Pressure on Chinese economy grows; US oil patch data weak; EU lending weak; Aussie retail sales weak, some key commodity prices low; UST 10yr 4.22%; gold up and oil down; NZ$1 = 59.1 USc; TWI-5 = 68.3

Here's our summary of key economic events overnight that affect New Zealand, with news the pressure remains on the Chinese economy and Beijing seems committed to tough it out without its usual debt-inducing stimulus strategies.

But mainland China equities as well as those in Hong Kong jumped more than +1% yesterday after Beijing announced new measures to boost its capital markets, including halving the stamp duty on stock trading, and they were effective immediately. But they opened up +5.5% and it was downward from there, so questions are being asked if this can last much more than a day or two.

Yesterday we noted that factories are under pressure in China because export order flows are drying up. Today we can note that this is heaping pressure on factory owners and their workers. Strikes, accidents and staff seeking help with their employment situation are rising now.

In the US, the Dallas Fed factory survey posted negative indications although these were less than in July, and in fact the least negative in five months. Employment growth slowed, but at least it is growth. New order levels aren't back positive yet, so it is no surprise that in this region, one dominated by the oil patch, the future general business activity index is negative too.

In Europe, the tight policies of the ECB designed to quell inflation are having a tough impact on new lending, especially new lending to companies. Yes, lending grew in July, but at its slowest pace since 2015.

In Australia, retail sales rose by +0.5% in July from June, topping market estimates of a +0.3% gain and reversing from a -0.8% fall in the previous month. But this may not be sustainable. The largest gainers were cafés and restaurants, up because of additional spending linked to the 2023 FIFA Women’s World Cup and school holidays. But when you account for population growth, retail sales are effectively flat on a per capita basis; and incorporating the effect of price increases, the result is even weaker on a real per capita basis, running lower between -3% and -3½% per year.

Perhaps we should also note that the international price of wheat has continued to fall and is now back to where it was almost three years ago. And India's tightened ban on rice exports isn't materially affecting the international rice price, yet, anyway.

Locally, the IMF released its latest review of the New Zealand economy, pointing out that government spending needs to be reined in. More here.

The UST 10yr yield will start today at 4.22%, down -2 bps from this time yesterday. Their key 2-10 yield curve inversion is little-changed at -83 bps. Their 1-5 curve inversion is a little deeper at -105 bps. Their 3 mth-10yr curve inversion is also little-changed at -119 bps. The Australian 10 year bond yield is now at 4.14% and unchanged from yesterday. The China 10 year bond rate is up +2 bps at 2.60%. And the NZ Government 10 year bond rate is still at 5.09%.

Wall Street has opened its week up +0.4%. Overnight, European markets were mixed. London ended unchanged after a late sell-off. Frankfurt rose +1.0%. And Paris rose +1.3%. Yesterday, Tokyo ended up +1.7%. Hong Kong rose a full +1.0%, and Shanghai was up +1.1%, both ending the day with leaking gains. The ASX200 ended its Monday session up +0.6% while the NZX50 only managed a +0.1% gain.

The price of gold will start today at US$1920/oz and up +US$5 from yesterday.

And oil prices are -50 USc softer at just under US$79.50/bbl in the US. The international Brent price is -US$1 lower at US$83.50/bbl.

The Kiwi dollar starts today a marginal +10 bps firmer than yesterday at just on 59.1 USc. Against the Aussie we are down -¼c at just under 92.2 AUc. Against the euro we are unchanged at 54.7 euro cents. That all means the TWI-5 is now at 68.3 and down -10 bps.

The bitcoin price is little-changed again today and now at US$26,090 and up +0.3% from yesterday. Volatility over the past 24 hours has been low at just under +/- 0.7%.

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