US data softens broadly; US tries to help Big Tech from paying taxes in any country; SpaceX delivers losses to investors; 'excessive pricing' tackled; UST 10yr at 4.37%; gold up and oil eases; NZ$1 = 56.4 USc; TWI-5 = 60.3

Here's our summary of key economic events that affect New Zealand, with news significant cracks are showing in US economic policies and direction. Those at the top may profit, but everyone else may be left holding the consequences.

First, the US merchandise trade balance worsened in May. Imports rose +3.6% while exports fell -5.4%. These were much larger shifts than were anticipated. Clearly tariffs aren't working other than making imports more expensive and hurting exports. The net result was a -US$103.5 bln deficit for May, the largest in a year. And their largest May deficit ever.

And we should also note that US inventories are rising and quite quickly. In May, wholesale inventories were up +4.4% from a year ago, retail inventories up +3.1%. The stockpiling we noted in their PMI activity is adding deadweight to their logistics systems

Meanwhile, Trump is going into bat again for his billionaire tech supporters so that they don't have to pay tax on their operations in other countries, threatening 100% tariffs on any country that imposes a digital services tax.

The University of Michigan Consumer Sentiment index was revised up to 49.5 in June, although that was less of a revision higher than expected. Still, sentiment improved from May which was the lowest level on record, supported in part by a moderation in petrol prices. And that is despite the fact they remain -31% higher than at the start of Trump's failed Iran adventure.

The latest update of the US Fed's balance sheet shows that they have completely paused the quantitative tightening selldown program of bonds and other financial instrument built up during the pandemic crisis. If anything, they have been growing it (minorly) in 2026.

The epicenter of artificial intelligence research and commercialisation, California, is also home to millions of workers who could potentially be AI victims. So yesterday it launched an "AI Job Loss Tracker". It is going to be instructive to watch. Their June data, based on their jobless/benefit data activity, hasn't yet picked up any surge, but it is early days.

In China, they say artificial intelligence is reshaping the global labour market not by triggering mass layoffs of existing workers but by causing employers to pull back on hirings for new, entry-level positions.

In the EU, an ECB survey revealed that median year-ahead inflation expectations eased to 3.5% in May, the lowest level in three months, down from 4.0% in each of the previous two months which were the highest readings since 2023. Longer-term inflation expectations were steady, at 2.9% for three years ahead. Consumers also expect house prices to rise by 3.6% over the next year, slightly below 3.7% in April. Expectations for mortgage interest rates were unchanged at 4.9%.

Greenland said on Friday it has rejected an application from Greenland Minerals, a unit of Australia’s Energy Transition Minerals, to renew its exploration license for the Kuannersuit rare earths project.

In Australia, their competition regulator has been armed with new powers to monitor the pricing policies of the Coles and Woolworths supermarket chains. What is being prohibited is "excessive pricing". But there is no fixed threshold for what is an excessive price for a grocery product. Instead, the ACCC will monitor supermarket pricing information and consider all relevant circumstances, including the cost to supply the product to consumers and what is a reasonable margin for the supermarket, to determine if a grocery product was excessively priced.

The UST 10yr yield is now just on 4.37%, down -2 bps from this time yesterday, down -12 bps for the week. The key 2-10 yield curve is now at +28 bps (up +1 bp). Their 1-5 curve is now at +20 bps (-1 bp) and the 3 mth-10yr curve is at +69 bps (down -6 bps). The China 10 year bond rate is unchanged at 1.73%, down -2 bps for the week. The Japanese 10 year bond yield is down -2 bp at 2.61%, down -4 bps for the week. The Australian 10 year bond yield starts today at 4.76%, up +3 bps from yesterday but down -7 bps for the week. And the NZ Government 10 year bond rate is at 4.39% to be up +2 bps, down -7 bps for the week.

Wall Street is holding soft today, just -0.1% lower on the S&P500 to be down -2.1% for the week, while the Nasdaq is down -0.2% today for a -4.6% weekly retreat. Overnight, European markets were lower between Frankfurt's -1.3% and London's -0.2%. Yesterday Tokyo closed down -4.2% to end its week -2.4% lower. Hong Kong closed down -1.8% for a -4.8% weekly drop while Shanghai fell -2.3% on Friday for a weekly -1.6% easing. Singapore ended down -0.5%. The ASX200 ended its Friday session up +0.2% to cap a weekly -0.4% dip. The NZX50 closed little-changed for a weekly -0.1% easing.

The Fear & Greed index has moved over to be just in the 'extreme fear' zone from the 'fear' zone a week ago.

We have previously noted how the SpaceX IPO's frenzy has given way to losses for early investors (-5.1% so far). But the institutional investors in their recent US$25 bln bond issue have been taking a large bath too so far. And investors in Oracle's bonds are taking even larger losses.

The price of gold has risen to US$4074/oz, up a net +US$42/oz from yesterday. That is down -US$81/oz from a week ago. Silver is just on US$59/oz, up +US$1 from yesterday but down -US$5.50 for the week.

Oil prices are down -US$2.50 from yesterday at just on US$69/bbl in the US, while the international Brent price is now just under US$72/bbl. A week ago these prices were US$77.50 and US$80.50 respectively. Hormuz transits have picked up with 45 crude or product tankers exiting over the past 24 hours (5 dark with transponders off) and 18 entering for new loads (0 dark). Two thirds of the exiting vessels were headed to China, 10% were Russian-linked, 5% headed for Singapore 4% to South Korea. There are still hundreds yet to try their luck, no doubt inhibited by insurance issues.

The Kiwi dollar is down -10 bps from this time yesterday at just on 56.4 USc, down -100 bps from a week ago. Against the Aussie we are up +10 bps at 81.8 AUc. Against the euro we are down -20 bps at just on 49.5 euro cents. That all means our TWI-5 starts today at just over 60.3 which is down -10 bps from yesterday, down -110 bps for the week, and its lowest since the GFC in 2009.

The bitcoin price starts today at US$59,771 and up +0.7% from this time yesterday., but down -5.1% from this time last week Volatility over the past 24 hours has again been modest at just over +/- 1.9%.

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