US data mixed; Canada grows; China marks time; German inflation eases; eyes on yen; Rocket Lab expands; air cargo activity declines; UST 10yr at 4.43%; gold holds and oil down even as Hormuz quiet; AU$1 = 69.2 USc

Here's our summary of key economic events overnight that affect Australia with news the Persian Gulf situation is settling into a chronic stalemate after the acute hot conflict. US allies in the region are confused, Qatar's role in negotiations is questioned as to whether it can actually do anything, and Iran and Oman are moving forward with their plans for 'fees' and 'management' of the waterway. The US is getting sidelined.

One outcome seems clear however; Chinese EV's are dominating world car sales so demand for crude oil is likely to be much less in the future, and that will limit oil price pressures.

But first today in the US, labour market data for May about job openings was little-changed from April even if it still is near a two year high, which was slightly better than was expected.

But the June PMI report for the important Chicago manufacturing hub was quite a bit weaker than for May and what was expected. But it is only back to February levels which isn't bad at all. It was a fall away in new orders that drove the easing.

Meanwhile the Dallas Fed's regional services survey became positive - just - for the first time in five months. They reported that selling price pressures increased slightly, while input price and wage pressures grew at a faster pace.

The Conference Board sentiment survey barely moved in June from May, which actually was a result that disappointed analysts because a more marked improvement was anticipated. And that was because respondents turned negative about job prospects, with almost a quarter of them unexpectedly saying jobs are 'hard to get', the highest level sine early 2021.

And we should perhaps note that the deadly screwworm cattle disease is still spreading in Texas and New Mexico, spreading to other animals too. Even though the number of animals reported as having contracted the disease remains small, the risks to cattle herds in these states in very large.

In Canada, the expectation that it was falling into recession has proven not to be the case. Canada’s GDP rebounded from a first-quarter contraction to record a +0.5% monthly gain in April making this their largest economic expansion in nine months. Their May estimate points to a further if minor + 0.1% growth.

Across the Pacific in Japan, the yen slipped into the 162-per-US dollar range yesterday for the first time in 39 years, and extending a slide that has accelerated in the past few months. A two month intervention effort isn't working, raising fresh questions about what is driving the yen's renewed weakness.

China's official PMIs posted some marginal improvements in June, actually very marginal but at least they are not contracting. Their factory PMI is expanding, just. New orders picked up slightly. And their services PMI is now not contracting. But it isn't expanding either. New orders in this version are still negative, but the overall index was bolstered by expectations for improvement and lower lead times. All other more direct elements are negative to some degree. We should note that the unofficial PMIs by S&P Global/RatingDog have tended to be more expansionary in 2026. These unofficial results will come later today (Wednesday) and Friday.

German inflation came in at 2.3% in June, down from 2.6% in May, 2.9% in April, and softer than anticipated, mainly because energy prices retreated there.

Back in the US, Rocket Lab has agreed to buy Iridium Communications, a pioneer in satellite telephones, in a broadening attempt to compete with Starlink. It combines their launch capabilities and satellite manufacturing with Iridium’s network in low-Earth orbit and valuable radio frequencies for satellite communication.

Yesterday we reported a +6% rise in May air cargo activity. But today the May air passenger travel data was released showing it declined -2.2% from a year ago, down -3.1% for international travel. The main diver of the pullback was international travel through the Middle East (-28.8%). But it is also worth noting that domestic air travel in China fell (-6.2%) as well as in the US (-1.9%).

The UST 10yr yield is now just on 4.43%, up +6 bps from this time yesterday. The key 2-10 yield curve is now at +28 bps (up +2 bps). Their 1-5 curve is now at +21 bps (+3 bps) and the 3 mth-10yr curve is at +74 bps (+5 bps). The China 10 year bond rate is up +1 bp at 1.73%. The Japanese 10 year bond yield is up +5 bps at 2.69%. The Australian 10 year bond yield starts today at 4.72%, down -2 bps from yesterday. 

Wall Street has risen again today, up +0.9% on the S&P500, up +1.5% on the Nasdaq. Overnight, European markets were mixed between London's +0.1% and Frankfurt's +1.5. Yesterday Tokyo closed up +0.9%. Hong Kong closed down -0.6% although Shanghai was up +0.5%. Singapore was down -0.7%. The ASX200 ended its Tuesday down -0.5%. 

The price of gold has risen to US$4026/oz, up a net +US$4/oz from yesterday. Silver is now under US$59.50/oz, up +US$1.50 from a day ago.

Oil prices are down -US$1.50 from yesterday at just on US$69.50/bbl in the US, while the international Brent price is unchanged at just on US$73/bbl. Hormuz transits have stayed at their lower level after the recent volatility & uncertainties with just 19 crude or product tankers exiting over the past 24 hours (5 dark with transponders off) and 23 entering for new loads (5 dark). Over the past two days, almost 70% of the exiting vessels have been headed to China.

The Australian  dollar is up +30 bps from this time yesterday at just under 69.2 USc. Against the Japanese yen we are up +90 bps at ¥112.4. Against the euro we are up +30 bps at just on 60.3 euro cents.

The bitcoin price starts today at US$58,325 and down -3.3% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.0%.