US services sector loses expansion impulse; Canadian minimum pay rises; Toronto real estate sales rise but prices fall; record China travel; plenty of nickel; UST 10yr at 4.12%; gold & silver rise again, oil holds; AU$1 = 66.1 USc;

Here's our summary of key economic events overnight that affect Australia, with news investor 'greed' appetite is being challenged by super-high valuation premiums, a slowing of the giant American economy, and dodgy politics. Financial markets are ending the week high, but with no enthusiasm. The Nasdaq is lower, the S&P500 barely holding its current levels, and the Dow's limited big-company index is higher. Even in the equity market, the concentration of 'value' into just a few still hasn't corroded the confidence of equity funds to buy. There seems to be a transition to 'wagering' there will be a buyer in the future willing to pay ever higher prices, and away from 'economic fundamentals'.

With the US Federal agencies largely shut down, and there being no September non-farm payrolls release, financial markets are having to use other data to assess how the giant American economy is faring. Overnight, ISM released its services PMI and that showed a sector no longer expanding. New orders did though, barely, and a sharp slowdown from August. Business activity actually contracted, down near the brief dip in mid-2024, and apart from that its lowest level since the pandemic in 2020. Analysts were not expecting this widely-watched metric to be so downbeat.

The S&P Global/Markit services PMI for the US was more positive, but also showed a cooling.

Part of both is that price rise impulses were restrained. Businesses are not able to pass on the tariff taxes in full, and that makes them feel quite constrained.

In Canada, five provinces raised their minimum wages this week, following five who did it earlier in the year. As a result, British Columbia is now at C$17.85/hr (AU$19.50), Ontario is at C$17.60/hr. Quebec at C$16.10/hr and Alberta is the lowest at C$15/hr (AU$16.35).

Canadian housing markets are operating on a two-track basis now; rising sales volumes and falling sales prices. In Toronto, sales volumes rose +8.5% in September from a year ago to 5592 homes sold, but average prices fell -4.7% on the same basis. And that was despite a central bank rate cut in the month.

In China, the massive Mid-Autumn Festival holiday travel is underway. China's railways handled an all-time record 23.1 million passenger trips on Wednesday, the first day of the eight-day holiday.

The FAO global food price index fell in September and in part that was due to retreating dairy prices. But they are still +9% higher than year-ago levels. On the other hand, meat prices rose again to be +6.6% higher than year-ago levels. Sheepmeat surged on limited supply and good demand. Beef prices rose sharply to all-time high levels.

This week our look at one core global resource focuses on nickel, a key ingredient of stainless steel. At current production levels at existing mines, these are expected to last at least 35 years. But that doesn't account for known resources that are yet to be mined. On known reserves, there is at least 100 years of resource available at current production levels.

The UST 10yr yield is now at 4.12% and up +4 bps from yesterday but down -6 bps for the week. The key 2-10 yield curve is now at +55 bps. Their 1-5 curve is positive by +6 bps. But their 3 mth-10yr curve is now -2 bps inverted. The China 10 year bond rate is holding at 1.88% while they are on holiday. The Australian 10 year bond yield starts today at 4.34%, up +2 bps overnight, down -4 bps from a week ago. 

Wall Street was marginally firmer in Friday trade with the S&P500 up +0.1% from yesterday, up +0.8% for the week and while it is off its intra-day high it ends with an all-time weekly high. US equity prices are now trading at a record premium over their forward EPS. Overnight, European markets were mixed with London up +0.7% but Frankfurt dipping -0.2%. Yesterday Tokyo closed up +1.9% to be +1.6% higher for the week and a new ATH. Hong Kong closed down -0.5% but up +3.3% for the week. Shanghai was closed for their national holiday. Singapore ended its session up +0.4%. The ASX200 ended its Friday up +0.5% for a net +2.0% gain for the week. 

The Fear & Greed index is still in the 'neutral' zone, little changed from last week but tending to 'greed'.

The price of gold will start today at US$3882/oz, up +US$41 from yesterday and a new high. That is up +US$110 or +2.9% from a week ago. Silver had another big spurt this week, now just under US$48/oz, a weekly gain of +3.8%.

American oil prices are up +50 USc at just on US$61/bbl, but down -US$4 from a week ago, with the international Brent price now just over US$64.5 and down -$5.50 from a week ago.

The Australian dollar is at just over 66.1 USc, up +10 bps from yesterday and up +60 bps from a week ago. Against the Japanese yen we are up +10 bps at ¥97.4. Against the euro we are unchanged at 56.3 euro cents up up +30 bps for the week.

The bitcoin price starts today at US$122,986 and up +2.5% from this time yesterday and a new all-time high. It is up +12% from this time last week. Volatility over the past 24 hours has been modest at just on +/- 1.9%.