Here's our summary of key economic events overnight that affect New Zealand with news the NZD is falling again and sharply, now back to one-month lows as commodity prices suggested shifts to our disadvantage, and global trade flows became more uncertain.
The global risk-off trend is building. Wall Street opened weak, although it has pared back some of the losses in its afternoon trade.
Elsewhere in the US, a key MidWest factory survey, the Chicago PMI, contracted less in March than expected. The shift itself wasn't large, but it was unexpected because a worsening was expected. So it has gained attention. But more than a third of respondents to this survey said they would respond to tariff pressures by raising prices. Only 18% said they would on-shore supplies. New order growth only got also-ran mentions. Overall, this report is of a slower downturn.
The Dallas Fed factory survey was mixed. New order levels improved marginally but remained weak. Production levels rose more. But perceptions of broader business conditions continued to worsen in March. The general business activity index fell to its lowest reading since July 2024.
US factories are not gearing up for the 'benefits' of tariffs, yet anyway. And there are no significant signs of plans to do that.
In Canada, one party is advancing an election strategy to push back on the tariff impacts on their trade with the US, ramping up home-building sharply to a level that reminds them of the post WWII surge. This campaign pledge is likely to find a receptive audience, because by all accounts Canadians are really, really pissed-off at the US.
They will need something significant because all indications are that the impending tariff levels from the US are not being worked lower but in fact are more likely now to be at the upper end of earlier signals when they are announced on Thursday NZT.
Across the Pacific in Japan there was a good jump in industrial production reported for February, from January.
In South Korea, industrial production there was a rise on the same basis, although smaller.
In China, they reported official PMIs for March and the factory one rose marginally as expected to a small expansion. Their services PMI for March rose marginally more. Importantly, in both cases new order levels came in better than the overall indexes.
In India, they are moving into summer and all the indications are for extreme temperatures. So high are they being forecast that they could be at a level that causes parts of their economy to shut down, or at least stumble. Heatwaves are being normalised, with more energy consumption the only way to battle it on an individual level, and that means burning more coal.
In Germany, retail sales rose more than expected in February (in real terms), which was much better than expected. Meanwhile they said the CPI inflation was running at 2.2% and slightly lower than the February level, and a four month low.
Like Canada, Australia is also in an election campaign. US tariff impacts haven't really become an issue there yet although being anti-Trump is helping. But more of an issue is that China has another spy ship circling while at the same time its diplomats are calling for 'trade unity'. It is such an obvious carrot-and-stick play that it is winning China no friends. The trade fallout if Australia doesn't buckle, could be more serious for them than US tariffs.
Australian property prices continued to recover from a short-lived dip to hit fresh highs in March as borrowers and prospective home buyers await a decision on interest rates today. Data from CoreLogic showed house prices rose in all cities except Hobart last month, with the national median value of a home now over AU$820,000.
The UST 10yr yield is now at 4.25%, unchanged from yesterday at this time. The key 2-10 yield curve is still at +34 bps. Their 1-5 curve is inverted by -6 bps. And their 3 mth-10yr curve is also still inverted by the same -6 bps. The Australian 10 year bond yield starts today at 4.46% and down -11 bp from yesterday. The China 10 year bond rate is now at 1.88% and up +11 bp. The NZ Government 10 year bond rate is now at 4.49%, and down -7 bps from yesterday at this time.
Wall Street has started its week little-changed on the S&P500. Overnight, European markets fell between -0.9% (London) and -1.6% (Paris). Yesterday, Tokyo ended its Monday session down -4.0%. Hong Kong shed -1.3% and Shanghai was down -0.5%. Singapore fell -0.2%. The ASX200 ended its Monday session down a sharpish -1.7%. But the NZX50 fell the least of any of the markets we follow, down just -0.1%.
The price of gold will start today at just on US$3118/oz and up another net +US$34 from yesterday and easily a new all-time high.
Oil prices are up +US$2 from yesterday at just over US$71.50/bbl in the US and the international Brent price is now just under US$75/bbl.
The Kiwi dollar is now at 56.7 USc and down -½c from this time yesterday. Against the Aussie we are down -10 bps at 90.8 AUc. Against the euro we are also down -½c at just under 52.5 euro cents. That all means our TWI-5 starts today now just on 66.3 and down -40 bps.
The bitcoin price starts today at US$83,350 and up +1.3% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.5%.
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