Here's our summary of key economic events over the weekend that affect Australia, with news that while much of the financial world seems disconnected from economic reality, we are about to reminded of our local realities this week.
This week in Australia it will be all about the Westpac consumer confidence survey, the NAB business confidence survey, and consumer inflation expectations. And in New Zealand, they review their official cash rate on Wednesday where another rate cut is expected.
The US government shutdown will remain the focus this week in the world's major financial markets as the extended impasse between members of Congress showed little signs of improvement. The shutdown jeopardises releases from US Federal agencies including the trade balance, jobless claims, and the budget statement after the September jobs report and other key data has already been delayed. Still, the minutes from the FOMC's last meeting is still expected.
Among non-US governmental releases, October's Michigan Consumer Sentiment surveyed will be eyed.
Over the weekend the ruling LDP party in Japan selected a new prime minister, notable because it is Japan's first female prime minister, Sanae Takaichi. Takaichi, 64, was known to be close to the late Prime Minister Shinzo Abe, another prominent right-wing leader of the LDP. She has publicly stated that she sees former UK Prime Minister Margaret Thatcher as her role model. She has been called a "China hawk". Some locally fear they may be getting a Liz Truss.
In China, the massive Mid-Autumn Festival holiday travel is underway. China's railways handled an all-time record 23.1 million passenger trips last Wednesday, the first day of the eight-day holiday.
Across the Pacific in the US over the weekend, there was no September non-farm payrolls report due to their Federal government shutdown.
But the ISM released its services PMI for September and that showed a sector no longer expanding. New orders did though, barely, but a sharp slowdown from August's rise. 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.
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 last 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.
More globally, 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.
And we should probably note that after rising to €84/tonne in 2024 to start this year, EU carbon prices then fell to about €60/tonne at the end of March. But since then they have risen back to almost €80/tonne now and putting on a bit of a spurt in early October. While local carbon markets are struggling, the same is not true elsewhere.
The UST 10yr yield is now at 4.12% and unchanged from Saturday but down -6 bps for the week. The key 2-10 yield curve is still at +55 bps. Their 1-5 curve is positive by +6 bps. But their 3 mth-10yr curve is now -1 bp 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 4.32%, down -2 bps from Saturday.
The price of gold will start today at US$3885/oz, up +US$3 from Saturday and a new high. That is up +US$113 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 softish at just under US$61/bbl, but down -US$4 from a week ago, with the international Brent price now just on US$64.50/bbl and down -$5.50 from a week ago.
The Australian dollar is at just over 66 USc, down -10 bps from Saturday but up +40 bps from a week ago. Against the Japanese yen we holding at ¥97.4. Against the euro we are up +20 bps at 56.5 euro cents.
The bitcoin price starts today at US$122,805 and virtually unchanged from this time Saturday. Volatility over the past 24 hours has been modest at just on +/- 1.5%.
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