US-Iran talks chaotic; eyes on US PCE inflation; Canada loosens bank capital buffers; Europe swelters; Malaysia stars; Australia extends fuel tax relief; UST 10yr at 4.49%; gold and oil little-changed; AU$1 = 70.1 USc;

Here's our summary of key economic events over the weekend that affect Australia, with news the coming week will be largely about the Strait of Hormuz and whether the US-Iran agreements will hold and traffic resumes at scale. But we start the week with a pessimistic outlook. Iran says it has closed the Strait (again) and it will remain closed until the US honours its commitment to get Israel to stop invading Lebanon. The US seems unable to do that and responded with threats. Talks in Geneva sputter along and it is hard to know if they are meaningful. And that likely means ship traffic in the Strait will be tolled by Iran when things settle, as they eventually will.

Away from all that, locally  we will get important updates for CPI inflation (4.3%), jobs growth (+30,000), and household spending (+4.1%).

In China, their central bank is widely expected to keep its one-year and five-year loan prime rates unchanged in its June review. They will also release FDI data (likely at least -10% lower from a year ago).

Taiwan will update its eye-catching export order data, expected to rise to +50% in May from a year ago.

There will be many early June PMI indicators coming out this week including from the US (expect stable or easing). But the big US data will be their PCE inflation report where analysts expect them to report a May level close to 4%.

Canada will report its CPI and that is expected to come in at 2.9% but with core readings a bit lower.

Over the weekend they reported retail sales rose in April to be +3.7% higher than year-ago levels but unchanged in volume terms. Their May retail sales indicator rose a bit more, but this too may be all about fuel prices more than volume gains.

Staying in Canada, their banking prudential regulator lowered its capital buffers over the weekend with the express intent of allowing their banks to lend more to businesses "in support of Canada's economic adaptation to new opportunities":

Across the Pacific, Malaysia said it's exports rose a startling +45% in May and far better than the outsized +35% expected - and easily an all-time record high. This is all driven by electronic goods (+71%) although LNG exports were very strong too (+112%). Their traditional rural exports (palm oil, natural rubber) took a hammering however.

Meanwhile Malaysia reported CPI as up just +2.0% in May from a year ago with food prices up just +1.2%.

Germany said its May producer prices rose +2.2% from a year ago, the most since June 2023 when most of that intervening prior saw declines.

And in Europe generally, they are suffering extreme heat, early in their summer, with temperatures 40o plus in many places. It will be a long summer for them.

The UST 10yr yield is now just on 4.49%, unchanged from this time Saturday, up a net +1 bps for the week. The key 2-10 yield curve is now at +31 bps (unchanged). Their 1-5 curve is now at +25 bps (+1 bp) and the 3 mth-10yr curve is at +84 bps (unchanged). The China 10 year bond rate is also unchanged at 1.75%. The Japanese 10 year bond yield is holding at 2.65%. The Australian 10 year bond yield starts today at 4.81%, down -2 bps from Saturday, unchanged for the week.

The price of gold has held at US$4152/oz, down a net -US$66/oz for the week. Silver is at US$65/oz, down -US$3 for the week.

Oil prices are holding from Saturday at just under US$77.50/bbl in the US, while the international Brent price is now just over US$80.50/bbl. A week ago these prices were US$84.50 and US$87/bbl respectively. Hormuz transits are picking up with 15 crude or product tankers exiting over the past 24 hours (3 dark with transponders off) and 17 entering for new loads (8 dark). (Normal is 60 in each direction.)

The Canberra government said it has extended their fuel excise tax relief until the end of July.

The Australian dollar is unchanged from this time Saturday at just on 70.1 USc to make it a full -80 bps lower than a week ago. Against the Japanese yen we are little-changed at ¥113.1. Against the euro we are staying lower at just on 61.1 euro cents.

The bitcoin price starts today at US$63,124 and up +1.8% from this time Saturday. Volatility over the past 24 hours has been low at just over +/- 0.6%.