China PMIs steady with little expansion; house prices ease in Sydney & Melbourne; Aussie super stress grows; strong El Niño developing; UST 10yr at 4.45%; gold and oil softish; NZ$1 = 59.9 USc; TWI-5 = 63.4

Here's our summary of key economic events over the weekend that affect New Zealand with news ships are slowly exiting the Strait of Hormuz, and over the four months since the start of the conflict about a quarter of the ships trapped initially have now transited out. It is an open question whether their owners will want to go back for more cargoes, until the issue is resolved. But the US keeps changing the rules, and Iran isn't buckling, so far at least. In fact in the face of Trump's change demands, they have now added their own.

The bottom line; there is no resolution to the core crisis. This is in large part because Trump has not signed off on the tentative negotiated US-Iran deal. He seems to distrust his own negotiators as much as Iran. Markets are assuming he will eventually. They may be waiting a while. Already it is clear the the Obama deal way back when was a better deal for the US than what is now on the table.

But first locally, there won't be a lot of significant economic data released this coming week. We will get April building consent data, loan data, Barfoot's and other housing results for May, and some Q1-2026 trade and building work data too. And a full dairy auction on Wednesday.

In Australia, it will be trade, building permit data, and the Q1-2026 GDP outcomes.

Elsewhere there will be a raft of PMIs released for many countries.

That will include the two key ones for the US. And their week will end with the May no-farm payrolls report, preceded by a number of other labour market indicators. Payrolls are expected to have risen less than +100,000 in the month.

In India, they will be reviewing their official interest rate settings (no change expected). They will also released industrial production and GDP data.

Trade and inflation data will come from many other Asian countries as well along with PMI results.

In China, the key releases include their two PMIs with the official one out already. That shows their factory sector slipped back slightly to a steady state, neither expanding nor contracting. It also shows their services sector no longer contracting, now with a very modest expansion.

In Australia, their long-needed house price correction is underway - tentatively and only in some cities. Higher mortgage rates, crimped affordability, and the recent Budget changes relating to how CGT is to be applied have all combined to see prices dip again in some of their biggest markets. Transaction volumes are retreating too and recent auction volumes are now at six-year lows. Sydney average prices dipped -0.9% in May to be -2.1% lower over the past three months. For Melbourne it was a -0.8% May dip for a -2.3% quarterly fall. For Brisbane, Adelaide and Perth however the upward pressure remains.

And staying in Australia, they now expect 2.5 mln people will enter retirement over the next ten years, heightening concerns about their resources. A recent survey indicates savers there now think they need A$1 mln to be comfortable. But for those in the 60-65 age group, average current balances are only A$400,000 for males and A$315,000 for women. This is resulting in some deep anxiety for many.

Even though it originates in the Pacific, a global stress is looming with rising chances of a 'super' El Niño on the way and it will  build its impact later this year. According to NIWA/Earth Sciences, during El Niño, New Zealand tends to experience stronger or more frequent winds from the west in summer, which can encourage dryness in eastern areas and more rain in the west. In winter, the winds tend to blow more from the south, causing colder temperatures across the country. In spring and autumn, southwesterly winds are more common.

The UST 10yr yield is now just on 4.45%, up +1 bps from this time Saturday, down -12 bps for the week. The key 2-10 yield curve is now at +44 bps (no change). Their 1-5 curve is now at +36 bps (unchanged) and the 3 mth-10yr curve is at +76 bps (+1 bp). The China 10 year bond rate is up +1 bp at just under 1.72%. The Japanese 10 year bond yield is unchanged at 2.66%. The Australian 10 year bond yield starts today at 4.84%, down -1 bp from Saturday, down -8 bps for the week. And the NZ Government 10 year bond rate is unchanged at 4.55%, down -17 bps for the week.

The price of gold will start today down -US$17 at US$4538/oz, up +US$23 for the week. Silver is down -50 USc at just over US$75/oz.

Oil prices are softish just under US$87.50/bbl in the US, while the international Brent price is now on US$91/bbl and down -50 USc. A week ago these prices were US$96.50 and US$103.50/bbl respectively.

Urea prices are falling back with the oil price, but this is not the case for sulphur, which remains close to its record highs.

The Kiwi dollar is unchanged from Saturday at this time at 59.9 USc, up +130 bps for the week. That is its highest since the Middle East conflict began. Against the Aussie we are up +10 bps at 83.4 AUc. Against the euro we are firmer at just under 51.4 euro cents. That all means our TWI-5 starts today at just under 63.4 which is up +10 bps from Saturday, up +130 bps for the week.

The bitcoin price starts today at US$73,514 and up +0.3% from this time Saturday, but down -4.0% for the week. Volatility over the past 24 hours has been low at just under +/- 0.6%.

The easiest place to stay up with event risk is by following our Economic Calendar here ».