American housebuilding weak everywhere except in one pocket; US sentiment stabilises at low level; eyes on Japan; Malaysia growth good; UST 10yr at 4.42%; gold and oil little-changed; NZ$1 = 59.6 USc; TWI-5 = 67.5

Here's our summary of key economic events overnight that affect New Zealand, with news the dog days of summer in the northern hemisphere are not really bringing any relief on the global economic front. Messy situations look like they are just going to get worse. And as tough as it is in New Zealand, it has the sense of being a stable haven compared to many places. For now at least.

In the US, a surge in multi-unit house building in the Northeast propelled its overall June housing starts to a good rebound after the very weak May result. But starts for single family homes fell -4.6%, and the starts in the South fell -0.7%, in the West they fell -1.4% and in the Midwest the dropped -5.3%. It clearly remains a fragile sector.

But it might be stabilising. Residential building consent issuance was good in June. It shows the same profile as housing starts - strong for multi-unit developments (+8.1%), weak for single family homes -*3.7%). In this case, the strength was in the South, offset by retreats in the Midwest, the West, and the Northeast.

Also stabilising was the sentiment survey from the University of Michigan for July. It ticked up slightly from June but is still almost -7% lower than year-ago levels. But it is off the canvas because it is now higher than any month since February. Inflation expectations eased back a bit too in July from June.

Corporate America is feeling bullish. For the Q2 earnings reports so far for S&P500 companies, 83% have reported a positive EPS surprise and 83% have reported a positive revenue surprise. To be fair, the early reporting companies tend to be financials. The industrials will come later.

But in two weeks, the Whitehouse plans to roll out a double-whammy of tariffs; arbitrary ones for most countries, and industry specific ones. If they actually happen, history will mark the date when US industry became uncompetitive.

Japan's annual inflation rate eased to 3.3% in June 2025 from 3.5% in the previous month, marking the lowest reading since last November. Most components eased, but not food, which rose 7.2%, the most since March, a surge due to the doubling of rice prices over the fast year.

And the rice price issue seems likely to have a significant influence in Sunday's Japanese elections. Markets are bracing for the incumbents to take a drubbing. Tariffs, inflation and budget troubles are weighing on the ruling parties, and bond markets sense change, bidding up some bond yields to their highest in 20 years. Any new government would have mounting challenges that won't be solved by more tinkering.

In Malaysia, their economy expanded by +4.5% year-on-year in Q2-2025, slightly up from +4.4% growth in the previous period. For them domestic demand was robust, but exports were a bit weaker than anticipated.

In Australia, regulator ASIC is probing the affairs of private debt manager Metrics Credit Partners, a second tier finance operator focused on the real estate sector and funded by retail and wholesale investors. It reportedly has $30 bln of "assets under management". Liquidity issues are under scrutiny as lending standards may have contributed to the stress in the chase to maintain the high yield promises made (7% to 10% after fees). Metrics is only one of the companies ASIC is reviewing as part of its wider private debt sector review.

The UST 10yr yield is now at 4.42%, down -4 bps from yesterday at this time to be back where it was a week ago. The key 2-10 yield curve is now at +55 bps. But their 1-5 curve is still inverted by -12 bp. And their 3 mth-10yr curve now +11 bps positive. The Australian 10 year bond yield starts today at 4.35% and up +1 bp from yesterday and littler-changed from a week ago. The China 10 year bond rate is little-changed again at 1.67%. The NZ Government 10 year bond rate starts today at just under 4.64% and up +2 bps - but that is up +11 bps from a week ago.

Wall Street is little-changed today with the S&P500, and just off its record high but enough to claim a record high weekly close. Good corporate earnings are driving the mood. European markets were all mixed in a +/-0.2% range. Tokyo ended its Friday session down -0.2% for a +1.0% weekly rise. Hong Kong was up +1.3% in Friday trade for a +3.0% weekly rise. Shanghai rose +0.5% on Friday locking in just a +0.6% weekly change. Singapore ended up +0.7%. The ASX200 closed on Friday up +1.4% and a weekly +2.1% gain. And the NZX50 dipped -0.2% Friday but still managed a +1.5% weekly rise.

The Fear & Greed index has remained in the 'extreme greed' zone as it was a week ago.

The price of gold will start today at US$3,351/oz, up +US$15 from yesterday and little-changed from a week ago.

American oil prices are unchanged at US$67.50/bbl while the international Brent price is still just under US$69.50/bbl. But both are -US$1 lower than week ago levels.

The Kiwi dollar is now at 59.6 USc and up +40 bps from this time yesterday - but down -50 bps from a week ago. Against the Aussie we are up +25 bps at 91.6 AUc. Against the euro we are up +15 bps at 51.3 euro cents. That all means our TWI-5 starts today at just on 67.5, up +30 bps from yesterday but down -10 bps from this time last week.

The bitcoin price starts today at US$117,646 and down -1.2% from this time yesterday but essentially unchanged from a week ago. Volatility over the past 24 hours has remained modest, at just under +/-1.5%.

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