Here's our summary of key economic events overnight that affect New Zealand, with news the hot-war tensions in the Middle East from Israel's attack on Iran has generated substantial financial market reaction. And a 'hot' war between Israel and Iran could go on for a very long time.
The gold price has jumped. The oil price has soared. Equity prices are falling. Bond yields are up. The US dollar has been falling but is now in a wavering phase.
Before that news however, American consumer sentiment improved in early June from May in the widely-followed University of Michigan survey which was taken June 2-7, 2025. Although this is the first improvement in the past six months, it is off a record low and is still -11% lower than year-ago levels. This survey pre-dates the current crises.
A new independent poll, in the same time period, shows that the job approval assessment for the US president has fallen below 40% for the first time, down to just 38% and the lowest of this new term.
On the US West Coast, container traffic at the large Los Angeles shipping terminals fell in May. Import traffic was down -19% from April, down -9% from a year ago. Export loadings were down -5% from a year ago. (The Long Beach May data isn't available yet but it is likely to be similar.)
North of the border, and perhaps somewhat surprisingly, Canadian vehicle purchases rose in April to 195,700, the highest level since June 2019. Perhaps this is boosted by buyers wanting to avoid tariff-related price hikes. The jump was country-wide and was +11% above the year-ago level.
Meanwhile Canadian manufacturing sales fell -2.8% in April, with the tariff impacts starting to be felt. It was down -2.7% from a year ago. Recession risks are rising in Canada.
Japanese industrial production also fell in April from March, down -1.1%, but remained +0.5% higher than a year ago.
Malaysian retail sales were up +4.7% in April from a year ago, but as good as that sounds it is the weakest year-on-year rise since May 2023. And these gains are before inflation, which is running in Malaysia at only +1.4%.
In China, their banks extended ¥620 biln in new yuan loans in May, up from ¥280 bln in April, but that was the lowest level for that month since 2005. Despite the monthly rebound, the May new loan figure was way less than the expected ¥850 bln, and even lower than the ¥950 bln in May 2024. Low interest rates are not encouraging lending. The average rate in May was little-changed at 1.55%.
EU industrial production sagged in April from March after a strong March gain, but managed to stay marginally higher than year-ago levels. The EU publishes this data on a volume basis, so this is a 'real' gain.
Also in Europe, this open letter has been released, signed by more than 400 notables including 31 Nobel Prize winners.
And locally, we should probably note that the Air India crash of a Boeing Dreamliner turns the focus back on to Boeing, and now the safety of the Dreamliner aircraft. Air NZ has 14 787-9 Dreamliners. If there is a recall or stand-down for this model, it will hit Air NZ even harder than the Boeing 737 Max crisis.
The UST 10yr yield is now at 4.41%, and up +5 bps from this time yesterday but down -10 bps for the week. The key 2-10 yield curve is now at +47 bps. Their 1-5 curve is now inverted by -7 bps. And their 3 mth-10yr curve more positive at +24 bps. The Australian 10 year bond yield starts today at 4.18% and unchanged from yesterday at this time although down -16 bps from a week ago. The China 10 year bond rate is still holding at 1.68%. The NZ Government 10 year bond rate starts today at 4.56% and down -2 bps but down -7 bps from this time last week.
Wall Street was down in its Friday session of the S&P500, retreating -1.1% for a weekly -0.4% fall. European markets mostly down -1% in overnight trade. Tokyo ended yesterday down -0.7% and down -0.5% for the week. Hong Kong fell -0.6% for a -0.4% weekly dip, and Shanghai ended down -0.8% also down -0.4% for the week. Singapore fell -0.3%. The ASX200 was down a minor -0.2% in its Friday trade, up +0.1% for the week. The NZX50 ended down -0.8% but only down -0.1% for the week.
The Fear & Greed index is still in the 'greed' zone, unchanged from a week ago. But because markets are now closed, it probably doesn't reflect the hot war situation yet.
The price of gold will start today at US$3,433/oz, and up another +US$50 from yesterday. And that is a +US$115 rise from a week ago. In contrast the silver price at US$36.17/oz is little-changed from a week ago.
American oil prices are up a sharp +US$5 at just over US$73.50/bbl while the international Brent price is now just over US$74.50/bbl. These represent a +14% jump from this time last week and are back to levels we last had in January. (So far, US pump prices are not reflecting the higher oil cost, but it will be imminent.)
The Kiwi dollar is now just under 60.3 USc, down -30 bps from yesterday, up +10 bps from a week ago. Against the Aussie we are down -20 bps at 92.7 AUc. Against the euro we are down -20 bps at 52.2 euro cents. That all means our TWI-5 starts today at under 68.1 and down -20 bps from yesterday, down -10 bps from a week ago.
The bitcoin price starts today at US$105,109 and down -3.1% from yesterday on the risk aversion vibe. But that is still+0.4% higher than week-ago levels. Volatility over the past 24 hours has been moderate at just on +/-2.2%.
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6 Comments
The demographic dividend slams in to reverse.
"Over the next quarter century, the age mix will slow the growth in hours per capita per week—and thus GDP per capita growth—by 0.4 percent annually in every first wave region other than North America.
...Tweaking retirement ages will not be sufficient. In many countries, it will take raising labor intensity across different age groups and simultaneously increasing productivity, alongside migration and long-term increases in fertility."
https://www.mckinsey.com/mgi/our-research/dependency-and-depopulation-c…
I can't say how much I appreciate these daily updates.
It's not just the quick facts, like;
The gold price has jumped. The oil price has soared. Equity prices are falling. Bond yields are up. The US dollar has been falling but is now in a wavering phase.
With the detail below, but I hadn't seen this before and it's a worthwhile read;
Also in Europe, this open letter has been released, signed by more than 400 notables including 31 Nobel Prize winners.
Different times. In context there was a fight between fascism and communism. Communism trend in Spain resulting in the Spanish Civil War.
Kate - I've written here many times that Trump is a symptom, not a cause.
So too, fascists in general. Psychopaths are always with us, but the conditions where they gain traction are the variable factor.
We are past the peak of globalisation; on a per-head basis, well past. People sense they are in reverse, and the hurt is well up into the 'middle class'now and reaching higher. Fertile ground...
And the dominant System - economic growth for the benefit of a very few (at the expense of many now and all in the future) - has commandeered democracy; look at Bishop, Luxon, Seymour and Co; hucksters all. They're not there for us - they're there for the few. And the global ship is sinking, so we ordinary folk are getting less of less.
Those who fixate on tyrants, rather than 'why tyrants', annoy me. Remember this?
//www.interest.co.nz/opinion/95460/murray-grimwood-aka-interestconz-comme…
'real question is not who Farage? The question is why Farage?'
:)
While he isn't perfect, Ray Dalio's 'changing world order' seems relatively accurate in terms of observations of historical trends. Reform is demanded by the masses post conflict, innovation and peace leads to prosperity, prosperity leads to malaise and entitlement, wealth accumulates more and more towards the top eschelon of society as they gain greater power and influence, until there is yet another conflict and the public demand reform.
Naturally the world has change a LOT in the last 75years but in many ways it is the same as previous empires, reserve currencies, as human behaviour repeats. Today information is transmitted near instantly, an incredible feat. But what good is this information without an educated populace to solve problems collectively for the greater good? This is my true worry, that we will see the masses dumbed down, losing generations of skills and knowledge as they rely on electrical goods to for it over innate skill and craftsmanship.
Israel is seeing that it's getting basically zero punishment for the atrocities its committing against Palestinians, given the shield of the US. So it's deciding that while its got a free pass, it should just push it as far as possible to further its own goals. Jeez, I never thought I would be wanting Iran to win anything, but in this case, I hope Israel walks away with a bloody nose, as does the US for all the help they give them. The Onion seems to be the only real news site stating the obvious: https://theonion.com/netanyahu-calls-iran-strikes-necessary-to-prevent-…
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