The US appears to back-track on Iran and oil falls; US PMIs expanding but not so in Canada; China contracts; ASEAN PMIs very upbeat; eyes on the RBA and multi-unit construction; UST 10yr at 4.87%; gold firms but oil falls hard; AU$1 = 70.2 USc

Here's our summary of key economic events overnight that affect Australia, with news it is the final day of campaigning in the US mid-term elections and financial markets there are relatively upbeat. Helping is a rather sharp fall in the oil price as the Americans back-track on their tough talk with Iran.

But first in the US, the October factory PMIs were positive, with the widely-watched ISM one rising slightly to a good expansion based on new orders that rose for the first time in four months, and rising output. Inventories expanded, but new export orders didn't although they didn't contract either. Input prices are still rising fast although not as fast as the unusual burst in September.

Meanwhile the internationally-benchmarked S&P Global version revealed rising production and new orders levels albeit at slower rates and broadly matching the ISM levels. However they report price pressures intensified noticeably as supply chain disruption persisted.

Meanwhile, the Canadian PMI expansion fell away noticeably with production and new orders both contracting, their first of 2026. They report a considerable lengthening of delivery times. And price pressures intensified there as well. Factory confidence in their outlook is reported as 'subdued' and job losses are being recorded.

Across the Pacific in China, and unlike the official versions of their factory PMI which recorded a contraction, the private S&P Global (RD) factory PMI in for October held a modest expansion. They reported a rise in new orders and a rise in output. Some went into stock-building however. Encouragingly, these was an easing in cost and price pressures.

We have previously noted the sharp fall in domestic car sales in China, and the rush by manufacturers to sell into export markets. Something similar is happening in their steel industry with sharply lower domestic demand, higher costs (especially for coal), and a focus turn to exports. This shift will undoubtedly raise tensions with the countries they target, especially as Chinese exports benefit from a wide range of national and local subsidies. Even if production output doesn't fall a lot this situation will make Australian iron ore suppliers very nervous about future prospects. In Chinese yuan, these producers are now paying -17.5% less for iron ore than at the start of 2026. In USD, producers are getting -15.5% less on the same basis with prices back to pre-pandemic levels. It is tough being an iron ore miner now. (With copper, the reverse is true with prices up +15% since the start of 2026.)

And there were a number of other factory PMIs out in Asia today. After the weekend one from Japan which revealed a good expansion even if less than in September, South Korea posted much softer but still positive expansion, Taiwan maintained it very good expansion (the best of the region), as did Malaysia. Vietnam's expansion was a bit more modest, but Indonesia found some wind for its sails delivering an expansion that matched Malaysia and Taiwan.

The Indian factory PMI is probably worth a separate mention. Although their level is similar to the US versions, their are seeing good increases in new orders. And this is coming with very modest price changes. That augers well for their export competitiveness.

Eurozone PMI expansions remained solid but modest despite new order growth.

Here in Australia, the respected Melbourne Institute inflation gauge for September pegged it at 4.8% and a third consecutive monthly rise. This will lock in the +25 bps RBA rate rise later today, taking it to 4.85%.

And staying local, there has been a surge in multi-unit residential building consents in September, more than making up for a sharpish fall in consents to build new houses, and allowing the overall level to rise +5.3% from August. That means, September building consents were -0.8% below year-ago levels.

The UST 10yr yield is down another -6 bps from yesterday at 4.87%. The 30 year yield is at 5.25%, down also -6 bps from yesterday. The key 2-10 yield curve is now at +30 bps (down -5 bps). Their 1-5 curve is now at +30 bps (down -4 bps) and the 3 mth-10yr curve is at +91 bps (down -5 bps). The China 10 year bond rate is unchanged at under 1.63%. The Japanese 10 year bond yield is also unchanged at 2.78%. The Australian 10 year bond yield starts today at 5.10%, down -3 bps. 

Wall Street has started its week with the S&P500 up +0.4% and the Nasdaq up +0.4% but both gains are half what they were earlier in the session. Overnight, European markets were all up between London's +0.3% and Paris's +1.0%. Tokyo closed its Monday session dipping -0.3% and will be closed today for a holiday (Culture Day). Hong Kong rose +0.4% and Shanghai rose +1.1%. But Singapore fell a sharpish -1.4%. The ASX200 also fell and by -0.6% in its Monday trade. 

The price of gold is up +US$92 at US$3968/oz. Silver is now  just under US$51/oz and up +US$2 from yesterday.

Oil prices have fallen sharply today, down -US$7.50 from yesterday to just over US$96.50/bbl in the US, while the international Brent price is down -US$9 at just over US$104.50/bbl. Hormuz transits have gone even lower today ahead of expected new hostilities with just four ships exiting over the past 24 hours, no tankers escorted (1 dark with transponders off) and 4 entering for new loads, no tankers (2 dark). The Red Sea activity features much higher outbound traffic however at the Yemen chokepoint.

The Australian dollar is down -20 bps from yesterday at just under 70.2 USc. Against the Japanese yen we are unchanged at ¥110.8. Against the euro we are down -40 bps at 62.6 euro cents.

The bitcoin price starts today at US$77,369 and down -1.0% from this time yesterday. Volatility over the past 24 hours has been low at +/-0.9%.