Here's our summary of key economic events overnight that affect New Zealand, with news all eyes are now turning to the US Fed and the results of their meeting about to start.
But first up in the US, the widely-watched ISM services PMI for April came in better than expected with a modest expansion, off a nine month low in March. New orders drove the result as did higher inventories. Employment contracted again. Activity was little-changed but still expanding. However price pressures jumped to their highest since February 2023.
This contrasts with the globally-benchmarked S&P Global/Markit version which reported its slowest growth for 17 months amid subdued demand and a slump in business confidence and rising costs. Financial markets are preferring to look at the ISM one, however.
All eyes now turn to Thursday's (NZT) US Federal Reserve board meeting where most observers think they will hold policy unchanged to see how the price impact of tariffs works out.
There was a well supported UST 3yr bond auction this morning and that delivered a median yield of 3.77%, up slightly from 3.70% at the prior equivalent event a month ago.
In Washington, there are still no tariff deals. There are negotiations but it seems no-one is rolling over in the way the new US Administration assumed.
And as you will already probably know, Warren Buffett has announced his retirement as CEO at the end of this year, when he will be aged 95 years. But he will remain chairman of Berkshire Hathaway.
In Canada, things aren't good with their service sector suffering a steep contraction of activity in April.
And recession fears are putting a real downer on their real estate markets.
Across the Pacific, China is still on holiday. Singapore's April retail sales weakened from March, down a sharpish -2.8% to leave them up just 1.1% from the same month a year ago. Car sales were a significant factor in the month-on-month drop, but not all of it.
The results of the weekend's Singaporean general election are in and there was no surprise that they had engineered a dominant win for their ruling PAP party, enough to retain their two-thirds-and-more majority. They won 87 of the 98 seats 'contested' with 67% of the vote. Their courts ensured the opposition could only run weak candidates. They have a 'democracy' in name only.
Post-election in Australia, the ASX200 fell -1.0%, and their benchmark 10 year bond rose +10 bps from pre-election levels. Investors think they are facing at least six more years of a Labor-led government, three at least with a majority-Labor government.
The key trends in the Aussie election were a stark gender divide with women overwhelmingly repelled by the Liberals, immigrant votes, including Chinese votes, increasingly attracted to Labor, and the rise and rise of Teal candidates (who are social liberals, economic conservatives). The opposition Liberal Party are likely to compound their mistakes by selecting two older socially conservative men to the top leadership.
The other notable trend from the Aussie election was the near wipeout of the Greens. Even their leader is having trouble holding his seat.
Global food prices rose in April but are only back to the same level they were in 2023 and well below March 2022 levels. But the rise was largely down to rises for meat (up +4.3% from year-ago levels), and especially dairy (up +23% on the same basis).
The UST 10yr yield is now at 4.34%, unchanged from this time yesterday. The key 2-10 yield curve is now at +52 bps. Their 1-5 curve is still inverted by -7 bps. And their 3 mth-10yr curve is now not inverted, now +6 bps. The Australian 10 year bond yield starts today at 4.31% and up +4 bps from yesterday. The China 10 year bond rate is unchanged at 1.62% due to their holiday. The NZ Government 10 year bond rate is down -2 bps at 4.50%.
Wall Street is down -0.3% in Monday trade on the S&P500 to start the week. Overnight, European markets were quite mixed with London up +1.2% while Paris was down -0.5%. Yesterday Tokyo rose +1.0% in Monday trade. Hong Kong and Shanghai were closed for their May Day holidays. Singapore was up +0.2%. The ASX200 ended its Monday down -1.0% but the NZX50 rose +0.8%.
The price of gold will start today at US$3313/oz, and up +US$74 from yesterday.
Oil prices are weaker again, down -US$1 at just on US$57/bbl in the US and the international Brent price is now just under US$60/bbl. These are still four year lows, hurt by the combination of easing global demand along with rising output.
The Kiwi dollar is now at 59.6 USc, down -20 bps from yesterday at this time. Against the Aussie we are down -20 bps at 92.3 AUc. Against the euro we are little-changed at 52.3 euro cents. That all means our TWI-5 starts today just under 67.9 and up +10 bps.
The bitcoin price starts today down -1.0% from yesterday at US$94,803. Volatility over the past 24 hours has been modest at +/- 1.1%.
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27 Comments
The negative swing against the Green parties in both the Canadian and Australian elections is noteworthy and may be attributable to the public viewing the respective parties evidencing greater political priorities at the expense of the founding environmental causes. In other words the basics of the “Green”movement have been hijacked by individuals who are seen as too politically extreme. The NZ counterpart should take note as there have been here, displays of unsavoury and intemperate behaviour. Presently their vote is holding up in the polls but that may be largely due to dissatisfied Labour supporters.
To have any chance here Labour have to distance themselves from the Greens and Maori Party.
They also need to rid themselves of the man who doesn't know what a women is.
Do it all at once I say.
You just created NZFirst
If Lab did the above, NZF would become key.
They've got into bed in the past, but going forward their interests will more likely diverge; one party is firmly interested in retaining or improving entitlements to the elderly, while the other is going to come under increasing pressure to allocate more resources to the working age population.
Bingo. I see everyone as valuing the core sectors such as healthcare, but to beef the healthcare system back up AND maintain universal pension isn't going to be palatable to working age people given the level of tax they would need to pay to support it. I see it becoming a core election issue in the next 1-2 elections where the youth will be even further disenfranchised from having the NZ opportunities of their predecessors, as the wealth gap continues to grow and wages get further suppressed from a glum economy.
In simple terms, people are choosing to believe that they can 'improve', and that impediments to that fable are to be rejected. In a way, the Greens have done that too; away from real science into wokeism.
Tells us we will pursue consumption (of ever-more of the ever-worse remaining parts of a finite planet) faster until physics intervenes. Well, physics and biology and chemistry, combined. The result will be collapse, rather than a gentle-as-possible landing.
I was at an LG future-economic-planning jam-session last night. Long on testosterone and short on stature (if I were to describe the largely-invited crowd). They were woefully ignorant of humanity's trajectory, or limits of any kind - one trotted out the old 'we need just a bit more' that I've heard from every echelon of that type, for decades.
They brought to mind this: https://www.youtube.com/watch?v=UjCV-FayxXc
You went to a seminar on future economic planning and expected them to talk about economic decline?
That'd be like going down to the Rugby Club and being surprised no one was talking about feelings.
or better still Soccer!
Correction: Football
I've heard, although not seen it yet, Trump too is talking about needing more population. The ignorance across the world is woeful and dangerous. It was either Foxy or Pa1nter or both who identified historical exhortations towards high birth rates was about staffing armies, to both defend yourself and to invade and conquer. Without that need the old religious demands for multiplication (the fun stuff, not mathematics!) are not valid and create the problem.
Did they talk about too many people on the planet at all? Having some form of population limits?
It's very hard to have a rebellion without a decent population of young males.
All governments are aware of lowering global population, the rest of the century will see them all competing for a shrinking pool of migrants.
I wouldn't be surprised if countries start cloning workers, and wouldn't rule out that people are already being cloned for research purposes.
Women are displacing men everywhere; from politician to newsreader to CEO so expect them to lead the revolution. At our universities women outnumber men about 3 to 2, universities still have their protests, expect them to be led by young women. Ref "Liberty Leading the People" by Eugène Delacroix.
If it's a violent revolution, you need lots of young testosterone.
But yeah dudes everywhere are being displaced. That higher education level leads to less coupling, and less kiddies.
Elon is the champion of reproduction. In NZ it is the Greens, breed more it is your right.
Word is that $15 million one off and $100k a month is Elon's going rate for women willing to have his babies (remotely I think - I suspect a higher rate would be needed for the personal touch).
On condition of a C-section delivery because he believes this allows development of a larger brain, plus a non-disclosure agreement. Moving to his Austin compound with some of the other mothers is optional.
What a weird dude.
That scenario would take 2 weirdos (& reminds me of an old joke about haggling I can't really repeat here).
Is that like working from home !
So basically its the same as what we do with WINZ, but privately funded.
It's always more lucrative to work in the private sector, I guess.
I often vote Green, and I would love the party to pay less attention to social issues and more to environmental issues. As it stands we're basically a collection of everyone past a certain threshold of 'left', whether that be socially or environmentally but it feels that the balance is a little out of whack. More time celebrating and supporting successes like the Cap and Trade scheme please, and less focus on immigration which is essentially in conflict with our environmental aims.
There's feedback that people that might otherwise have voted Green voted for Labour in Australia "...because they wanted to keep Peter Dutton out of The Lodge."
I wonder if something similar was an influence in Canada.
"
But in addition to the boundary redraw, Mr Bandt said a number of people had told him during the campaign that they had previously voted for the Greens but would change their ballot to Labor this election because they wanted to keep Peter Dutton out of The Lodge.
More than a dozen Victorian voters who have previously voted Green, wrote in to the ABC's Your Say project to explain why Labor got their vote this time around — and keeping Mr Dutton out was one reason.
"
https://www.abc.net.au/news/2025-05-06/goldstein-melbourne-federal-elec…
The Green vote - and I mean the real Green, not the woke who-knows-what - never got above 10% anywhere.
I think this is a clue as to why? https://dothemath.ucsd.edu/2015/04/programmed-to-ignore/
An oldie but a thought-provoker. So they are left with intelligent strategic use of a minority vote. Not surprising, but a tad sad, given the human trajectory...
"You Call this Science?
Well, no. I’m not calling what I’m doing here “science.” It’s analysis, based on a couple of selective sets of survey data."
They have always had all ideas and no execution. One could argue it is from lack of opportunity to do so, however that one isn't me. There's a difference between coming up with an idea, and being able to formulate a cohesive plan, taking into account the various spectrum of factors, in executing it. the previous Labour government were a key example of this.
Don't they have preferential voting in Aus, so you can safely vote for a minor party knowing that it will switch to your second preference if the minor doesn't get in.
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