US inflation eases but still well above Fed target; Singapore growth stays high; China exports jump; Aussie sentient less negative; UST 10yr at 4.57%; gold rises; oil eases on Trump's toll backdown; AU$1 = 69.7 USc

Here's our summary of key economic events overnight that affect Australia, with news of more Trump flip-flops in haphazard moves that show Trump has no strategy or exit plan from the mess he created in the Middle East.

But first, the US released its June CPI result with a somewhat surprising dip, with it falling to 3.5% after May's three year high 4.2%. Markets had expected a lesser dip to 3.8%. The biggest retreat was the -9.7% fall in petrol prices (although this monitoring only recorded a +6.8% fall).

Inflation was on the mind of Fed speakers overnight, especially Kevin Warsh, who reiterated his commitment to fighting inflation saying he had "no tolerance for persistently elevated inflation". But he had no details or plans on how he is to tackle inflation. He was presenting the Fed's semi-annual Monetary Policy Report to Congress. The Fed's target is inflation at 2% and it has been above that for 63 consecutive months now, so the credibility of achieving that target is not high.

The ADP weekly private jobs monitoring fell again, now under +20,000 and the first time it has reported a gain that low since mid-March. It has been tracking lower since early May.

The lower fuel costs shifted the needle in the NFIB sentiment survey for SMEs, resulting in a less-negative June result. But these same respondents cited inflation as their biggest threat, the highest since October 2024.

Yesterday, big US banks reported strong earnings gains, helped by their role in the Big Tech IPOs and other tech fundraising.

Singapore said its economic activity was +5.7% higher in Q2-2026 than in the same quarter in 2025. While this was a bit less than the +6.3% first quarter result, it was above the expected +5.5% outcome.

China said its June exports were up a remarkable +27% from the same month a year ago, driven by US companies stockpiling ahead of the expected inflationary effects of upcoming producer price inflation from the Middle East shocks, and by China's push to export cars, and far more than the +18% expected. It also said its imports were +36% higher than a year ago, driven by crude oil imports. That all meant that it had a near record trade surplus of +US$126 bln in June, only exceeded by the January 2025 +US$136 bln in that month.

Here in Australia, the Westpac-MI consumer sentiment survey became less pessimistic in July, mainly because their fuel price pressures eased - and their interest rate fears moderated as well. Job loss concerns eased too. But consumers remained gloomy about the economy overall and that meant they don't think now is a good time to buy a major appliance. And, although it recovered somewhat from very low levels, Aussies are still very uncertain where their housing market is going.

The story was quite similar for business sentiment in July as reported by the NAB survey. However, this one reported a sharper-than-expected improvement even if it is still negative. Price pressures also moderated, with input price growth slowing to its weakest pace since February and retail prices falling for the first time in seven years.

The UST 10yr yield is now just on 4.57%, down -4 bps from this time yesterday. The key 2-10 yield curve is now at +38 bps (up +3 bps). Their 1-5 curve is now at +26 bps (unchanged) and the 3 mth-10yr curve is at +88 bps (-4 bps). The China 10 year bond rate is up +1 bp at 1.74%. The Japanese 10 year bond yield is now at 2.69%, down -9 bps. The Australian 10 year bond yield starts today at 4.89%, unchanged from yesterday.

Wall Street has started today more positively with the S&P500 recovering +0.4% and the Nasdaq up +1.0%. Overnight, European markets were little-changed again between London's +0.3% while Paris's unchanged result. Yesterday, Tokyo ended its Tuesday trade up +0.7%. Hong Kong firmed as well, up +0.5%. But Shanghai was up a large +1.4%. Singapore ended up +0.5%. The ASX200 ended its Tuesday trade essentially unchanged again.

The price of gold has risen to US$4059/oz, up +US$66/oz from yesterday. Silver is now just under US$59/oz, up +US$1.50 from yesterday.

Oil prices are up +US$1.50 from yesterday at just on US$78.50/bbl in the US, while the international Brent price is now just over US$84/bbl and up +US$2. Hormuz transits have essentially dried up as the hot conflict explodes again and Iran declaring the Strait 'closed'. There have been just 3 crude tankers and 7 cargo ships exiting over the past 24 hours and all of those tied to Iran (1 dark with transponders off) but only 9 entering for new loads, all Iran-linked (1 dark). No-one was prepared to pay Trump's tolls, so Trump backed down (in a weird rambling announcement), less than 24 hours after announcing the levies. It is unknown if any are paying Iran's tolls. Plans to build pipelines to avoid the area are getting new momentum now. So Iran is shifting its focus to blockading the Red Sea at Yemen.

The Australian dollar is up +50 bps from yesterday at just over 69.7 USc. Against the Japanese yen we are up +60 bps ¥113.1. Against the euro we are up +20 bps at just on 61 euro cents.

The bitcoin price starts today at US$64,477 and up +4.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.5%.