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%.
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20 Comments
I wonder if this US-China trade-deal stuff will be buy the rumor sell the fact
Referring to reports of people being denied entry to the US recently. Has an anyone checked to see if the actual numbers are any different to the last, say, 15 years or is it just MSM deciding to report every instance now?
They look to be as accessible as the guest count at Guantanamo Bay
IMHO this is a concern?
https://www.theguardian.com/us-news/live/2025/may/09/trump-administrati…
Trump ‘looking at’ suspending habeas corpus, top aide Stephen Miller says – US politics live
There is precedent. President Lincoln went that hard and far and together with empowering the Sedition Act, folk were locked up hand over fist. Of course then there was a civil war raging with rather porous boundaries, that scarcely defined what was the North or South, and plenty of pockets of insurgency spread amongst all of it. Perhaps President Trump believes that all sounds sufficiently familiar.
He's the power behind the throne. Not that any amount of idiotic threats will ever get anywhere - other than where they already are with hundreds of legal challenges YET to lose;
https://www.justsecurity.org/107087/tracker-litigation-legal-challenges…
Quite the decline - "The downturn in China’s softwood imports is closely linked to reduced demand from the residential construction sector. In 2024, the total floor area of new construction starts fell by 68%
...Using this approach,China’s total softwood imports was 49.9 million cubic metres (log equivalent) in 2024, which represented a 40.8% reduction from 2019.
In terms of market share shifts between 2019 and 2024:
- Russia's share fell from 36% to 32%
- Europe's share declined from 18% to 15%
- Canada's share dropped from 10% to 6%
- New Zealand's share increased from 22% to 36%, making it the largest overall suppliers of softwoods to China"
Increased market share with pitiful returns - into a market with decreasing population with our sucessive governments subsidising tree planting.
https://www.alphametrik.com/post-2025-04
So now the art of the deal guy, who is practicing 'strategic uncertainty' with respect to trade negotiations - has just tweeted for the benefit of Xi's negotiators, that an 80% tariff on Chinese goods is "about right".
A more hilarious administration would be hard to find.
Looks like the Chinese don't even need to show up, just wait until Trump negotiates himself down to an acceptable level.
"Tolerance for pain is higher in China’: Beijing enters US tariff talks with upper hand
US and Chinese officials meet in Switzerland this weekend for talks over the tariff war between them. Analysts say expectations are low and symbolism outweighs substance."
https://www.channelnewsasia.com/east-asia/us-china-trade-talks-switzerl…
an 80% tariff will change things for sure, I think it will eventually be 60%... Even a settlement will mean less international trade, I think US Equity markets are overvalued here. P/E ratios will drop.
He makes it up as he goes along Kate. In fact he makes himself up too, as he goes along. In hindsight it would have been a better outcome for hm to have run two consecutive terms. That way there remained at least some restraints and disciplines, seated in Congress, the Senate and the Public Administration. Now though that the Supreme Court has incredibly granted him immunity, it’s a wide open range, shooting box.
Now though that the Supreme Court has incredibly granted him immunity,
Which is why he's openly touting meme coins and a plethora of other carpetbagging schemes - being immune from profiteering off the office.
One of the key strategies in a successful negotiation is to be quiet, and let the other party make the first offer or concession. Clearly, Trump has no clue how to negotiate and can't stop his loud mouth from ruining his position.
Why is Canadian unemployment so high?
Manufacturing on a downer and their economy, like ours, only grows when people are borrowing billions to buy houses.
We could ask Trudeau's economic advisor Bart Carny?
https://www.cbc.ca/news/politics/mark-carney-adviser-coronavirus-respon…
1🇨🇭 Switzerland$7.27
🥈 2🇳🇿 New Zealand$6.40
🥉 3🇮🇸 Iceland$6.23
Some eggciting news from Visual Capitalist. We got a silver in the competition for most expensive dozen of eggs in the world 💪 USD I think
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