US second-tier data weak; China struggles to suppress negative economic sentiment; Taiwan retail rises; Singapore factories weaker; UST 10yr 3.72%; gold and oil firmer; NZ$1 = 61.7 USc; TWI-5 = 70.1

Here's our summary of key economic events overnight that affect New Zealand, with news China is struggling to regain its economic momentum.

And perhaps the US is as well. Although not as weak as the May result, the June factory survey by the Dallas Fed in America's oil patch remains weak. Shrinking new orders are the key feature. Loan demand is weak. (And although it has a reputation for 'low taxes' at the state level, it turns out they are higher for middle-class households in Texas than its political rival California.)

Factory sales rose in Canada in May in data released overnight. That is their third consecutive rise, and their seventh rise in the past nine months.

In China, complaints against banks are rising, and sharply. Most seem to revolve around banks not letting borrowers repay their mortgages early. Chinese households are prioritising savings over consumption as economic uncertainty rises. On the other hand banks stand to lose a lot if large numbers of borrowers repay early. And Beijing is clearly worried about excessive saving and what it is doing to economic activity. In this context, the apparent block against repaying loans early is frustrating borrowers and in some way making the negative sentiment worse.

And staying in China, we should note that a new article in the People’s Daily, the official newspaper of the ruling Communist Party, vows to build efforts to unleash the potential of artificial general intelligence. It wants to lead the "new wave of tech revolution ... industrial transformation" it says.

The recent holiday trading was notable for its lacklusterness. Authorities are worried about the growing spread of pessimism.

Meanwhile, China’s currency depreciated as much as -0.9% to 7.2380 per US dollar in Shanghai yesterday, and well worse that the official central bank setting as pessimism over the economic recovery continues to weigh on sentiment. That adds to a full -4% devaluation since the start of 2023.

Taiwanese retail sales rose in May. It was a modest rise from April, but a big surge from a year ago, but that was because the base was weak in 2022. But it was the inverse for their industrial production which recorded a sharpish fall from a year ago, again due to base effects. The month-on-month they recorded a rare rise.

Singapore's industrial production was also expected to rise month-on-month, but it didn't which would have disappointed them. Their year-on-year retreat was worse than expected.

Also disappointing was the latest German sentiment survey which came in less optimistic than expected. Europe's largest economy is struggling again after rising sentiment about future prospects from October through to April.

The UST 10yr yield will start today at 3.72% and down -2 bps. Their key 2-10 yield curve inversion is unchanged at -102 bps. Their 1-5 curve is more inverted at -131 bps. And their 3 mth-10yr curve is inverted by -140 bps. The Australian 10 year bond yield is now at 3.90% and down -4 bps. The China 10 year bond rate is little-changed at 2.71%. And the NZ Government 10 year bond rate is also down -4 bps at 4.56%.

Wall Street has opened its Monday trade with a -0.1% dip in the S&P500 today. Overnight, European markets were mixed with London down -0.1% and Paris up +0.3%. Yesterday, Tokyo ended its Monday trade down -0.3%. Hong Kong fell -0.5%, and Shanghai fell a much sharper -1.5%. The ASX200 ended its session also down -0.3%. But the NZX50 fell away sharpish at the end to be down -0.8%.

The price of gold will start today at US$1925/oz and that's up a minor +US$5/oz from yesterday.

And oil prices are marginally firmer from yesterday to now be just under US$70/bbl in the US. The international Brent price is little-changed at just over US$74.50/bbl.

The Kiwi dollar starts today at 61.7 USc and up +¼c from yesterday. Against the Aussie we are also +¼c firmer at 92.4 AUc. Against the euro we are firmer too at 56.6 euro cents. That means the TWI-5 is still just on 70.1 and up +30 bps since this time yesterday.

The bitcoin price has eased again from this time yesterday and now is at US$30,081 with another dip of -1.5%. Volatility over the past 24 hours has been modest at just under +/- 1.2%.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».