Here's our summary of key economic events over the weekend that affect Australia, with news the world is working out how live with a capricious America.
First though, the week ahead will feature Tuesday afternoon's cash rate review from the RBA, followed by Wednesday by the RBNZ's OCR review. The TBA is expected to cut our rate by -25 bps to 3.60% but the RBNZ is expected to hold at 3.25%. We will be covering the outcomes and implications of both reviews.
Both Malaysia and South Korea will also be reviewing their official rates. The Malaysian will likely leave their rate unchanged at 3.00%, and the South Koreans are expected to cut theirs by -25 bps to 2.25%.
In the US, apparently negotiating trade deals is complicated (who knew?) so Trump is dispensing with all that and just "sending letters" unilaterally. "90 deals in 90 days" is too hard for him. He might have got one over the line with Vietnam (he claims but the Vietnamese haven't confirmed). He sort of got one with the UK but before the 90 day clock started. And the China one he claims leaves the US in a worse position. His Treasury Secretary is promising "a few more" over the next few days and weeks. "Best deal maker of all time".
And we should probably note that the integrity of official US data, from the Census Bureau, the BLS and the BEA, all now under Trump control (in the Lutnick Commerce Department), is getting increasingly questioned. Sharp budget cutbacks is resulting in fewer actual surveys, more 'estimates by officials'. Even Fed boss Powell expressed concern over the issue in questioning at the recent Congressional testimony. The data reporters are moving to a "Make Trump Look Good" approach.
Suspicion is rising because there are widespread indications tariff-tax price increases are being pushed through but the BLS data isn't reflecting that.
In China we will get CPI and PPI updates for June later this week. It would be supremely ironic if users came to view Chinese economic data was more trustworthy than American. It no longer seems far-fetched.
Across the Pacific in Japan, household spending jumped +4.7% in May from a year ago, reversing a -0.1% fall in April and far exceeding an expected +1.2% rise. It was their fastest growth since August 2022, and that August 2022 was only good because it was off the very weak pandemic-affected base a year earlier.
Singaporean retail sales rose by +1.4% in May from a year ago, accelerating from a downwardly revised +0.2% rise in April. This was the third straight month of growth and the fastest annual increase since January. But to be fair, most of the increase was driven by car sales, a very expensive and exclusive corner of their retail sector.
Next, halfway around the world, EU producer prices eased again in May so that it is only +0.4% higher than year ago levels, less in the euro area. The past three months have delivered producer prices lower than in each of the prior months.
German factory orders dropped by -1.4% in May from April and that was weaker than expected, but the April gain was revised higher. The May weakness however came after some very large-scale computer, electronic and optical orders in April. From a year ago, these factory orders were up +5.3%.
And we should probably note that EU house prices are rising, up +5.7% from a year ago led by 10%-plus gains in Portugal (+16%), Bulgaria (+15%), Croatia (+13%), Slovakia (+12%), Hungary (+12%), and Spain (+12%).
In Australia, household spending rose in May and by more than expected with a good recovery from a weak month in April. This spending was up +4.2% from May a year ago. It was their best gain in 7 months.
The FAO food price index was little-changed in June from May, holding its gains from a year ago. Within that, both meat and dairy prices rose.
The UST 10yr yield is now at 4.33%, and unchanged from Saturday. That makes it up +6 bps for the week. The key 2-10 yield curve is holding at +44 bps. Their 1-5 curve is inverted by -14 bps and also little-changed. And their 3 mth-10yr curve is marginally steeper, now +11 bps positive. The Australian 10 year bond yield starts today at 4.19% and unchanged from Saturday. The China 10 year bond rate is still at 1.64%.
The price of gold will start today at US$3,336/oz, and unchanged from Saturday.
American oil prices are unchanged at just under US$66.50/bbl while the international Brent price is also little-changed at just under US$68.50/bbl.
The Aussie dollar is now just on 65.5 USc, down -20 bps from Saturday. Against the Japanese yen we are down -40 bps at ¥94.7. Against the euro we are also down -20 bps at 55.6 euro cents.
The bitcoin price starts today at US$108,921 and up +1.0% from this time Saturday. Volatility over the past 24 hours has been low at just on +/-0.5%.