US housebuilders downbeat on cost pressure; Canadian housebuilders buoyant; India jobless levels low; Singapore exports fall; China keeps pressure on EU; UST 10yr at 4.34%; gold holds and oil firms; NZ$1 = 59.2 USc; TWI-5 = 67

Here's our summary of key economic events overnight that affect New Zealand, with news that attention will now turn to the annual Fed meeting in Jackson Hole, WO. This year Fed boss Powell is not only trying to balance US monetary policy settings between rising inflation pressures and a basically stable (and good) labour market, he also has to contend with a unstable fiscal policies and political pressure, with two and soon to be three voting members who want to appease the "low rate" President. He is earning his keep at present, and this summer forum will be a way for him to make his case.

Special attention will be on his comments about rate cut prospects, something markets have mostly priced in for the September 18 meetings. Currently, analysts expect Powell to be coy about his signals for a rate cut.

But on the current data front in the US, their housebuilding industry remains quite glum. The NAHB index of sentiment in the sector is near a record low, only worse during one month in the pandemic. And the July retreat was not expected. Builder sentiment has now been in negative territory for 16 consecutive months and their key problem is costs, induced recently by tariff taxes, and keeping new housing basically unaffordable for new buyers.

But north of the border, its quite a different situation. Canadian housing starts hit a three year high in July, up +3.7% from June which was also a very strong month. The Canadians are tackling their housing affordability issue with a strong push for more supply. The key gains are with multi-unit housing in Montreal and the Prairie Provinces.

It is not something we have reported on before, but India is now releasing monthly unemployment data. Previously it was quarterly and the latest release shows this key metric at 4.2% in July, which is a record low since records started in 1995. Nothing like an expanding economy to pull down the jobless rates.

Singapore’s non-oil domestic exports (NODX) fell -4.6% year-on-year in July, reversing a downwardly revised +12.9% surge in June and establishing a yoyo pattern. This marked the third decline so far this year and the steepest contraction since October 2024, due to a fall in non-electronic exports, especially to the US (-48%) but also China -12%). Perhaps more worrying, near neighbours Thailand, Malaysia and Indonesia all bought significantly less in July.

In China, the $2 bln trade in dairy products from the EU to China is under investigation by political authorities as part of pressures China is exerting as countermeasures for EU restrictions on China. Now the Chinese are drawing out the pressure with another extension to the probe, due to "complexity" in the case.

The UST 10yr yield is now at 4.34%, up +2 bps from yesterday at this time. The key 2-10 yield curve is still at +57 bps. Their 1-5 curve is still inverted by -9 bps. And their 3 mth-10yr curve is still inverted by -2 bps. The Australian 10 year bond yield starts today at 4.30% and up +7 bps bps from yesterday. The China 10 year bond rate is up +2 bps at 1.77% and a four month high. The NZ Government 10 year bond rate starts today at just on 4.47% and up +2 bps.

Wall Street has started its week hesitant with the S&P500 little-changed in Monday trade. Overnight, European markets were mixed between London's +0.2% and Paris's -0.5%. Tokyo ended its Monday session up +0.8% to yet another record high. Hong Kong was down -0.4% while Shanghai gained an outsized-for-them +0.8%. Singapore fell a full -1.0% however. The ASX200 rose a minor +0.2%, while the NZX50 was up a stronger +0.6% in Monday trade with late session momentum.

The price of gold will start today at US$3,333/oz, essentially unchanged from yesterday.

American oil prices have firmed slightly to be just under US$63.50/bbl with the international Brent price under US$66.50/bbl.

The Kiwi dollar is at just on 59.2 USc and unchanged from yesterday. Against the Aussie we have firmed +20 bps to 91.2 AUc. Against the euro we are also up +20 bps at 50.8 euro cents. That all means our TWI-5 starts today at just on 67, and up +20 bps.

The bitcoin price starts today at US$116,576 and down -1.2% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/-1.4%.

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