US data very unimpressive; China services expand faster; Korea eyes joining the CPTPP; Australian GDP rises faster than expected; UST 10yr at 4.22%; gold rises sharply again, oil firmish; AU$1 = 65.5 USc

​Here's our summary of key economic events overnight that affect Australia, with news the world's largest economy is being hit today with a string of pessimistic data reports, despite one of the tech giants avoiding a breakup which saw its shares surge to a record high.

American job openings fell by 176,000 to 7.18 mln in July and that was the lowest level since September 2024 and well below market expectations of 7.4 mln. Interestingly, there was wide regional variation with openings dropping most in the South, down -161,000, while they rose in the West, up by +113,000 openings.

So it won't be a surprise to learn that mortgage applications fell again last week, the third consecutive weekly retreat. This happened even though mortgage interest rates were little-changed.

And it also won't be too much of a surprise to learn that US factory orders declined also in July from June, down an outsized -1.3% - and the June data was revised lower to be down -4.3%. New durable goods orders were down -2.8% in July. These won't be welcome trends, especially as tariffs were supposed to bolster US manufacturing. Year-on-year the July levels are up +1.8% and well below what can be accounted for by inflation. But it will be the recent sharper trends lower that are most concerning.

So the Fed's August Beige Book note of "flat to declining consumer spending because, for many households, wages were failing to keep up with rising prices. Contacts frequently cited economic uncertainty and tariffs as negative factors." will come as no surprise.

In China, all the news is about its massive military parade in Tiananmen Square. This one follows similar shows of force that started in Pyongyang on April 15, followed in Tehran on April 20, then Moscow on May 9, and Washington DC on June 14. All organised by authoritarians. It's a militarisation trend that is very retrograde. And they are massive propaganda exercises, so it is disappointing that some of our politicians want to be seen at them. But like many others, they follow the money and incentives.

Staying in China, the RatingDog (ex-Caixin) services PMI for August expanded faster than July and to a good level, better than expected and the fastest expansion in their services sector since May 2024. New orders grew at the strongest pace since May 2024, supported by a stronger rise in new export business, which increased at the fastest rate in six months. Like yesterday's RatingDog factory PMI, this survey as also better than the official services PMI.

And South Korean officials now say they want to join the CPTPP, as insurance against US tariff moves against them. The path won't be easy for them, mainly because they have built up insulations and protections against Japanese investment making inroads into their economy.

In Europe, producer prices were only up a modest +0.4% in July from a year ago, confirming they seem to have a good lid on inflation there. But the more recent indications are rises that are slightly above that (at a rate of +0.6%). At least the Europeans don't have the pressure of self-imposed tariff-taxes. Their cost competitive position vs the US is improving sharply.

Australian economic activity grew +0.6% in Q2-2025, accelerating from an upwardly revised +0.3% in Q1 and better than analyst expectations of +0.5%. Year on year Australian GDP was up +1.8%, above forecasts of +1.6% and the fastest pace since Q3 2023.

The UST 10yr yield is now at 4.22%, down -6 bps from yesterday at this time. The key 2-10 yield curve is back at +60 bps. Their 1-5 curve is now inverted by -9 bps. And their 3 mth-10yr curve is now inverted -6 bps. The China 10 year bond rate is up +1 bp at 1.78%. The Australian 10 year bond yield starts today at 4.38% and unchanged from yesterday. 

Wall Street is little-changed with the S&P500 just less than +0.1% firmer. Overnight, European markets were all higher between Frankfurt up +0.5% and Paris up +0.9%. Yesterday, Tokyo closed down -0.9%, Hong Kong closed down -0.6% and Shanghai closed down -1.2%. Singapore ended its session down -0.2%. The ASX200 ended its Wednesday session down a sharp -1.8%. 

The price of gold will start today at US$3,573/oz, up +US$47 from yesterday and surging to yet another new record high. Silver has moved higher too and now over US$41/oz.

American oil prices are -US$2 lower at just over US$63.50/bbl with the international Brent price now just under US$67.50/bbl.

The Australian dollar is at just under 65.5 USc and up +20 bps from yesterday. Against the Japanese yen we are down -20 bps ¥96.9. Against the euro we are unchanged at 56.1 euro cents.

The bitcoin price starts today at US$112,443 and up +1.4% from this time yesterday. Volatility over the past 24 hours has been low at just on +/- 0.9%.