Select chart tabs<\/p>\n US$
\n AU$
\n TWI-5
\n \u00a5en
\n \u00a5uan
\n \u20acuro
\n GBP
\n Bitcoin<\/p>\n
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