Here's our summary of key economic events overnight that affect New Zealand, with news negative data is starting to flow more aggressively in the US as the consequences of dumb policy show through. It been a track to decline for the first 100 days of Trump II.
First, the US Redbook index of retail sales rose +6.1% last week from the week before, but the strong suspicion is that much of this is inflation-related.
And that is supported by a sharp drop in consumer sentiment reported by the Conference Board, down to a 13 year low in April and confirming the UofM earlier sentiment survey.
US job openings fell by -288,000 to 7.192 mln in March, down -901,000 from a year ago to the lowest level in six months and well below market expectations of 7.5 mln. The drop was broad-based. Their quit rate rose to an 8 month high.
The US trade deficit in goods and services widened sharply to -US$162 bln in March, the largest on record, and well above the expected -US$146 bln gap as tariff threats drove US importers to front-load their purchases. Unsurprisingly, that also generated a spike in wholesale inventories.
This bad trade result probably cements a very weak Q2-2025 GDP result. The next AtlantaFed GDP Now update will come tomorrow, and is unlikely to be pretty.
The Dallas Fed's services sector survey pointed to weaker conditions and a weaker outlook.
The Canadian election has resulted in a narrow win for the center-left (in North American terms) Liberals and the Quebec coalition partner. This is an unusual fourth consecutive win for the Liberals, and an unlikely one, very much aided by Trump trolling. It will be a tough gig because they are clearly facing recession, also flowing from the newly-fractious US relationship.
The ECB survey on consumer inflation expectations in the euro-zone rose in March with the year ahead expectation up to 2.9%, its highest in a year.
EU consumer sentiment dropped in March and to its lowest since December.
And we should probably note that Denmark says it wants the EU to join the CPTPP.
In Australia, there are three days left of campaigning in their federal election. Polling is tightening. Despite those polls still showing Labour ahead, much will depend on how voters rank their preferences, which could make it rather close.
The overnight dairy Pulse auction came in better than the futures market signaled. The SMP price rose as expected and to its highest in a year, but the WMP price did not fall as expected, rather it showed a small gain and to its highest in three years.
The UST 10yr yield is now at 4.17%, down another -4 bps from this time yesterday. The key 2-10 yield curve has stayed at +51 bps. Their 1-5 curve is now inverted by -13 bps. And their 3 mth-10yr curve is inverted -14 bps. The Australian 10 year bond yield starts today at 4.20% and up +3 bps from yesterday. The China 10 year bond rate is now at 1.64% and down -2 bps. The NZ Government 10 year bond rate is up +3 bps at 4.48%.
Wall Street is up +0.6% in Tuesday trade on the S&P500. Overnight, European markets were mixed ranging from +0.7% in Frankfurt to -0.2% in Paris. Yesterday. Tokyo rose +0.4% in Tuesday trade. Hong Kong rose +0.2% while Shanghai slipped -0.1%. Singapore slipped -0.2%. The ASX200 ended its Tuesday up +0.9% but the NZX50 ended falling -0.6%.
The price of gold will start today at US$3319/oz, and down -US$17 from yesterday.
Oil prices are down -US$1.50 at just on US$60.50/bbl in the US and the international Brent price is down a bit less, now just under US$64.50/bbl. These are two-week lows as global trade tensions and weak US data dampened the demand outlook.
The Kiwi dollar is now at 59.4 USc, down -20 bps from yesterday at this time. Against the Aussie we are up +10 bps at 93 AUc. Against the euro we are unchanged at 52.2 euro cents. That all means our TWI-5 starts today just on 67.6 and down -10 bps.
The bitcoin price starts today up +1.3% from yesterday at US$95,401. Volatility over the past 24 hours has been lowat +/- 0.9%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
34 Comments
A timely reminder that most of us take electric power supply for granted nowadays, along with everything in the modern world that it supports. I do remember that it wasn't always like that in my SI childhood before the Waitaki & Clutha schemes came onstream.
How Spain powered back to life from unprecedented national blackout
https://www.bbc.com/news/articles/c175ykvjxyeo
"Energy experts have warned that the grids may have been made less stable by wide adoption of renewable energy - after Spain's power grid ran entirely on renewables for the first time earlier this month."
https://www.dailymail.co.uk/news/article-14658349/power-comes-Spain-Por…
A timely reminder that most of us take electric power supply for granted nowadays, along with everything in the modern world that it supports
We take most everything for granted, using a disproportionate amount of mental energy on what's wrong or absent than the simply crazy amount of benefits we have that most humans have never experienced.
Gotta love these ancient brains.
That incident, like Aussies crowded on beaches with fires up their a---s and Covid - is indicative of where we are headed.
https://www.goodreads.com/book/show/477.The_Collapse_of_Complex_Societi…
Doesn't bode well, either. Not a lot of folk do much in the resilience line - largely because they're not told to...
I never feel comfortable in the large cities of the world - they are all on the edge of breakdown. I can at least survive back here, but would have no show in LA, London etc.
An electricity island with low inertia in system due to too much solar/wind. Negligence by virtue signalling net zero politicians.
"Europe appears to have been seconds away a continent-wide blackout. The grid frequency across continental Europe plunged to 49.85 hertz — just a hair above the red-line collapse threshold. The normal operating frequency for Europe’s power grid is 50.00 Hz, kept with an extremely tight margin of ±0.1 Hz. Anything outside ±0.2 Hz triggers major emergency actions. If the frequency had fallen just another 0.3 Hz — below 49.5 Hz — Europe could have suffered a system-wide cascading blackout. At that threshold, automatic protective relays disconnect major power plants, and collapse accelerates."
https://x.com/shellenberger/status/1916914966663434493/photo/1
"Rotational inertia is a measure of the kinetic energy present in a generator's spinning rotor, and system inertia is the total amount of rotational inertia available to the grid from online, synchronously-connected generators [10]. Studies have shown that grids with reduced system inertia levels require faster frequency control after a contingency event [12]. When connected systems fail to respond in time to an outage, frequency deviations can lead to significant problems on the grid. For example, generator damage, under-frequency load-shedding, and in the worst case, fault cascades and blackouts might occur [13]."
https://www.sciencedirect.com/science/article/pii/S0360544219308564
Get used to it - fossil energy is leaving us. We use energy to the tune of 300 million barrels of oil a day.
That isn't a typo - 300 million barrels (and to visualise that, a 44-gal drum is near-enough a barrel).
100 million of that is just oil.
Every day.
What happens beyond oil, is the only question. There are no others. Yes, grids will be in trouble.
Inertia has nothing to do with hydrocarbons. Can be provided by hydro, nuclear or a big fly wheel. I thought you had given up being a peak oil tragic?
https://www.pagerpower.com/news/the-worlds-largest-flywheel/
https://www.forbes.com/sites/rrapier/2024/12/22/us-energy-dominance-con…
https://www.oedigital.com/news/521464-china-s-cnooc-aims-for-record-oil…
https://en.mercopress.com/2024/11/21/guyana-oil-output-breaking-all-oil…
Google: The world currently has proven oil reserves equivalent to 46.6 times its annual consumption, meaning it has approximately 47 years of oil left at current consumption levels, excluding unproven reserves.
Obviously problems hit well before 2071 but current rapid improvements in solar energy and batteries give us time to adapt. A move from fossil fuels to renewables will require improvements to grids. The recent problems in Europe reveal grids cross borders. Even the Cook Strait?
Just because the reserves are there, doesn't make them easy or efficient to access. Although a US invasion of Venezuela would be likely if things got really dire given their mass reserves
That was oil. There is gas, coal and tar sands. Oil to become more expensive - isn't that why every country is investing in Solar and EVs? I'm agreeing with you but saying don't panic.
The Club of Rome Limits to Growth reckons had petroleum running out in 2022. In reality we had 1.7 trillion bbl proven reserve with Texas pumping more oil last decade than the previous 90 years of drilling. So no, don't panic. Don't even wring your hands.
"Petroleum, with a 31-year lifetime at the present usage
rate, would actually last only 20 years at the present rate of
growth, and 50 years if reserves are multiplied by five. It is
clear that the present exponentially growing usage rates greatly
diminish the length of time that wide-scale economic growth
can be based on these raw materials."
https://www.library.dartmouth.edu/digital/digital-collections/limits-gr…
What the bond yield curve timelines do people pay attention? 1y Vs 5y? 2 Vs 10? Eyeball the whole lot?
In Australia “much will depend on how voters rank their preferences.” Or perhaps how rank the preferences on offer are. It has become rather obvious, at least wherever in the world real elections are held, that voters rank the negativity ahead of the positivity by voting against rather than for. Case in point, CNN headline - Canadians are united against Trump but divided on almost everything else,” thus the downfall of the Conservatives.
And then complain loudly when the choice turns negative.
3 years later they then do the same again.
Slow learners.
But do they really have a choice? Both lots are as bad as each other, just in different ways, like here, and it's been that way since I started taking notice.
It makes sense when you realise that the responsibility of elected officials was abdicated some time ago.
You've gotta admire some of the Aussie political commentators blunt sarc & turns of phrase, we don't see that anymore in NZ since we lost Clarke, BillyT, McPhail & Gadsby etc
https://www.abc.net.au/news/2025-04-30/coalition-bus-whitlam-aged-care-…
Canadian boomers are united against Trump - biggest issue by seven points isTrump derangement. Housing - notsomuch.
"Nearly half of Canadians (45%) rank “reducing your cost of living” among their two decisive issues, up three points in a fortnight. “Dealing with Donald Trump and the impact of his decisions” follows at 30 per cent, while housing (20%), economic growth (19%) and healthcare (18%) round out the top tier.
But the mix shifts sharply by generation: cost of living dominates for every age group, yet Trump anxiety rises from just 18 per cent among 18- to 29-year-olds to 45 per cent among voters 60-plus, while concern about housing falls from 36 percent in Gen Z to 11 per cent in Boomers."
https://abacusdata.ca/wp-content/uploads/2025/04/image-126.png
Interesting that us old timers are more adverse to Trump than youngsters. What have we learned over the last 60 years that they haven't?
The 60+ have their pension schemes/retirement funds invested in the US i would think, and volatility doesn’t favour that age group if that be the case. The young can wearher and rebuild, the elderly less so.
A bit of ageism there. My 2 middle aged kids were complaining only last week about Trump knocking 10% off their Kiwisaver balance over the last couple of months.
Our cynicism is more probably that a lot of us 60+ were impressionable teenagers in the tumultuous 1960's / 70s & have seen a lot of both the good & bad of the post WW2 American century & their deteriorating leadership
It isn't ageist at all. More so looking at a possible reason behind the results noted. Financial security will be front and centre for retirees more so than the youth who have more time to work and earn etc.
I reckon I'm typical - over 70 with no pension other than Super. Why am I more troubled by Trump than my working kids and teenage grandchildren?
Likely because your formative years, your parents and grandparents, were still in the shadow of world wars and great depressions. The world didn’t actually modernise all that much until the 1960s and the those reaching maturity around about then were conditioned to the lessons learnt up until then which means knowing what an apple cart is and what its overturning will mean.
Perhaps the reason behind the tariffs is more simple. 'You guys are spending too much on stuff we can't afford and it ends now'!
Which is true of course. The free ride had to end at some point, Trump just bringing it forward.
That and China is producing an insane amount of stuff.
"‘The Tsunami Is Coming’: China’s Global Exports Are Just Getting Started
Recent data from China’s central bank shows that state-controlled banks lent an extra $1.9 trillion to industrial borrowers over the past four years. On the fringes of cities all over China, new factories are being built day and night, and existing factories are being upgraded with robots and automation.
China’s investments and advances in manufacturing are producing a wave of exports that threatens to cause factory closings and layoffs not just in the United States but also around the globe.
“The tsunami is coming for everyone,” said Katherine Tai, who was the United States Trade Representative for former President Joseph R. Biden Jr.
...China is exporting so much partly because its own people are buying so little. A housing market crash since 2021 has wiped out much of the savings of the middle class and ruined many wealthy families.
...China is not just building car factories. It has built more petrochemical refinery capacity in the past five years, for example, than Europe, Japan and South Korea together have created since World War II."
https://www.nytimes.com/2025/04/07/business/china-manufacturing-exports…
I'm still waiting for a cheaper EV's and solar panels. Find me some profile.
Consider flying to Oz, picking up some used ones off of gumtree from someone who has upgraded a perfectly good system, then fly back with them or ship them over and it will likely save you some coin. The joys o picking up some state subsidised oz ones at a bargain. Also it will depend on what your roof orientation and sunshine hours are as to the return on investment as well, but I'm betting on the electricity pricing growing by more than people predict and quote for.
Not sure how I could fly back with them :)
Not exactly a free ride either. A great percentage of that spending was and is from borrowed money. Ever since the credit card was unleashed on society it has become increasingly obvious that too many in society cannot distinguish their purchasing as being from money earned or money borrowed.
You think the great icon to push back against the tide of overconsumption is a guy who eats multiple McDonald's burgers every day and has a gold plated bathroom? The man with multiple bankruptcies and a trail of unpaid loans in his wake?
Or is this one of those things that's only for the poors?
They have to do something, they have been freeloading via paying for imports by countries buying US treasuries.
This is coming to an end, So what do they do?
Trump will get the blame and likely crash and burn within months. The US consumer has no idea what's about to hit, they live in their own world and spend any time there you can see how insulated in world views they are.
As for the tariffs, god knows how importers are working out what they pay. It is a self assessed system, so a confused and fraudulent mess will be happening already.
God bless America....you need it.
The US consumer has no idea what's about to hit, they live in their own world and spend any time there you can see how insulated in world views they are
Amen, I don't see the bulk of Americans realising how good they have had it in terms of consumer options and prices. The question is, will they accept it and adapt without civil unrest, or burn the house down.
It's ASB's turn on the propaganda mill this time with news "It's time to pick an interest rate strategy".
Better get those long term rates locked in everyone... while they continue to cut TDs at the same terms.
https://www.rnz.co.nz/news/business/559392/time-to-pick-a-home-loan-str…
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.