Here's our summary of key economic events overnight that affect Australia with news conflict in the Persian Gulf has erupted again with attacks on US naval forces trying to open the waterway for US flagged vessels. Iran also hit the UAE. Iran also warned that it will tighten its control over the Strait. So far there have been 28 attacks and 6 near-misses.
The oil price has risen, equities have fallen, and benchmark interest rates rose.
How China reacts will be important now. So far they are bolstering their support of Tehran via trade and payments support, and banning their companies from respecting the US sanctions threats.
In the US, factory orders rose in March and by more than expected as the stockpiling trend got started. They are now almost +3.7% higher on a nominal basis than a year ago. This data matches the recent factory PMI data we have reported earlier.
US April vehicle sales came it at an annualised 15.9 mln rate, slightly less than for March and less than expected. This was down -7.2% from April 2025, but holding at about the post-pandemic average which in turn is about -10% lower than pre-pandemic levels.
The US Fed loan officers survey may have disappointed some observers. Earlier in the year, indications were for rising demand. But the results of the April survey found little-change. At least it didn't find softer demand.
In Canada, they have announced a $C1 bln support program for manufacturers hit by the swingeing Trump tariffs on their steel products, a sector hit particularly hard. Another C$500 mln in regional support was announced at the same time.
In South Korea, we got another very good factory PMI for April. The S&P Global version rose to 53.6 in April from 52.6 in March, the strongest expansion since February 2022. But the scramble for more orders, and production is to get ahead of incoming inflation pressure. In fact, input costs and output price inflation surged to its highest in the 22-year history of this monitoring.
In Taiwan, the same scramble is underway, with production and sales rising sharply as firms look to stockpile. That drove their factory PMI to new momentum and a five year high.
In Europe, the ECB also released a survey of bank forecasters. They found there were expectations for higher inflation in the near term, but unchanged further out. These analysts have downgraded their 2026 and 2027 growth expectations, but left longer forecasts unchanged.
Here in Australia, the Melbourne Institute's Inflation Gauge tracking reported a +0.6% rise from March to be 4.3% higher than a year ago. The April result was lower than the record high monthly increase at +1.3% in March, and compares with the official March monthly annual rise of 4.6%. Despite the easing, this rate remains very high and likely well above what the RBA will be comfortable with. The RBA is widely expected to raise its policy rate +25 bps to 4.35% later today, although in the past 24 hours, the market conviction has wavered.
The UST 10yr yield is now just on 4.44%, up +6 bps from this time yesterday. The key 2-10 yield curve is now at +48 bps (-1 bp). Their 1-5 curve is now at +33 bps (+3 bps) and the 3 mth-10yr curve is at +78 bps (+7 bps). The China 10 year bond rate is now at 1.75%, unchanged. The Japanese 10 year bond yield is down -1 bp at 2.50%. The Australian 10 year bond yield starts today at 5.02%, down -1 bp.
Wall Street has started its week with the S&P500 down -0.4%. Overnight, European markets were down between London's -0.1% and Paris's -1.7%. Yesterday Tokyo was closed for a holiday. Hong Kong was open and was up +1.4%. But Shanghai and Singapore were closed for holidays. The ASX200 ended down -0.4%.
The price of gold will start today down -US$92 at US$4522/oz. Silver is down -US$2 at just under US$73/oz.
American oil prices are up +US$3 at just on US$105/bbl, while the international Brent price is up +US$5.50 and now at US$113.50/bbl.
The Australian dollar is down -40 bps from yesterday at this time at 71.7 USc. Against the Japanese yen we are down -50 bps at ¥112.7. Against the euro we are down -20 bps at just on 61.3 euro cents.
The bitcoin price starts today at US$80,587 and up +2.4% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.6%.
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