Here’s my summary of the key issues over night that affect New Zealand, with news there is a deal between the US and Iran, finally finalised.
But first, American retail sales unexpectedly fell in June as households cut back on purchases of cars and a range of other goods, raising concerns their economy may be slowing again. Markets had expected +0.3% growth, but instead they got a -0.3% decline for the month. Perhaps reflecting this, small business optimism fell as well in a survey out overnight.
In Australia, the slowdown in China and other concerns about global growth have failed to dent business confidence there, according to the NAB survey for June. It shows a solid pick-up in both sentiment and conditions, one that is broad-based across most industry groups. A notable exception however is retail.
Later today, China will report its Q2 GDP and that is expected to be weaker than we have been used to hearing – less than a 7% annual rate. Whether that is a portent for their new growth track is up for debate; the Chinese leadership is certainly talking things up overnight. But the damage they did recently to their equity markets will be long-lasting.
In New York, the UST 10yr yield benchmark stumbled slightly following the weak retail sales data; it is currently up to 2.40%.
Oil markets are however inching higher. The US benchmark price is now just above US$53/barrel, and Brent crude is just above US$58/barrel. The long awaited US-Iran deal was agreed overnight to general applause – except in the US Congress and Israel. Confirmation by the US may be a stormy affair. Sudden output increases flooding markets also seems less likely.
The gold price is down again, now at US$1,154/oz as general risk levels fade.
The US dollar took a small hit from the retail data. We are range-bound against all other pairs. We start today lower at 67.1 US¢, unchanged at 90.1 AU¢, and marginally higher at 61 euro cents. The TWI-5 is still at 71.6.
If you want to catch up with all the local changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here »