US data mixed but markets fear rate hikes coming; Asian data very good; Australia sees rural exports declining as costs twist commercial decisions; UST 10yr at 4.46%; gold down and oil dips; AU$1 = 69.2 USc;

Here's our summary of key economic events that affect Australia, with news markets are betting that the next rate move by the US Fed will be a hike. And that has juiced up the USD today.

But first in the US, there was another good weekly jobs indicator from ADP for private payrolls, rising about what was expected.

And the flash US factory PMI for June shows solid growth, in fact its best in 4 years, but it also signals lower employment and elevated price inflation, so a mixed bag. The fall in factory jobs was the fastest since the pandemic. New order growth was good but the hikes in input prices are still next-level. Their service sector rose too but much more modestly and new order growth was tame.

But none of this showed up in the Richmond Fed's factory survey. While it did expand it was very modest and well below its May level and what was expected. They had the same lack-luster result in their service sector.

There was a well-supported US Treasury 2 year bond auction overnight, delivering a median yield of 4.14% (high 4.19%) which was well above the 4.02% median at the same event a month ago.

The Chicago Fed boss said yesterday the US inflation is too high and "going the wrong way". (He is presently an alternate FOMC member, but he will be a full member in 2027.)

Across the Pacific, Japan's factories are expanding solidly and faster. They recorded a stronger rise in business activity in June, but rate of cost inflation has hit a four-year high. New orders rose their fastest since 2022.

Singapore is managing to navigate the current global inflation pressures well. They recorded an inflation rate that held steady at 1.8% in May, unchanged for a third consecutive month and below market expectations of 2%.

In India, their flash June PMI's remained elevated and very expansionary, in both their factory and services sectors. New orders rose at a good pace, but input cost pressures eased, rising at a five month low.

In Taiwan, we are so used to reporting spectacular results but they no longer seem out of the ordinary. But in fact they remain extraordinary. Their May export orders were up +47% from a year ago to almost a new record high.

In Europe, their factory PMI is still expanding in June, but less so. Inflationary pressures show signs of softening there. Holding them back is their services sector.

The latest flash PMI for Australia shows that business activity nears stabilisation in June as the service sector improved, but new orders continue to fall, including for new export orders.

And staying in locally, their latest quarterly update for rural commodities notes that the gross value of agricultural production is forecast to fall by -5% to AU$98 bln in the 2026–27 upcoming year. They expect "average broadacre farm business profit" to fall by -70%, driven by lower revenue and higher input prices.

The UST 10yr yield is now just on 4.46%, down -5 bps from this time yesterday. The key 2-10 yield curve is now at +27 bps (down -2 bps). Their 1-5 curve is now at +26 bps (+1 bp) and the 3 mth-10yr curve is at +84 bps (down -4 bps). The China 10 year bond rate is up +1 bp at 1.74%. The Japanese 10 year bond yield is down -1 bp at 2.67%. The Australian 10 year bond yield starts today at 4.78%, down -4 bps from yesterday. 

Wall Street is in retreat, down -1.4% on the S&P500 while the Nasdaq is down -2.2%. But despite that, SpaceX has recovered slightly today. Overnight, European markets were mixed between Frankfurt's -1.0% dip and London's +0.1% rise. Yesterday Tokyo closed down -3.5%. Hong Kong closed down -1.8% and Shanghai was down -1.5%. Singapore ended unchanged. The ASX200 ended its Tuesday session down -0.3%. 

The price of gold has fallen to US$4130/oz, down a net -US$50/oz from yesterday. Silver is just under US$62/oz, down -US$3.50 from yesterday.

Oil prices are down -50 USc from yesterday at just on US$73/bbl in the US, while the international Brent price is now just on US$77/bbl. Hormuz transits are staying modest up with 16 crude or product tankers exiting over the past 24 hours (7 dark with transponders off) and 20 entering for new loads (2 dark).

The Australian dollar is down -80 bps from this time yesterday at just on 69.2 USc and a seven month low. Against the Japanese yen we are down -140 bps to ¥111.7. Against the euro we are down -50 bps at just on 60.8 euro cents.

The bitcoin price starts today at US$63,388 and up +0.4% from this time yesterday. Volatility over the past 24 hours has been modest at just over +/- 1.8%.