Here's our summary of key economic events overnight that affect New Zealand, with news there may be trade policy chaos, and it may get worse, but you wouldn't know it from today's data, especially June data from China.
But first, India said its CPI inflation is falling, and quite quickly now, taken lower by falling food prices. Their CPI fell for the eighth straight month, down to 2.1% in June, the lowest level since January 2019, down from 2.8% in May. Analysts had expected it to fall to 2.5% in June, so this is quite a sharper move lower. You may recall the recent 7.4% peak in October 2024, then also driven by food prices.
The question now is, will the RBI cut its 5.5% policy rate. Many analysts don't think the Indian central bank is ready yet to do that. They next meet on August 7.
In Singapore they said their economy was 4.3% higher in Q2-2025 than Q2-2024. Their GDP rose +1.4% s.a. in the three months through June. Analysts had expected the rise to be only +0.8% increase. Construction helped drive the June result, surging 4.4%. The Q1-2025 contract was revised to -0.5%. Apart from that Q1-2025 stumble, their expansion has been rising since early 2023.
In Japan, machinery orders didn't fall as much in May as anticipated (after a big dip in April), so they ended +6.6% higher than year ago levels.
In China, so far, the Trump tariffs or the uncertainty surrounding them have had no noticeable negative impact on their exports. They came in at US$325 bln in June, up +5.8% from a year ago and up +$9 bln from May. This was better than expected. Imports were also little-changed, up +1.1% from a year ago, slightly softer than expected. The main impact of the US tariff war against everyone is that China is benefiting as the US makes enemies everywhere. The details by country are here.
China's trade surplus widened significantly to +US$115 bln in June, up from +US$99 bln in June 2024. China’s trade surplus with the US widened to US$26.5 bln in June, up +47% from May.
Meanwhile, new yuan loans rose in June, and by more than expected. Typically, we see a June rise as banks push to achieve quarterly targets. But this rise is far better than even for that, and better than the rise a year ago. Helping was a Beijing push to front-load bond sales being rolled out to support their economy during the tariff trade war. In the end they issued ¥2.24 tln in new loans in June, well above the expected ¥1.8 tln. (This data never shows how much is directed to SOE borrowing.)
We should not forget the impact of the consumer subsidies being deployed to keep China's retail demand elevated. They seem quite effective, but clearly they cannot continue indefinitely. Some regions are already starting to turn them off due to cost reasons, so we won't have long to find the reaction to that.
In the US all eyes are on what the June CPI inflation will come in at. It was 2.4% in May, and is widely expected to come in at 2.7% in June when it is reported tomorrow. Markets price no chance of a rate cut by the Fed at their next review at the end of the month.
The UST 10yr yield is now at 4.43%, little-changed from yesterday at this time. The key 2-10 yield curve is still at +53 bps. But their 1-5 curve is now inverted by -11 bp. And their 3 mth-10yr curve now +11 bps positive. The Australian 10 year bond yield starts today at 4.36% and up +3 bps from yesterday. The China 10 year bond rate is little-changed today at 1.67%. The NZ Government 10 year bond rate starts today at just over 4.56% and up +3 bps.
Watt Street has started its week with the S&P500 up +0.2% but just below its July 3 record high. European markets were mixed between London's +0.6% gain and Frankfurt's -0.4% loss. Tokyo ended its Monday session down -0.3%. Hong Kong was up +0.3% as was Shanghai. Singapore ended up +0.5%. The ASX200 closed on Monday down -0.1% and that was also how the NZX50 closed.
The price of gold will start today at US$3,349/oz, down -US$6 from yesterday at this time.
American oil prices are down -US$1.50 just on US$67/bbl while the international Brent price is just over US$69/bbl.
The Kiwi dollar is now at 59.7 USc and down -40 bps from this time yesterday. Against the Aussie we are down -10 bps at 91.3 AUc. Against the euro we are down -20 bps at 51.3 euro cents. That all means our TWI-5 starts today at just on 67.4, and down -20 bps.
The bitcoin price starts today at US$119,767 and up +0.8% from this time yesterday. And that takes it just on NZ$200,000. Volatility over the past 24 hours has been modest at just on +/-1.9%.
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6 Comments
Let's open up kiwisaver for property investment. What could possibly go wrong?
https://www.stuff.co.nz/home-property/360756441/should-kiwisaver-be-ope…
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Surprise surprise that a property investor thinks this a good idea. The article should be paid advertisement and labelled as such.
Odds on we see more of this until finally the govt succumbs to the wishes of the people and allow it to be. It'll be a strategy.
I've heard Nichole speak. Her business model is no model down deals where she gets a property under a conditional contract and onsells at settlement for a profit. She went Bankrupt wheeling and dealing during the GFC and all she has learned is to do the same thing with other people's money. The business model today is 100% illegal (transacting in properties you don't own is against the Real Estate Agents Act). What on earth she is doing penning articles on a national news website I have no idea. She should not be allowed within 100 miles of anybody's kiwisaver.
I'm not disagreeing with your comment however to clarify the scenario: isn't she formally transacting a sale when she actually owns it at settlement? Over the years I've known of a few people who've done this (IIRC Bob Jones on Property book had a case example)
In addition to her dodgy history there is more to consider.
Her advice is take money out of peoples Kiwisaver and put it into property which is declining in value. And often has costs beyond the income. So capital negative and cashflow negative.
What is Stuff thinking?
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