No deal in US-Iran talks yet; US data mixed; investors extract big yield jump in UST 2yr bonds; Singapore and Taiwan rise; aluminium price nears record high; UST 10yr at 4.49%; gold eases; oil rises; AU$1 = 71.6 USc

Here's our summary of key economic events overnight that affect Australia with news traders who claimed to foresee a Trump 'victory' over Iran are getting a lesson in their susceptibility to propaganda.

In the Middle East, US and Israeli struck a number of Iranian vessels in the Strait of Hormuz, hours after President Donald Trump had suggested negotiations with Tehran over an interim deal were progressing. Renewed aggression there and in Lebanon hardly seems to indicate talks are "going nicely". Both sides are in a chronic violent embrace, despite what they say.

Oil prices are rising again; prospects for normalisation have faded significantly.

First we should note in the US, the Conference Board said its survey of consumer confidence edged down in May. But this dip wasn't quite as much as analysts had expected.

Meanwhile the May Dallas Fed factory survey edged up slightly from its languid ("stable") state, a bit less than other similar surveys and less than expected.

And the National Activity Index tracked by the Chicago Fed rose in April to its best reading since March 2025.

The US Treasury's popular 2 year bond auction today brought sharply higher yields. The median yield today was 4.02% (high was 4.07%), a big shift up from the median 3.75% at the equivalent event a month ago.

Across the Pacific, Singapore said its industrial production was up a very healthy +17.6% in April from a year ago, a rising trend and an expansion that is starting to rival Taiwan.

And in Taiwan industrial production rose at a +15% rate in April from the same month a year ago, less than in March but still the third-best month ever. The base has been rising spectacularly for more than a year now so the outsized yeay-on-year growth will ease back from here. Their retail sales were up +5.2% in April, extending the outsized improvements to three consecutive months now.

In Malaysia, it appears that they have instituted a 10% tariff on imported gold bars, surprising dealers and buyers alike.

We should note that the aluminium price pushed up yet again, now very close to the brief pandemic-induced peak. Also tin prices are also near record highs, but this is nothing to do with the Middle East. Rather it relates to an Indonesian crackdown on illegal tin mining there, which has been extensive. They are going after the palm oil industry too, but over financial issues.

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 +44 bps (+10 bps). Their 1-5 curve is now at +37 bps (down -4 bps) and the 3 mth-10yr curve is at +84 bps (+4 bps). The China 10 year bond rate is still at 1.75%, unchanged from yesterday. The Japanese 10 year bond yield is up +2 bps at 2.72%. The Australian 10 year bond yield starts today at 4.93%, up +6 bps.

Wall Street is back open after their long weekend holiday with the S&P500 up +0.6%. The Nasdaq was up +1.2%. Both are new record highs. Overnight, European markets ended between Paris's -1.0% fall and London's +0.2% firming. Yesterday, Tokyo closed down -0.2%. Hong Kong was unchanged and Shanghai dipped -0.2%. Singapore ended down -0.8%. The ASX200 ended its Tuesday session down -0.4%. 

The price of gold will start today down -US$64 at US$4499/oz. Silver is down -US$2 at just under US$76/oz.

Oil prices have risen +US$3.50 to just under US$94/bbl in the US, while the international Brent price is up +US$3 to just on US$99.50/bbl.

The Australian dollar is down -10 bps from yesterday at this time at 71.6 USc. Against the Japanese yen we are up +20 bps at ¥114.1. Against the euro we are unchanged at 61.6 euro cents.

The bitcoin price starts today at US$75,906 and down -2.1% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.5%.