Here's our summary of key economic events overnight that affect Australia, with news precious metals prices are having a moment - in US dollars at least, largely because the US dollar is extending its retreat. The same impact is affecting commodities like copper. Prices are rising in the US as a consequence of tariff-taxes which are pushing down the value of the greenback.
In the US, the retail impulse continued to expand last week, up +5.1% from a year ago. But the suspicion lingers that much of this is the inclusion of tariff taxes, despite what the CPI indicates.
And those tariff taxes hurt the results in the latest Richmond Fed factory survey. This was their worst result in ten months and was led by a sharp retreat in new orders. Input cost growth stayed up.
The cost of those tariff-taxes on US companies was on full display in US earnings reports. For Stellantis (Chrysler) it was US$300 mln, for GM US$1 bln. Both ate away at reported profits significantly. It is hard to see these type of companies absorbing costs like this for much longer.
Across the Pacific, Taiwanese export orders continued their outstanding growth, up almost another +-25% in June from the same month in 2024 which itself led year-ago levels. It is hugely impressive and continues a very strong 2025 monthly set. It is their electronics industry leading the way.
Sentiment in Japan bounced back yesterday as it became a clearer bet that Prime Minister Shigeru Ishiba is expected to remain in office despite the embarrassing performance of his party at the recent upper house elections. But holding on, he will be a damaged leader. The upstart ‘Japanese First’ Sanseito party has emerged as powerful force after these elections, and that was despite a 'secret' Russian campaign to support them (and destabilise Japan) that was exposed before voting.
In the Europe, the ECB's latest credit survey found a twist towards housing lending there. While credit standards for company loans remained broadly unchanged, credit standards tightened slightly for housing loans and more markedly for consumer credit. But this was because housing loan demand continued to increase strongly, while demand for company loans remained weak.
In Australia, the vultures are out targeting vulnerable borrowers who are debt stressed. It has ASIC worried and they have launched a review into the debt management and credit repair sector in an effort to protect those experiencing financial hardship. Expect the Commerce Commission here to assess whether it needs to do similar work.
Staying in Australia, the RBA released the minutes of its July 8 meeting and they revealed little new. They left its cash rate steady at 3.85% at this meeting, defying market forecasts for a -25 bps cut. The move was passed by majority vote, six in favour and three against. These minutes were full of "wait and see" sentiment, "data dependent" notes. Part of the waiting-to-see is because they doubt Trump will actually do what he threatens. They buy the TACO view apparently.
The UST 10yr yield is now at 4.34%, down -3 bps from yesterday at this time. The key 2-10 yield curve is unchanged at +51 bps. Their 1-5 curve is more inverted -19 bps. And their 3 mth-10yr curve a flatter +3 bps positive. The Australian 10 year bond yield starts today at 4.28% and down -1 bp from yesterday. The China 10 year bond rate is firmish again at 1.69%, up +1 bp.
Wall Street is little-changed in Tuesday trade on the S&P500 but it is holding near its record high. Overnight European markets were mixed with London up +0.1% but Frankfurt down -1.1%. Yesterday Tokyo ended down -0.1%. Hong Kong was up +0.5% and that was matched in Shanghai. Singapore was unchanged. The ASX200 ended up +0.1%.
The price of gold will start today at US$3,427/oz, up another +US$34 from yesterday. And that almost matched its record high on April 21.
And the silver price has pushed on up over US$39/oz It isn't yet threatening its 2011 peaks (US$48) but the recent climb has some people quite excited.
American oil prices are -US$2 softer at just on US$65/bbl but the international Brent price is only down -50 USc at just under US$68.50/bbl.
The Australian dollar is now at 65.2 USc and up +10 bps from yesterday. Against the Japanese yen we are down -40 bps at ¥96.2. Against the euro we are down -20 bps at 55.8 euro cents.
The bitcoin price starts today at US$119,198 and up +1.1% from this time yesterday. Volatility over the past 24 hours has remained modest, at just under +/-1.2%.