US-Beijing visit struggles for positives; US retail up on petrol costs; China bank lending falters; Australia tackles sham retail discounts; freight rates rise; UST 10yr at 4.49%; gold and oil hold again; AU$1 = 72.2 USc;

Here's our summary of key economic events overnight that affect Australia with news the US-China summit in Beijing is underway and so far the results have been underwhelming. Xi warned Trump about US support for Taiwan, and a big jet order for Boeing wasn't quite what was expected, causing Boeing's share price to fall today (-3.6%). The travelling CEO's seem to be impressed with China's opportunities, rather than Trump getting China to invest in the US. But it is only day one, so more may come of this visit.

In the US data out overnight shows there were 190,600 initial jobless claims last week, less than seasonal factors would have indicated. There are now 1.7 mln people on these benefits, less than a year ago and about the same as two years ago. Given how this is tracking so different to the US household labour force survey, part of the jobless claims easing can be attributed to tougher qualification standards.

US retail sales rose marginally in April from March to be +4.5% higher than year ago levels. Higher dollar sales at petrol stations were a key factor. The timing of one-off tax refunds probably played a part too. This is a gain that is higher than the 3.8% US CPI.

Business inventories rose as well (the data is for March). Retail inventories did too. But both are up less than the sales gains, so the inventory to sales ratio is improving.

In China, banks haven't been lending at the rate expected. New yuan loans by Chinese banks fell by a net -¥10 bln in April, and much less than the expected +¥300 bln, and less than the +¥285 bln in April 2025. This is quite an unexpectedly variation and turn down in momentum, and only the third time on record this has happened. One reason is that there is a shift to corporate bond financing, away from bank financing.

Here in Australia, our competition regulator has prevailed in a case it brought against supermarket giant Coles claiming its discount claims were a sham. This judgement is sure to echo in New Zealand. The ACCC has a parallel case pending against Woolworths.

Meanwhile the peak Australian labour union, the ACTU, has amended its claim for a minimum wage rise to +6% before the Fair Work Commission, taking the claimed rate to $26.45/hour. Obviously the change is in response to rising inflation.

Global container freight rates were up +12% last week to be +14% higher than year-ago levels. Surcharging for fuel is the key reason for the rises although this is also the time the northern hemisphere "peak season surcharges (PSS) start to be applied. Bulk cargo rates shifted higher again last week as well, up +5.4% and are now at levels we had during the pandemic stresses.

The UST 10yr yield is now just on 4.49%, up +2 bps from this time yesterday. The key 2-10 yield curve is now at +47 bps (-1 bp). Their 1-5 curve is now at +32 bps (-2 bps) and the 3 mth-10yr curve is at +80 bps (down -2 bps). The China 10 year bond rate is now at 1.75%, up +1 bps from yesterday. The Japanese 10 year bond yield is up +3 bps at 2.63% and a new 29 year high. The Australian 10 year bond yield starts today at 4.99%, down -8 bps from yesterday. 

Wall Street lower today with the S&P500 up +0.8% and a new record high. Overnight, European markets were all higher between London's +0.5% and Frankfurt's +1.3%. Tokyo ended its Thursday session down -1.0%. Hong Kong was unchanged with Shanghai down -1.5%. Singapore was down -0.2%. But the ASX200 ended up a minor +0.1%. 

The price of gold will start today down -US$12 at US$4678/oz. Silver is down -US$3 at just under US$85/oz.

American oil prices are holding up at just over US$101.50/bbl, while the international Brent price is just under US$106/bbl.

The Australian dollar is down -30 bps from yesterday at this time at 72.2 USc. Against the Japanese yen we are down -10 bps at ¥114.3. Against the euro we are unchanged at just under 61.9 euro cents. 

The bitcoin price starts today at US$81,564 and up +2.7% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.1%.