US services sector stable; Canada's dips but inflation elevated; a regional China bank collapses; China leads fintech patent race; Australian inflation expectations ease; UST 10yr at 4.48%; gold and oil stable; AU$1 = 69.5 USc

Here's our summary of key economic events overnight affect Australia, with news that now the Hormiz situation is settling down somewhat with oil prices easing, the global economy seems to be responding with a better outlook.

First today, the widely-watched US ISM services PMI came in at a good level for June even if slightly softer than for May. Price pressures eased slightly, new business stayed at good levels even if less than for May, but employment was stronger even if it is still the weakest component. This Overall services measure has been at or about this level for seven months now is a relatively settled state. It is much more in positive territory than the S&P Global services PMI for the US.

The S&P Global services June PMI for Canada is negative after a fall from May's small (but rare) expansion. Business activity weakened as new orders fell for a second straight month, with firms citing high prices and geopolitical uncertainty as key factors weighing on domestic and foreign demand.

Meanwhile, the Bank of Canada's June quarter Business Outlook survey found similar views. Overall business sentiment has deteriorated after improving over the past three quarters. Sales outlooks have softened slightly, but firms’ export outlooks have improved. Fewer firms said trade uncertainty and hesitancy among US customers are constraining exports, and more firms reported strong demand for commodity exports. Most firms did not report binding capacity constraints or labour shortages.

Meanwhile a companion consumer survey shows inflation expectations are now over 3% there and right at the top of its target range of 1-3%.

Singapore reported its May retail sales data overnight and it wasn't positive. Of course, this was during the height of the Middle East uncertainties.

In China, a private bank in Wuhan with US$19 bln in assets has collapsed and been taken over by regulators. While it isn't a large institution, others are saying it won't be an isolated event among regional banks. (For comparative reference, the US FDIC has dealt with two US banks in 2026 that have failed.)

And according to research by a Japanese consultancy, Chinese banks and tech companies led the world in applications for financial technology patents over the last decade, surpassing the US in a field that supports a wide range of financial services from lending and asset management to cryptocurrencies. They examined fintech-related patent filings in 118 countries and regions in the 10 years through 2025, working with Tokyo-based research firm Patent Result. The total tally reached roughly 120,000, nearly triple the number in the preceding decade.

Also for May, the EU posted its producer price data, showing a rising +5.7% level from a year ago and driven by higher energy costs. But they also released May retail sales data and perhaps surprisingly, these rose on a real basis, up a creditable +1.9% from a year ago on a price-adjusted basis.

Here in Australia, the Melbourne Institute survey of inflation expectations eased back slightly to 5.5% after the March spike that was rose again in April. But it has eased from there, and slipped again in June. Wage expectations, by comparison, have remained unchanged for the past seven months.

The UST 10yr yield is now just on 4.48%, down -1 bp from this time yesterday. The key 2-10 yield curve is now at +36 bps (unchanged). Their 1-5 curve is now at +27 bps (-1 bp) and the 3 mth-10yr curve is at +81 bps (-6 bps). The China 10 year bond rate is down -1 bps at 1.73%. The Japanese 10 year bond yield is now at 2.83%, up +6 bps and at new 30 year-high levels. The Australian 10 year bond yield starts today at 4.81%, up +1 bp from yesterday. 

Wall Street has started its week up +0.8% on the S&P500, up +1.3% on the Nasdaq. Overnight, European markets were mixed between London's -0.3% dip and Frankfurt's minor +0.1% rise. Yesterday Tokyo ended little-changed. Hong Kong rose +1.1% while Shanghai slipped -0.1%. Singapore was up +0.3%. The ASX200 ended its Monday down -0.2%. 

The price of gold has slipped to US$4158/oz, down -US$15/oz from yesterday. Silver is now under US$62.50/oz, down -50 USc from yesterday.

Oil prices are down -50 USc from yesterday at just under US$68.50/bbl in the US, while the international Brent price is now just under US$72/bbl. Hormuz transits have stayed low on renewed uncertainties with just 16 crude or product tankers exiting over the past 24 hours (0 dark with transponders off) but 20 entering for new loads (5 dark). Interestingly, Red Sea activity near Yemen has fallen to similarly low levels on added risks there.

The Australian dollar is up +20 bps from this time yesterday at just on 69.5 USc. Against the Japanese yen we are up +70 bps at ¥112.7. Against the euro we are up +10 bps at just on 60.8 euro cents. 

The bitcoin price starts today at US$63,554 and up +1.6% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.0%.