Here's our summary of key economic events overnight that affect New Zealand, with news Iran has decided to shift its policy from defensive to "fully offensive" due to the deadlock in efforts to agree a permanent end to its war with the United States, a senior Iranian official told Reuters overnight. Meanwhile, Trump has threatened to bomb Oman, a Gulf emirate and until recently an ally.
All this is unnerving bond markets with the yield on the US Treasury 30 year bond now at a 22 year high. And they aren't the only long bond yields to rise. Its a trend of higher money costs that is probably only getting started.
However domestically in the US, there have been two third-tier data items out today, and both somewhat positive. The NAHB home builder sentiment survey increased very slightly in August from its unusual July low. But it still remains lower than foir most of 2026 as the core affordability pressures haven't really gone away.
Meanwhile, the NY Fed's regional Empire factory survey was more positive in its August report with reporting strong current activity and new order flows stayed positive. Employment hardly changed however, and input cost increases rose fast again even if prices received eased.
Meanwhile, Canadian inflation was reported back at 3.0% for July, a bit higher than the 2.9% expected and possibly bringing a rate hike there back into play. Rising fuel prices are a key driver here.
Across the Pacific in Singapore, they reported very strong July export growth, up +24% from a year ago to a new all-time monthly July record of S$76 bln but not quite eclipsing their June levels. This is all based on the export of electronic equipment. Their big export destinations are the US, South Korea, Thailand, Taiwan and India. This exporting strength enabled them to post a very large trade surplus in July. (Imports from China were up, but nowhere near enough to account for the export gains overall. So this isn't a re-export story of the paranoid type.)
Japan reported a softer economic activity expansion in Q2-2026 than expected. Analysts had expected their GDP to grow by +2% and up from +1.9% in Q1. But the data released yesterday only shows a +1.1% expansion. But yesterday's data is preliminary and may well be revised higher.
Japanese industrial production rose +1.9% in June from May and exceeding the earlier flash indication (which was very good on its own), and far exceeding the May +0.1% rise. This was the third consecutive monthly expansion and the strongest growth since January. And it took the year on year expansion up by an impressive +4.9%.
China's industrial production was claimed to be up +4.5% in July from a year ago and basically meeting targets. Within that, they claim hi-tech +16.9% on the same basis. But just like most month before they claim they are doing this with electricity production up only +1.9% in July from the same month in 2025. It seems very implausible, the only country with fast growing industrial output with essentially no growth in electricity used - and over the very long haul.
More realistically, China said its retail sales were up only +0.6% in July from a year ago.
According to these official sources, China house prices are falling less now. New housing was down -3.2% from a year ago, essentially unchanged from June. In fact many more cities had no change or a small increase especially top-tier cities. Second tier cities aren't getting the same boost however. Existing home sales prices are easing less too.
The UST 10yr yield is now just on 4.73%, up +3 bps from this time yesterday. The 30 year yield is at 5.31% and up +4 bps, and that is its highest in more than 20 years. 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.
Wall Street has started its week slightly on the back foot with the S&P500 down -0.4% and the Nasdaq down -0.2%. Overnight, European markets were all also lower between London's -0.3% and Paris's -0.7% falls. But Tokyo ended its Monday session up +0.7%. Hong Kong was up +1.3%. Shanghai was up +1.4%. Singapore ended up +0.4%. The ASX200 ended its Monday session down -0.5% however. And the NZX50 ended down -1.0%.
The price of gold is rising, now at US$4413/oz, up +US$37 from yesterday at this time. Silver has risen +US$1.50 to just over US$66.
Oil prices are up +US$1.50 from yesterday at just over US$84/bbl in the US, while the international Brent price is now just on US$90.50/bbl and up +US$2. Hormuz transits have stayed very low. There has been only one crude tanker and 3 cargo ship exiting over the past 24 hours (3 dark with transponders off) and eight entering for new loads (4 dark), again all Iran-linked. The Red Sea activity is still only about 20 exits at the Yemen chokepoint, a slight uptick. But pipeline shipments via alternate routes are at record levels.
The Kiwi dollar is up +10 bps from yesterday at just on 59 USc. Against the Aussie we have dropped -10 bps to 83.1 AUc. Against the euro we are up +10 bps at 51 euro cents. That all means our TWI-5 starts today at just on 62.6, up +10 bps from this time yesterday.
The bitcoin price starts today at US$64,245 and up +1.8% from yesterday. Volatility over the past 24 hours has also been modest at just on +/-1.3%.
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4 Comments
It IS a re-export story.
Of the factual type.
Nothing is made of or by, nothing.
Assembly required
Could easily be. How much stuff is actually manufactured in Singapore, or even assembled (taking Slow Learner's point)? Warehouse data would possibly add substance, to see if stocks grew over previous months.
Nothing? As an embedded cynic that has to be contested. Religion has made plenty out of nothing, think the Roman’s Catholic Church for instance. Admittedly though, the plenty has had to have been made by others out of something. That is why atheists are so admirable as they demonstrate that they can go forward in life without any invisible means of support.
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