US public policy descends into farce; US job cuts at five year high; Japanese sentiment rises; Aussie spending up, exports down; AU FHB scheme launches to strong demand; UST 10yr at 4.09%; gold and oil retreat; AU$1 = 65.9 USc

​Here's our summary of key economic events overnight that affect New Zealand, with news the US is throwing out its existing economic playbooks and replacing it with personal revenge and retribution.

First, there is no progress on the US federal government shutdown, other than Trump declaring it an 'unprecedented opportunity' to defund his opponents. The childishness of the approach by a world power is something to behold.

Almost certainly, there will be no US non-farm payrolls report tomorrow due to the Federal government shutdown. That will save the Administration from what would likely be an embarrassing result of job atrophy.

US-based employers announced 54,064 job cuts in September, the least in three months, compared to 85,979 in August. But of course, October is off to a very rocky start. So far this year, companies have announced 946,426 job cuts, the highest such level in five year when 2,082,262 were announced. It is up +55% from the 609,242 job cuts announced through the first three quarters of last year and is up +24% from the 2024 full year total of 761,358.

In Japan, it may have been only a small improvement from August, but Japan’s consumer confidence index rose in September, reaching its highest level since December 2024. Most components improved, including overall livelihood, employment outlook, and willingness to buy durable goods.

Here in Australia, household spending inched higher by just +0.1% in August to be +5.0% than year-ago levels. It was held back by lower spending on booze and recreation, lifted by higher spending on transport.

Aussie exports were weak in August, mainly because of lower gold exports. This means August goods exports were -3.5% lower than year ago levels. Imports were +4.5% higher on the same basis.

And the new First Home Buyer scheme is open and accepting applications. The word is that demand is strong. The scheme allows buyers to buy with extreme leverage - as little as a 2% deposit - all backed up by the taxpayer. The extra demand will come at a time of low listing availability, low new build activity, and already high prices. Analysts expect to be watching future house prices zooming higher because of these new incentives and the existing pressures.

Global container freight rates were down another -5% last week from the prior week, and it was the same story; the decline was led by outbound rates from China. Bulk cargo rates fell -11% in the past week to be very similar to year-ago levels.

The UST 10yr yield is still at 4.09%, down another -2 bps from yesterday on risk aversion. The key 2-10 yield curve is now up at +54 bps. Their 1-5 curve is positive by +5 bps. And their 3 mth-10yr curve is now inverted again, now by -3 bps. The China 10 year bond rate is unchanged at 1.88%. The Australian 10 year bond yield starts today at 4.32%, down -3 bps from yesterday. 

Wall Street is little-changed in Thursday trade, with the S&P500 level-pegging (+0.1%). Overnight, European markets were quite mixed with London down -0.2% but Frankfurt and Paris up more than +1%. Tokyo ended its Thursday session up +0.9%. Hong Kong rose +0.9% and of course Shanghai was closed for their Golden Week holiday. Singapore rose +1.7%. The ASX200 ended its Thursday up +1.1%.

The price of gold will start today at US$3841/oz, down -US$29 from yesterday.

American oil prices are down another -US$1.50 at just on US$60.50/bbl, with the international Brent price now just over US$64/bbl. In the US, these much lower prices are not really flowing through to pump prices with current prices little-different to year-ago levels even though US crude prices are -18% lower than then.

The Australian dollar is at just on 65.9 USc and down -20 bps from yesterday. Against the Japanese yen however we are down -20 bps at ¥97.1. Against the euro we are unchanged at 56.3 euro cents.

The bitcoin price starts today at US$119,725 and up +1.7% from yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.4%.