US factory sentiment stays down; Japan consumer sentiment up; Beijing declines sharp new stimulus; Singapore sentiment improves; Aussie house price growth cools; UST 10yr 3.96%; gold and oil up; NZ$1 = 62.2 USc; TWI-5 = 70.2

Here's our summary of key economic events overnight that affect New Zealand, with news a quiet end to July as the northern hemisphere holidays in the heat has brought out some tame second tier data. And China chipped in with an underwhelming announcement of how they will deal with their slowdown.

But first, although it improved in July from June, the Chicago PMI that measures activity in the key Mid-West manufacturing region remained solidly negative. And there were also signs of improvement in the Dallas Fed's July factory survey even if it stayed negative as well. But it is the Mid-West one that needs to move up more to indicate a better outlook.

However, we are seeing a good recovery in Japanese consumer sentiment. It still has a way to go to get back to pre-pandemic levels but it is rising quickly now. Meanwhile the Bank of Japan ran an unscheduled bond auction yesterday in a bid to stop yields rising too fast.

China's official factory PMI survey contracted the least in July in the last four months of contraction (49.3). But their official services PMI fell to its weakest level of the year, now with only a tame expansion (51.5). The private Caixin version is out later today for factories, and Thursday for services.

Yesterday's 'big stimulus announcement' in Beijing turned out to be a damp squib, with almost all of it a restatement of previous piecemeal initiatives. But it did show that Beijing is keeping a wary eye on the situation, and it still has its big set-piece direct stimulus options up its sleeve. Beijing wants people to consume more, including buying more cars and investing in property. It also wants people to take more holidays. And it is calling for more private sector investment. But to outsiders, it look like policy makers are just too confident that Party exhortations will work.

China's property crisis which has been going on for more than two years with waves of defaults, is entering a new phase. State-backed developers are now having trouble making bond payments and repaying debt. It's a big deal with more than NZ$575 bln in maturing bonds potentially triggering new stresses.

Singapore's business confidence is now back in positive territory and at its best level of the year.

EU inflation slowed for a third consecutive month to 5.3% in July from 5.5% in June. This was the expected easing.

In Australia, there is some evidence their rising official interest rates are keeping a lid on property prices. They rose in July from June and a fifth consecutive month of gains, but this was the slowest in that set. Year-on-year they are down -3.4%. Listings are up as some stressed homeowners shift to quitting the market. They are seeing a similar easing pattern in home loan borrowing. The RBA will review its cash rate target later today and analysts are expecting a +25 bps rise again, taking their rate to 4.35%, and that may hasten the housing market cooling. However it is no certainty there will be a rate hike today. Recent retail sales data was decidedly weak and the RBA may think it has done enough already.

The UST 10yr yield will start today at 3.96% and unchanged from this time yesterday. Their key 2-10 yield curve inversion is little-changed at -92 bps. Their 1-5 curve is deeper at -123 bps. And their 3 mth-10yr curve is slightly more inverted at -144 bps. The Australian 10 year bond yield is now at 3.99% and unchanged from yesterday. The China 10 year bond rate little-changed at 2.70%. The NZ Government 10 year bond rate is down -5 bps from yesterday to 4.75%.

Wall Street has started its week with the S&P500 little-changed. Overnight European markets closed mixed between Frankfurt's -0.1% dip and Paris's +0.3% rise. Yesterday Tokyo ended its Monday session up +1.3%. Hong Kong rose +0.8%. And Shanghai rose +0.5%. The ASX200 ended irts Monday session up a mere +0.1% but the NZX50 ended up a much stronger +0.9%.

The price of gold will start today at US$1971/oz and up +US$12 from yesterday.

And oil prices are up another +50 USc at just over US$81/bbl in the US. The international Brent price is now just over US$85/bbl.

The Kiwi dollar starts today up more than +½c at just on 62.2 USc but still in its recent range. Against the Aussie we are marginally softer at 92.5 AUc. Against the euro we more than +½c higher at 56.5 euro cents. That all means the TWI-5 has risen +50 bps to 70.2.

The bitcoin price has eased very slightly since this time yesterday and is now at US$29,226. Volatility over the past 24 hours has remained low, also at just under +/- 0.8%.

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