Here's our summary of key economic events overnight that affect New Zealand, with news commodity currencies are in favour at the end of the week as global commodity prices get a halo boost from the taxes Americans are prepared to pay for commodities. Risk is in favour; 'greed is good' and blindness to the downside possibilities seems wilful. It helps that heavyweight investors have gone on their summer vacations.
But first, US initial jobless claims came in at 240,800 last week, an increase and a bit more than seasonal factors would have expected. There are now 1.91 mln people on these benefits, +111,000 or +6.2% or more than at this time last year. That is their highest level since 2021.
There was a smaller US Treasury 30yr bond auction earlier today and if it wasn't for the SOMA activity from the New York Fed, demand would have been lighter than at the prior event. In the end, it delivered a median yield of 4.84%, little-changed from the 4.80% at the prior equivalent event.
In Japan, their June producer prices were up +2.9% from a year ago, a notable easing from the +4.3% rise in March. In fact, from May, Japanese producer prices slipped marginally. From early 2022, there has been an overall trend of these price increases easing and they may be now heading into a bit of a deflationary period.
China's vehicle sales grew by almost +14% in June from the same month a year ago following an +11% rise in May. Sales of new energy vehicles (NEVs) surged more than +26% in June, marking the fourth consecutive monthly increase. In the first half of 2025, total vehicle sales climbed +11%, while NEV sales jumped more than +40%. They are on target for NEV sales to exceed 16 mln units - which is more than all vehicle sales in the US. China is on track for sales of 33 mln for the full year, easily the world's largest vehicle market.
The Korean central bank kept its policy rate unchanged at 2.5% as expected. It last cut its rate in May.
Australian business turnover data has revealed that May activity was softish, recording a small slip from April. May was held back by a fall in their mining sector. But from a year ago, May 2025 was overall +5.9% higher on a current price basis.
Container freight rates fell -5% last week from the prior week, almost all on outbound cargoes from China. Overall rates are now half year-ago levels, although to be fair those year-ago levels were juiced up by the Red Sea crisis. Bulk cargo rates were little changed this week but are -25% lower than year-ago levels.
The UST 10yr yield is now at 4.35%, and up +1 bp from yesterday. The key 2-10 yield curve is holding at +47 bps. Their 1-5 curve is inverted by -14 bps and little-changed again. And their 3 mth-10yr curve now +4 bps positive. The Australian 10 year bond yield starts today at 4.32% and down -1 bp from yesterday. The China 10 year bond rate is firmish at 1.66%. The NZ Government 10 year bond rate starts today at just over 4.52%, down -9 bps.
Wall Street is slightly firmer on the S&P500 and up +0.3% but again in record territory. Overnight European markets were mixed with London up +1.2 and Frankfurt down -0.4%, a reversal of yesterday's fortunes. Tokyo ended its Thursday session down -0.4%, Hong Kong was up +0.6%, and Shanghai was up +0.5% Singapore rose +0.4%. The ASX200 ended its Thursday session up +0.6%, while the NZX50 was down -0.1%.
The price of gold will start today at US$3,317/oz, and up +US$9 from yesterday.
American oil prices are down -US$2 at US$66.50/bbl while the international Brent price is now just over US$68.50/bbl.
The Kiwi dollar is now at 60.3 USc, up +25 bps from yesterday. Against the Aussie we are down -10 bps at 91.6 AUc. Against the euro we are up +30 bps at 51.5 euro cents. That all means our TWI-5 starts today at just on 67.7 and +20 bps firmer than yesterday at this time.
The bitcoin price starts today at US$113,549, a record high and up +4.0% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/-2.0%.
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18 Comments
Unemployment everywhere is becoming a worry. It may be just that my YouTube algorithm is presenting a lot of videos but I do know some people who are having trouble finding work.
Flow on impact of the uncertainty Trump is creating?
It feels like we are in a transition period, but the dominant influence remains the US simply due to the sheer size of it's economy, and legacy influences on global geopolitics and economics. The bad players are clearly seeking to build their power and dominance, and there is little doubt that people will suffer under their authoritarian approaches. There is no way to predict which way this is going to end up, although there is little doubt that most by far have hope towards some sort of stability based on equality.
Who knows?
So how does your last sentence relate to your second sentence? The bad players (and does this include Trump) are going to deliver that stability and equality? Or are “the people” wilfully blind in their optimism.
I think that most people are 'wilfully blind'. It's not an unusual trait of the human character. There old adages about 'hoping for the best while planning for the worst, but very few seem to do the second bit.
Is Trump a bad player? At this moment in time, he's not got there yet, but unless someone dials him back or removes him, i think he will become one. The reason for the 'not yet' perspective is the lag of shifting US Society, as driven by their politics, from where they were (believing they were the world's 'good guys'), into the nation he would shape it to be. A brief look at history and the imposition of fascist states certainly suggests the US under Trump is headed there, and it is clear that many in the US will happily step up to do that dirty work for him. Power over others is an enticing corruption for many, especially if the 'others' are deprived of the means to fight back or defend themselves, and those in power are not facing any consequences for their excesses. It is increasingly evident that rule by fear is well underway in the US in some areas.
Back to the first paragraph; under those kind of societal pressures there will always be those, possibly even a silent majority of apolitical people who are just keeping their head down, not expressing any political opinions or breaking any laws and perhaps fervently believing that this too shall pass. The martin Niemollers of the 21st century.
Do we have any research on authoritarian approaches and employment? I always thought they had a good track record, building Death Stars and things like that.
My role is an auditor, and in the early days when colleagues were giving me a bit of grief, I did suggest I could bring my Darth Vader helmet to work.
Does you job satisfy a want or need? The 'rock star' economy created an abundance of want based jobs (personal care, leisure, entertainment etc). These will go.
Both the public and private sector is also riddled with non productive staff, many catering to ideological whims, virtue signalling and over protective regulations. Hopefully these will go to.
With modern productivity we probably only need about 30% employment to produce our "needs". The rest is a mixture of producing "wants", pointless bullshit, or rent-seeking and other zero-sum efforts. Our inability to imagine a world without a standard 40 hour week is creating some mind blowing wastage of energy and effort.
ID to Google in Oz…what could possibly go wrong
“From December 27, Google and Microsoft will have to use some form of age-assurance technology on users when they sign in, or face fines of almost $50 million per breach.”
https://www.abc.net.au/news/2025-07-11/age-verification-search-engines/105516256
All Time High for BTC.
US$116k and climbing
It will retrace at some stage but will be interesting to see how high it gets
Interesting they have banned ATM's here. This was to crack down on untraceable transactions.
When you consider they bombed the hell out of Gadaffi due to his promotion of a gold backed currency, it's hard to imagine any Central Banks/Govts will just stop at ATM's. It creates a serious monetary threat, so surely will eventually be met with coordinated suppression.
Great for those who hold, but paying a $100k for a digit is not a gamble I would take.
A lot of the big institutions are buying into it though.
TradFi and DeFi are just becoming Fi.
Many of us already have exposure via traditional ETFs or KS accounts without knowing we're really just crypto bros
"When you consider they bombed the hell out of Gadaffi due to his promotion of a gold backed currency" and actively sponsored terrorism, especially against the US and its citizens, not to mention his other excesses. You're drawing a long bow there Ras.
Why?
Both the bombing of Gaddafi’s Libya—widely seen as linked to his plans for a gold-backed currency—and modern government crackdowns on Bitcoin reflect resistance to monetary systems outside central control. In each case, alternative currencies are perceived threats.
And put a bomb in the disco in Berlin in 1986, that killed two US servicemen and injured many others. This is the reason they bombed Libya, not some fanciful tale of a gold backed currency. Libya simply did not have the wealth or influence to have much impact on world economics, and Gaddafi was already being recognised as a dictator whose excesses were too much.
Unemployment going to be a much bigger issue with AI
I have seen some massive productivity enhancing AI lately
Call center staff will suffer 10-25% reductions over the next 12 months IMHO
Good lord I hope airlines add AI agents for call center.
I have been steadily loading up chat to the point it can give a pretty decent answer to email queries i get. Sure i need to edit and also check references and facts, but it is taking the drudgery out of long explanatory replies. Loading in a foreign financial doc and getting an explanation particularly helpful.
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