Commodity prices ease lower across the board

<p>Kia ora,</p><p>Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news commodity prices are trending down across the board now - but not money commodity prices.</p><p>But first in the US, although <a href="https://www.mba.org/news-and-research/newsroom/news/2023/10/25/mortgage-applications-decrease-in-latest-mba-weekly-survey" target="_blank"><strong>mortgage applications</strong></a> 'only' fell -1% last week from the prior week (and to be down -22% from a year earlier), the big news was the +20 bps jump in their benchmark 30 year mortgage interest rate from a week ago, now up to 7.9% plus points, the highest since 2000. Rates have now risen seven consecutive weeks at a cumulative amount of +69 bps.</p><p>While this may is keeping the existing home resale market quiet, oddly it is doesn't seem to be hurting <a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" target="_blank"><strong>new home sales</strong></a>. They rose sharply in September to an annualised rate of 759,000 and their highest since February 2022. In this corner of their housing market, FOMO seems to be active. And as we recently noted, there may be more to come because building consents and <a href="https://www.census.gov/construction/nrc/pdf/newresconst.pdf" target="_blank"><strong>housing start data</strong></a> is holding up too.</p><p>This housing data was noticed by financial markets, triggering a turnaround, and a new jump in bond yields.</p><p>In Canada their central bank <a href="https://www.bankofcanada.ca/2023/10/fad-press-release-2023-10-25/" target="_blank"><strong>held its policy rate at 5.0%</strong></a> in an overnight decision. Their quantitative tightening program continues (selling down bonds they earlier bought to support markets). They noted that overall market conditions are now doing their rate job for them and the risk is that ma