US data wavers as inflation expectations rise; dairy prices fall; Canada trade surplus higher; Japanese household spending rises; UST 10yr at 4.48%; gold down; oil up on new Hormuz threats; AU$1 = 69.4 USc

Here's our summary of key economic events overnight affect Australia, with news renewed Hormuz attacks are raising oil prices and interest rates today, not helped by a pullback in tech stocks.

But first today in the US, the RealClearMarkets/TIPP Economic Optimism Index rose in July to a better than expected level but it is still well below the average over the past year and below its long term norm.

Meanwhile, American consumer inflation expectations rose when a small dip was anticipated. It is now at 3.7%, its highest since September 2023 and is rising even though expectations for lower petrol prices are included in these results.

The weekly private jobs growth monitoring by ADP shows a smaller rise last week than they have recorded in the past 15 week, since mid-March in fact. And the trend has been down for seven straight weeks. This is consistent with the easing that the official non-farm payrolls report showed for June.

The US Logistics Managers Index rose again in June and to its highest since March 2022, driven by three factors; anticipation of more tariff action from Trump, stockpiling to get ahead of inflation, and an expectation that the end of year retail season will be 'normal'.

US exports weakened in May and imports rose in the same time in the broader trade result that includes both goods and services, delivering a sharp rise in their deficit and their highest in over a year. This result matched the recent report of merchandise trade but brings their services trade into the picture.

Meanwhile Canada reported rising exports and stable imports to give them a larger trade surplus in May.

China said its foreign exchange reserves dipped slightly in June from their unusually high May levels. Part of this was due to the retreat in the gold price. But their central bank continued its gold-buying streak for a 20th month, with reserves reaching 75.44 million troy ounces by June’s end, up from 74.96 million in May.

China’s excavator sales are rebounding, up by more than a third in June from a year ago, driven by major projects.

New data out yesterday paints a much improved picture for Japanese household spending in May as households started to get their mojo back. And don't overlook that this was in the middle of the Trump Gulf War uncertainties.

The UST 10yr yield is now just on 4.55%, up +7 bps from this time yesterday. The key 2-10 yield curve is now at +37 bps (up +1 bp). Their 1-5 curve is now at +28 bps (-1 bp) and the 3 mth-10yr curve is at +88 bps (+7 bps). The China 10 year bond rate is unchanged at 1.73%. The Japanese 10 year bond yield is now at 2.84%, up +1 bp and at new 30 year-high levels. The Australian 10 year bond yield starts today at 4.84%, up +3 bps from yesterday. 

Wall Street has been softish on the S&P500, down -0.5% while on the Nasdaq it is down -1.2%. Overnight, European markets were mixed between London's +0.1% and Frankfurt's large -1.4% fall. Yesterday Tokyo ended down an even larger -2.1%. Hong Kong dipper -0.5% while Shanghai was down -1.3%. Singapore was up +1.6% however. The ASX200 ended its Tuesday down -0.3%.

The price of gold has slipped to US$4146/oz, down -US$13/oz from yesterday. Silver is now under US$61/oz, down -US$1.50 from yesterday.

Oil prices are up +US$2 from yesterday at just under US$70.50/bbl in the US, while the international Brent price is now just on US$74/bbl. Hormuz transits have picked up sharply despite renewed uncertainties with 27 crude or product tankers exiting over the past 24 hours (4 dark with transponders off) but only 18 entering for new loads (4 dark). Interestingly. All this comes as attacks on ships in transit become daily events, so the rise in oil prices isn't surprising. Red Sea activity near Yemen has fallen again to even lower levels on added risks there too.

The Australian dollar is down -10 bps from this time yesterday at just on 69.4 USc. Against the Japanese yen we are down -30 bps at ¥112.4. Against the euro we are little-changed at just on 60.8 euro cents. 

The bitcoin price starts today at US$64,063 and up +0.8% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.3%.