Here's our summary of key economic events overnight that affect New Zealand, with news the financial markets are awaiting the reconciliation of the US budget bill between the Senate and House versions. And they are waiting for news of "the countries lining up to make a [tariff] deal". There only seems to be one, Vietnam, and the details of that 'deal' remain murky.
Meanwhile, American home loan interest rates fell last week to a three month low and that brought a surge in refinancing, although applications for a new mortgage were basically unchanged at a low level. That resulted in the total volume of mortgage applications rising by +2.7% last week from the prior week.
Monitored job cuts in June shows it a relatively quiet month with 47,000 layoffs recorded. So far in 2025, the retail sector has cut the most private-sector jobs this year with 80,000 lost, hit by tariffs, inflation, and uncertainty. The expected DOGE cuts aren't as prominent yet due to the ongoing legal action uncertainty.
But in contract, the US ADP Employment Report recorded a shrinkage in private payrolls in June by -33,000 when a +95,000 gain was expected. That's a big miss. This is a precursor for tomorrow's non-farm payrolls report for June which is expected to show a low +110,000 jobs gain. And while the ADP Report has a spotty track record matching the official data, you would have to suspect there are downside risks to the non-farm payroll estimates.
Whatever the actual data shows, it seems pretty clear the stuffing is being knocked out of the once-strong engine of the US economy. 2025 is shaping up to be their weakest jobs growth since at least 2015 (pandemic excepted).
US vehicle sales are also easing, down to a 15.3 mln annual rate and well below the March rate of 17.8 mln. The pre-tariff surge has created a shadow. But few analysts think it will rise much, mainly because of the tariff taxes.
We don't have the equivalent China vehicle sales data yet but it will be very much higher (32.7 mln in the year to May), However they have their own problems of very rapid innovation and obsolescence, and worrying viability of large parts of their industry. Xiaomi's sudden entry into this sector is causing an existential shock for its rivals.
Singapore’s manufacturing PMI inched up out of contraction in June from May, snapping a two-month retreat as firms likely front-loaded orders ahead of looming American tariff deadlines. The recovery was primarily driven by faster expansion in new orders, new exports, and input purchases.
In Australia, retail sales rose marginally in May to be +3.3% higher than year-ago levels. For context, Australian CPI was up +2.4% in the year to March, up +2.1% in their monthly inflation indicator for the year to May. So they have been getting 'real' volume increases although that may have faded recently. And this recent fade may bolster the case for a July 8 RBA rate cut.
Meanwhile Australian building consents stopped falling in May as they had done in April, and are now +6.5% higher than May 2024. Multi-unit buildings are back driving the increase. The RBA's May 21 rate cut is getting the credit.
The UST 10yr yield is now at 4.29%, and up +4 bps from yesterday at this time. The key 2-10 yield curve is more positive at +51 bps. Their 1-5 curve is now inverted by -13 bps. And their 3 mth-10yr curve is now +5 bps positive. The Australian 10 year bond yield starts today at 4.21% and up +9 bps from yesterday. The China 10 year bond rate is little-changed at 1.64%. The NZ Government 10 year bond rate starts today at 4.50%, up +1 bp.
Wall Street is slightly firmer today with the S&P500 up +0.4%. But it is still at a record high. Overnight European markets ended mixed with London down -0.1% while Paris rose +1.0%. Tokyo fell -0.6%. Hong Kong rose +0.6%, but Shanghai was down a minor -0.1% in Wednesday trade. Singapore rose +0.5%. The ASX200 ended its Wednesday trade up +0.7%, while the NZX50 rose a lesser +0.4%.
The price of gold will start today at US$3,347/oz, and up +US$10 from yesterday.
American oil prices are much firmer from yesterday, up +US$1.50 at just over US$67/bbl while the international Brent price is up the same at just under US$69/bbl.
The Kiwi dollar is now just on 60.8 USc, down -10 bps from yesterday. Against the Aussie we are down -10 bps at 92.5 AUc. Against the euro we are down the same at 51.6 euro cents. That all means our TWI-5 starts today at 68.1 and also down -10 bps from yesterday.
The bitcoin price starts today at US$109,025 and up +2.6% from this time yesterday. Volatility over the past 24 hours has been modest at just over +/-1.9%.
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21 Comments
The Vietnamese know how to speak Trump's language:
"Vietnam bypassing its own laws to fast-track $1.5B Trump golf resort amid tariffs threat, report says"
"Wednesday’s groundbreaking for the project took place just three months after the initial documents were filed, a process which experts told the Times usually takes at least two years. Some steps were reportedly skipped entirely"
https://www.independent.co.uk/news/world/americas/us-politics/vietnam-t…
The most corrupt regime in American history is just getting warmed up.
The power of office. Old proverb from somewhere says - best not to ever confuse power of office with power of orifice.
Vietnam is no more or less corrupt than many Asian countries. Maybe Trump oiled the wheels with some koha..
My intention wasn't particularly to have a go at the Vietnamese. The unusual situation here is the US President holding trade threats over essentially every nation in the world unless they pay homage to him and/or support his various grifts. It's tough to deal with someone so powerful, so openly corrupt, and so willing to put his own financial interests above all else.
Luckily they got plenty of practice with the Clinton Foundation
Its a sickness that both sides of the political spectrum seem to display... One being bigger , more public then the other doesn't sway me much, they are both ugly. The USA is well corrupt.
Not too interested in the partisan to-and-fro myself, I won't stand up for any previous wrong-doing. But I think what Trump is doing is way beyond anything either party has subjected us to in the past. And completely shameless.
The tariff game.
Score: US 20, Vietnam 0
https://www.indiatoday.in/world/us-news/story/vietnam-to-face-20-tariff…
WASHINGTON (AP) — State and federal prosecutors have charged more than 320 people and uncovered nearly $15 billion in false claims in what they described Monday as the largest coordinated takedown of health care fraud schemes in Justice Department history.
...Among the cases is a $10 billion urinary catheter scheme that authorities say highlights the increasingly sophisticated methods used by transnational criminal organizations. Authorities say the group behind the scheme used foreign straw owners to secretly buy up dozens of medical supply companies and then used stolen identities and confidential health data to file fake Medicare claims.
A billion here , a billion there, and pretty soon you are talking real money.
there must be a movie in here somewhere.
Looking at the very cool ev's coming out, particularly the Chinese and the abundance of tech in them, I wonder if their life cycle will be similar to a smart phone?
Hardly enviro friendly if that becomes the case.
Yes, with high tech vehicles nowadays it's a lot harder to spend our weekends saving the environment by repairing / rebuilding 20+ year old British & American rubbish as we did back in the 1970s & 80's before the 2nd hand Japanese imports arrived.
I typically keep my vehicles for at least 10 years (one of my current ones is 28yo) however I'm hanging out for a 4WD SUV EV with >750kms range & >1.5T towing next
yeah I'm same. Well maintained Jap ICE car is hard to wear out. Once you get over not giving a s##t about what people think when you rock up in your old runaround it becomes quite satisfying.
Biggest financial mistake people make is buying cars on finance.
Indeed, I love the old Jap imports as they are easier to fix, parts galore for them, and more manual cars still around back then (personal preference).
Well maintained Jap ICE car
I think you should use the word 'Japanese' as the way you describe the Japanese nationality is outdated and potentially seen as racist, despite intentions.
What about ‘Jap’s eye’?
Is "Brit" ok? Scot? Pom?
Yes because the origins of those words are different. Today, the term is considered a racial slur and is generally avoided in public discourse, media, and advertising. Its use is often seen as an example of casual racism or ignorance, even if the speaker does not intend offense. Beauden Barrett used it in a podcast when he was living in Japan and was advised not to.
Japanese Americans and advocacy groups have campaigned for decades to have the term recognized as a slur and eliminated from media and dictionaries, emphasizing that it is regarded as offensive.
Regrettably it was ingrained at early ages. Who can remember “Taffy was a Welshman, Taffy was etc etc.” Both welcome and appropriate that modern times have seen suchlike being banished.
It's a car I'm referring to, not a person. Vicariously offended?
It's a car I'm referring to, not a person. Vicariously offended?
Personally, I'm not offended by its use, depending on context, and I have no doubt you're not using the term in a nasty manner. Just pointing it out.
I’d be more concerned about their low tech features. How’s their rust protection fairing?
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