US domestic data positive but trade data weak; Canada trade data weaker; Yen rises; EU PPI high; Australia trade data soft; Dutch move their gold out of the US; UST 10yr at 4.77%; gold up while oil holds; NZ$1 = 58.9 USc; TWI-5 = 62.2

Here's our summary of key economic events overnight that affect New Zealand, with news financial markets are in a holding pattern today.

First we should note that this coming weekend will be a major long weekend holiday in the US, for Monday's Labor Day. The means US markets will likely be quieter than normal until Tuesday their time, Wednesday ours. But they will still release their August non-farm payrolls report tomorrow and that is expected to show a +56,000 jobs gain and continuing the low expansion that has been usual in 2026.

Today, the US initial jobless claims data for last week was released coming in at just over +170,000 and slightly more than seasonal factors would have indicated. There are now 1.74 mln people claiming these benefits, lower than a year ago and two years ago on much tighter eligibility requirements.

The widely watched ISM services PMI came in marginally better than expected and better than for July with gains in activity and new business, but falling employment metrics. Twelve industry sectors indicated growth in August, one fewer than the previous month, while five reported contraction, up one compared to July. Price pressures remain very elevated at its highest level since August 2022. The S&P Global services PMI was also out overnight showing a similar expansion even if the details were different; jobs growth hits highest since January 2025, and input costs and selling prices increases were at a slower rate. Take your pick.

There was an interesting speech from Fed heavyweight Christopher Waller, someone once floated as a possible Trump pick to replace Powell. Perhaps predictably he lined up with Kevin Warsh on pulling back on forward guidance communication, although he has staked out a full need to communicate of most other aspects of Fed thinking. This speech shows he isn't in the camp worried about current inflation risks because he thinks the peak pressure has passed. That tone took some sting out of the US Treasury bond yields today.

The US also released its broader trade result for July, covering both goods and services. This confirmed the trade deficit spike we saw in the earlier merchandise-only data. In this case their services surplus was weak, so had a minimal impact on the large and growing goods deficit. Both exports and imports of services fell, notably for travel and financial services. Overall this deficit is now its largest in sixteen months when the pre-tariff stockpiling was at its peak.

Canada also reported trade data for July, and while they still have a surplus, it was much narrower than expected. Exports fell while imports rose. It was their first export decline in six months.

The Japanese yen has climbed to the ¥155:USD level, its highest since early August as traders priced in the chance of faster Bank of Japan interest rate hikes. The Bank of Japan next meets in two weeks from today.

In China, their private services PMI by S&P Global (RatingDog) came in positive and certainly better than the contracting official version. The rise was soft but better than market forecasts. The increase was from better domestic demand, while foreign sales rose for the fourth straight month, but at a more modest pace than in July.

The EU said producer prices there rose more sharply in July than June, but only by what they had in May - although that was a fast pace, and well above what they were expecting. For the whole EU, they were up +5.6% from a year ago and largely driven by the +12.5% rise in fuel costs. They were expecting only a +4.6% rise in overall PPI increases. Of special worry however will be that these costs rose at a very fast +1.4% in July from June.

In Australia, they advised that their exports fell in July from June by -3.3% and their imports fell by -2.5%, giving them a reduced merchandise trade surplus of +AU$1.9 bln. A year ago that surplus was +AU$6.2 bln.

The Reserve Bank of Australia is reiterating that it doesn't see a business case for a retail central bank digital currency (CBDC). "Australia’s retail payment system is serving households and businesses well," the RBA says, and "there is no clear public interest case for a retail CBDC." This follows more work by the RBA and Australia's Treasury. This conclusion is in line with what the two said in 2024, as the Reserve Bank of New Zealand embarked on work towards the potential introduction of a retail CBDC in NZ.

Global container freight rates were unchanged from last week, and are now +110% higher than year ago levels. Global bulk cargo rates are +8.5% higher than week ago levels, in fact now their highest since May 2022. That puts them up +68% from a year ago.

The UST 10yr yield is now just on 4.77%, down -3 bps from yesterday at this time. The 30 year yield is at 5.28%, up +2 bps. The key 2-10 yield curve is still at +41 bps (unchanged). Their 1-5 curve is now at +38 bps (-1 bp) and the 3 mth-10yr curve is at +106 bps (+2 bps). The China 10 year bond rate is up +11 bp at 1.69%. The Japanese 10 year bond yield is now at 3.00%, down -1 bp but still a 30 year high. The Australian 10 year bond yield starts today at 5.22%, up another +6 bps. The NZ Government 10 year bond rate is now at 4.81%, down -1 bp from yesterday.

Wall Street is firmer again today with the S&P500 up +1.1% and the Nasdaq up +1.5%. Overnight, European markets were firmer too  between Paris's +0.1% and London's +0.7%. Tokyo ended its Thursday trade down a minor -0.2%. Hong Kong dipped -0.4%. But Shanghai was unchanged. Singapore was rose its own minor +0.1%.The ASX ended its Thursday up +0.5%. But the NZX50 was down  -0.6%.

The price of gold is now at US$4486/oz, and up +US$114 from yesterday at this time. Silver has risen +US$2 to just on US$67/oz. Meanwhile the Dutch central bank has confirmed it has moved it gold holdings out of the US "to improve tradability", but likely also to prevent the Trump Administration from using them as a bargaining chip.

Oil prices are -50 USc lower at just on US$91/bbl in the US, while the international Brent price is just over US$95/bbl and down -US$1. Hormuz transits have held very low with just five ships exiting over the past 24 hours, four of which are tankers (4 dark with transponders off) and only four entering for new loads (2 dark). The Red Sea activity is marginally higher than yesterday but still with less than 20 each way at the Yemen chokepoint.

The Kiwi dollar is up +40 bps from yesterday at just on 58.9 USc. Against the Aussie we are up +20 bps at 81.7 AUc. Against the euro we are up +10 bps at 50.6 euro cents. That all means our TWI-5 starts today at just on 62.2, up +30 bps from yesterday.

The bitcoin price starts today at US$81,011 and up +4.7% from yesterday at this time. Volatility over the past 24 hours has been moderate at just on +/-2.8%.

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