Here's our summary of key economic events overnight that affect New Zealand, with news Iran is claiming control of the Strait of Hormuz as the US backs away, unable to exert the pressure it thought it could. The pause in fighting there has calmed markets significantly even if few ships are actually transiting.
Elsewhere, the US durable goods order report for June was a strong one, up +8.9% from the same month a year ago, but only up +0.3% from May, so most of the gain was in prior months and the June rise was much less than the expected +2.5%. Capital goods were up +4.1% from a year ago, but excluding defense and aircraft, they were up a good +14%.
The Dallas Fed regional factory survey was positive too, even if only marginally. That completes seven consecutive months of only marginal changes, some up, some down. Price and wage pressures remained markedly elevated, they said.
There were two large US Treasury bond auctions overnight, both well supported. But both saw sharpish rises in yields from the prior equivalent events a month ago. The two year median yield rose +13 bps, and the five year yield rose +21 bps on the same basis.
In Canada, their central bank surveys market participants quarterly and these professionals were less upbeat than at the previous survey. They foresaw no policy rate changes in 2026, but rises in the next two years. They also foresee a 25% chance of recession, although more likely growth in the 1-2% range. This is lower than in the prior survey. Trump's trade tensions are the main risk they see.
Singapore has surprised markets with another tightening move, its second consecutive such shift. Singapore regulates its monetary policy via its exchange rate (the S$NEER). It is raising its exchange rate to dampen inflationary pressures. The June CPI inflation rate there rose to 1.9%, its highest since August 2024.
Singapore's industrial production growth came in less than expected in June, up +7.2% from a year ago when a +9% rise was expected, down from the almost +18% in May.
China reported strong industrial profit growth in June, up +15% from the same month a year ago although this was less than the claimed +18% growth rate for the first half of 2026. They say their factory sector profits rose more than 20% on the year-to-date basis, but companies producing electricity saw theirs fall more than -4%. Local listed companies did well, but foreign companies hardly made any gains. Local private companies came in in-between.
Expectations are rising that the current CCP summit in Beijing will deliver new stimulus programs.
The Indonesian central bank chief has been pushed out with two years left on his term. The Indonesian government wasn't happy with the standard approach of the experienced governor, and wanted the central bank to support it's all-out drive for economic growth rather than inflation control. It was a sudden change, but one preceded by the President appointing a family member as a deputy governor earlier in the year (remember Turkey?). Indonesia has been suffering a weak currency due to the political interference.
In Europe, Spain, France and Italy are all battling out-of-control wildfires. Everywhere is battling intense heat.
The UST 10yr yield is now just on 4.65%, down -3 bps from this time yesterday. The key 2-10 yield curve is now at +32 bps (down -3 bps). Their 1-5 curve is now at +28 bps (-1 bp) and the 3 mth-10yr curve is at +89 bps (-2 bps). The China 10 year bond rate is still at 1.72%. The Japanese 10 year bond yield is now at 2.78%, down -3 bps. The Australian 10 year bond yield starts today at 5.02%, down -7 bps from yesterday. The NZ Government 10 year bond rate is at 4.74%, and down -6 bps from yesterday.
Wall Street has opened little-changed on both the S&P500 and the Nasdaq in Monday trade. Overnight, European markets were firmer, up +0.4% except Frankfurt which was up a full +1.0%. Yesterday Tokyo ended its Monday trade up +0.5%. Hong Kong started its week up +1.0% and Shanghai was up +1.2%. Singapore was up +0.6%. The ASX200 ended up +1.4% and the best of the markets we follow. The NZX50 rose +0.6%.
The price of gold has risen to US$4078/oz, up +US$26 from yesterday. Silver is now just on US$58.50/oz, up +50 USc from yesterday.
Oil prices have fallen sharply and by US$8 from yesterday at now just over US$82.50/bbl in the US, while the international Brent price is now just under US$89.50/bbl and down -US$9. Hormuz transits are still basically halted There have been 3 crude tankers and only 2 cargo ship exiting over the past 24 hours (1 dark with transponders off) and two entering for new loads (1 dark). The Red Sea is only marginally more active.
The IEA has been reviewing why oil markets have proven more resilient through the current crisis than some had feared and they point out that oil output in countries not directly affected by the Persian Gulf troubles has risen notably and most countries are permitting export flows. They also point o the major release of strategic reserves to cushion the shocks, with 290 mln barrels released so far with more than 1 bln still in reserve. But they note that markets for refined products are considerably tighter than for crude oil.
The Kiwi dollar is down -20 bps from yesterday at just on 57.7 USc. Against the Aussie we are down -30 bps at 82.6 AUc. Against the euro we are down -10 bps at just under 50.8 euro cents. That all means our TWI-5 starts today at 61.6 which is down -20 bps from this time yesterday.
The bitcoin price starts today at US$64,917 and up +0.4% from this time yesterday. Volatility over the past 24 hours has been low at just on +/-0.9%.
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