Global bond yields closed higher despite limited economic data. Gold prices whipsaw on confusion about US tariffs on imports of gold bars. US equities extend recent gains

US equities ended last week on a firm note. The S&P gained almost 1% and closed just below the record high from the end of July, having fully retraced the post labour market selloff. There was limited first tier data or other catalysts to provide the market with direction. The Euro Stoxx index was little changed while the Nikkei gained 2.0% after the US agreed to end ‘stacking’ on universal tariff and cut car levies. Global bonds closed higher in yield and absolute moves in currency markets were small.

President Trump chose economic adviser Stephen Miran to serve as a Federal Reserve governor. If Miran is approved by the Senate, he will take the seat vacated by Adriana Kugler and is expected to serve a term that expires in January. Although he is likely to join Waller and Bowman in supporting rate cuts, the announcement had limited market impact. Separately, Bowman has said over the weekend she would favour three cuts this year.

Brent crude prices dipped below US$66 per barrel, to the lowest level in more than two months, before rebounding to end the session little changed. Market participants are looking ahead to a planned meeting between Presidents Putin and Trump, which could impact Russian crude supplies in the global market. Separately, China defended its purchases of Russian oil saying they were ‘legitimate and lawful’. Oil prices have declined in August following further supply increases from OPEC+.

Gold futures prices whipsawed following a Financial Times report that said bullion from Switzerland, which is the world’s largest refining hub, would face US import tariffs. It was expected gold bars would be exempted from tariffs. The intra-day high for the front futures contract was only marginally below the record peak reached during the post liberation day volatility at the end of April. Prices retraced after the White House said it would clarify ‘misinformation’ on gold tariffs.

US treasuries sold off on Friday night with yields ending 3 -4bp higher across the curve. There wasn’t an obvious catalyst for the move higher in yield. It may suggest some overhang from the US$125 billion of supply last week in addition to more corporate issuance than expected. 10-year notes closed 3bp higher at 4.28%. 10-year bund yields increased 6bp to 2.68%.

China CPI was unchanged on an annual basis, reflecting still fragile consumer demand, while producer prices declined at an annual rate of 3.65%. Robust demand for Chinese exports has supported the economy in the face of US tariffs, but industrial profits are deteriorating set against the backdrop of limited corporate pricing power, amid weak consumer spending and poor sentiment.

In currency markets, the US dollar index was nearly unchanged relative to the NZ close on Friday with small net moves across most G10 currencies. The Canadian dollar dipped after employment growth was weaker than expected. Payrolls fell 41k in July, missing expectations for a gain of 10k jobs. The unemployment rate was unchanged at 6.9%. The NZD was little changed against the US dollar and on the major crosses.

NZ fixed income markets were confined to narrow ranges in the local session on Friday. Yields ended the session flat to 2bp lower across the swap and government curves. Australian 10-year government bond futures are 4bp higher in yield terms since the local close on Friday, which suggests an upward bias for NZ yields on the open.

There is no domestic or international data of note in the next 24 hours. Turning to the remainder of the week, electronic card transactions and the manufacturing PMI will provide a gauge of domestic activity and inflation partials for July are also scheduled. The Reserve Bank of Australia is expected to cut rates by 25bp to 3.60% on Tuesday after last month’s unexpected hold. Labour market data is also released in Australia. The key event on the international calendar is US CPI data for July which will be closely monitored for the impact of tariffs.