Here's our summary of key economic events overnight that affect New Zealand, with news the giant US economy is slowing. It hasn't had three consecutive lackluster quarters in at least a decade, certainly not since the GFC.
US jobless claims fell last week but by less than seasonal factors would have suggested. There are now 1.85 mln people on these benefits, less than last year at this time but only marginally less than two years ago.
US PCE inflation fell in June to 3.7% from 4.0% in May, as analysts had expected. But that is way higher than the Fed used to say it would tolerate. Personal disposable income rose less than personal spending, and for a fifth consecutive month.
Meanwhile, their Q2-2026 GDP update sagged in its first estimate, now up +1.5% and lower than the Q1-2025 final reading of +2.0%. Analysts had expected Q2 to come in at 2.1% so this data is a disappointment. It does mean a Fed rate hike is probably off the table, so equity markets rose. But so did long term bond yields although there was a notable pullback in short term yields and so their rate curve steepened sharply. The USD also took a tumble and is now down -1.6% in just the past two days.
As expected, China’s top leadership pledged to roll out targeted stimulus measures to support their economy in the second half of the year. The directives, issued at a Politburo meeting yesterday, come as the world’s second-largest economy faces weak domestic demand and deepening structural imbalances. Second-quarter growth has been lower than they need to reach their targets.
In Japan, observers see a Bank of Japan market intervention to support the yen. The yen rose sharply to the 157 range against the US dollar at one point yesterday, its strongest level since mid-May.
Staying in Japan, consumer sentiment picked up in July but that is off a lowish base and it is barely back to its 2023-2024 levels.
Sentiment surveys in the EU were out too for July and they rose again to extend their streak for both consumers and business sentiment.
EU GDP results for Q2-2026 were also released overnight, rising to 1.2% from a year ago. For them, that is quite positive.
In Germany, CPI inflation rose 2.8% in July, up from 2.3% in June which was below what they had in prior months, so more back at trend.
The Bank of England reviewed their monetary policy overnight, but made no changes.
In Australia in a briefing released on the ASX, banking major NAB noted that their "total Australian home lending applications were 15% lower than the prior quarter".
Staying in Australia, they reported that the number of new dwellings consented rose +7.2% in June from May to 18,328 (up +8.9% from a year ago). Houses were up only +0.4% but other dwellings were up almost +18% from May, although that doesn't quite take them back to year-ago levels despite this recent surge.
Yesterday, Ampol (the owner of Z Energy here) reported sharply increased margins. Clearly refiners have been adding much more to retail prices than just the higher cost of crude.
Global air travel fell in June, not by a lot, but essentially driven by sharp retreats in Middle East travel. Also unusual is a fall-off in both domestic and international travel in North America, an unexpected shift. Domestic air travel in China was also unusually weak.
Container freight rates fell again last week, down -3% but they remain +70% higher than year-ago levels. Bulk cargo rates also fell marginally to be -24% lower than year-ago levels.
The UST 10yr yield is now just on 4.67%, up +2 bps from this time yesterday. The 30 year yield is nearly at a 20 year high. The key 2-10 yield curve is now at +44 bps (+13 bps). Their 1-5 curve is now at +36 bps (+8 bps) and the 3 mth-10yr curve is at +100 bps (+6 bps). There has been a sharp steepening of the US rate curve today, a harsh market verdict on the Warsh performance yesterday. The China 10 year bond rate is little-changed at 1.72%. The Japanese 10 year bond yield is now at 2.80%, up +4 bps. The Australian 10 year bond yield starts today at 4.95%, down -1 bp from yesterday. The NZ Government 10 year bond rate is at 4.76%, and back up +8 bps from yesterday.
Wall Street is recovering on both the S&P500 (+1.8%) and the Nasdaq (+2.9%) in their Thursday trade. Overnight, European markets were mixed again, down -0.1% in London and up +0.9% in Paris. Yesterday Tokyo ended its Thursday trade up +0.7%. Hong Kong ended up +00.2% but Shanghai fell -0.6%. Singapore fell back -0.7% The ASX200 ended down -0.8%. The NZX50 was down a chunky -1.5%.
The price of gold has risen to US$4105/oz, up +US$30 from yesterday. Silver is now just under US$59/oz, up +50 USc from yesterday.
Oil prices have dipped by -50 USc from yesterday at now just under US$84/bbl in the US, while the international Brent price is now just over US$89/bbl and down -US$1.50. Hormuz transits are still constrained. There have been 3 crude tankers and only 7 cargo ship exiting over the past 24 hours (1 dark with transponders off) and ten entering for new loads (4 dark). The Red Sea activity is still low at less than 20 either way.
The Kiwi dollar is up +100 bps from yesterday at just under 58.8 USc and suddenly back to early June levels. Against the Aussie we are up +40 bps at 83.3 AUc. Against the euro we have risen +30 bps to 51 euro cents. That all means our TWI-5 starts today at 62.5 which is up +80 bps from this time yesterday.
The bitcoin price starts today at US$64,802 and up +1.4% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/-1.4%.
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