The global markets are a rollercoaster, aren't they? One day it's all smooth sailing, the next it's a wild ride. And today, it seems like we're in the middle of a particularly turbulent one. The US-Iran deal has sent a wave of relief through financial markets, but commodity prices are still feeling the heat. It's like the markets are saying, 'We'll take the deal, but we're not letting go of our grip on these commodities just yet.'
But let's not get too excited. The US manufacturing output has stalled, and the factory survey for the New York region came in weaker than expected. It's like the markets are saying, 'Hey, we might be celebrating, but we're not out of the woods yet.' The NAHB survey of housebuilders also remained weak, indicating that affordability concerns are still a big deal. So, while the markets are cheering, there are still some underlying issues that need addressing.
In Canada, things are looking up. May housing starts dipped, but they're still high on a historical basis. And April industrial production was strong, with manufacturing sales up 4.2%. It's like Canada is saying, 'We've got this under control.'
India is also making waves. Its exports rose to a record high of US$45.2 billion in May, an 18% increase from the previous year. It's like India is saying, 'We're here to stay.'
The EU industrial production rose in April, a better-than-expected result. And France is facing pressure from the US over its digital services tax. It's like the markets are saying, 'France, you're not getting away with this.'
The UST 10-year yield is now just on 4.46%, and the key 2-10 yield curve is at +41 bps. The China 10-year bond rate is little-changed at 1.75%, and the Japanese 10-year bond yield is down -7 bps at 2.57%. The Australian 10-year bond yield starts today at 4.85%, and the NZ Government 10-year bond rate is down -6 bps at 4.44%.
Wall Street has started its week strongly, with the S&P500 up +1.8% and the Nasdaq up +2.9%. European markets were mixed, with Frankfurt rising +1.4% and London retreating -0.4%. Tokyo ended its Monday session up an eye-catching +5.0%, but Hong Kong only rose +0.5%. Singapore rose +1.0%, and the ASX200 ended its Monday session up +1.2%. But the NZX50 eased an out-of-step -0.2%.
The price of gold has recovered further, up +US$99 from yesterday to US$4321/oz. Silver is up +US$2.50 to US$70/oz. Oil prices are down -US$4.50 from yesterday at just under US$80.50/bbl in the US, while the international Brent price is now just over US$83/bbl. The Kiwi dollar is unchanged from this time yesterday at just on 58.3 USc. Against the Aussie, we are down -40 bps at 82.4 AUc. Against the euro, we are down -10 bps at just under 50.3 euro cents.
The TWI-5 starts today at just under 61.9, which is down -10 bps from yesterday. Bitcoin price starts today at US$66,868 and up +5.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.9%.
So, what does all this mean? Well, in my opinion, it's a mixed bag. The US-Iran deal is a relief, but commodity prices are still high. The US manufacturing output is stalled, and affordability concerns are still a big deal. Canada and India are doing well, but France is facing pressure. The markets are cheering, but there are still some underlying issues that need addressing. It's like the markets are saying, 'We're not out of the woods yet.'
Personally, I think that the markets are sending a clear message: 'We're not taking any chances. We're still feeling the heat, and we're not letting go of our grip on these commodities just yet.' It's like the markets are saying, 'We're still in the game, and we're not going to let up until we're sure that everything is under control.' So, while the markets are cheering, we need to keep an eye on the underlying issues and make sure that we're not taking any unnecessary risks.
