Hormuz still shut despite US claims; US data mixed; Canada posts trade surplus; Singapore retail strong; RBA hikes as inflation rises; UST 10yr at 4.42%; gold firms and oil eases; AU$1 = 71.9 USc;

Here's our summary of key economic events overnight that affect Australia with news that although the US claims the ceasefire with Iran is holding and "ships are lining up to transit", in fact, very little is moving in the area between Iran's red lines. And the most high profile transit in the past 24 hours was an Iranian tanker. Still, the US claims resonated on Wall Street, and stocks rose, benchmark rates fell.

But first today, US job openings fell, although to be fair, but less than expected. But even then, they are back at levels they had in April 2018, which is less than it seems because their labour force is so much larger now.

There were two services PMI reports out for the US overnight (ISM and S&P Global) and both showed that new business intakes fell for first time in two years as war in the Middle East and inflation hit demand. But both were positive even if less so that in the prior two months.

The reason for the retreat can be found in the latest April logistics managers report, where freight costs leapt, taking this index back to pandemic-stress levels.

The US RCM/TIPP economic optimism index fell yet again, down to levels last seen in early 2024. It has retreated steadily since December 2024. It's sponsor's report called it 'steady' but that is gilding it somewhat.

US exports and imports were little-changed in April, but both are in rising trends even if imports rose slightly more than exports (which rose largely on petroleum exports). Their trade deficit has widened.

Canada also reported export data and that came in at a one year high, and unexpectedly good result, largely on the back of high exports of petroleum and gold. Imports fell back in April but from an unusually high March level. The result was a good trade surplus, their first since September 2025.

Singapore reported March retail sales late yesterday and they were better than expected with a good +4.8% rise from a year ago. That represents a real gain because their CPI inflation was 1.8% in March.

As widely anticipated, the RBA raised its cash rate target by +25 bps to 4.35% late yesterday. It was a split decision with one voting member wanting to hold the rate unchanged. But they face sharply higher inflation threats that seem to be growing and prior rate hikes have done little to quell those. However they have restrained their housing market enthusiasm and this latest hike is expected to put the brakes on that further. Traders still believe there is at least one more rate increase this year despite the RBA saying their policy was still only mildly restrictive.

This comes after the March CPI rose +4.6%, and yesterday they reported that household spending remained high over the year in nominal terms, up +6.3% compared to March 2025 (and the highest since January 2023). Most of this is 'price' and much of it relates to a +32.8% increase in monthly fuel prices. But in volume terms, they say fuel purchases are lower, down -1.3% in March from February.

The UST 10yr yield is now just on 4.42%, down -2 bps from this time yesterday. The key 2-10 yield curve is now at +48 bps (unchanged). Their 1-5 curve is now at +32 bps (-1 bp) and the 3 mth-10yr curve is at +76 bps (-2 bps). The China 10 year bond rate is now at 1.75%, unchanged. The Japanese 10 year bond yield is also unchanged at 2.50%. The Australian 10 year bond yield starts today at 4.96%, down -6 bps. 

Wall Street has started its Tuesday with the S&P500 up +1.0% and a new record high. Overnight, European markets were mixed between London's -1.4% drop and Frankfurt's +1.7% rise. Yesterday Tokyo was closed for a holiday. Hong Kong was open and was down -0.8%. But Shanghai and Singapore were closed for holidays. The ASX200 ended down -0.2%. 

The price of gold will start today up +US$37 at US$4559/oz. Silver is unchanged at just over US$73/oz.

American oil prices are down -US$3 at just on US$102/bbl, while the international Brent price is down -US$3.50 and now at US$110/bbl. It is hard to see these prices easing further given the sharp fall in global oil reserves recently. Even the future process of building them back will add to demand and prices.

The Australian dollar is up +30 bps from yesterday at this time at 71.9 USc. Against the Japanese yen we are up +100 bps at ¥113.5. Against the euro we are up +20 bps at just on 61.4 euro cents. 

The bitcoin price starts today at US$81,300 and up +0.9% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.3%.