OECD watches global growth ease back; US signals mixed; Japanese sentiment rises; Australia building permits shrink; UST 10yr at 4.10%; gold eases and oil soft; AU$1 = 65.6 USc;

Here's our summary of key economic events overnight that affect Australia, with news the world is in a slowdown period as the globally large economies show signs of culminating, or at least slowing.

The OECD says global economic growth will to ease to +2.9% in 2026 from +3.2% in 2025 as tariffs, weak trade and geopolitical uncertainty weigh on activity. In the US, growth is projected to slow to +2.0% in 2025 and +1.7% in 2026. For China, they see economic growth of +5% in 2025 and weaken to 4.4% in 2026 and 4.3% in 2027. Consumption will be dampened by high precautionary savings and the payback effect of the now winding down trade-in program.

For Australia, they said economic growth is now strengthening and becoming more private-sector-driven. GDP growth is projected to quicken to +2.3% in 2026 and 2027, up from 1.8% in 2025. This is consistent with a gradual closing of the small negative output gap, keeping unemployment low while allowing inflation to remain close to target. Risks are balanced, with downside risks from a greater-than-expected softening of labour market conditions while, on the upside, strengthening disposable incomes could bring a faster acceleration of private consumption.

The signals in the US were not as negative today. The RCM/TIPP economic optimism Index recovered in December from is sharp November dip. But to be fair, this only returns it to the below-average levels it reported from March to October.

But that rebound was not seen in their logistics sector. The Logistics Manager’s Index eased back to its slowest growth in the sector since June 2024. The slowdown is driven by a continued softening of inventory and warehousing metrics but tempered by some expansion in transportation. Warehousing utilisation contracted for the first time in the 9-year history of the index.

However, by some accounts the US holiday retail activity was strong, especially for online trade. Shoppers there spent US$14 bln online on Cyber Monday, pushing total online sales over the Thanksgiving weekend to US$44 bln. Spending rose +7.7% during the so-called Cyber Week - the five days from Thanksgiving to Cyber Monday - compared with an +8.2% increase to US$41 bln last year and above its prior expectations of US$43.7 bln.

Across the Pacific, Japanese consumer confidence rose sharply in November from October to its best level since April 2024, with all components improving.

In the EU, inflation is running in their sweet spot. Euro area consumer price inflation rose to +2.2% in November, up from 2.1% in October and slightly above market expectations of 2.1%. Services inflation accelerated to +3.5% however (from 3.4%) and its highest level since April, while energy prices declined at a slower pace.

Back here in Australia, and after a big September surge, October's residential building permit levels were expected to be tame by comparison. But in the event it was negative and the September rise was revised lower. And that meant the annual level of consents to October were lower than a year ago and its first year-on-year retreat since June 2024.

The UST 10yr yield is now just under 4.10%, up +1 bp from this time yesterday. The key 2-10 yield curve is now at +58 bps. Their 1-5 curve is now positive by +6 bps and the 3 mth-10yr curve is positive by +24 bps in a big move. The China 10 year bond rate is holding higher at 1.83%. The Australian 10 year bond yield starts today at 4.61%, up +2 bps.

Wall Street has started its Tuesday with the S&P500 little-changed, up just +0.1%. Overnight, European markets were mixed between Frankfurt which rose +0.5% and Paris which fell -0.3%. Yesterday, Tokyo closed essentially unchanged, Hong Kong was up +0.2%, but Shanghai ended down -0.4%. Singapore closed essentially up +0.3%. The ASX200 ended its Tuesday session up +0.2%. 

The price of gold will start today at US$4186/oz, and down -US$47 from yesterday. Silver has held up at US$58/oz.

American oil prices are -50 USc softer at just under US$59/bbl, while the international Brent price is now at just over US$62.50/bbl. And we should note that natural gas prices dropped back yesterday after the prior day surge.

The Australian dollar is up +20 bps from yesterday, now just under 65.6 USc. Against the Japanese yen we are up +30 bps at ¥102.2. Against the euro we are up +10 bps at 56.5 euro cents. Exchange rate charts are here.

The bitcoin price starts today at US$90,852 and recovering +6.4% from this time yesterday. Volatility over the past 24 hours has been high, at just on +/- 3.6%.