US jobs growth steady; EU names [some] tax havens; German factory orders jump; AU GDP disappoints; AU interest-only lending plunges; UST 10yr yield at 2.32%; oil down and gold unchanged; NZ$1 = 68.8 US¢, TWI-5 = 71.8

Here’s my summary of the key events overnight that affect New Zealand with news of a very sharp fall in investor interest-only lending in Australia.

But first in the US, their precursor ADP employment report has come in right where markets were expecting. It is a good rise and broadly based powered by mid-sized firms and services. Only construction and IT services showed any declines in employment levels. This probably means Saturday’s non-farm payrolls report will shows payrolls expanded by +200,000. That is not spectacular, but the average over the past year is a +167,000 gain.

The Bank of Canada has held its official interest rate unchanged at 1%, but it did say it is seeing signs of higher prices in the country.

In Europe, the EU has named and shamed 17 countries on a new tax haven blacklist. But the bloc’s effort to crack down on tax avoidance has come under fire, with no EU member states included on the list. That list includes Samoa, the UAE, and South Korea. But it doesn’t include Luxembourg, Malta, the Netherlands or Ireland, all countries with far larger tax haven issues.

German factory orders rose yet again in October, in data out overnight. It was the third straight month of strong growth and prior month data was revised higher as well.

Yesterday’s Q3 GDP data release in Australia shows their economy grew slower than forecast as household spending rose at the weakest pace since the 2008 financial crisis. So despite the RBA’s view earlier in the week that interest rate rises may be near it looks more like they will keep interest rates on hold for longer.

And staying in Australia, their crackdown on risky investor lending has resulted in the share of interest-only loans plunging by nearly half in just three months. APRA data shows that interest-only lending dived -45% during the September quarter. Interest only loans made up 30% of the new loans in the June quarter, but that share has plunged to an historic low of just 17% in the latest data.

In New York, the UST 10yr yield is now at 2.32%.

The price of crude oil is sharply lower today, down -US$1.50, now just over US$56 / barrel, while the Brent benchmark is just over US$61.50. Significant rises in petrol stocks worldwide are behind the drop. But further out analysts are raising their forecast of 2018 crude oil prices after an OPEC-Russia output restraint deal was extended. But the irony is those crude price estimates are actually lower than today’s prices.

And reinforcing the theme of lower commodity prices, copper dropped more than -3% yesterday on the Shanghai market. China growth concerns are behind the shift lower.

The price of gold is unchanged at its new lower level of US$1,263 oz.

The Kiwi dollar is also unchanged. We are still at 68.8 US¢. And on the cross rates we are higher at 90.9 AU¢ following yesterday’s AU GDP undershoot, and against the euro at 58.3 euro cents. That puts the TWI-5 little changed at 71.8. But bitcoin is sharply higher yet again today, up US$1,000 in the past 24 hours to US$12,720. (NZ$18,500)

If you want to catch up with all the changes yesterday, we have an update here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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