China reveals some worrying slowdown data and inability to transition; US reveals spreading economic weaknesses; others expand at pace; UST 10yr at 4.70%; gold stable; oil prices firmer; NZ$1 = 58.9 USc; TWI-5 = 62.5

Here's our summary of key economic events over the weekend that affect New Zealand, with news the US economy is starting to show signs of exhaustion - just as the Chinese economy looks like it can't actually transition to one where internal demand replaces their industrial exports engine, as they were planning.

But locally this week it will be all about how July retail sales turned out, and an update on our June population. And there will be a rush of earnings reports out this week from listed companies.

In Australia we will get their July labour market update, and both the August Westpac consumer confidence survey results, along with an update of inflation expectations.

Globally, the ongoing standstill between Iran and the US should continue to dictate energy prices and influence global interest rates. Rates will also take the spotlight with minutes from the last divisive meeting of the Federal Reserve, which included three dissents. More US data is expected to confirm their slowing economy.

In Japan there will be a raft of data updates for the world's fourth largest economy, including for GDP, exports, inflation, machinery orders and flash PMI data.

Indonesia and Sweden will review policy rates and settings this week.

In China, July data released this week will include industrial production, retail sales, house prices, fixed asset investment and their unemployment rate. The People’s Bank of China is also widely expected to leave its one- and five-year loan prime rates unchanged at 3% and 3.5%, respectively

This will come even though they have surprised with their bank lending actually contracting in July, only the third time ever this has happened and by far the largest retreat. Net new yuan loans fell by -¥340 bln in July when a weak no-change was expected (actually a minor +¥45 bln). July is often a lowish month for new bank lending but this latest data represents some real weaknesses. A slowing economy and poor consumer sentiment, particularly for housing, limited the demand for loans. About -¥460 bln of this fall was for consumer debt. But the swing also reflects the downturn for the traditional business sectors of the economy. Their tech sector commonly raises cash in the bond market instead of bank loans. So within this result there may be evidence of a structural shift.

Taiwan said its economic activity came in +12.9% higher in Q2-2026 from a year ago, lower than the +15.4% rise in Q1-2026.GDP. It was still the second-best growth pace they have recorded in almost 50 years.

Malaysia said its economic activity expanded +6.0% in Q2-2026, a rise from the +5.4% in Q1-2026 and better than the expected +5.7%.

In India, the bank lending impulse has the taps open fully, with lending up more than +19% at the end of July from the same point a year ago. This is a new modern record rise rate, and to record levels.

Across the Pacific, US retail sales took an unexpected dip in July from June. They fell -0.6% on that basis when a +0.1% rise to compliment June's rise was expected. This is a big miss and was the first decline since October 2025 and the largest in over a year. Weaker sales at online retailers, car dealers, petrol stations and electronics stores shifted the needle, so it was a broad based dip. From a year ago, these July sales were still up +5.2% from earlier gains.

Also dipping was US consumer sentiment, but this is for August, so the dour mood is extending. The widely-watched University of Michigan survey came in back at levels that followed the US attacks on Iran, so the July rise was an anomaly. A small easing was expected, but not one this big. Year-ahead inflation expectations ticked up from 4.2% in July to 4.3% this month.

Inflation and inflation expectations are key for the Fed. The new boss Kevin Warsh may not want to talk about the elevated threats, but other regional governors are, some who vote. The Atlanta Fed's boss isn't one of those but she says inflation is too high and risks staying like that and embedding unless the Middle East situation resolves quickly. The Chicago Fed's boss is worried too. Current CPI is 3.4% officially, but the Cleveland Fed nowcasts the PCE measure of inflation and their latest update has it at over 3.7%. These levels are a long way from the mandated 2% policy rate and Warsh is likely to get out-voted when they next meet in Mid-September. Financial markets currently price in one chance in three of a +25 bps rise then.

And for the record, current US petrol prices are now +5.7% higher than month-ago levels. Diesel is +11% higher on that same basis. Their inflation threat is not receding.

Meanwhile the EU reported that Q2-2026, economic activity rose +0.4% in the euro area and by +0.5% in the overall EU compared with the previous quarter, up +1.0% and +1.2% respectively from a year ago. So recent activity is picking up, although in a way that was broadly anticipated.

The UST 10yr yield is now just on 4.70%, up +1 bp from this time Saturday, up +5 bps for the week. The 30 year yield is at 5.27% and up +6 bps for the week. The key 2-10 yield curve is now at +53 bps (unchanged). Their 1-5 curve is now at +39 bps (unchanged) and the 3 mth-10yr curve is at +100 bps (-1 bp). The China 10 year bond rate is up +1 bp to 1.69%. The Japanese 10 year bond yield is now at 2.88%, unchanged, up +9 bps for the week and its highest since 1996. The Australian 10 year bond yield starts today at 4.98%, down -1 bp from Saturday, up +1 bps for the week. The NZ Government 10 year bond rate is at 4.71%, unchanged from Saturday at this time, and down -3 bps for the week.

The price of gold is stable, now at US$4376/oz, up just +US$2 from Saturday, up +US$39 from this time last week. Silver has held at just over US$64.50/oz, up a net +US$1 for the week.

Oil prices are unchanged from Saturday at just under US$82.50/bbl in the US, while the international Brent price is now just on US$88.50/bbl. A week ago these prices were US$78 and US$83.50/bbl respectively, so a +6% weekly rise. Hormuz transits have stayed very low. There has been only one crude tanker and 4 cargo ship exiting over the past 24 hours (2 dark with transponders off) and four entering for new loads (1 dark), again all Iran-linked. The Red Sea activity is now less than 20 exits at the Yemen chokepoint, a slight uptick. But pipeline shipments via alternate routes are at record levels.

And Trump's emergency pumping of the US Strategic Petroleum Reserve is now down to levels many think is dangerous because the salt caverns that hold this backup reserve risk irreversible damage making the current under 300 mln barrels inaccessible and unable to be replenished.

The Kiwi dollar is little-changed from Saturday at just under 58.9 USc and unchanged for the week. Against the Aussie we are holding at 83.2 AUc. Against the euro we are still at 50.9 euro cents. That all means our TWI-5 starts today at just over 62.5, unchanged from this time Saturday and very similar to a week ago.

The bitcoin price starts today at US$63,102 and up +0.4% from this time Saturday, down -2.6% for the week. Volatility over the past 24 hours has also been very low at just on +/-0.3%.

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