Here's our summary of key economic events overnight that affect New Zealand, with news nothing is resolved in the Persian Gulf. There are virtually no transits and the US can't make anything happen. Regional powers are building new alliances. Trump has been marginalised.
In the US economy, and even with Trump loyalists controlling the data agency, US non-farm payrolls were reported contracting in July, down -23,000 at the headline level when a very modest +80,000 was expected. That is their worst July result in at least a decade. And it get much worse if you look at actual data because payrolls shrank almost -1.1 mln in July from June before seasonal adjustment. This is the real number of people who lost employment in the month.
Their participation rate inched down while their jobless rate was little-changed at 4.1%.
US inflation expectations for one year ahead edged down to 3.6% in July from 3.7% in June which was the highest since September 2023. The July level is the new baseline since the US attacked Iran. Prior to that, this survey recorded about 3% for the prior two years. Earnings in the same survey are seen to rise +2.8%, so that continues to record an underwater expectation for household finances.
US consumer debt levels rose +3.3% in June with revolving credit rising +6.0% on the same basis as both credit card debt and car loans rising sharply. Student loans recorded an unusual fall.
A weakening labour market and both stubbornly high inflation and inflation expectations will complicate the discussions in Warsh's Fed meetings. Do they cut, hold or raise. There are probably votes for all three options. Markets currently price in half a chance of a +25 bps hike in September. And Trump is back trying to screw the scrum.
There was quite the contrast in Canada with them reporting their employment rose +75,100 in July from June. It will have been a very long time since they had a gain that exceeded their southern neighbour. Their jobless rate fell to 6.4% and a two year low while their participation rate inched up.
Across the Pacific, China’s exports surged almost +24% to US$398 bln in July in a better than expected result. The gains were driven by strong demand for AI-related technology products and a rush by manufacturers to ship goods to the US ahead of potential new tariffs. Outbound shipments to the US rose +17%, the EU by +16%, and and to ASEAN nations by +38%.
And while China reported relatively stable foreign exchange reserves as at the end of July, they also reported that their official gold holdings rose +640,000 oz, almost +20 tonnes in one month. That is the most in a 21 month streak of gold buying.
Meanwhile Typhoon Dolphin is heading for the China coast, due to strike north of Taiwan. but south of Shanghai.
Taiwanese exports stayed very high at US$75.3 bln, just off record levels, but as time rolls on with these high or record high levels, the year-on-year gains are fading. Still, they managed to report a +33% rise from a year ago, an unusually strong gain. And their trade surplus remained unusually large at +US$17.2 bln, up from +US$14.3 bln in July 2025.
The FAO's World Food Price Index stayed elevated in July, but reporting small dips for both meat and dairy. A noted exception was for sheep meats. They say these prices increased further in July, reaching a new record high, "supported by persistently tight exportable supplies in Oceania and sustained global import demand".
While we are talking about a UN agency, we should also note that the influence games are in full swing for the appointment of a new US general secretary. There are seven declared candidates, two from Africa, five from Central or South America. They will be replacing António Guterres, the Portuguese diplomat whose term ends on December 31, 2026.
The UST 10yr yield is now just on 4.64%, down -3 bps from this time yesterday but down -10 bps for the week. The 30 year yield is at 5.21% and down -1 bp from yesterday. The key 2-10 yield curve is now at +45 bps (up +3 bps). Their 1-5 curve is now at +35 bps (+2 bps) and the 3 mth-10yr curve is at +96 bps (-2 bps). The China 10 year bond rate is little-changed at 1.70%. The Japanese 10 year bond yield is now at 2.79%, up +2 bps, unchanged for the week. The Australian 10 year bond yield starts today at 4.97%, unchanged from yesterday and for the week. The NZ Government 10 year bond rate is at 4.74%, up +3 bps from yesterday, up +4 bps for the week.
Wall Street is up +0.6% on the S&P500 in Friday trade and a +3.3% weekly gain, with the Nasdaq up +1.3% today for a +4.9% weekly gain. (SpaceX has recovered to US$129.) Overnight, European markets were firm between Paris's +0.2% and Frankfurt's +0.7% rise. Yesterday Tokyo fell -0.1% to end its week up +2.8%. Hong Kong was up +0.5% for a weekly -1.2% loss. Shanghai rose +1.0% on Friday to cap a +3.3% weekly rise. The KOSPI fell a net -1.6% for its week. Singapore ended up +1.1% for a weekly +1.2% gain. The ASX200 ended its Friday trade down -0.1% for a +3.5% weekly result. But the NZX50 fell -1.0% on Friday and limiting its weekly gain to +0.9%..
The Fear & Greed index is now in the 'greed' zone and for the first time since early June.
The price of gold has risen to US$4337/oz, up +US$92 from yesterday, up +US$287 or +7% from a week ago. Silver has risen +US$2 at just over US$63.50/oz. That is up +US$5.50/oz for the week or a +9.5% gain.
Oil prices are up +50 USs from yesterday and now just over US$78/bbl in the US, while the international Brent price is now just on US$83.50/bbl and up +US$1, A week ago these prices were US$84.50 and US$88/bbl respectively. Hormuz transits are still very constrained. There has been only one crude tanker and 4 cargo ship exiting over the past 24 hours (1 dark with transponders off) and four entering for new loads (none dark), again all Iran-linked. The Red Sea activity is still low with just 10 either way at the Yemen chokepoint.
The Kiwi dollar is up +20 bps from yesterday at just under 58.9 USc, making it unchanged for the week. Against the Aussie we are little-changed at 83.4 AUc. Against the euro we have firmed +10 bps to 51 euro cents. That all means our TWI-5 starts today at 62.5 which is up +10 bps from this time yesterday but down -10 bps for the week.
The bitcoin price starts today at US$64,789 and up +0.4% from this time yesterday, up +2.8% from last week. Volatility over the past 24 hours has stayed low at just on +/-0.9%.
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