Bessent moves markets; US data lackluster; Canada trade rises; China sets tight fuel goal; copper price at record; Aussie bird flu spreads; UST 10yr at 4.63%; gold rises; oil falls hard again; NZ$1 = 58.9 USc; TWI-5 = 62.6

Here's our summary of key economic events overnight that affect New Zealand, with news the oil price has taken another large retreat today even though the Red Sea and Strait of Hormuz remain essentially closed. Alternative ways to shift crude oil out of the region are gathering pace and effectiveness. But this big price drop is directly related to Scott Bessent saying a deal with Iran to reopen the Streat is imminent, comments that have moved markets.

But first up today, there was another full dairy auction earlier this morning and prices in USD were virtually unchanged overall (+0.1%), but they did dip in NZD by -0.9% on the higher currency. Of note is the new season volumes offered, very similar to the same event a year ago. But prices are now a full -10% lower this year than then.

In the US, job openings fell in June, coming in slightly less than expected. The number of job openings fell in almost all industries except in the logistics sector and in federal government. Regionally, openings fell in the Northeast (-62,000), the South (-50,000), and the Midwest (-97,000), but rose in the West (+32,000).

Also falling were US factory orders. They dipped -0.3% from the previous month in June, extending the revised -1.1% decline in May. This was disappointing because analysts had expected a +0.2% increase. It was the first month of back-to-back declines in nearly one year. Still, they are up more than +10% from June a year ago, reflecting the earlier stockpiling urgency.

Meanwhile US exports of both goods and services fell -0.9% in June while their imports of both fell -1.8% on the same basis. That narrowed their trade deficit although not be as much as expected.

The US Logistics Managers Index is still very high, but is now slowing as the stockpiling urgency seems 'full' now. July demand for warehouse capacity and transportation both actually retreated in the month.

The RealClearMarkets/TIPP Economic Optimism Index edged down in August from July, missing market expectations of an improvement and remaining below the neutral level. The Six-Month Economic Outlook index fell on weaker expectations for the US economy.

In Canada's June exports rose as did their imports, both much more than expected and delivering a larger trade surplus than expected, to a four year high. Canada's transition away from dependence on its now-unreliable southern neighbour has been impressive, you have to say.

In China, they have set a new target to reach 50% of electricity produced from non-fossil fuels by 2030, up from 42% now. It is a heady and fast goal.

In Australia, household spending rose +0.8% in June from may to be +6.0% higher than year-ago levels. This is a very consistent rising trend from September 2024 when it was at under +1% from the prior year. This high gain was largely due to increased spending on cars, especially EVs, and for travel.

And we must note that the H5 bird flu is killing more birds in Australia now. It is getting closer, even in Eastern states.

As we noted yesterday, the copper price has risen again and is now over US$14,000/tonne and back at record highs.

The UST 10yr yield is now just on 4.63%, down another -6 bps from this time yesterday. The 30 year yield is at 5.19% and down another -4 bps. The key 2-10 yield curve is now at +43 bps (unchanged). Their 1-5 curve is now at +33 bps (-2 bps) and the 3 mth-10yr curve is at +95 bps (-5 bps). The China 10 year bond rate is little-changed at 1.70%. The Japanese 10 year bond yield is now at 2.85%, up +3 bps. The Australian 10 year bond yield starts today at 4.93%, down -5 bps from yesterday. The NZ Government 10 year bond rate is at 4.76%, down -1 bp from yesterday.

Wall Street is in a good mood today on recovering tech views and the Hormuz retreat, up +2.0% in Tuesday trade with the Nasdaq up +2.9%, both extending yesterdays good gains. SpaceX earnings are due to be released after today's market close. Overnight, European markets were mixed between London's +0.2% dip and Frankfurt's +0.8% rise. Yesterday Tokyo rose +0.3%. Hong Kong was down -0.6% but Shanghai rose +0.3%. The KOSPI recovered +1.6%. Singapore ended unchanged. The ASX200 ended its Tuesday trade up +1.4%. And the NZX50 ended up +0.9%.

The price of gold has risen to US$4088/oz, up +US$55 from yesterday. Silver is up +US$2 at just over US$59.50/oz.

Oil prices are down another -US$4 from yesterday and now just under US$76/bbl in the US, while the international Brent price is now just under US$79.50/bbl. Hormuz transits are still very constrained. There have been only three crude tanker and 9 cargo ship exiting over the past 24 hours (7 dark with transponders off) and ten entering for new loads (4 dark), again all Iran-linked. The Red Sea activity is still low with much less than 20 either way.

The Kiwi dollar is back up +30 bps from yesterday at just over 58.9 USc. Against the Aussie we are down -10 bps at 83.7 AUc. Against the euro we have firmed +10 bps to 51.1 euro cents. That all means our TWI-5 starts today at 62.6 which is back up +20 bps from this time yesterday.

The bitcoin price starts today at US$63,915 and up +0.1% from this time yesterday. Volatility over the past 24 hours has been low at just on +/-0.7%.

Join us later this morning for the June update of the New Zealand labour market.

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