Eyes on 'reciprocal tariffs'; Canada calls election; Japanese inflation stays high; Malaysia inflation low; private equity downgraded; UST 10yr at 4.25%, gold firms and oil stable; NZ$1 = 57.3 USc; TWI = 66.9

Here's our summary of key economic events overnight that affect New Zealand with news we are heading into a week where the data won't be as important as the policy decisions made and about to be made. And we do seem to be seeing a shift in great-power economic fortunes; the US fading while China gets up off its knees.

Although there are only a few key data releases in New Zealand, Australia will release its monthly inflation indicator for February this week on Wednesday and its monthly household spending indicator on Thursday. These will both feed into their election campaign narratives. And later today we will get a first look at their March PMI tracking.

There will be similar 'flash' PMIs from Japan, India, the EU and the US out this week too. South Korea will release business and consumer confidence data while Singapore will release its February inflation rate.

And in the US it will be all about personal income and spending, consumer sentiment, durable goods orders, pending home sales, and the final estimate of Q4-2024 GDP.

In the US this week all eyes will be on how the threatened 'reciprocal tariffs' play out. Those around Trump seem to be starting to realise that tariffs are a tax on yourself, so are growing less certain they are a good idea. The talk now is a scaling back of the 'promised' action threatened to take effect on April 1 (US time), just nine days from now.

No doubt they are very aware of the signals the widely-respected Atlanta Fed's GDPNow is giving.

In Canada, retreating car sales, especially of American brands, has seen their February retail sales take an unexpected dip. They fell by -0.4% from the previous month and January was revised lower, so that is back-to-back falls in retail sales for the first time since June 2024. A +0.3% rise was anticipated in February. Year on year, February retail sales were up +4.2%.

And in Canada, the Liberal government has called an election on April 28 (Saturday NZT). The race is set to revolve around who is best placed to fend off Trump. Trump pettiness is sure to be an issue.

The Japanese inflation rate dipped to 3.7% in February from a 2-year high of 4.0% in January. Helping was a sharp pullback in price of electricity, up +9.0% in February from a year ago, back from +18.0% in January on the same basis. New utility bill subsidies are behind that shift. So this isn't likely to shift the Bank of Japan from its rate rising path.

As expected, Malaysia's CPI inflation rate came in at +1.5%, but that was its lowest since February 2021. Their food prices were stable, housing costs fell.

In China, they are piling on the pressure to try and stop the Hong Kong company who owns the Panama port facilities from completing the deal to sell it to America's Blackrock. CK Hutchison is in an impossible situation now, a pawn between great powers. How this one falls will likely tell us a lot.

Meanwhile, their retail sales activity is on the rise. (At +4.0% year on year and rising from +3.7% in December, and that now bests the US's +3.1% and a fall from +4.4% in December, on the same basis.)

In a bit of a surprise to many analysts, EU consumer sentiment did not improve in March as it has done previously in 2025, rather it dipped lower. To be fair, it has been deeply negative since mid-2021 and running below its long term average for the past two years.

Here's something you don't see everyday. A ratings agency putting a whole sector on 'watch' - in advance of failures. This is from Australia's SQM Research who now say the private credit sector (aka, the private debt sector, or 'private equity') is facing a wave of bad loans. It has a list of 14 issues that the sector is deficient with. Companies owned/funded by this sector are at heightened risk of short-term cut-and-run strategies, making matters worse.

The UST 10yr yield is now at 4.25%, unchanged from Saturday at this time. But that is -6 bps lower than a week ago. The key 2-10 yield curve is holding at +30 bps. Their 1-5 curve inversion is -3 bp. And their 3 mth-10yr curve inversion is still -4 bps. The Australian 10 year bond yield starts today at 4.39% and down -6 bps from Saturday. The China 10 year bond rate is now at 1.90% and unchanged. The NZ Government 10 year bond rate is now at 4.62%, also unchanged from yesterday. A week ago it was at 4.68%.

The price of gold will start today at just on US$3023/oz and up a net +US$9 from Saturday.

Oil prices are stable from Saturday at just under US$68.50/bbl in the US and the international Brent price is still just over US$72/bbl.

The Kiwi dollar is now at 57.3 USc and down -10 bps from this time Saturday. A week ago, it was at 57.5 USc. Against the Aussie we are holding at 91.4 AUc. Against the euro we are also holding at 53 euro cents. That all means our TWI-5 starts today just on 66.9, and unchanged. A week ago it was at 66.7.

The bitcoin price starts today at US$85,264 and up +1.6% from this time Saturday. A week ago it was at US$84,261. Volatility over the past 24 hours has again been low at +/- 0.9%.

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