US data improves but economic expansion slows; Canadian wildfire crisis spreads; Singapore exports hesitate; China oil imports at decade low; UST 10yr at 4.55%; gold firms; oil jumps; AU$1 = 68.8 USc

Here's our summary of key economic events overnight that affect New Zealand, with news the US is pushing ahead with intensified military strikes on Iran, and Iran is responding against US positions in the region. The net result is higher oil prices, a retreating sock market, and a general risk-off tone in financial markets.

But overnight, there was a very good report out for US housing starts in June which came in +3.6% higher than year ago levels and brushing off their unusually weak May report.

But for all the positives that some Fed district factory surveys have shown, these are not showing up in US industrial production data yet. You might have thought the increased local stockpiling surge would be visible by now. But to June, it isn't. US industrial production rose a paltry +0.1% in June to be +1.1% higher than a year ago. And that is its weakest increase in three months.

Although consumers are still very negative in their sentiment, there was a notable improvement in the latest survey results from the widely-respected and long running University of Michigan consumer sentiment survey. With the second straight month of 10% jumps, consumer sentiment climbed to its least negative reading since February of this year on the basis of easing price pressures at the petrol pump in recent weeks. All five index components improved, led by significant 20% increases in buying conditions for durables as well as year-ahead business conditions. This month’s rise in sentiment was pervasive across the population, seen across groups by age, income, wealth, and political party.

Will it last? If it truly is directly related to pump prices, then today's outsized jump in crude oil prices (below) and the turn up in pump prices in the past few days, suggests not. Today's pump prices are almost back to month-ago levels when the sentiment survey hit its record lows.

Looking backwards over the past month, US data has seen improvements. But these have not been enough to return the Atlanta Fed's GDPNow tracking to where it was in May, so a sharp downshift is still in place. And it is worth noting that 'consensus forecasts' by mainstream economists have not yet reflected that retreat.

There is no Aussie GDP nowcast from an official institution. The Melbourne Institute version won't be updated until the end of the month.

In Canada, the spread of their enormous wildfires are becoming an international irritant. Canada is struggling to contain them. In an unusual move, the US is refusing to assist, even though Canada sends crews and support to the US when they have wildfire emergencies. There are major wildfires in Washington and Oregon as well.

Across the Pacific, Singapore's export growth fell back sharply and unexpectedly in June. Electronics exports remained elevated, but non-electronics exports were unusually weak in the month. Their big decliners were for petrochemicals, food, and non-monetary gold. Trade with the US was especially hard hit.

Here's something we haven't covered so far. Their June trade data for China shows that its crude oil imports are now at a ten year low. In fact their June crude oil imports were -11.4% lower than a year ago in volume terms. It is a shift that will have global implications.

The UST 10yr yield is now just on 4.55%, down -2 bps from this time yesterday, down a net -2 bps for the week. The key 2-10 yield curve is now at +37 bps (down -3 bps). Their 1-5 curve is now at +28 bps (-2 bps) and the 3 mth-10yr curve is at +83 bps (-4 bps). The China 10 year bond rate is down -1 bp at 1.73%. The Japanese 10 year bond yield is now at 2.70%, down -2 bps, down -1 bp for the week. The Australian 10 year bond yield starts today at 4.92%, up +1 bp from yesterday, up +6 bps for the week. 

Wall Street took fright today with the S&P500 down -1.0% and the Nasdaq down -1.4%. That means the S&P500 is down -1.2% for the week and the Nasdaq down -2.2%. The SpaceX share price is now below US$124, down -5.5% on the day, down -14.4% for the week. The 'smart money' hype is vanishing. Overnight, European markets were mixed between Paris's -0.5% while London rose +0.3%. Yesterday, Tokyo ended its Friday trade down a very sharp -4.0% for a -6.2% weekly drop. Hong Kong fell -1.8% to end its week up +1.7%. But Shanghai fell -3.1% on Friday for a -5.1% weekly drop. Singapore ended down -0.5%. The ASX200 ended its Friday trade down -0.5% for an unchanged week. 

The Fear & Greed index is back in the 'fear' zone from being just in the 'neutral' zone a week ago.

The price of gold has risen to US$4005/oz, up +US$21 from yesterday but down -US$95 from a week ago. Silver is now just under US$56/oz, up +50 USc from yesterday but down -US$3.50 for the week.

Oil prices are +US$3 higher from yesterday at just on US$82/bbl in the US, while the international Brent price is now just under US$88/bbl. A week ago these prices were US$71.50 and US$76 respectively so a +16% rise since then.. Hormuz transits have stayed low overnight There have been just 7 crude tankers and 9 cargo ships exiting over the past 24 hours (8 dark with transponders off) and 10 entering for new loads (3 dark) and almost all Iran-linked.

The Australian dollar is down -10 bps from yesterday at just on 68.8 USc but down -70 bps for the week. Against the Japanese yen  we are down -20 bps at ¥113.4. Against the euro we are down -10 bps at just on 61 euro cents.

The bitcoin price starts today at US$64,010 and down -0.2% from this time yesterday, up +0.4% from a week ago. Volatility over the past 24 hours has been modest at just over +/-1.4%.