US labour market makes gains, but only in one region; US service sector expands; tariff-tax legality examined; China service expansion fragile; UST 10yr at 4.15%; gold up and oil down; AU$1 = 56.6

Here's our summary of key economic events overnight that affect Australia, with news the good bits which seem to dominate today are in fact masking some some less-than-good trends nested within them.

First up, US ADP employment report on private payrolls for October reported a +42,000 rise in filled jobs, much better than the -29,000 shedding in September and also better than the expected +25,000 gain observers had thought. They also reported that pay growth has been largely flat for more than a year. However the October jobs gains are all concentrated in California and the other two Pacific states. Without their +37,000 gain, things would look rather somber - which is what the rest of the country faces. This survey does not cover public sector employees and of course that is currently very negative given Trump's shutdown.

And we should note that this Federal government shutdown is now the longest in US history, and now longer than his first 2018-19 one.

And we should also note that oral arguments are being heard in the US Supreme Court's review of the legality of the Trump tariffs. Given the stacked nature of the court, no-one really expects them to rule the Trump actions as 'illegal', but there was a surprising amount of sceptical questioning around the legal basis earlier today.

US mortgage applications fell -1.9% last week from the prior week, the fifth decrease in the past six weeks.

In a notable contrast to the weak factory sector, the giant American services sector expanded faster in October according to the ISM services PMI. It rose more than expected to its best level since February, putting its September stall behind it. But forward looking sentiment isn't strong, with these firms still contracting workforce levels, and frustration at the level of tariff-taxes they have to bear.

Meanwhile, American household debt rose by +US$197 bln in Q3-2025 from the prior quarter to a new record high of almost US$$18.6 tln and up +4.4% from a year earlier. Mortgage balances grew by +US$137 bln and credit card balances rose by US$$24 bln in the quarter. These shifts are being considered 'steady' rather than indicating added risk.

Across the Pacific in China, the private S&P Global services PMI has remained modestly expansionary in October, and still better than the official version. The sector continues supported by a faster rise in overall new business, although export sales fell modestly. Meanwhile, 'efficiency' drives led to staffing levels reducing in part due to cost concerns. Despite higher input prices, output charges fell fractionally, while business confidence regarding the year ahead softened.

In Europe, Germany reported a rise in factory orders in September from the prior month, however that still leaves than -4.4% lower than year-ago levels. They will be encouraged by the recent uptick, which was better than expected. The new order uptick in the car, electrical and transportation sectors were particularly encouraging.

Sweden’s central bank kept its policy rate unchanged at 1.75% at its October meeting, as widely anticipated. Tonight the Norwegians will review their 4% rate too, and they aren't expected to make any changes either.

The UST 10yr yield is now at 4.15%, up +7 bps from yesterday at this time. The key 2-10 yield curve is now at +53 bps. Their 1-5 curve is now +5 bps positive and the 3 mth-10yr curve is now +23 bps positive. The China 10 year bond rate is unchanged at 1.74%. The Australian 10 year bond yield starts today at 4.36%, up +5 bps from yesterday.

Wall Street has started its Wednesday with the S&P500 up +0.4% and a partial recovery. Overnight, European markets were all positive between London's +0.6% and Paris's +0.2%. Tokyo was down another sharpish -2.5% yesterday. Hong Kong dipped -0.1% but Shanghai was up +0.2%. Singapore ended its Wednesday session down -0.1%. The ASX200 also ended down -0.1%.

The price of gold will start today at US$3982/oz, up +US$14 from this time yesterday.

American oil prices are -50 USc lower from yesterday at just under US$60/bbl, with the international Brent price now just under US$64/bbl.

The Australian dollar is now at just under 65.1 USc, and up +30 bps from yesterday. Against the Japanese yen we are up +110 bps at ¥100.3. Against the euro we are up +30 bps at 56.7 euro cents.

The bitcoin price starts today at US$103,811 and recovering +1.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.2%.