Inflation vanishes in Canada; Japanese exports fall; Japanese machine orders tank; China tax receipts rise; China dominates Aussie exports; UST 10yr yield at 0.68%; oil unchanged and gold drops; NZ$1 = 66.1 USc; TWI-5 = 69

Here's our summary of key economic events overnight that affect New Zealand, with news that business pullbacks on investment spending is causing havoc among Japan's machinery manufacturers.

But first in the US we should note that mortgage applications fell last week.

In Canada, consumer inflation vanished in July. In fact they recorded deflation from the prior month.

Japanese exports have continued to drop sharply in July even though the rate of fall is slowing. There was a recovery in shipments to China that helped cushion declines of exports to Europe and the US. The value of their exports fell -19% from a year earlier amid continued steep falls especially for vehicles. The drop was about as expected.

And Japanese machinery orders are still falling sharply. They were down -23% year-on-year in June and are expected to be down -21% in the July to September quarter. Export orders are down more, down about a third on this basis. It is very grim for capital goods manufacturers, especially as analysts had expected July data to show some gains.

But in China, they are reporting growing tax revenues. They were up +4.3% in July over the same month a year ago, a quickening pace. This is clear evidence their upturn is underway.

And staying in China, the massive Three Gorges Dam has reached record high water levels as torrential rains caused heavy flooding upstream on the Yangtze River. No reports of damaged dam integrity yet, but any failure will threaten commerce along the country's longest river. The mighty Yellow River is also in massive flood.

For all its troubles of late, the Hong Kong jobless rate has stayed at 6.1%. However they have a very low participation rate of 59.6%.

Australia's trade troubles with China will be an intractable problem for them. China is the destination of almost half of their export trade, a dominance that is strategically unnerving for them. China has fierce leverage. In contract, China takes 28% of our exports.

Overnight, European equity markets rose an average of +0.8%. Today, Wall Street is unchanged in early afternoon trade and holding a new record high. Update: Some disappointing key earnings reports have Wall Street falling in late trade. Yesterday, Shanghai fell hard, down -1.2%. Hong Kong did manage some afternoon trade, reopening after the storm, but it too fell and by -0.7%. But Tokyo managed a +0.3% gain. The ASX200 ended yesterday up +0.7% and the NZX50 Capital Index had a profit-taking day after some key results, down -0.8% at the close.

The latest global compilation of COVID-19 data is here. The global tally is 22,218,000 and that is up +262,000 since when we last checked this time yesterday. Global deaths reported now exceed 783,000.

A quarter of all reported cases globally are in the US, which is up +45,000 since yesterday to 5,673,000. US deaths are now just over 175,600 and a death rate of 530/mln (+4/mln). Only seven countries have a higher death rate. The net number of people actively infected in the US fell overnight to 2,466,200, so marginally more recoveries than new infections.

In Australia, there have now been 23,993 COVID-19 cases reported, another 220 since yesterday, and still very much concentrated in Victoria. Australia's death count is up to 450 (+12). Their recovery rate is now up to over 63%. There are 8302 active cases in Australia (-109) indicating a turned tide and more recoveries than new infections.

The UST 10yr yield is up +1 bps at 0.68%. Their 2-10 curve is still at +53 bps. And their 1-5 curve is also unchanged at +15 bps, while their 3m-10yr curve is marginally steeper at +60 bps. The Aussie Govt 10yr yield is up +1 bp at 0.88%. The China Govt 10yr is up +2 bps at 3.01%. And the NZ Govt 10 yr yield will start today at 0.67% and unchanged.

The price of gold was very volatile overnight. After yesterday's +US$23 rise, it has fallen -US$38 today to US$1,968/oz. Silver which didn't rise much yesterday, fell in sympathy, down -1.1% overnight.

Oil prices are little-changed again today. They are still just under US$43/bbl in the US and the international price is still just over US$45/bbl.

And the Kiwi dollar rose overnight and then fell back to the same level as this time yesterday, just on 66.1 USc. Update: It has subsequently fallen sharply to 65.7 USc. Against the Australian dollar we are firmer at 91.4 AUc. Against the euro we are up marginally at 55.6 euro cents. That means our TWI-5 has firmed to 69.

The bitcoin price has slipped -2.0% from this time yesterday to now be at US$11,791. The bitcoin rate is charted in the exchange rate set below.

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