Here's our summary of key economic events overnight that affect New Zealand, with news that even though the US Fed held its policy rate unchanged on Thursday (despite 3 dissenters wanting higher rates), markets have pushed US benchmark rates higher anyway. The UST 10 year is +27 bps higher at the end of July than at the beginning. Their 30 year benchmark is also +27 bps higher. Most of these increases came in the past two weeks, and will resonate soon for American home loan borrowers.
The updated July University of Michigan sentiment survey confirmed its better July levels, and confirmed lower inflation expectations. Still, these new levels are -11% lower than year-ago levels with perceptions of current conditions -19% lower. These measures are still in the down-trend that started in 2024 even after these better July results. They noted that US consumers remain focused on pocketbook issues like purchasing power, while political or military developments remain more in the background.
Also improving in July were the results of the Chicago PMI, clearly benefiting from stockpiling and reshoring still.
In the current Q2-2026 earnings season reporting, 86% of S&P 500 companies have reported a positive EPS surprise and 77% of S&P 500 companies has reported a positive revenue surprise.
In Canada, they reported their GDP rose modestly in June, a third consecutive rise and the fifth gain in six months as their economy gathers steam. Q2-2026 results aren't yet available but it is clear they will be quite positive, in contrast to the small dip in Q1-2026, and the weak Q2-2025 result.
After four months of minor expansion, the official factory PMI in China has slipped back into small contraction with a much sharper shift than was expected. After two months of minor expansion, their official services PMI also slipped back into a small contraction, also a sharper shift lower than expected. China's overall growth targets are looking less likely to be achieved the longer the year goes on. But lets not overstate these pullback signals; most countries would love to have their growth levels even at the reduced impetus. China's key issue is that new order levels are fading and exports are the key driver, not internal consumption (which is their goal). So more induced infrastructure stimulus is on the way. Also worth noting is that the private S&P Global PMIs are usually more upbeat than these official ones.
Korean industrial production bounced back sharply in June after the minor but unexpected dip in May. The June level was +5.8% higher than a year ago, up +2.3% from May, a heartening rebound for them.
The Korean stock market bounced back sharply on Friday after the earlier dives, but they still ended the week down more than -3%.
Japanese industrial production recorded a similar recovery in June, up +4.2% from a year ago, up +1.3% for the month. But that was not matched by retail sales in Japan which took a rather large tumble, down -4.1% from the strong year-ago level, up +0.5% from May.
The Japanese central bank intervention support for their currency may have been significantly expensive, even if it has succeeded in halting the devaluation with a 3% recovery. Reports indicate they spent US$45 to US$50 bln on the few-days effort. More may be coming.
EU inflation came in at 2.9% in July as expected, up marginally from June's 2.8%.
Australian producer prices rose +3.6% in June from a year ago, the most since early 2025 and above the anticipated +2.5% and even the 'high' Q1-2026 3.0% level. Inflation is embedding and it is a result that will focus attention by officials.
The UST 10yr yield is now just on 4.74%, up +7 bps from this time yesterday, up +6 bps for the week. We make that its highest since January 2025 (briefly) and prior to that October 2023. The 30 year yield is at a 20+ year high. The key 2-10 yield curve is now at +45 bps (+1 bp). Their 1-5 curve is now at +40 bps (+4 bps) and the 3 mth-10yr curve is at +105 bps (+5 bps). There has been an extended steepening of the US rate curve today, continuing the harsh market verdict on the Warsh performance midweek. Unintentionally, he has delivered a market rate hike. The China 10 year bond rate is down -1 bp at 1.71%. The Japanese 10 year bond yield is now at 2.79%, down -1 bp. The Australian 10 year bond yield starts today at 4.97%, up +2 bps from yesterday, but down -6 bps for the week. The NZ Government 10 year bond rate is at 4.70%, and down -6 bps from yesterday, down -12 bps for the week.
Wall Street is ending the week on a positive note with both the S&P500 up +0.7% and the Nasdaq up +1.0% in their Friday trade. Overnight, European markets were mixed again, down -0.3% in London and up +0.3% in Paris. Yesterday Tokyo ended its Friday trade up a massive +4.0% but that didn't recover earlier losses so it ended down -1.2% for the week. Hong Kong ended up +0.1% for a +3.6% weekly gain, and Shanghai rose +0.7% on Friday to end its week up +0.6%. Singapore fell back -0.6% The ASX200 ended up a minor +0.1% on Friday, for a weekly +1.3% gain. The NZX50 was down -0.5% on Friday for a similar weekly loss.
The Fear & Greed index is still in the 'fear' zone as it has been all month.
The price of gold has fallen to US$4050/oz, down -US$55 from yesterday but almost unchanged for the week (+US$2). Silver is now just under US$58/oz, down -US$1 from yesterday, down -50 USc for the week.
Oil prices have firmed by +50 USc from yesterday at now just under US$84.50/bbl in the US, while the international Brent price retreated by -US$1 to now just over US$88/bbl. Hormuz transits are still very constrained. There have been no crude tankers and only 4 cargo ship exiting over the past 24 hours (none dark with transponders off) and seven entering for new loads (4 dark), all Iran-linked. The Red Sea activity is still low at about 20 either way. That is kept low because only Chinese vessels are getting Houthi exemptions.
The Kiwi dollar is up +10 bps from yesterday at just under 58.9 USc, up +100 bps for the week and back to early June levels. Against the Aussie we are up +10 bps at 83.7 AUc. Against the euro we have risen +10 bps to 51.1 euro cents. That all means our TWI-5 starts today at 62.6 which is also up +10 bps from this time yesterday, also up +100 bps for the week.
The bitcoin price starts today at US$63,038 and down -2.7% from this time yesterday, down -1.8% for the week. Volatility over the past 24 hours has been moderate at just on +/-2.3%.
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