Here's our summary of key economic events overnight that affect New Zealand, with news Iran and Oman say they have a deal on the Hormuz Strait, and the US says it is still hoping for a deal to open it up. But the US no longer has any cards, it seems.
Away from all that in the US, mortgage applications fell again last week with both new loan and refinance activity falling, probably due to the continued rise in home loan interest rates and pushing them up to year-ago levels of 6.81%.
Their ADP jobs report only signaled +44,000 July jobs added to private payrolls, much less than the expected low +70,000 and the low June level of +95,000. This report is the precursor to Saturday's July non-farm payrolls release where analysts expect July payrolls to have expanded +202,000. Those analysts may be in for some disappointment.
The ISM services PMI for July came in little-changed at a modest-to-moderate reading, boosted by good new order levels but held back by faster rising costs. Also, jobs in the sector contracted. Meanwhile the S&P Global version of the US services PMI recovered to a similar level, reporting activity rises at their strongest rate since October 2025, job creation at highest for eight months amid an improved outlook, but much steeper rises in both input costs and selling prices.
US crude oil stocks recovered somewhat last week with a rare rise. But this may have been because they are still drawing down their strategic reserves at a rate that is worrying many and now at almost an all-time low since 1983.
In China, their private S&P Global (RatingDog) services PMI fell back sharply. It is still expanding, but now only just. Total activity and new business both expand more slowly. Employment rose for third month running, the longest sequence since the second half of 2024. And they recorded the weakest rise in average input prices since January. Yes, this survey is better than the contracting official version, but the fall-away was faster in this report.
Singapore's retail sales rose sharply in June to be +4.0% higher than year-ago levels. Meanwhile their PMI rose faster and near its best-ever, but largely because firms there built stocks to retain resilience.
Japan's services PMI expanded at a slower pace in July as cost pressures remain intense there.
And Indonesia said its economic activity was +5.3% higher in June than a year ago with the expected rebound from the Q1 dip coming as expected - but slightly better than anticipated.
The copper price has surged again, now at a new all-time high of US$14,825/tonne (NZ$25,000/tonne, and at $25/kg no doubt a new target for thieves.).
The UST 10yr yield is now just on 4.62%, down -1 bp from this time yesterday. The 30 year yield is at 5.17% and down another -2 bps. The key 2-10 yield curve is now at +43 bps (unchanged). Their 1-5 curve is now at +30 bps (-3 bps) and the 3 mth-10yr curve is at +94 bps (-1 bp). The China 10 year bond rate is little-changed at 1.70%. The Japanese 10 year bond yield is now at 2.81%, down -4 bps. The Australian 10 year bond yield starts today at 4.93%, unchanged from yesterday. The NZ Government 10 year bond rate is at 4.69%, down -7 bps from yesterday.
Wall Street is unchanged in Wednesday trade with the Nasdaq down -0.5%. (SpaceX has fallen to US$110. The final lock-up period ends after the market close today and share on the market will treble from 659 mln to 1.55 bln.) Overnight, European markets were mixed between Paris's no-changed and Frankfurt's -0.3% dip. Yesterday Tokyo rose +3.7%. Hong Kong was up a minor +0.2% but Shanghai rose +1.5%. The KOSPI recovered another +3.8%. Singapore ended down -0.6%. The ASX200 ended its Wednesday trade up +0.9%. And the NZX50 rose +0.7%.
The price of gold has risen to US$4253/oz, up +US$165 from yesterday. Silver is up +US$2.50 at just over US$62/oz.
Oil prices are down another -US$1.50 from yesterday and now just on US$74.50/bbl in the US, while the international Brent price is now just under US$79/bbl and down -50 USc. Hormuz transits are still very constrained. There has been only one crude tanker and 6 cargo ship exiting over the past 24 hours (1 dark with transponders off) and eleven entering for new loads (6 dark), again all Iran-linked. The Red Sea activity is still low with much less than 20 either way.
The Kiwi dollar is little-changed from yesterday at just over 58.9 USc. Against the Aussie we are down -30 bps at 83.4 AUc. Against the euro we have dipped -10 bps to 51 euro cents. That all means our TWI-5 starts today at 62.5 which is down -10 bps from this time yesterday.
The bitcoin price starts today at US$64,698 and up +1.2% from this time yesterday. Volatility over the past 24 hours has stayed low at just on +/-0.7%.
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3 Comments
“The US no longer has any cards.” What, not even aces and eights?
The more interesting bit will be Trump's reaction when the announcement reaches him. The US will still be at war with Iran while ME nations move further to distance themselves from the US. My question is does the deal have any reference to a US presence in Oman or other ME countries? I'd be surprised if it doesn't. Thinking about it I don't think the US has a significant presence in Oman, but the RAF are still be there. The UK haven't contributed to Trump's war so they don't appear to be a target.
They've still got the joker. Let's hope they get a better hand in 898 days time.
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