Pre-holiday data releases flood US markets, a mixed set; Singapore factories very busy; Hong Kong tragedy; Australian inflation rises unexpectedly; UST 10yr at 4.00%; gold up and oil firms; AU$1 = 65.2 USc;

Here's our summary of key economic events overnight that affect Australia, with news notable data in both Australia and New Zealand yesterday has reset our currencies and our benchmark interest rates.

In New Zealand it was the market reaction to their central bank rate cut, in Australia of course it was the unexpected rise in the CPI inflation. Both had a cumulative impact in both countries.

But first, American mortgage applications last week were little-changed, but refinance activity softened noticeably while new purchase activity was firm, despite mortgage interest rates creeping up.

Actual US initial jobless claims rose to 244,000 last week from the prior week's 218,300, but that puts them almost identical to year-ago levels. Continuing claims are now 1,796,000, +4.3% higher than year-ago levels.

Catchup data for US durable goods orders for September was mildly positive from August but were a good +9.6% higher than year-ago levels. Excluding aircraft and defence orders, capital goods orders were little-changed from a year ago.

More current, the Chicago PMI came in much more negative in November than the weak October level with weakness building in new order levels, production, and employment. It is now down approaching ten-year lows.

The Fed's Beige Book indicated the American economy is just reading water. They noted the US economic activity was little changed in recent weeks, and overall consumer spending declined further - except among well-heeled consumers. Cost pressures from tariff-taxes were noted but the economy isn't strong enough for the importer who paid these taxes to pass many of them on.

Across the Pacific, Singapore reported strong rises in industrial production, rising +29% from a year ago and that was their largest gain in over ten years.

In Hong Kong we should note a tragedy. A massive fire has engulfed multiple high-rise residential blocks in Hong Kong's northern Tai Po district overnight, killing at least 36 people with hundreds still missing They struggled to bring the blaze under control.

Here in Australia, CPI inflation accelerated to 3.8% in October, up from 3.6% in September and above expectations of a 3.6% increase. It is well above the RBA’s 2-3% target range. This is the highest inflation reading since the monthly data series began in April 2025. They are likely to get rate hikes in 2026 now.

And staying locally, total construction work fell -0.7% in Q3-2025 from the prior quarter, missing expectations for a +0.4% rise. But it held its year-on-year +2.9% growth in Q3. The quarterly downturn was driven primarily by a sharp drop in engineering work based around infrastructure projects.

In New Zealand, yesterday's RBNZ Monetary Policy Statement and -25 bps rate cut brought a more hawkish tone than financial markets were expecting and that caused a rethink in how interest rate pricing was set, resulting in a rise across the board in wholesale rates.

The UST 10yr yield is now just on 4.00%, up +1 bp from this time yesterday. The key 2-10 yield curve is still at +52 bps. Their 1-5 curve is now inverted by -3 bps and the 3 mth-10yr curve is now only +1 bp positive. The China 10 year bond rate is up +1 bp at 1.83%. The Australian 10 year bond yield starts today at 4.49%, up +6 bps from yesterday at this time.

Wall Street is firm again with the S&P500 up +0.9% in Wednesday pre-holiday trade. European markets were all up another +0.9% overnight. Tokyo ended up +1.8% yesterday. However Hong Kong rose only +0.1% in Wednesday trade and Shanghai ended down -0.2%. Singapore firmed +0.4%. The ASX200 ended its Wednesday trade up +0.8%.

The price of gold will start today at US$4166/oz, and up +US$29 from yesterday.

American oil prices have risen +50 USc from yesterday to be just on US$58/bbl, while the international Brent price is now just on US$62.50/bbl.

The Australian dollar is up a sharpish +40 bps from yesterday, now at just under 65.2 USc. Against the Japanese yen we are up +70 bps at ¥101.9. Against the euro we have risen +20 bps to 56.2 euro cents.

The bitcoin price starts today at US$87,560 and up +0.6% from yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.0%.

In the US, S&P Ratings has downgraded its stability rating of stablecoin Tether to 'Weak", concerned it is undercollateralised - that is, it no longer has the backing to maintain is USD peg.

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