Here's our summary of key economic events overnight that affect New Zealand with news that catches us up over the past two days.
First, the inflation measure the US Fed prefers, the personal consumption expenditure price index (PCE) was unchanged in May from April following a +0.3% rise in April. This was what markets were expecting. That means the annual PCE rate slipped to 2.6%, its lowest since March 2021. (The May CPI was 3.3% and we get the June CPI on June 13 (NZT).
Personal spending was up +2.4% from May a year ago, personal income a bit less.
US durable goods orders were unchanged in may from April but were -1.2% lower than the same month a year ago. Of more concern however will be that capital goods orders fell -10% on the same basis.
Eventually that may weigh on employment, but so far it hasn't. Last week initial claims for jobless benefits fell from the prior week. Compared to the same week a year ago the number of people on these benefits was higher, but in relation to their workforce, that gain was insignificant. The American's next report their labour market data for June this time next week. Markets still expect non-farm payrolls will have grown +180,000.
US pending home sales for May fell when a bounce-back was expected, reinforcing the fund the American housing market is in.
There was a major bounce-back in the regional Chicago PMI in June after its sharp fall in May. This was led by a big jump in new orders.
But that was not the case 'down the road' in the Kansas City Fed factory survey which eased back into a contraction in June.
The widely-watched University of Michigan consumer sentiment survey was little-changed in June, but it is up more than +6% from a year ago.
Japan industrial production rose +2.8% in May from April, beating market forecasts, flash data showed. It also recorded an unusual year-on-year result too. This was the second increase so far this year, mainly due to strong motor vehicles output. They think June will slip back but July will be another gain.
The ECB said that its survey of consumer inflation expectations over the year ahead are now back to 2.8%, the same level they were at when they started this survey in early 2020. They peaked at 5.8% in October 2022. Those survey said they felt inflation ran at 5.8% over the prior 12 months. (It actually ran at 2.7% in the year to May but averaged 3.9% over the past twelve months.)
The rise and rise of container freight rates continued last week, up +4% from the prior week to now be a massive 256% higher than the same week a year ago. Again the main culprit was outbound rates from China to Europe, hostage to the Yemeni Houthis and their piracy. Bulk cargo rates were up +2% for the week and are again in an uptrend. They are up +72% for the year.
The UST 10yr yield is now at 4.39% and up +7 bps from this time Thursday, up +8 bps for the week. The key 2-10 yield curve inversion is again much less at -37 bps. Their 1-5 curve is also less inverted, by -78 bps. And their 3 mth-10yr curve inversion is unchanged at -103 bps. The Australian 10 year bond yield is back down -7 bps at 4.35% on the Aussie CPI result. The China 10 year bond rate is down -3 bps at 2.21% and a new all-time record low. The NZ Government 10 year bond rate is now at 4.73% and up +8 bps from Thursday but up only +5 bps for the week.
On Wall Street, the S&P500 is down -0.4% in its Friday session but a weekly +0.2% gain and a +2.9% monthly gain. Overnight, European markets closed similarly on average. Yesterday Tokyo closed +0.6% higher. Hong Kong closed unchanged, but Shanghai rose +0.7% to be down -0.5% for the week. Singapore ended down -0.3%. The ASX200 closed up +0.1% yesterday to end its week down -0.4% and the NZX50 didn't trade yesterday of course, ending its week down -0.5%
The Fear & Greed index is little-changed, just in the 'neutral' range.
The price of gold will start today up +US$25 from Thursday at US$2326/oz. A week ago it was at US$2320/oz.
Oil prices are little-changed from Thursday at just on US$81/bbl in the US while the international Brent price is still under US$85/bbl.
The Kiwi dollar starts today slightly firmer from Thursday at just under 61 USc. Against the Aussie we are unchanged at 91.4 AUc. Against the euro we are also unchanged at 56.9 euro cents. That all means our TWI-5 starts today still lower at 70.5.
The bitcoin price starts today at US$60,654 and down -1.6% from this time yesterday. But that is -5.2% lower for the week. Volatility over the past 24 hours has remained modest at just on +/- 1.3%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.