US payrolls rise better than expected but suffer prior revision; Canadian payroll growth evaporates; Japan pension fund books huge gain; copper rises again; UST 10yr 4.28%; gold up and oil down; NZ$1 = 61.4 USc; TWI-5 = 70.6

Here's our summary of key economic events overnight that affect New Zealand with news the US Fed will probably like the slowing US labour market.

Overnight the closely watched non-farm payrolls report for the US was released with a headline result of +206,000 larger employment in June, more than the +190,000 expected, and their unemployment rate changed little at 4.1%.

But this seasonally-adjusted data masks an actual rise of +547,000 people on company payrolls, although that was lower than the +844,000 increase the prior month. It also masks some downward revisions to the prior month.

There are now 161.8 mil people employed in June, including the unincorporated self employed, up +433,000 from May. So all the growth is in company payrolls and people are shifting out of self-employment to the more formal workforce.

And that is conformed by pay rates. Average hourly pay hit US$30 for the first time ever in June, up +4.0% from a year ago (and rising faster than inflation). Average weekly earnings (which accounts for working hours), rose +3.7% (also more than inflation which is running at 3.3%).

Basically, today's data changed their economic situation little but is has a sense of a slowing trend. US Treasury yields fell on the news, but Wall Street equities took it in its stride. The USD eased very slightly.

The Fed probably liked what it saw. New York Fed boss said the US economy was doing remarkably well and there had been significant progress towards inflation goals.

The next US Fed rate review is on August 1, 2024 NZT.

In Canada, their labour market report for June wasn't as positive. In fact their employed jobs fell a trivial -1,400 when a +22,500 rise was expected. They will be disappointed in that. This data probably advanced the case for a July rate cut when their central bank meets next on July 25, NZT. Their policy rate is currently 4.75%.

In Japan, their huge Government Pension Investment Fund, one of the world's biggest institutional investors, booked a +NZ$462 bln gain in the past year (more than New Zealand's entire economic activity as measured by GDP). They need it however; as wages rise there and their workforce ages further, the claims on that will rise. That fund alone has reserves of almost NZ$2.5 tln.

In Thailand, they have decided to close duty-free shopping for travelers arriving at international airports in an effort to lift spending by tourists inside the country proper. This week's cabinet decision affects eight airports, including Bangkok and Phuket.

In Europe, one major election (Britain) is resolved with the expected result. Today the French are voting. The outcome is far less certain there, but the earlier 'expected' far-right win is now no longer a sure thing.

And we should probably note than in the first week of July, we have seen a sharp rise in the copper price, reversing some of its wall from the peak at the end of May.

The UST 10yr yield is now at 4.28% and down -9 bps from yesterday and down -12 bps from a week ago. The key 2-10 yield curve inversion is little-changed at -33 bps. Their 1-5 curve is now at -78 bps. And their 3 mth-10yr curve inversion is more inverted at -110 bps. The Australian 10 year bond yield starts today at 4.41% and down -4 bps. The China 10 year bond rate is now at 2.27% and up +5 bps. The NZ Government 10 year bond rate is now at 4.77% and down -3 bps but up +4 bps from a week ago,

Wall Street is higher today with the S&P500 up +0.5%. It ends its interrupted week up almost +2%. Overnight European markets were mixed with Frankfurt up +0.1% but London down -0.5%. Paris is trading nervously but only down -0.3%. Yesterday Tokyo ended its Friday session little-changed to cap a +2.7% weekly rise. Hong Kong was down -1.3% on Friday but ended its week up +1.2%. But Shanghai ended down another -0.3% for a weekly slip of -0.5%. Singapore was down -0.3%. The ASX200 ended down a trivial -0.1% in its Friday trade to be up +0.7% for the week. But the NZX50 rose +0.4% yesterday to be also up +0.7% for the week.

The Fear & Greed index is little-changed, in the 'neutral' range.

The price of gold will start today up a sharp +US$33 from yesterday at US$2390/oz. A week ago this price was US$2326/oz

Oil prices are -50 USc softer from this time yesterday at just under US$83/bbl in the US while the international Brent price is down -US$1 at US$86.50/bbl. A week ago these prices were US$81 and US$85/bbl respectively.

The Kiwi dollar starts today +20 bps firmer from yesterday and back up at 61.4 USc. A week ago it was under 61 USc so nearly a +½c rise since. Against the Aussie we are still at 91 AUc. Against the euro we are also holding at 56.7 euro cents. That all means our TWI-5 starts today at 70.6 and uup +20 bps from yesterday but only up +10 bps in a week.

The bitcoin price starts today at US$56,536 and down another -3.0% from this time yesterday. A week ago this price was US$60,654, so it is down -6.8% from then. Volatility over the past 24 hours has been very high at just on +/- 4.7%.

Go the ABs !

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