Here’s our summary of key economic events overnight that affect New Zealand, with news cold winds are blowing downunder, and in Sweden, but Americans are feeling better about themselves.

The latest update of consumer sentiment in the US, this one from the University of Michigan survey, delivered a bounce that wasn’t expected. June sentiment rose to its highest in four months reflecting greater optimism as inflation eased and policymakers resolved the immediate debt ceiling crisis. In fact that caps a year of rising sentiment, with this index up +27% from a year ago.

Despite getting a new Governor who was thought to be ready to declare victory over deflation, the Bank of Japan under its new leader late yesterday kept its key short-term interest rate unchanged at -0.1% and that of 10-year bond yields at around 0% by a unanimous vote. It said it didn’t move because of the high risks it sees in international economies.

Singapore’s exports slumped in May, and crashing very much more than expected. They have had a good run over the past two years but from July 2022 there has been a steady and now increasing retreat. This data is kind of a regional canary.

We should note that Sweden is in a full-blown property crisis. Residential housing values have fallen about -20% from their peak, and commercial property firms are falling over, weighed down with debt in a rising interest rate market that is crushing values. The OECD is warning of financial stability risks in the country and their government has said it will act if the risks expand further than the property sectors. Germany has some of these pressures as well.

In Australia, the pressure in not coming from their housing market, rather it is coming in retail sales. At its monthly review, the RBA noted a “substantial slowing in household spending” and this past week many key retailers have been reporting retreating sales levels, some quite sharp. New data from BNPL operator Zip shows a -7.4% slide in spending in fashion and clothing in the first two weeks of June compared to the first two weeks in May. Some major retailers are signaling sales are down -20% recently. Discounting is being turbocharged and the retailing industry is worried.

Oddly, New Zealand may not actually be in a real recession despite the dodgy “two quarters rule” that is more media hype than an actual economic measure. But it has unnerved the Aussies, and they seem to be more likely to have a real recession ahead in 2023 than us.

The UST 10yr yield will start today at 3.74% and up +4 bps but exactly where they were a week ago. The Fed update came and went with little net change in this key benchmark. Their key 2-10 yield curve is more inverted at -94 bps. Their 1-5 curve is less inverted at -125 bps. And their 3 mth-10yr curve is less inverted at -135 bps. The Australian 10 year bond yield is now at 4.03% and up +4 bps. The China 10 year bond rate has risen +2 bps to 2.71%. But the NZ Government 10 year bond rate is down -2 bps at 4.56%.

Wall Street dipped on the S&P500 in Friday trade, down -0.4%, but ended the week up a strong +2.4%. Overnight European markets were mixed with London up +0.2% and Paris roared back and more, up +1.3% on the day and a +1.9% weekly rise. Yesterday Tokyo closed up +0.7% in Friday trade to end the week up an impressive +4.0%. Hong Kong rose a strong +1.1% for a weekly rise of +3.1% and Shanghai was up +0.6% for a +1.5% weekly gain. The ASX200 ended its Friday session up +1.1 for a +2.1% weekly rise. But the NZX50 could only manage a +1.0% daily gain on Friday taking the weekly rise to +0.9%.

The price of gold will start today down -US$3 at US$1957/oz and down -US$4 for the week.

Oil prices are up another +US$1 today to now be just under US$72/bbl in the US. The international Brent price is now up at just over US$76.50/bbl. A week ago these two prices were US$70 and US$75 respectively.

The Kiwi dollar starts today up at 62.3 USc and unchanged from yesterday. But it is up more than +1c in a week. Against the Aussie we are unchanged at 90.6 AUc. Against the euro we are unchanged as well at 56.9 euro cents. That means the TWI-5 is little-changed at 69.9 but up +50 bps in a week.

The bitcoin price is much higher since this time yesterday at US$26,286 and up almost +5% from yesterday at this time. A week ago it was at US$26,446, so little net change since then. Volatility over the past 24 hours has been moderate at just on +/- 2.5%.

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