Eyes on the Aussie GDP and NZ OCR; Malaysia and India post strong data; Warsh trapped by high US inflation, weakening economy; UST 10yr at 4.72%; gold and oil on hold; AU$1 = 71.6 USc

Here's our summary of key economic events over the weekend that affect Australia, with news central banks are being forced to acknowledge that their measured approach to inflation control over most of 2026 just hasn't worked and they need a refreashed, tougher approach.

Locally this week, there will residential real estate updates, building permit data, and the Q2-2026 GDP expansion rate, expected to be up +1.6% from a year ago, much lower than the Q1-2025 expansion of +2.5%.

In New Zealand there will be a Wednesday central bank review where a +25 bps hike is widely anticipated and priced in.

In the US, the developing conflicts between the Fed's desire to rein in inflation, and the Trump Administration's actions to ignore that threat and to try and push down interest rates will increasingly be watched by markets. There will also be PMIs out pointing to economic activity changes, and the week will end with their August non-farm payrolls report which is currently expected to show a very minor +45,000 jobs expansion.

In Canada there will be a rate review although no change is expected from the current 2.25%. They have a 3% CPI level, and a major challenge from their obnoxious neighbour to contend with.

Japan will release a broad range of economic reports, including the latest industrial production, retail sales, consumer confidence, housing starts and household spending data.

India will release GDP data (expect +7.1%). Malaysia will review its policy rate, but no change is expected from the present 2.75% And there will be PMIs everywhere. And that includes China.

Over the weekend, Japan reported a 2.4% jobless rate in July, their lowest in more than a year and their second lowest since before the pandemic.

And it seems Japan can still surprise. Births from January through June were 342,068, up +0.8% (+2,788 more) from the same period in 2025. It was their first rise for the first half of the year in 11 years.

Malaysia said producer prices there rose at a very fast +9.7% rate in July, their fastest since the pandemic and before that since early 2017.

India reported that its industrial production eased back from a +9.5% expansion rate in June to +7.3% in July. But this was still a better result than anticipated. Meanwhile, Indian bank loan growth has stayed extraordinarily high, up +18.3% from a year ago.

In China, mirroring the Evergrande disaster, China Vanke’s first-half loss widened to -¥16 bln as sales slumped and debt pressure built. Upcoming debt maturities may trigger the end of it.

And the EU released the August results of its business and consumer sentiment surveys. The net outcome is improving sentiment, especially business sentiment. Only consumer sentiment remains low but it is marginally less so in August.

In the US, in his Jackson Hole speech, Fed boss Kevin Warsh flagged that inflation in the American economy is too high but he offered no indication whether he favours keeping interest rates at current levels or pushing them higher. But he did restate that 2% is their inflation target. He gave no indication of rate policy but the inflation warning was enough for financial markets to conclude rate rises are more likely. Especially as he likely doesn't have the votes for a hold or cut.

In the real American economy, the Chicago PMI fell sharply in August into a contraction. The fall was driven by declines in New Orders, Order Backlogs, Production and Supplier Deliveries. It was their first fall in four months and discouraging, suggesting the stockpiling trend may be ending as inventories are now well built.

Meanwhile, the US non-farms payrolls data has gone through their annual adjustment. That says their previous reports of job growth were overstated by 79,000. And that is an adjustment of weak results in the first place. It is another discouraging signal.

And the University of Michigan consumer sentiment August survey was updated too, confirming its early month reading, falling about -6% from last month and landing about -11% below a year ago. They noted continued worries that inflation will remain elevated for the foreseeable future. Current levels are near the post-pandemic lows. In fact they are near the low points this survey got in the pandemic.

In Canada, they reported a revised Q2-2026 GDP expansion of +3.3% for the year. They noted that their household saving rate reached 3.7% in the quarter as growth in disposable income (+2.1%) outpaced nominal household spending (+1.7%). But they also flagged that the July expansion has vanished, no expansion in this latest month. Given the problems with their southern neighbour, it is hard to see an expansion continuing.

The UST 10yr yield is now just on 4.72%, down -1 bp from Saturday at this time, down -2 bps for the week. The 30 year yield is at 5.21%, also dipping -1 bp. The key 2-10 yield curve is now at +37 bps (down -1 bp). Their 1-5 curve is now at +34 bps (unchanged) and the 3 mth-10yr curve is at +96 bps (-2 bps). The China 10 year bond rate is unchanged at 1.70%, up +1 bps for the week. The Japanese 10 year bond yield is now at 2.93%, up +1 bp, up +5 bps for the week and a 30 year high. The Australian 10 year bond yield starts today at 5.09%, unchanged from Saturday, up +6 bps for the week. 

The price of gold is now at US$4454/oz, and down -US$8 from Saturday at this time, down -US$167/oz for the week. Silver has fallen -50 USc to just over US$66/oz and a -US$3.50 weekly fall.

Oil prices are holding from Saturday at just under US$83.50/bbl in the US, while the international Brent price is just on US$88.50/bbl. A week ago these prices were US$87/bbl and US$94.50/bbl respectively Hormuz transits have held very low with just two ships exiting over the past 24 hours (none dark with transponders off) and five entering for new loads (0 dark). The Red Sea activity is lower than Saturday with less than 20 each way at the Yemen chokepoint.

The Australia dollar is unchanged from Saturday at just on 71.6 USc. Against the Japanese yen we are holding at ¥114.7. Against the euro we are holding at 61.8 euro cents.

The bitcoin price starts today at US$79,010 and up +1.7% from Saturday at this time. Volatility over the past 24 hours has been low at just on +/-0.9%.