Here's our summary of key economic events overnight that affect New Zealand, with news US Republicans are becoming more like the CPC than they probably realise.
But first, there were 209,000 initial jobless claims in the US last week, a small decrease from the prior week but less of a decrease seasonal factors would have assumed. That resulted in the widely reported seasonally adjusted level to jump to its highest in eight months. There are now 1.757 mln people on these benefits, almost +100,000 more than at this time last year.
That level may grow. The Challenger job cut report came in with another outsized count for May, and were up +47% over the same in 2024. They say layoff activity is now spreading to other sectors than just the Federal government.
US exports rose slightly in April, enough to claim an all-time record high. And as expected, actually a bit more than expected, US imports fell sharply after the March pre-tariff splurge. The average of March and April was about the same level they recorded in each of January and February 2025. For April 2025, the US$350 bln in imports were little-different to the April 2024 level of US$340 bln. It only looks like a big drop because of all the front-loading generated by tariff-tax uncertainty.
We should note that US data reliability may become more like Chinese data - heavily influenced by politics. In a random note, the BLS said it isn't going to survey prices as deeply anymore, which could mean "inflation" will be what the Administration says it is. They are also shifting that statistics agency to be under Howard Lutnick's control. And the Republicans have gone on the attack at the bipartisan Congressional Budget Office for saying their new Budget will swell their deficit by US$2.4 tln. The employees who released that are being laid off. They will be replaced with more compliant analysts.
Meanwhile, there has been a phone call between China president Xi and US President Trump. But is seems to have achieved little other than agreement for more talks. However, mutual visits are a likely result, and the set-piece opportunities may give Xi an opportunity to get Trump to "chicken out".
North of the border, Canadian exports fell more than -10% while their imports fell -3.5% in April. Again, the same trade and tariff-war factors are at play here, and that has resulted in a record trade deficit for them.
In China, the Caixin China General Services PMI rose in May from April’s seven-month low and in line with market forecasts of only a very modest expansion. This survey shows a small uptick in new business and activity, despite a renewed decline in new export orders. New export orders fell for the first time in 2025, dampened by Trump's tariffs. The official Chinese services PMI also showed a modest expansion, one weaker than this Caixin version.
In Taiwan, their inflation rate eased to 1.6% in May from 2.0% in April, and that is its lowest rate since March 2021. They are back to about what it was running in the years prior to the pandemic.
Singapore released April retail sales data and that showed virtually no expansion there. Over the past six months, their retail activity has been quite unstable in its ups and downs.
As expected, the ECB cut its key interest rates by -25 bps at its overnight meeting, to 2.15%. Updated inflation and economic forecasts show eurozone inflation is near their 2% target, with projections showing 2.0% in 2025 (vs 2.3% previously), 1.6% in 2026 (vs 1.9% previously), and 2.0% in 2027. They say their expansion is being held back by global events but all the same they see their combined economy expanding slightly faster over the next three years.
Australia's exports rose +2.1% in April from the same month a year ago. Their imports were up +3.5% on the same basis. The result was a sharp weakening in their merchandise trade surplus, as you might have expected. It would have been worse if their gold exports had not come in +48% higher than year ago levels in April. The longer term view of the year to April 2025 compared to the year to April 2024 saw exports down -5.2% and imports up +2.7% showing the balance is tightening over the longer term too.
Household spending in Australia in April was flat. But spending on recreational and cultural activities, health, and dining out contributed to a +1.5% rise in services spending, while spending on goods fell by -1.1%, with households buying less clothing and footwear and new vehicles.
Last week, container freight rates jumped an outsized +41% from the prior week, with capacity struggling to cope with the sudden Trump tariff-tax pause and a new rush to beat what might happen in 90 days. It was impossible for shipping lines to adjust capacity for this unexpected shift. The largest rises were trans-Pacific rises, up almost +60%. Despite that, these container freight rates are now -25% lower than year-ago levels, although those year ago levels were in a sharp upswing that ran to mid-July 2024. Bulk cargo rates are also on the move up, gaining +9.5% in the past week.
The UST 10yr yield is now at 4.39%, and up +4 bps from yesterday. The key 2-10 yield curve is now at +46 bps. Their 1-5 curve is inverted by -11 bps. And their 3 mth-10yr curve now positive at +14 bps. The Australian 10 year bond yield starts today at 4.24% and down -4 bps from yesterday at this time. The China 10 year bond rate is little-changed at just over 1.70%. The NZ Government 10 year bond rate starts today at 4.54% and down -2 bps.
Wall Street is slightly weaker with the S&P500 down -0.7% in Thursday trade as confidence in public policy fades in a sudden Trump/Musk slanging match. Overnight, European markets gained marginally. Tokyo ended its Thursday trade down -0.5%. Hong Kong rose +1.1% and Shanghai was up +0.2%. Singapore ended up +0.4%. The ASX200 was essentially unchanged at the end of Thursday trade but the NZX50 rose +0.7%.
The price of gold will start today at US$3,352/oz, and down -US$28 from yesterday.
American oil prices are up +50 USc at just over US$63/bbl while the international Brent price is up the same at just over US$65/bbl.
The Kiwi dollar is still at 60.4 USc, essentially unchanged from yesterday at this time. Against the Aussie we are also unchanged at just under 92.8 AUc. Against the euro we are up +10 bps at 52.9 euro cents. That all means our TWI-5 starts today at just on 68.3 and up +10 bps from yesterday.
The bitcoin price starts today at US$103,373 and down -1.6% from yesterday. Volatility over the past 24 hours has been modest at just under +/-1.2%.
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26 Comments
The Trump-Musk fallout is getting interesting. Musk has posted that the reason the Epstein files haven't been published is that they incriminate Trump himself.
Hardly a surprise, but looks like the spat is starting to get personal.
Is there a world where they take each other out and the rest of us can get back to normality?
The new normality is abnormality and increasingly so, daily.
Incriminating Trump doesn't seem to be an issue these days, would he even care?
mfd - no.
Firstly, it wasn't 'normality'. It as a one-off blip that my circles are calling the Carbon Pulse. It is plateauing, with ramifications for all who placed bets on Growth.
And secondly, they are a symptom not a cause.
The second sentence was the first sentence, re-formatted.
:)
The Babylon Bee:
“This isn’t America’s fault. Sometimes, billionaires just grow apart.”
The two of them are fighting over the rockets now - Musk threatening to dismantle the SpaceX craft used to travel to/from the ISS and Bannon calling on Trump to seize SpaceX assets.
I'm hoping he downloaded them along with all the other data he took - and that a release without redaction is imminent.
Along with Hunter what was he doing in Ukraine Biden's laptop?
They're all corrupt at that level - by default and by definition. Focusing on them, is avoidance of the bigger picture.
:)
I'm not sure if your son making some dodgy business deals and playing off your family name is morally equivalent to the kind of stuff Epstein and his mates were getting up to. Let's remember what Trump said back in 2002:
“I’ve known Jeff [Epstein] for 15 years. Terrific guy. He’s a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side.”
And then remember to include that Trump then banned Epstein from Mar del Lago.
You forgot that bit.
Yes, in 2008 after decades of being associated with him.
I also didn't mention Trump walking around backstage in girls dressing rooms when he ran the Miss Teen USA beauty pageant either. Or the alarming things he's said about his own daughter. Or the fact that a jury found him to be a sexual predator after he assaulted a woman in a department store.
But hey, what really is on that Hunter Biden laptop? I heard that guy took some drugs!
Let's be honest, they don't care about the bigger picture, they simply wish to continue to pathologically hoard wealth. The rest is simply peripheral to them.
Not so sure. Who do you think got us here?- in my opinion, those in power.
Take the theory of doughnut economics. If those in power directed us toward that economic methodology via the decisions and legislation they pass while in power - how much better off would we be?
Every time I walk down the fizzy drink aisle in the grocery store, I think, just imagine if we simply banned the sale of those products in plastic containers? There are alternatives to plastic. Doughnut economics would have us 'design out' such products from the system.
I hear that Putin has offered to negotiate a truce in the new Trump - Musk war.
We could stop buying plastics, Kate.
And fossil energy.
That would put those activities out of business (same result as legislating).
We don't though - our 'economy' would more than tank if we did, and individually we're cogs in it.
So it will go until it crashes. Which ain't far away. Irrespective of who is in power...
So now both Musk and Putin holding incriminating videos and pics of Trump.
So many out there that have paid him off via his crypto that the man is going to have trouble balancing his obligations.
It will all catch up, he's too stupid to see it.
13-year high for silver. So at what price do we start bragging about when we bought?
Agree, the sleeping silver giant has finally stirred again. Next stop US$48/49 oz imho. Then the sky is the limit, as $100 $200oz is the next lift stop toward the silver lined penthouse suite.
Silver stacker or silver miner buyer?? I'm more of an ASX miner buyer myself. Those ASX listings have smelt the silver surge in the last 10 days........interesting how new silver positions are purchased a few days before a silver surge.....
Silver Continuous Contract Futures Prices and News | SI00
13-year high for silver. So at what price do we start bragging about when we bought?
Only third time in history that silver price has been above $36 per ounce. If you don't own physical, you want exposure to something like ETPMAG.
Don't be surprised if the silver they say they own is over-stated.
Be interesting to see if the important Chinese PM buyers, pile hard into silver this afternoon NZ time ??
Can we crack USD$40oz in June?
"In an advance that could dramatically reduce the amount of energy needed for crude oil fractionation, MIT engineers have developed a membrane that filters the components of crude oil by their molecular size.
The key innovation is that the filters we developed can separate very small molecules at an atomistic length scale,” says Zachary P. Smith, an associate professor of chemical engineering at MIT and the senior author of the new study.
...Conventional heat-driven processes for fractionating crude oil make up about 1 percent of global energy use, and it has been estimated that using membranes for crude oil separation could reduce the amount of energy needed by about 90 percent.
...To come up with a better alternative, the MIT team decided to try modifying polymers that are used for reverse osmosis water desalination. Since their adoption in the 1970s, reverse osmosis membranes have reduced the energy consumption of desalination by about 90 percent — a remarkable industrial success story."
https://news.mit.edu/2025/new-approach-could-fractionate-crude-oil-usin…
Sounds like an EROEI issue to me - I thought you insisted that wasn't a concept?
Global energy-use is about 300 million BOE a day, so it's taking 3 million BOE to filter their fracked output? Which is around 10 million, or less, from memory? An EROEI of 3? Really?
One can see why the research got funding.....
Yeah, it's only 6% of annual anthro CO2 emission, better to just burn it and keep the global greening pumping. Consumers won't be interested in 50% refinery opex saving or more plentiful hydrocarbon supply without the refinery NOx, SOx.
Fractionation is different to fracking.
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