Eyes on China-US meeting in Switzerland; US gets shunned by world's travelers; Canadian jobless rise; Japanese households spending freely; China holds trade gains; UST 10yr at 4.38%; gold and oil up NZ$1 = 59.2 USc; TWI-5 = 67.6

Here's our summary of key economic events overnight that affect New Zealand, with news all eyes are now on the expected meeting between senior Chinese and American officials who are looking for an off-ramp from the silly trade and tariff-war hostilities.

Meanwhile in the US, that foreigners are avoiding travel there has been confirmed by new data that shows an historic drop in inbound travel spending. It has only been a sharper drop in the aftermath of the 9/11 attacks and the early stages of the badly-handled response to Covid. The US as a travel destination is a significant reason they have run services surpluses. The travel boycott may build over fears it is unsafe, amid numerous reports of immigration officers detaining tourists or denying entry even for transit.

Looking north, although the Canadian jobless rate rose a touch more than expected to 6.9% in April (and a 3 year high), and there was only a minor rise in payroll employment, there was in fact a strong rise in full-time jobs and an equally notable fall in part-time roles.

The Canadian dollar fell on the jobless rise. The overall weakness however probably means the Bank of Canada will cut its 2.75% policy rate again at their next meeting on June 5 (NZT).

Across the Pacific in Japan, household spending rose +2.1% in March from a year ago and far better than the expected +0.2% gain. It was the strongest growth since December. Helping was that the previous retreats of spending on food basically stopped, while spending on furniture and on recreation rose a good levels.

In China, April exports came in very much better than the pullback that was expected. In fact their trade surplus was almost as strong as the unusual March trade surplus. Few were expecting this 'good' result. Here are the results by trading partner.

New Zealand exported twice what we imported from them. For Australia it was almost the same but the Aussies have a higher dependency on China than we do. For the US, they are still taking more that 10% of all Chinese exports although that is down from nearly 13% usually. But Chinese buying of American goods is now under 6% of all Chinese imports, down from the usual 16%. The Americans may have initiated the tariff war, but the Chinese have reacted far faster.

Meanwhile China said it Q1-2025 current account surplus hit a record high, more than treble what it was in the same quarter a year ago. US demand saw their merchandise trade surplus leap, while their services deficit narrowed slightly.

The UST 10yr yield is at 4.38%, up +1 bp from this time yesterday and up +16 bps for the week. The key 2-10 yield curve is little-changed at +49 bps. Their 1-5 curve is inverted by only -9 bps. And their 3 mth-10yr curve has stayed positive at +7 bps. The Australian 10 year bond yield starts today at 4.34% and up +4 bps from yesterday. The China 10 year bond rate is unchanged at 1.64%. The NZ Government 10 year bond rate is up +2 bps at 4.51%. That is up +5 bps for the week.

Wall Street was down -0.1% in Friday trade on the S&P500 and unchanged for the week. Nobody followed Trump's "buy stocks" tweet. (Here is the latest update on the US results reporting calendar.) Overnight, European markets were mostly up +0.6% although London only managed half that. Yesterday Tokyo rose +1.6% in Friday trade. Hong Kong was up +0.4% and Shanghai was down -0.3%. Singapore however was up +0.7%. The ASX200 ended its Friday up +0.5% to be unchanged for their post-election week. And the NZX50 finished up a stronger +1.1% for a +2.3% weekly rise.

The Fear & Greed index is now in the 'greed' zone, a shift from last week's 'neutral' zone.

The price of gold will start today at US$3338/oz, and up +US$35 from yesterday. That is up +US$124 from a week ago. Americans now view gold as a better long term 'investment' than equities.

Oil prices are firmer today, up +US$1 at just on US$61/bbl in the US and the international Brent price is now just under US$64/bbl. The Russian price is now at a -$9 discount (-14%). A week ago the main two prices were at US$58.50 and US$61.50/bbl.

The Kiwi dollar is now at 59.2 USc, up +10 bps from yesterday at this time, down -30 bps from a week ago. Against the Aussie we are down -10 bps at 92.2 AUc. Against the euro we are down -10 bps at 52.5 euro cents. That all means our TWI-5 starts today just on 67.6 and unchanged from yesterday, down -20 bps from this time last week.

The bitcoin price starts today at US$103,122 and up +2.0% from yesterday, up +6.5% from a week ago. But volatility over the past 24 hours has been modest at just under +/- 1.5%.

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