Here's our summary of key economic events overnight that affect New Zealand, with news the global economy's track is no clearer today.
First up, the US central bank kept it key policy rate unchanged at 4.50% for a third consecutive meeting in line with expectations. They are keeping their wait-and-see approach but watching to see if the tariff taxes drive up inflation and slow economic growth. They say they still see expanded economic activity despite signs net exports are volatile. So far they haven't seen the jobless rate move "and labour market conditions remain solid". But they are seeing elevated inflation, and they foresee risks of higher unemployment and higher inflation.
Equity markets dropped on the release, as did benchmark bond yields. The USD hardly moved however.
Earlier, it was reported that US mortgage application volumes jumped +11% last week from the previous week, ending the three consecutive slumps from earlier in the month. The rebound came after there was another small drop in benchmark mortgage rates.
Across the Pacific, China's FX reserves rose in April to their highest level in more than six months (in USD).
And staying in China, their central bank said it will cut the reserve requirement ratio (RRR) by -50 basis points, injecting about ¥1 tln in liquidity into their domestic economy. But the cut won't come until May 15 and will then be the first RRR cut in 2025. They also said they will lower the rate on seven-day reverse repurchase agreements by 10 basis points to 1.40%, effective today, Thursday, May 8. This is the first cut to this key policy rate since September 2024 and could lead to cuts in market and other regulatory rates.
And despite denials on both sides, both China and the US said they will meet in Switzerland to discuss stuff on Saturday. Interestingly, the Chinese side will be represented by their lead person for China-US economic and trade affairs, but the US side won't be led by its USTR, but the more senior Treasury Secretary.
In the EU there were no surprises in their March retail sales volume data, holding flat again.
However, there was positive data out of Germany, where factory orders rose +3.6% in March from February, well above market expectations of a +1.3% gain and putting behind it February's lackluster result. It was their strongest increase since December, with broad-based gains across sectors.
Meanwhile, Poland cut its official interest rate by -50 bps to 5.25%. Falling inflation and weak economic activity prompted the move, but it was unusual because they have elections due on May 18 and they are battling Russian election interference.
In Australia, regulator ASIC said it has imposed additional conditions on Macquarie Bank's Australian financial services licence after multiple and significant compliance failures – some going undetected for many years and one for a decade.
And it seems Peter Dutton wasn't the only party leader to lose his seat at the weekend election. The Greens leader will too. In fact, like the Liberals, the Greens vote fell rather sharply at that election.
Separately, the OECD said the global trade in fake goods reached almost US$½ tln in the latest data they have - which is for 2021, posing risks to consumer safety and compromising intellectual property. The breakdown in trade cooperation since won't have lessened the problem.
The UST 10yr yield was at 4.28%, down -3 bps from this time yesterday before the US Fed announcement, then slipped slightly further to 4.27%. The key 2-10 yield curve is lower at +48 bps. Their 1-5 curve is now inverted by -13 bps. And their 3 mth-10yr curve is still flat. The Australian 10 year bond yield starts today at 4.28% and down -9 bps from yesterday. The China 10 year bond rate is up +1 bp at 1.64%. The NZ Government 10 year bond rate is down -5 bps at 4.52%.
Wall Street was up +0.3% in Wednesday trade on the S&P500 prior to the Fed announcement, then fell -0.2% after it but is now back up +0.3%. Overnight, European markets were mostly lower by -0.6%. Yesterday Tokyo dipped -0.1% in Wednesday trade. Hong Kong edged up +0.1% and Shanghai was up a stronger +0.8%. Singapore was up +0.1%. The ASX200 ended its Wednesday up +0.3% and the NZX50 finished up +0.6%.
The price of gold will start today at US$3384/oz, and down -US$30 from yesterday.
Oil prices are firmer today, up +50 USc at just on US$58.50/bbl in the US and the international Brent price is now just under US$61.50/bbl.
The Kiwi dollar is now at 59.7 USc, down -30 bps from yesterday at this time. Against the Aussie we are unchanged at 92½ AUc. Against the euro we are down -20 bps at 52.6 euro cents. That all means our TWI-5 starts today just on 67.8 and down -20 bps.
The bitcoin price starts today at US$96,653 and up +2.2% from yesterday. Volatility over the past 24 hours has been modest at +/- 1.6%.
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28 Comments
Good little summary that the self interested have done a good job convincing many of us that it's not them thats fleecing us, it's migrants
https://youtu.be/vqdC9cL-Q5I?si=G1wgIr794TBuWvQo
If the good people at at war with migrants and wokeness, they'll overlook that workers are being exploited to the benefit of profit takers and capital owners.
We always blame OTHERS.
Well, it can't be us, can it?
On another note, this comment-blocking is becoming tiresome, Interest.co.
I'd actually thought commenting had gotten better in recent days.
But uhh, it's a two fold thing.
- We now have a system that's perfected the art of grifting every last cent from workers
- by in large, people aren't resisting the system to any great degree, and still go with the status quo
The status quo is fine until it impacts negatively on the individual. By the way I haven’t been blocked. Thank god for Laxsol.
Would you say the status quo has been delivering positively in recent years?
What has improved in say, the last decade or two? I can only think of the crime rate, and that's because adolescent males are too busy playing pew pew in their bedrooms.
Agree but apart from momentous unexpected events the status quo mostly evolves, rather than arrives over night. Resultantly the “ waking up” to it takes time hence my point about individual reaction. But yes it’s been a hell of a century. So far only thing missing is a world war and that prospect has escalated rather than diminish.
What is happening with "comment blocking". What is it ?
How many testosterone filled young males are there in the UK?....a lot of pushback appears to be building in that part of the world....perhaps they may need distracting by a bit of military service?
There's more 50 year olds than 20 year olds.
but more than enough 20 somethings id suggest
Not many centuries where the British have not been engaged in either continental war or colonial equivalents. That in itself was quite an effective culling of the younger hoi polloi. Except 1914 - 1918 rather overdid things in that regard.
If the conflict in Ukraine is anything to go by, it'll be dudes in their mid 40s first.
As of yesterday, female soldiers in NZ will cost less.
Maybe we males should point out this major advantage to a cash-strapped Government?
"As of yesterday, female soldiers in NZ will cost less"
The Equal Pay Act is 50 years old.
Apparently they make better fighter pilots (can handle Gs better)
But then we don't have any fighter jets
Not to mention the “G” spot but at least for the snipers, pay could be based on head count. Zaitsev apropos Pavlichenko as a precedent.
Having employed a lot of people across a couple of industries, performance based pay works out the best.
Hard to do that for every job though.
Explain that PDK. About the female soldiers ???
My understanding is they are paid by rank. Gender irrelevant.
Pay for Army soldiers varies depending on specialist trade, experience and rank.
So if you had a specialty, for example artillery, that was mainly females, you can pay them less than a specialty that is mainly males (for example driving a tank), even though they had the same amount of training, rank, and experience.
Is driving a tank higher risk than artillery?
Lower pay for roles with a female leaning is usually because the sorts of roles males dominate carry higher risk. Well, that and you've got half as many people vying for the positions.
"...for example artillery, that was mainly females, you can pay them less than a specialty that is mainly males..." - evidence for your assertion?
Regular Force women and men are paid equally for the same occupation, rank level and tenure.
You left the 'if' out of my quote.
Your comment suggests you accept that at the same rank and tenure, pay can vary by occupation.
As it should, acknowledging different qualifications skills & experience required for different roles. Nothing to do with gender.
Here is a recent NZ Army video:
At around 50s mark you can see a woman helping load the artillery piece.
Mostly males in the exercise by the looks of it. Looks like fun, worth watching.
I think the theory was "if" there was a military role over represented by females. Artillery just being a place holder.
= making stuff up
Yes, I appreciate that, just thought the video was worth sharing.
Ah no ty
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