Here's our summary of key economic events overnight that affect Australia, with news US tariff threats are shifting from being aimed at trading 'partners' to a focus on commodities, today especially copper. Protection of favoured US business interests is the goal, cloaked in the labels of 'national security'.
But first up today, the US retail impulse as measured by the Redbook survey delivered a very good +5.9% gain over the same week a year ago, but it should be noted that earlier base week was an unusual down one.
And the New York Fed's national survey of consumer inflation expectations returned to a 'normal' 3% in June, and a five month low. But some components remain a worry. Those surveyed thing food prices will rise 5.5%, rents will rise +9.1% and medical care by +9.3%.
Meanwhile the NFIB Small Business Optimism Index for June was little changed at it long run level.
The popular US Treasury three year bond auction delivered unchanged demand and little-change on the median yields achieved. Today that came in at 3.84%, whereas the equivalent event a month ago was at 3.92%.
US consumer debt grew a very modest +US$5 bln in May, half the expansion in April and well below the average for the past year. The slowdown was very acute for revolving debt, like credit cards.
In Canada, the widely-watched local PMI turned positive in June following two toughish months.
In Germany, both exports and imports were expected to decline in May from April, and they did, but by slightly more than was expected. But both remain higher than year ago levels.
In Australia, the widely watched NAB business sentiment survey picked up and that was a much better outcome than the contraction expected. In fact this June result for business conditions broke the mold of the long-running decline that started in June 2022.
That survey didn't point to anything special in terms of cost pressures. But those cost pressures clearly worried the RBA when it surprised financial markets with its no-change decision yesterday. The widely-expected rate cut didn't happen and so household budgets will have to wait for more relief. The RBA did pick up the resilience in the overall economy, but judged it too early to respond to perceptions of economic weaknesses. In fact they saw the balance of risks from trade and labour market cost activity not requiring a boost from a cut in interest rates.
We should note that US tariff uncertainty is screwing around with some key commodity prices, especially copper, which has soared over the past day or so to over US$12,000/tonne and easily a new record high. Some US futures contracts are now up over US$13,000/tonne. US products that use copper are going to get a cost jolt. Because it is a jolt directly related to a new US tariff-tax, it won't affect products made outside the US.
The UST 10yr yield is now at 4.42%, and up another +3 bps from yesterday. The key 2-10 yield curve is holding at +51 bps. Their 1-5 curve is inverted by -13 bps and little-changed again. And their 3 mth-10yr curve is steeper, now +12 bps positive. The Australian 10 year bond yield starts today at 4.32% and up +9 bps from yesterday. The China 10 year bond rate is still at 1.65%.
Wall Street is slightly lower on the S&P500 on the risk-off mood from the new commodity tariff news. Overnight European markets were all up about +0.6. Tokyo ended its Monday session down -0.6%, Hong Kong was up +1.1%, and Shanghai was up +0.6. Singapore rose +0.4%. The ASX200 ended its Tuesday session unchanged after the RBA surprise.
The price of gold will start today at US$3,306/oz, and down -US$25 from yesterday.
American oil prices are up another +US$1 at just under US$68.50/bbl while the international Brent price is now just under US$70.50/bbl.
The Aussie dollar is now just on 65.2 USc, and down -70bps from yesterday. Against the Japanese yen we are up +140 bps at 95.8 AUc. Against the euro we are down -30 bps at 55.7 euro cents.
The bitcoin price starts today at US$109,015 and up +1.0% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/-2.3%.