Benchmark rates rise; Brazil votes; US service sector expands; Canada's doesn't; China holiday spending good; France stressed; UST 10yr at 5.34%; gold softer and oil eases slightly despite renewed attacks; AU$1 = 69.7 USc

Here's our summary of key economic events overnight that affect Australia, with news benchmark interest rates are rising quickly again today, especially in the US and Europe.

But first in Brazil, they will have a run-off election for President, with no candidate getting 50% of the vote. But the first round showed surprising support for the right-wing son of a previous military officer Jair Bolsonaro who has been president before Lula and who had thrown Lula into jail on grounds that were thrown out by Brazilian courts. In this latest poll, the younger Bolsonaro won 47% of votes versus Lula’s 45%, setting up an October 25 runoff which will be a bitter affair. Local financial markets rose on the prospects.

In the US, the service sector PMIs out overnight were both in a good expansion mode, but indicated  different trajectories. The widely-watched local ISM one reported a moderating of the good expansion in August in its September update. Business activity eased back noticeably, and new orders also moderated even it both are still at very good levels.

Meanwhile, the internationally-benchmarked S&P Global one was much more up-beat. It reported a surge in activity as new order growth hit 4½ year high. Employment growth was its strongest since June 2022. But Input cost inflation reaccelerated to its steepest since November 2022 and matching the pandemic pressures.

Canada's equivalent services PMI was little-changed, stuck just below an expansion level, but they have the same cost intensification problem.

In China, official monitoring of holiday spending midway through the seven-day National Day holidays, shows foot traffic up +3.4% from last year and revenue up +5.3%. They will be happy with that.

Singapore said its retail sales growth was weak in August, coming in below July's modest level and well below the expected levels.

In France, their central bank boss has warned his country's budget is at risk of being strangled by rising interest payment costs.

Here in Australia, the independent Melbourne Institute Monthly Inflation Gauge increased for a third consecutive month in September, after falling in May and June. The increase was primarily attributed to transport (fuel) price rises, with annual headline inflation of 4.8%, unchanged from August. (The ABS said the August CPI was 4.0%.) The monthly cost of living also increased across a range of household types (age pensioners, other government transfer recipients, employees, pensioners and beneficiaries and self-funded retirees).

The UST 10yr yield is rising, now just on 5.34%, up +6 bps from yesterday to its highest in 24 years. The 30 year yield is at 5.70%, up +7 bps and its highest since 2002 as well. The key 2-10 yield curve is now at +48 bps (up +4 bps). Their 1-5 curve is now at +61 bps (-2 bps) and the 3 mth-10yr curve is at +139 bps (+6 bps). The China 10 year bond rate is little-changed at 1.68%. The Japanese 10 year bond yield is now at 3.13%, up +3 bps from yesterday. The Australian 10 year bond yield starts today at 5.42%, up +9 bps from yesterday and a 15 year high.

Wall Street has started its week with the S&P500 up +0.7% and the Nasdaq up +0.8%. Overnight, European markets were mixed between London's +0.3% rise and Paris's -0.8% fall. Yesterday, Tokyo ended up +2.4%. Hong King was up +0.3% and of course Shanghai was closed. Singapore ended up +0.5%. The ASX200 closed unchanged. 

The price of gold is at US$4130/oz and down a minor -US$10 from yesterday. Silver is at just under US$61/oz and up +50 USc today. 'Low' gold prices are having a very negative impact on the price of gold mining stocks.

Oil prices have eased -US$1/bbl from yesterday to just over US$90/bbl in the US, while the international Brent price is down -US$1.50 to US$101/bbl. And we should note the pace of the flurry on attacks on tankers in the Hormuz region in the past few days has not slackened.  Hormuz transits have reduced again today with just eight ships exiting over the past 24 hours, no tankers escorted (0 dark with transponders off) and 5 entering for new loads (0 dark). Looming new conflict clouds the situation again. The Red Sea activity is back up to the low 20 vessels in either direction at the Yemen chokepoint, the area diverted by the Saudi attacks elsewhere. Saudi-backed Yemeni government forces staged a lightning advance overnight to retake the coast around the Bab el-Mandeb Strait.

The Australian dollar is up +10 bps from yesterday, now at just on 69.7 USc. Against the Japanese yen we are up +30 bps at ¥110.1. Against the euro we are up +40 bps at just on 62.2 euro cents.

The bitcoin price starts today at US$85,248 and down a very minor -0.1% from yesterday. Volatility over the past 24 hours has been modest at just over +/-1%.