China car exports flood global markets; helium access a new chokepoint; Japan PPI high & rising; eyes on yen; US data languid; freight rates rise again; UST 10yr at 4.56%; gold rises; oil holds on Strait closure; AU$1 = 69.5 USc

Here's our summary of key economic events over the weekend that affect Australia, with news the Hormuz Strait is effectively shut again with Iran's 'strategy' winning against the US 'firepower'. It is hard to think of any other politician trashing their advantage perceptions so completely. There will be long historical echoes from all this ineffective breast-beating.

But elsewhere and locally, we will get our June labour market updates, after updates for consumer and business sentiment.

In the US, apart from Trump's wars, investors will turn their attention to the Q2 earnings season, and a steady stream on important economic data that includes their CPI, retail sales and consumer sentiment updates. Fed boss Warsh will be briefing Congress and that will be interesting too, especially about his views on 'reform'.

Canada will be reviewing their central bank's policy rate this week, although no change from the 2.25% is anticipated.

In Japan, it will be about machinery orders and industrial production with eyes also firmly focused on their currency - which will also impact their fast-rising interest rates.

In China, it will be a busy week of June economic data releases including for trade, and debt, and highlighted by their Q2-2026 GDP growth rate.

Over the weekend, 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.

It is storm season in China again, and severe flooding has hit a number of regions, enough to concentrate minds in Beijing.

Elsewhere, China has banned the export of helium. Actually the re-export of helium because it gets most of it from Russia. The Middle East conflict has restricted supply from there, and tech users in Europe and Asia are now in a tough spot, as are medical users everywhere. China is conserving its Russian imports for its own tech industry.

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).

Elsewhere, in the 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.

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 events.

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 Saturday but up +7 bps for the week. The key 2-10 yield curve is now at +35 bps (down -1 bp). Their 1-5 curve is now at +25 bps (+1 bp) and the 3 mth-10yr curve is at +87 bps (-1 bp). 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 2.77%, up +6 bps but unchanged for the week. The Australian 10 year bond yield starts today at 4.84%, down -2 bps from Saturday but up +6 bps for the week. 

The price of gold has risen to US$4119/oz, up +US$19/oz from Saturday, but down -US$55 from a week ago. Silver is now just under US$60/oz, up +50 USc from Saturday, down -US$2.50 from a week ago.

Oil prices are little-changed from Saturday at just on US$71.50/bbl in the US, while the international Brent price is now just on 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 and Iran declaring the Strait 'closed'. There have been just 12 crude or product tankers exiting over the past 24 hours and 5 of those tied to Iran (5 dark with transponders off) but only 9 entering for new loads, again mostly Iran-linked (3 dark).

The Australian dollar is unchanged from Saturday at just over 69.5 USc, up +50 bps from a week ago. Against the Japanese yen we are unchanged at ¥112.4. Against the euro we are unchanged at just on 60.9 euro cents.

The bitcoin price starts today at US$64,084 and up +0.6% from this time Saturday, up +2.9% from a week ago. Volatility over the past 24 hours has been low at just under +/- 0.6%.