Global eyes on end-of-year retail demand; Canadian earnings rise; China profits fall; APRA worried about housing loan risks; Aussie investment jumps; UST 10yr at 4.00%; gold dips and oil firms; AU$1 = 65.3 USc

Here's our summary of key economic events overnight that affect Australia, with news the global economy has one month to go to bolster its 2025 economic performance, all down to retail sales now.

First, of course, the US is now in its Thanksgiving holiday weekend, the start of their big retail period until Christmas. A lot rides on the consumer spending activity in this period. It is an impulse with global impact. But the lead-in has not been helpful about giving clues on how it will turn out.

Meanwhile, Canadian average weekly earnings came in stronger than expected, up +3.1% in September from a year ago and a touch higher than the August +2.7% rise on the same basis. It was a broad-based rise. It is not a bad result for them given their CPI rise was +2.4% in September, and fell to +2.2% in October, so their earnings are recording real gains.

The 'Buy Canadian' movement will be getting the ultimate test this weekend during the 'Black Friday' sales period.

In China, industrial profits dropped -5.5% in October from a year ago, taking the top off the +22% jump in September. and the +13% rise in August, and being the first slowdown in growth in three months. A quarter of all companies are now posting losses, a record high. The cost of debt is also a reason some are noting that profits are under pressure. And that may loom larger, because Beijing as told their SOE banks to lend more to other SOEs to prop up consumption demand.

We can also see office rents in major cities falling, vacancy rates rising, as pain spreads in the commercial property sector. Vanke is wobbling more now. And separately, despite high sales and rapid growth, Chinese car manufacturers are suffering record low margins. Their industry is very vulnerable to a demand slowdown.

In Taiwan, consumer sentiment edged up in October from September, but it is still quite low and far lower than year-ago levels. They haven't got back anywhere near the level they started the year with. Relentless mainland pressure to 'unify' and kill their independence isn't helping.

The Bank of Korea held its base policy rate at 2.5% at yesterday's meeting, the final policy session of the year. It did this despite concerns over the broader Korean economic outlook, including a persistent property market slump and a volatile currency.

In Malaysia, producer prices were little-changed in October, essentially ending the deflation they had in the prior seven months.

In the EU, overall economic sentiment held as did consumer inflation expectations. They are modest and back to pre-pandemic levels in a stable mode and putting behind them the rather strong deflationary expectations over the past two years. That sanguine view was reinforced by the release overnight of the ECB meeting minutes. They seem happy with where they are at and no rate changes seem imminent.

Here in Australia, prudential regulator APRA said yesterday it will limit high debt-to-income home loans to constrain riskier lending that is starting to show up in that market. Some of it has been induced by the Canberra government's taxpayer-subsidised 5% deposit guarantee scheme.

And staying locally, new private capital spending is rising and more quickly than expected. The rise was largely driven by non-mining industries, which recorded a +13.0% jump, while spending on mining equipment and machinery grew just +4.5%.

Global container freight rates dipped -2% last week to be -47% lower than year-ago levels. Outbound China rates are a touch weaker while trans-Atlantic rates a touch stronger. However, bulk freight rates have risen +6.0% over the past week and are now sitting a touch over +50% higher than year ago levels and are back to levels we last saw briefly in November 2023, and prior to that during the pandemic.

The UST 10yr yield is still just on 4.00% with US markets closed. 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 inverted by -1 bp. The China 10 year bond rate is up +2 bps at 1.85%. The Australian 10 year bond yield starts today at 4.49%, unchanged from yesterday at this time.

Wall Street is of course closed today for its holiday. European markets were all little-changed overnight. Tokyo ended up +1.2% yesterday. Hong Kong was little-changed, up +0.1% in Thursday trade and Shanghai ended up +0.3%. Singapore firmed +0.2%. The ASX200 ended its Thursday trade up just +0.1%.

The price of gold will start today at US$4156/oz, and down -US$10 from yesterday.

American oil prices have risen almost +US$1 from yesterday to be just under US$59/bbl, while the international Brent price is also up, but less, now just over US$63/bbl.

The Australian dollar is unchanged from yesterday, still at just over 65.3 USc. Against the Japanese yen we are up +20 bps at just on ¥102. Against the euro we are also little-changed at 56.3 euro cents.

The bitcoin price starts today at US$91,468 and up +4.5% from yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.3%.