US real economy data mixed; Wall St enamoured with SK Hynix; China car sales strong, exports stronger; Japan PPI high; container freight rates rise; UST 10yr at 4.56%; gold rises; oil eases; AU$1 = 69.5 USc

Here's our summary of key economic events overnight that affect Australia, with news the Hormuz Strait is effectively shut again with little-prospect of it allowing vessels through, perhaps other than Iranian-linked ones.

Elsewhere, US initial jobless claims rose by +224,500 and about what seasonal factors can account for. There are now 1.767 mln people on these benefits, less than year-ago levels.

After the good May rebound, existing home sales in the US fell back to average levels, and to levels lower than a year ago. The median price is up only +1.8% from a year ago. That modest rise is less than income growth, so overall affordability is getting a chance to recover there.

On Wall Street, South Korean computer chip maker SK Hynix has raised US$26.5 bln in its New York IPO, the largest ever listing by a foreign firm in the US. SK Hynix is a key supplier to AI chip giant Nvidia.

Meanwhile the USDA said that global corn and wheat stocks are falling due to unfavourable weather in many place, and that signals that prices for these basic ag commodities are about to rise. They also reported lower beef production in the US and expect imports to stay elevated. US milk production is rising however.

In Canada, their payrolls rose a minor +18,200 in June, slightly better than the expected +10,000, and holding on to the +88,000 gain in May. The June gain was all about a strong rise in the private sector (+32,000) which consolidated the good May private sector rise (+56,000). But most of the net June gain was from part-time employment. These positive shifts in June may have something to do with hiring for the football World Cup.

Across the Pacific in the fiercely competitive Chinese car market, they reported 2.8 mln vehicle sales in June which was somewhat unexpected because a dip from May was anticipated. But it is a -3% dip from year-ago June sales levels. That pushes their twelve month sales to 33.8 mln units, up from 33.0 mln in the prior equivalent year. Car exports rose above 1 mln units in June, the first time that level has been achieved as it floods global markets.

Japan is reporting that their producer prices rose +7.1% in June from a year ago, accelerating from an upwardly revised +6.6% increase in May and above market expectations of a +6.8% gain. It is the fastest annual increase since March 2023. Higher energy prices following supply chain disruptions linked to the war in Iran are driving this, of course.

And Japan’s finance minister said they want to steer their state pension funds to "substantially" increase investments in domestic assets. This brought a sharp immediate reaction in both their currency and bond markets, due to the expected size of the shift. The yen gained, or at least it halted its fall, and their bond yields fell sharply (see below).

Global container freight rates rose another +2% last week to be +74% higher than year-ago levels, mostly about outbound freight rates from China to the US where demand is still high. Bulk cargo freight rates pushed higher too.

The UST 10yr yield is now just on 4.56%, unchanged from this time Thursday but up +7 bps for the week. The key 2-10 yield curve is now at +36 bps (unchanged). Their 1-5 curve is now at +24 bps (-1 bps) and the 3 mth-10yr curve is at +88 bps (-6 bps). The China 10 year bond rate is unchanged at 1.73%, down -1 bp for the week. The Japanese 10 year bond yield is now at 2.71%, down -17 bps and down -6 bps for the week. The Australian 10 year bond yield starts today at 4.86%, down -8 bps from Thursday but up +4 bps for the week.

Wall Street has been firmish on the S&P500 to end its week, up +0.4% from yesterday, up +0.9% for the week. The Nasdaq is up +0.3% for a good +1.1% weekly rise. Overnight, European markets were mixed between London's +0.2% and Frankfurt's -0.2%. Yesterday Tokyo ended up +1.2% for a -2.0% weekly retreat. Hong Kong rose +0.6% to cap a +3.3% rise. Meanwhile Shanghai was down -1.0% to end its week down -1.6%. Singapore was up +0.7%. The ASX200 ended its Friday up +0.5% for a weekly -0.1% dip.

The Fear & Greed index has moved into the middle of the 'neutral' zone from being just in the 'fear' zone a week ago.

The price of gold has risen to US$4100/oz, up +US$33/oz from Thursday, but down -US$74 from a week ago. Silver is now under US$59.50/oz, up +US$1 from Thursday, down -US$3 from a week ago.

Oil prices are down -US$2 from Thursday at just on US$71.50/bbl in the US, while the international Brent price is now just over US$76/bbl. A week ago these prices were US$68.50 and US$72/bbl. Hormuz transits have dived sharply as the hot conflict explodes again with just 10 crude or product tankers exiting over the past 24 hours and 5 of those tied to Iran (5 dark with transponders off) but only 12 entering for new loads, again mostly Iran-linked (3 dark).

The Australian dollar is up +20 bps from this time yesterday at just over 69.5 USc, up +10 bps from a week ago. Against the Japanese yen we are down -30 bps at ¥112.4. Against the euro we are up +20 bps at just on 60.9 euro cents.

The bitcoin price starts today at US$63,736 and up +2.7% from this time Thursday, up +2.6% from a week ago. Volatility over the past 24 hours has been modest at just under +/- 1.3%.