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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