Commodity prices ease again including dairy prices; US retail expands but house sales don't; India chooses fiscal stimulus; Taiwan data good; China equities fall; UST 10yr 4.25%; gold up but oil lower; NZ$1 = 59.5 USc; TWI-5 = 68.5

Here's our summary of key economic events overnight that affect New Zealand with news lower commodity prices spread more widely overnight and a dark mood flowed over Chinese equity markets late yesterday.

But first, there was a GDT Pulse auction event overnight. Basically prices fell. The SMP price was down a bit more than expected, down -2.8% from last week's full GDT event and taking it back to levels last seen in April. The more important WMP price was down too, down -1.5% in a lesser retreat than expected. Given how commodity prices have been falling generally recently, perhaps this isn't as tough as it could have been.

Meanwhile in the US, their retail sales at physical stores were up +4.9% last week from the same week a year ago, a much better gain than inflation, so consumers continue to spend, although not with quite the same impressive enthusiasm as a month ago.

But they are not spending to buy a house. Existing home sales fell by -5.4% from the previous month to an annual rate of 3.89 million units in June, the sharpest monthly decline since 2022, to the fewest amount of sales since the start of the year. It was the fourth consecutive monthly decline in existing home sales as the median sales price climbed to a record high of US$426,900 (NZ$717,000). Higher-end houses are still selling but the middle of the market is now a buyers market. Unsold housing inventory rose by to 1.32 million units, or 4.1 months' supply at the current monthly sales pace.

Also retreating was the Richmond Fed's survey of factories in the mid-Atlantic states. In fact, it contracted the most in four years. New order levels retreated although future expectations for new orders are holding up. Perhaps election-change prospects are weighing on these firms outlook?

Meanwhile there was a UST 2yr bond tender earlier today, and it was again very well supported, delivering a median yield of 4.39% and that was -27 bps lower than the 4.66% at the prior equivalent event a month ago.

In India, their Budget delivered a raft of changes. These included increased spending, job creation, and tax relief for the middle class. They hiked their Securities Transaction Tax, reduced taxes on short-term and long-term capital gains, and abolished the angel tax on foreign investment. They also cut import duties on gold and silver, but raised them on plastic products. Income tax thresholds were raised. In the end this is deficit spending equivalent to 4.9% of Indian GDP and continuing its fiscal stimulus. Modi's allies will be satisfied with what they got.

Taiwanese retail sales improved again in June, up almost +4% from a year ago, well above inflation there. And their industrial production was up an impressive +13.5% on the same basis.

EU consumer confidence improved marginally in July, although it remains low and well below its ten year average. But at least it isn't going backwards.

The UST 10yr yield is now at 4.25% and little-changed from this time yesterday. The key 2-10 yield curve inversion is less at -24 bps. Their 1-5 curve is little-changed at -73 bps. And their 3 mth-10yr curve inversion is holding at -113 bps. The Australian 10 year bond yield starts today at 4.37% and up +3 bps from yesterday. The China 10 year bond rate is down -1 bp at 2.24%. The NZ Government 10 year bond rate is now at 4.43%, and unchanged from yesterday.

On Wall Street, the S&P500 is basically on hold, up +0.1% in Tuesday trade. Overnight, European markets were quite mixed with Frankfurt up +0.8% while London was down -0.4%. Yesterday, Tokyo closed little-changed but Hong Kong fell -1.0% Shanghai was down -1.7% in its Tuesday trade both in sharp late selloffs. Tech capital Shenzhen fell almost -3.0%. Singapore was up +0.7%. The ASX200 rose +0.5% in Tuesday trade and the NZX50 was up +0.9% at the end.

The price of gold will start today up +US$10 from yesterday at US$2403/oz.

Oil prices are -US$1 lower at just on US$77/bbl in the US while the international Brent price is just on US$80.50/bbl.

The Kiwi dollar starts today down another -¼c at 59.5 USc. Against the Aussie we are still at 90 AUc. Against the euro we are also still at 54.9 euro cents. That all means our TWI-5 starts today at 68.5 and down -30 bps from yesterday.

The bitcoin price starts today at US$65,848 and down -2.3% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.8%.

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