US consumers turn glum on inflation fears; China new lending weak; China FDI inflows very weak; US assets hard-right social ideology into research grants; UST 10yr at 4.31%, gold up and oil holds; NZ$1 = 57.5 USc; TWI = 66.7

Here's our summary of key economic events overnight that affect New Zealand with news Wall Street is recovering today, making back some of the -US$5 tln plunge over the last few days. But the background economic drivers haven't improved, so it is a hesitant correction.

And that is because the widely anticipated March survey of consumer sentiment from the University of Michigan was out and it fell much more than expected. In fact it recorded its lowest level since November 2022. It is now down -27% from a year ago.

One key reason Americans are so glum (apart from the chaos of policy gyrations), they fear a sharp return of inflation. Year-ahead inflation expectations jumped up from 4.3% in February, already a high level, to 4.9% this month, also the highest reading since November 2022 and marking three consecutive months of unusually large increases. Their long term inflation expectations of 3.9% have now hit a 32 year high.

In China, after the spectacular rise in January loan growth, February levels came in quite low, showing the policy-induced surge could not be maintained. There were only ¥1.01 tln in new loans extended in the month, far below the ¥5.03 tln January level and back to levels it bounced along at for most 2024 months. The February 2024 level was ¥1.45 tln, so this 2025 result is a definite sag since then.

And their foreign direct investment data out for February was very weak again, only ¥114 bln in February, -20.4% lower than the already low ¥143.4 bln in the same month of 2024. And this is off the back of a 2024 which was their lowest FDI inflows in eleven years. For perspective in February 2022 they attracted ¥220 bln in foreign investment, so this 2025 level is about half of that.

In Australia, academic researchers there who receive some project funding from US agencies have received a 36 point ideological vetting questionnaire from the US Administration asking about their political and social views. China has its 'communism'; the US now has the same in 'trumpism'.

And we should expect Pharmac to come under attack from the US Administration, pressured to pay US drug companies more.

The UST 10yr yield is now at 4.31%, up +4 bps from Friday at this time, down -1 bps for the week. The key 2-10 yield curve is marginally flatter at +30 bps. Their 1-5 curve inversion is now -1 bp. And their 3 mth-10yr curve inversion is gone. The Australian 10 year bond yield starts today at 4.48% and up +1 bp from yesterday. The China 10 year bond rate is now at 1.90% and also up +1 bp. The NZ Government 10 year bond rate is now at 4.68%, and it too is up +1 bp from yesterday, up +4 bps from a week ago.

Wall Street is in recovery today, up +2% on the S&P500. But that is still down -1.5% from this time last week. (See this.) Overnight, European markets rose too, Paris and London up +1.1%, Frankfurt up +1.9%. Yesterday, Tokyo ended its Friday session up +0.7% for a net +0.2% weekly gain. Hong Kong was up +2.1% on Friday to close its week down -0.7%. Shanghai was up +1.8% on Friday, up +1.4% for the week. Singapore was little-changed on Friday. The ASX ended its Friday trade up +0.5% but down -2.0% for the week. And the NZX50 was also up +0.5% on Friday, but down -1.1% for its week.

The Fear & Greed Index ends the week staying in the 'extreme fear' zone, and unchanged from last week.

The price of gold will start today at just on US$2983/oz and up another net +US$3 from yesterday. Overnight it briefly spiked to US$3000 but then retraced sharply before a partial recovery. A week ago this price was US$2908/oz so a +US$75 rose since then, or +2.6%.

Oil prices are up +50 USc from yesterday at just on US$67/bbl in the US and the international Brent price is at just under US$70.50/bbl. This is the same level of a week ago.

And we should probably note that despite the new Administrations exhortations to the US oil industry to "drill, baby, drill" in fact North American rig counts are decreasing, and are now -4% lower than year-ago levels.

The Kiwi dollar is now at 57.5 USc and up +40 bps from yesterday. That makes it up +50 bps from a week ago. Against the Aussie however we are up +10 bps at 90.9 AUc. Against the euro we are up +30 bps at 52.8 euro cents. That all means our TWI-5 starts today just on 66.7, and up +30 bps from yesterday, up +40 bps for the week.

The bitcoin price starts today at US$84,261 and up +4.3% from this time yesterday. A week ago it was at $87,508 so a net -3.7% decline since then. Volatility over the past 24 hours has again been moderate at +/- 2.1%.

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