Here's our summary of key economic events overnight that affect New Zealand, with news we are being reminded of the central role the giant Wall Street markets play in global finance.
It is a US holiday weekend, Memorial Day, and without those US markets operating, data releases and other market activity is very restrained.
But in the US, Fed boss Powell delivered a graduation speech that contained a spirited defense of those who run public services and the core role they play in a crisis. He clearly showed there are no libertarians in a recession or threat of one. They all want "the government" to cover their backs.
And the Trump Administration also shows the power of 'active' government policy setting. The using of tax policy to help your friends (and family) and punish your perceived enemies is on full display. And the use of tariffs to screw the scrum is a lever that also shows that clearly.
From his bully-pulpit, Trump has delayed a punitive tariff threat on EU goods to July 9. It was enough to depress the USD on the capricious uncertainty and the EUR has hit a one-month high.
We should note that American hot-rolled steel prices are now at US$900/tonne which is +29% higher than when Trump's tariff actions started to take shape at the start of 2025. These are policies that are embedding sharp producer price inflation there. And of course, they will rise from here, as tariff pressure builds on other efficient manufacturers outside the US.
You can contrast that with Chinese steel prices. We don't have hot-rolled coil steel prices for China to hand, but we do have rebar steel prices there and they are now US$425/tonne, down from US$460/tonne at the start of 2025, so a -7.5% decrease. A crude matching of the US and China steel price shifts suggests the Chinese-sourced products have gained a +35% advantage in the period, largely offsetting the tariff actions. It is American consumers paying for all this infantile policy-making.
Meanwhile, the world is getting on with business, but just with fewer data signals to start the week.
In Canada, factory sales there were weakish in April, the weakest month of the year so far. Key to the fall were declining output in both their oil industry, and their car manufacturing.
A recent review of the Canadian economy by the OECD suggests it will avoid recession, but that expansion will be hard to find in the present trade-war climate.
Meanwhile, the province of Alberta is feeling very uneasy. There is a fringe movement there to cede from Canada and become a US state, built on the feeling that federal Canada doesn't appreciate the economic role they play in the Federation. But that overlooks the central role the US is playing in depressing the oil demand and prices they claim is 'theirs'. Joining the US would only accentuate the feelings of 'victimisation'.
Across the Pacific, Singapore also released April factory production data and that rose faster from March, to be +5.9% higher than year-ago levels.
The UST 10yr yield is now at 4.51%, and unchanged from yesterday while the New York bond market was closed. The key 2-10 yield curve is still at +52 bps. Their 1-5 curve is still inverted at -6 bps. And their 3 mth-10yr curve still at +22 bps. The Australian 10 year bond yield starts today at 4.38% and down -7 bps from yesterday at this time. The China 10 year bond rate is up +2 bps at 1.69%. The NZ Government 10 year bond rate is now at 4.62% and down -5 bps.
Wall Street is closed for their holiday. But the futures market suggests the S&P500 will open tomorrow up +1.5% in a EU tariff-delay relief rally. Overnight, European markets were up with Frankfurt gaining +1.7% and Patis was up +1.2%. London was closed for its own holiday. Tokyo ended its Monday trade up +1.0%. But Hong Kong fell -1.4% and Shanghai ended unchanged. Singapore ended down -0.2%. The ASX200 was also unchanged at the end of Monday trade while the NZX50 fell -0.4%.
The price of gold will start today at US$3,340/oz, and down -US$17 from yesterday.
Oil prices are holding at just on US$61.50/bbl in the US and the international Brent price is still just under US$65/bbl.
The Kiwi dollar is still at 60 USc, and up +10 bps at this time. Against the Aussie we are up +30 bps at just on 92.5 AUc. Against the euro we are down -20 bps at 52.5 euro cents. That all means our TWI-5 starts today still just under 67.9 and up +10 bps from yesterday.
The bitcoin price starts today at US$109,020 and up +1.6% from yesterday. Volatility over the past 24 hours has been modest at just on +/-1.4%.
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17 Comments
Increasingly everywhere people are essentially crying out the lyrics to the song "What about me" by Moving pictures;
"What About me? It isn't fair
I've had enough now, I want my share
Can't you see? I wanna live
But you just take more than you give"
(https://www.streetdirectory.com/lyricadvisor/song/eopwpl/what_about_me/)
And Trump is leading the chorus in ignorance that the last line is about America! Well, it could be! But increasingly the push back is gaining momentum. Karoline Leavitt has routinely pushed back against the press, citing the powers of the executive office, without acknowledging that the constitution restrains that authority. Courts across the country are increasingly recognising that simple fact, as well as that there is federal law that defines required processes that must be followed in many of the actions that Trump is attempting at home, but not complying with.
But his rambling at the West Point ceremony and, I suspect continued at the Memorial Day speech at Arlington, really makes one wonder if he is really not all that lucid.
Is this two presidents in a row now ?
They are building a track record of electing geriatrics, so it is entirely possible.
Perhaps it's like the Pope - not much life left to get elected, in the hope you can't do too much harm while in office? Trump's not really filling that bill is he?
It is fascinating that there is now a clique in America who are accusing the Biden administration of covering up his illness, even to the extent of suggesting that that was treason! It was clear though that Biden was struggling in the latter half of his term. Similar to Reagan.
Reagan left office at 77 and yes there were already the signs of mental decline that soon became publicly recognised. But he had completed eight years, wasn’t starting in on four. There are websites that show photos of before and after terms of presidents. The presidency takes a great toll even on younger examples such as Clinton. Trump even though he doesn’t have to worry about much because he knows he is infallible will not escape the same pressures. Still given that he’s been at it in high intensity politics since before 2016 plus the abundance of prosecutions, personal and corporate, against him and a 1” assassination miss, the man does demonstrate remarkable stamina and energy for his age
His self-centeredness is certainly remarkable, especially for the level of denial and wilful blindness, but also absolute belief that he is right and everyone else wrong (he's really is not alone on that one!). But assuming he is at least a liitle bit as clever as many hold him, he has to understand that at the end of this term, there will be those who will try to hold him to account for his actions (he won't be alone in that too I suspect).
I would suggest that the immunity decision by the Supreme Court is one of the most astonishing and detrimental developments in American history. Obviously Trump would uptake that to his own interpretation knowing full well even he was wrong and/or guilty it would be impossible in future, to convict him. As I posted elsewhere, in his old jargon he is flameproof, Teflon coated and untouchable. Next comes immortal?
Trump is the (obviously mentally incapacitated) frontman....the real problem lies with those that have maneuvered him back into office to implement their agenda are providing him all the support he needs.
You could say that all the way back to Reagan.
Politics paid-for by the highest bidder - remembering that maverick Presidents can always be removed (especially if riding in open cars...).
But remove Trump completely, and the game remains the same, as does the score.
If Trump is removed, would that not mean that we get JD Vance as PUSA? It feels like a downgrade, as hard as that is to believe.
Trump is irreplaceable and that fact is one of the greatest threats to the Republican Party as any outfit that allows itself to be completely dominated by one individual, unwittingly or not, creates a potential uncontainable void for itself and a barrel load of suppressed inherent issues including volatile personnel problems.Whatever you think of Trump he is undeniably unique and from looking at the muster around him, there ain’t going to be anyone take steps ”in the shoes of the fisherman.”
As has been explained here a few times, Trump is just the front man for Project 25.
Ask Ai what this project is and it you can see it all spelt out.
frightening anti-democratic autocracy by a bunch of entitled fiddlers. These people would steal and wreck all that really did make America great.
I think of him more as an ineffective Medieval ruler. Yes, there are powers behind the throne but they aren't unified. The ebb and flow of palace intrigue explains the constant flip-flopping of Trump's policies. For example on trade, when Navarro was in the ascendant tariffs were going to the moon and screw the consequences - this is a righteous stand for the American people. Then when that looks unpopular, Bessent takes the wheel and suddenly it's all about making reasonable deals that are, if anything, minor tweaks to the status quo.
Who knows what's next? Trump isn't smart enough to plot his own course, he'll be influenced by whoever has his ear on the day.
Reagan remembered as the great communicator.
Biden remembered as the great stumbler and mumbler.
Reagan looked healthier and more alert/aware/capable of making decisions after being shot than Biden did at peak health.
His farewell speech - my favourite quote from it:
The past few days when I've been at that window upstairs, I've thought a bit of the ``shining city upon a hill.'' The phrase comes from John Winthrop, who wrote it to describe the America he imagined. What he imagined was important because he was an early Pilgrim, an early freedom man. He journeyed here on what today we'd call a little wooden boat; and like the other Pilgrims, he was looking for a home that would be free.
I've spoken of the shining city all my political life, but I don't know if I ever quite communicated what I saw when I said it. But in my mind it was a tall, proud city built on rocks stronger than oceans, wind-swept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.
What ever happened to that Grand Old Party, eh?
His speech following the Challenger disaster was also very powerful, great speaker and obviously had good speech writers.
I wonder what Trump would have said in the same situation? "I prefer astronauts who don't explode"?
A thread I gave an uptick to everyone in.
It is American consumers paying for all this infantile policy-making.
And in the Memorial Day speech, "God did that" in reference to the Olympics having come about during his Presidency. I hate to think about the opening ceremony during the Olympics. Cringe.
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