US factory new orders fall; Canada launches sovereign wealth fund; Moody's upgrades China's outlook; China data improves; German mood sours; UST 10yr at 4.34%; gold eases but oil higher; AU$1 = 70.9 USc

Here's our summary of key economic events over the holiday weekend that affect Australia with news oil prices are rising as 'peace talks' stall. And the German Chancellor has said the US is being 'humiliated' by Iran.

In the US, the Dallas Fed factory survey shows activity continued to rise in April but that their new orders index plummeted sharply into contraction territory. Their shipments index fell into negative territory for the first time this year, while perceptions of broader business conditions continued to worsen notably in April.

There were two large US Treasury bond auctions earlier today and while the yields achieved were little different to those at the prior equivalent events a month ago, there was a notable rise in demand. The 2 year bond brought +8.7% more bid value, and the five year +1.8% more. Together that was +US$18 bln more.

Canada has launched a new sovereign wealth fund, seeding it with an initial C$25 bln funding.

We should note that Moody's has upgraded China's A1 credit rating outlook to 'Stable' from 'Negative' from its last change in December 2023.

Despite the Middle East headwinds, China’s industrial profits were +15.5% in Q1-2026 than in the same period in 2025. This maintained the good expansion in January and February. SOE profits rose +10%, local private forms were up +25%, but foreign firms in China hardly managed any increase. A large part of the result has been the huge profits their metals industry is winning, especially for rare earth minerals.

Taiwanese consumer sentiment edged up in April, but only marginally from its very low level. It is still basically at its lowest since January 2023.

In Malaysia, a sharp rise in oil prices in March turned their overall producer price deflation into inflation. It is sure to get sharper in subsequent months.

Meanwhile in Singapore industrial production rose sharply in March, up +10% from the same month a year ago after the very lackluster February result.

In Germany, the GfK Consumer Climate Indicator dropped in May more than expected and to its weakest level since February 2023. Mounting pressure on households from rising energy prices has pushed inflation higher and sentiment lower.

The UST 10yr yield is now just on 4.34%, up +3 bps from this time yesterday. The key 2-10 yield curve is unchanged at +53 bps. Their 1-5 curve is now at +26 bps (+1 bp) and the 3 mth-10yr curve is at +67 bps (+2 bps). The China 10 year bond rate is now at 1.77%, up +1 bp. The Japanese 10 year bond yield is also up +3 bps at 2.47% and a new high. The Australian 10 year bond yield starts today at 4.97%, down -1 bp from yesterday.

Wall Street has opened its week hesitantly with the S&P500 up just +0.1% although that is holding its record highs. Overnight European markets were -0.2% lower, although London fell -0.6%. Yesterday Tokyo rose a sharpish +1.4%. But Hong Kong dopped -0.2% while Shanghai rose +0.2%. Singapore fell -0.6%. The ASX200 traded but slipped -0.2% in limited activity. 

The price of gold will start today down -US$28 at US$4681/oz. (If you buy gold, it might just be supporting a criminal supply chain.) Silver is little-changed at just under US$75.50/oz.

American oil prices are up +US$2.50 at just under US$97/bbl, while the international Brent price is up +US$3.50, and now at US$109/bbl. A week ago these prices were US$84.50/bbl and US$91/bbl respectively, so a big net rise. And we should note that the Russian benchmark (Urals) oil price has eased by -US$1.50 to US$106/bbl.

The Australian dollar is up +20 bps from yesterday at this time at 70.9 USc. Against the Japanese yen we are up +30 bps at ¥114.6. Against the euro we are up +10 bps at just on 61.3 euro cents.

The bitcoin price starts today at US$76,753 and down -1.8% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.9%.