World's factories rise despite tariff threats; Australia building consents fall but house prices rise; wheat crop forecast jumps; UST 10yr at 4.25%; gold rises again with silver, oil firmish; AU$1 = 59 USc

​Here's our summary of key economic events overnight that affect Australia, with news that while financial markets are quiet due to the US Labor Day holiday, the data being reported in the rest of the world is actually very encouraging, especially for the factory sectors.

In China, the private Caixin PMI has a new sponsor - RatingDog. It is still produced by S&P Global. That August factory PMI showed manufacturing output returned to growth. Total new business expanded at quickest pace since March. But it also reported the fastest rise in average input prices in nine months. As has become the norm in 2025, this private PMI series is more bullish than the official PMI.

While we are noting improved factory PMIs in Australia and China, we should also note that they improved in Japan, Korea, Taiwan and Indonesia as well. The Trump tariff-taxes aren't killing these countries. In fact, because it is the American importers who are paying these taxes (and ultimately the American consumer), the whole tariff journey just shows the American's are prepared to pay a lot more for what they import, and demand isn't flagging. Yet, anyway.

Of special note is the regaining of momentum in India where their factory PMI turned notably higher on new orders and new-found momentum. This is now their fastest improvement in operating conditions in seventeen and a half years, with production growth accelerating to a nearly five-year high, supported by strong demand and better alignment of supply with orders. New orders rose at the fastest pace in nearly five years, and given they have been strong in the lead-up, this is really saying something.

Even European factories are on the move up, returning to expansion with the sharpest rise in factory output since March 2022. Their factory PMI is now at its highest in 41 months.

Australia’s factory sector expansion accelerated again in August. Higher new order levels, supported by a rise in exports, led to a solid rise in production. Confidence rose to its highest level since February 2022. The survey showed that manufacturers hired more staff and raised their purchasing and inventory levels. Meanwhile price pressures remained little problem.

And staying in Australia, residential building consents fell -8.2% in July from June, almost double the market expectations of a -4.8% fall. This sharply ate into the upwardly revised +12.2% increase in June. The decline was largely due to a sharp fall in approvals for dwellings that weren't houses (apartments and townhouses). By state, approvals fell sharpest in New South Wales (-25%), while rising in Tasmania (+12%), Western Australia (+12%), in Queensland (+5.9%).

Lower new homebuilding is juicing up their existing-home real estate markets. Cotality reported strong August gains from July, up +0.7% for the month nationally. It's back as a strong sellers market. The rises in Brisbane and Perth are notable, but the gains in Adelaide and Sydney were not far behind them in August. The consequences for affordability for most aspiring buyers look awful.

We should probably also note that the forecast for Australia's wheat crop was raised sharply in an overnight update. Good rains recently is behind the revision.

The UST 10yr yield is now at 4.25%, up +2 bps from yesterday at this time. The key 2-10 yield curve is up at +62 bps. The last time it was this steep was in February 2022. Long dated yields are on the move higher. The UST 30 year yield is actually closing in on 2007 levels. Their 1-5 curve is still inverted by -16 bps. And their 3 mth-10yr curve is now inverted -8 bps. The Australian 10 year bond yield starts today at 4.34% and up +4 bps from yesterday. The China 10 year bond rate is down -1 bp at 1.78%. 

Wall Street is on holiday today but the futures market suggests the S&P500 will open tomorrow up +0.3%. Overnight, European markets were little-changed, except Frankfurt which was up +0.6%. Yesterday, Tokyo closed down -1.2%, Hong Kong closed up +2.2% and Shanghai closed up +0.5%. Singapore ended its session up +0.1%. The ASX200 ended its Monday session down -0.5%. 

The price of gold will start today at US$3,477/oz, up +US$30 from yesterday and a new record high. Silver topped US$40/oz for the first time since 2011, also near a record high.

American oil prices are +50 USc firmer at just over US$64.50/bbl with the international Brent price holding just over US$68/bbl.

The Australian dollar is at just on 65.5 USc and up +10 bps from yesterday. Against the Japanese yen we are up +20 bps ¥96.5. Against the euro we are up +10 bps as well at 56 euro cents.

The bitcoin price starts today at US$108,918 and little-changed (down -0.1%) from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.2%.