US data mixed but exports up slightly; Canadian exports jump; China's exports surge, Taiwan even more so; Japanese & Indonesian central banks wary; UST 10yr at 4.53%; gold drops as does oil; AU$1 = 70.3 USc

Here's our summary of key economic events overnight that affect Australia, with news uncertainty swirls in the Middle East as Iran has shot down an American Apache helicopter (and Trump is looking more like Jimmy Carter by the day). But more ships are transiting (paying Iran's toll), and that extra oil is easing the global price.

But first in the US, NFIB Business Optimism Index fell again and to its lowest since October 2024. These businesses are struggling with "significant and unpredictable hikes in fuel prices", which they find harder to pass on to their customers compared to their larger corporate competitors.

The weekly ADP jobs report said new private sector jobs created were lower last week at +29,000, in fact their lowest since the end of March.

American existing home sales actually rose in May to an annualised rate of 4.17 mln, its highest of the year. This was impressive because mortgage interest rates rose in the period and seems not to have been the handbrake sometimes assumed. All the same, unsold inventory rose.

There was a small but notable increase in demand for the overnight and popular US Treasury 3 year bond which delivered a median yield of 4.15% (high of 4.19%), sharply up on the 3.92% median at the prior equivalent event a month ago.

In April, US exports of goods and services rose +2.6% from March, up +12.5% from a year ago, helped by better exports of crude oil, AI computer gear and aircraft, but most offset by a quite sharp fall in tourism receipts. Imports were up +1.9% from March, up +9.1% from a year ago, dominated by capital goods and rising transport and travel cost by Americans. Their trade deficit narrowed slightly, but big trade deficits remained with Taiwan (-$19.3 nln), Vietnam (-$19.3 bln), Mexico (-$14.8 bln), China (-$12.0 bln), the EU (-$7.2 bln), and Canada (-$6.2 bln).

The Texas screwworm outbreak is spreading which will affect their beef trade. The outbreak now includes for a dog.

Meanwhile, Canadian exports rose +1.6% from the previous month to C$75.2 bln in April, the highest on record and up +24.7% from the same month a year ago. Imports rose too, but they still managed to report their best monthly trade surplus since January 2025 and their best April since 2008.

Across the Pacific, China’s exports surged +19.4% in May from a year ago to a record high of US$377 bln, far exceeding forecasts of +15% and accelerating sharply from April’s 14.1% rise. It was the fastest increase since February and gave them a trade surplus of +US$105.4 bln. However, Chinese oil imports hit an eight year low in May.

Across the strait, Taiwan said its exports rose even more impressively, up +52% from a year ago. Their imports were up +55%. That means a trade surplus for them of +US$17.9 bln, middle-range for what they have had since October 2025 and wildly higher than in any prior period.

Japanese machine tool orders fell in May from April after falling in April too. But they remain up +37% from a year ago. The monthly easing was for orders from both domestic and foreign customers.

Staying in Japan, reports are growing that their central bank will raise its policy rate by +25 bps to 1.0% when they meet on Friday week. And they are likely to pause their JGB bond sell-down program that is underway.

And in Indonesia, their central bank held an emergency meeting to assess the economic crisis growing in their financial and fx markets. At that meeting they hikes their policy rate to 5.50%, a hike of +25 bps. They last met only three weeks ago when they raised their rate by +25 bps at that time too. They started 2026 with a 4.75% rate. Their actions are required to stop the Indonesian currency falling sharply, down -7.8% in 2026.

In Europe, the Netherlands blocked an American company from buying a local firm that handles its national ID system, saying it would create a “threat to the public interest.”

The UST 10yr yield is now just on 4.53%, down -2 bps for the day. The key 2-10 yield curve is now at +41 bps (+2 bps). Their 1-5 curve is now at +43 bps (-3 bps) and the 3 mth-10yr curve is at +87 bps (-1 bp). The China 10 year bond rate was up +1 bp to just under 1.74%. The Japanese 10 year bond yield is down -3 bps at 2.69%. The Australian 10 year bond yield starts today at 4.89%, down -7 bps from yesterday. 

Wall Street has moved into 'fear' mode with the S&P500 down -0.8% in Tuesday trade. The Nasdaq is down -1.6%. Overnight, European markets were mixed between Paris's +0.1% firming and London's -1.4% drop. Yesterday, Tokyo bounced back +2.2%. Hong Kong was down -0.4% but Shanghai rose +1.3%. Singapore also bounced back +1.2%. The ASX200 closed down -0.2% in Tuesday trade.

The price of gold will start today down -US$75 from yesterday at US$4258/oz. Silver is down a sharp -US$3.50 at just under US$65/oz.

Oil prices are down -US$2.50 from yesterday at just under US$88.50/bbl in the US, while the international Brent price is now just on US$91.50/bbl. Hormuz transits are still very low despite the pricing optimism. China’s crude imports dropped to around 7.8 million barrels per day last month, the lowest level in more than eight years and nearly 4 million barrels per day below the 2025 average. Weaker shipments to the world’s largest oil importer even if caused by Hormuz, combined with record US exports and emergency reserve releases, has limited the price impact of the Middle East conflict.

The Australian dollar is down -30 bps from this time yesterday at just on 70.3 USc. Against the Japanese yen we are down -10 bps at ¥112.7. Against the euro we are down -20 bps at just on 60.9 euro cents.

The bitcoin price starts today at just on US$61,545 and down -2.95% from this time yesterday. Volatility over the past 24 hours has been moderate at just over +/- 2.6%.