China reserves rise; Japan leading index rises; Singapore retail soft; Yen surges; EU growth picks up; German bund yields rise; copper hits record high; UST 10yr at 4.80%; gold and oil rise; NZ$1 = 58.8 USc; TWI-5 = 62

Here's our summary of key economic events overnight that affect New Zealand, with news global interest rates are still moving higher. And that is particularly true for Australian benchmark bonds. Money and commodities are transitioning somewhere, but it is not clear to where just yet.

But first, it is a public holiday in the US (Labor Day) with all their financial markets closed. Given their size, this has meant all other international markets are running at lower levels and in a hesitant mode. But some key shifts are not waiting for the Americans to return.

In China, their August foreign exchange reserves were reported overnight and they rose to US$3.44 tln, the second highest level ever but not quite hitting their record May result. That puts them +3.6% higher than year-ago levels. Of note is that they added another +20 tonnes of gold to their reserves in the month, which makes the calendar year increase now almost +80 tonnes. Gold now makes up 10.2% of their overall reserves, although that is down from 11% at the start of 2026.

And China announced major funding into eight large SOE institutions to enable them to lend more. It is injecting ¥300 bln (NZ$75 bln) in 'recapitalisation' the most it has done like this in 20 years. The funds will come from Ministry of Finance 'special bonds'. It is the latest and unlikely to be the last of economic support measures to 'reinvigorate' their economy.

Japan's July leading index rose to its highest since January 2014 although the June level was revised down. The July level was also slightly below analyst's expectations despite the gain. Rising job offers and consumer sentiment were among the factors behind the rise.

Singapore reported that its July retail sales were softer than expected. They were up by +1.5% from a year ago, the softest rise since May 2025 and slowing from a +4% increase in June.

The EU reported a better rise in economic activity. The EU economy expanded +1.4% in Q2-2026 in its updated result, up from +1.0% in the previous estimate and much better than the +0.9% growth recorded in Q1-2026. The gain was driven by stronger growth in household spending and gross fixed capital formation, with exports also rebounded sharply. Euro area expansion came in slightly less than the overall EU levels.

However German industrial production recorded a sharp and unexpected -1.1% fall in July, to now be -1.6% lower than year ago levels. (The Germans, as usual, report their data on an inflation-adjusted basis unlike many other countries.) The weakness there was from energy-intensive industries, and that includes car manufacturing.

In a reaction to the Saxony state election results, the German stock exchange dipped, and the 10yr German Bund yields rose to their highest since 2010.

But they weren't the only bond yields to rise. The Australian 10 year bond yields rose to 5.22% and their highest since 2011. (Of course this has little to do with a German state election.)

And the Japanese yen surged against the US dollar overnight, up to the 154 range as growing speculation over faster-than-expected Bank of Japan rate increases combined with renewed possibility of another round of currency intervention by the Japanese authorities drove the moves.

We should also probably note that the copper price jumped to US$14,513/tonne on the LME, a record high.

The UST 10yr yield is now just on 4.80%, up +2 bps from yesterday at this time. The 30 year yield is still at 5.25%, unchanged. The key 2-10 yield curve is now at +42 bps (up +1 bp). Their 1-5 curve is now at +42 bps (unchanged) and the 3 mth-10yr curve is at +108 bps (+1 bp). The China 10 year bond rate is holding at 1.68%. The Japanese 10 year bond yield is now at 2.91%, unchanged as well. The Australian 10 year bond yield starts today at 5.22%, up +7 bps from yesterday. The NZ Government 10 year bond rate is now at 4.81%, down -1 bp.

Wall street is closed today for their Labor Day holiday. Overnight European markets were mixed between Frankfurt's -0.2% dip and Paris's +0.3% firming. Yesterday Tokyo closed up +2.1%. Hong Kong was down -0.9% while Shanghai firmed a minor +0.1%. Singapore ended down -0.2%. The ASX200 ended its Monday trade up +0.1%. The NZX50 ended down -0.2%.

The price of gold is now at US$4407/oz, and down -US$26 from yesterday at this time. Silver is little-changed at just on US$66/oz.

Oil prices are up +US$1 at just over US$92.50/bbl in the US, while the international Brent price is just under US$97.50/bbl. Hormuz transits have basically stopped with just five ships exiting over the past 24 hours, and no tankers (0 dark with transponders off) and seven entering for new loads (0 dark). The Red Sea activity is marginally higher than yesterday with about 20 each way at the Yemen chokepoint.

The Kiwi dollar is little-changed from yesterday, still just on 58.8 USc . Against the Aussie we are down -20 bps at 81.4 AUc. Against the euro we are holding at 50.6 euro cents. That all means our TWI-5 starts today at just over 62, down -10 bps from yesterday.

The bitcoin price starts today at US$79,194 and down -0.7 from yesterday at this time. Volatility over the past 24 hours has been modest at just under +/-1.1%.

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