Here's our summary of key economic events over the weekend that affect New Zealand, with news geopolitics will suck up all the headlines this week, but we will focus on how the world's economies are faring.
This coming week will have a focus on Australia, and the RBA's Tuesday cash rate target review. "Everyone" expects them to cut by -25 bps to 3.60% - the more so because they skipped the expected cut at their July 9 review. There will be interest in the NAB business sentiment report this week too
In the US, the economic focus will be on CPI, PPI, retail sales and industrial production data. Market analysts aren't expecting to see much expansion and are expecting to see higher inflation. There will also be another consumer sentiment survey released this week too.
In Europe it will be all about GDP and sentiment updates. In Japan, we get to learn their Q2 GDP result. In India the focus will be on inflation updates.
In China there will be some big data released including for industrial production, retail sales, and new bank lending.
Over the weekend China released its July CPI data. It rose +0.4% from June, to be unchanged from a year ago. They are being suppressed by Beijing's subsidy programs. Food prices fell marginally in the month to be -1.0% lower than a year ago. Beef prices however rose +3.6% on that annual basis, sheepmeat prices fell -1.4%, and milk was down -1.3%.
Meanwhile overall Chinese producer prices deflated quicker, down -3.6% from a year ago. Producer purchase prices were down -4.5%, taking it to almost three years of continuous monthly declines. That's serious deflation.
More globally, the July world food price index inched higher, but that masks record higher prices for meat proteins. And those were driven by beef and sheep prices. Dairy prices eased back from June but only slightly and they remain very near record levels.
Canada released its July labour market report over the weekend showing 1.6 mln people unemployed for a jobless rate of 6.9%. That's high even if it is stable, and the number of people employed fell by -40,800, with a drop of -51,000 in full-time jobs and a rise of +10,000 in part-time jobs. The decline was mostly among 15-24 year olds. Markets had expected overall employment to rise by +13,000.
In Japan, June data for household spending rose +1.3% from the same month a year ago, down sharply from a +4.7% increase in May. Forecasts were for a +2.6% rise. Households were worried about the impact of US tariffs and persistent inflation on consumer activity. On a monthly basis, spending plunged -5.2% in June from May, reversing May’s +4.6% rise and undershooting expectations of a -3% correction.
And staying with Japan, they agreed with the US on a 15% "reciprocal" tariff. But Trump issued an executive order to charge 25% in a pique of retribution for slights no-one can quite understand. The Japanese have called them out on it, insisting they honour the negotiated deal. Now Bessent and Lutnick have agreed to not only correct the "administrative mistake" but refund the capricious tariff charges. The Japanese are back with the same deal as the EU has.
Taiwan's export performance continues to astound. Exports from the island nation surged +42% in July from a year ago to a record US$56.7 bln, following the +34% increase in June. They were expecting 'only' a +29% rise on this basis. by any measure this strength is quite remarkable. It is all built on electronics. Taiwanese imports were up +21% on the same basis.
In the US the appointment of Stephen Miran to fill a temporary vacancy as a board member of the US Federal Reserve adds in a protectionist sceptic to the voting mix. He is no fan of central bank independence. But oddly he has railed against the 'revolving door' of its members moving between Whitehouse/Treasury positions and the Fed governorships. He has now become exhibit A.
And global reinsurer SwissRe says 2025 is shaping up to incur weather and climate losses exceeding US$150 bln, after a record $80 bln in the first half. That would make it its costliest year since 2011 (when the NZ and Japanese earthquakes occurred), but by far the costliest for just climate impacts.
We should also note an AFR report that French dairy giant Lactalis, is the leading bidder for Fonterra’s Mainland business after being granted exclusivity to negotiate for a buyout. They got the nod with a price rumoured to be something less than $4 bln.
The UST 10yr yield is now at 4.28%, down -1 bp from Saturday and up +6 bps for the week. The key 2-10 yield curve is firmer at +53 bps. Their 1-5 curve is flatter at -11 bps. And their 3 mth-10yr curve is flatter at -8 bps. The Australian 10 year bond yield starts today at 4.26% and down -1 bp from Saturday, and up +4 bps for the week. The China 10 year bond rate is unchanged at 1.70%. The NZ Government 10 year bond rate starts today at just under 4.43% and unchanged, down -13 bps for the week.
The price of gold will start today at US$3,398/oz, up US$3 from Saturday. But that has built to a +US$51 gain for the week, or up +1.5%. The uncertainties swirling around the new US tariff ruling are flowing through the New York gold price. Meanwhile the White House called the news 'misinformation' even though their agency had published to tariff ruling.
American oil prices have slipped back again, down -50 USc to be just under US$63.50/bbl with the international Brent price down at just over US$66/bbl. These are more than -US$3.50 lower than week-ago levels.
The Kiwi dollar is at 59.5 USc and down -10 bps from Saturday, up +½c from a week ago. Against the Aussie we are up +10 bps at 91.3 AUc. Against the euro we are unchanged at 51.1 euro cents. That all means our TWI-5 starts today at just on 67.3, unchanged from Saturday and up +20 bps from this time last week.
The bitcoin price started today at US$118,561 and up +1.5% from this time Saturday. Volatility over the past 24 hours has been modest at just on +/-1.1%.
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21 Comments
Greens talking they will run the next government, not good for old white cis males.
we are going to have a very bad economy and a very strange election
As we need to move to a post colonial political system, are we well served by any of these overpaid under skilled folks? Abandon this system entirely and draw lots from the citizens would provide us with the same talents with less folk with a sense of entitlement. Oh, and rejig the wage to the average nurse or teacher. Our current system doesn’t work for our society.
I've always found it interesting that as a settler nation, full of people who wanted to leave the system they came from, we just went and emulated the same systems we left.
In a global consumer economy, somewhere like NZ is more likely to struggle competing at the tippie-top. Yet we'll still keep on keeping on in a race most will lose, and arguably don't want to be in.
Rather than be another franchise member of a global model we have no say over, probably we should decide what it actually means to be a New Zealander, what that should include as a lifestyle, and gravitate towards that. Although good luck in a world where everyone's got to be an individual rather than a group.
The people who left the UK didn't want the system they left. They left a British class system behind and the religious nuttiness that most of the world wallowed in.
Over time the class system has returned in a new form and the religious nuttiness has retuned via cultural awareness.
If NZ had maintained the path of the early settlers NZ would still be the gem it was.
The class system was always here, it's just that a deficit of people and an abundance of almost free land meant the working classes did alright.
The also left dirty, dysfunctional, overpopulated cities. Then rebuilt them.
Well said.
Surplus energy - the space over and above full-time survival - creates stratification. The more the surplus, the more the divergence. That's our history in a nutshell.
Except that it is now reversing; the lid is coming down and faster as it goes. The winners in a System always hang on until it is too late; that is exactly what 'back on track' represents. Usually the crowd gets angry enough to issue pitchforks; sometimes they welcome the Barbarians as a better-of-two-bad options.
We are a nomadic species who historically move, exploit, then move again once the resources have been depleted. This used to work on small scale where resources such as food came seasonally in different areas, and the likes of food could be preserved to last the winter and replenished in spring/summer, however on a global scale we have allowed certain civilizations to grow and settle through exploitation of other countries resources.
We'll migrate to those other countries temporarily, take in some sunshine.
Fetch me a beer tonto!
Teachers and nurses are raking it in over the average Kiwi battler.
If you value your children or grandchildren getting a reasonable education, and everyone's access to medical care then it is rightly so they are paid for the benefit they deliver.
I think they are going for the youth vote, and to be fair the current lot of old white cis males have not exactly done a good job for the youth!
To get the youth to bother to vote they need to think it will actually make a difference.
"we are going to have a very bad economy" - the current old white cis males are creating a very good economy? What have the coalition done that is good for the economy?
Slowed the speed of incineration?
I'd say that speed has increased significantly since the coalition were elected.
In general they have done some good things, but as usual they couldn't help themselves and had to give tax cuts at a very bad time to give tax cuts. Then they had to make a whole lot of cuts to pay for a small fraction of those tax cuts, and those cuts are killing the economy much more than the tax cuts improved it.
I can never work out if Trump is a complete moron or a genius in disguise. He has created this scenario where countries are happy that their tariff is only 15%! He looked like a bumbling buffoon along the way, I can't tell if that was intentional or not.
Maybe he is both - a complete idiot who is very good at getting his own way.
He's smart, but virtually all of his brain power is expended on getting what's good for Trump. The exact opposite of what being a good leader entails.
He knows how to play the system and failing that, he knows even better, how to confuse the system.
Not the first - Bush Jr and Reagan's puppeteers knew how to, too.
Bernays has a lot to answer for.
Australia:
"So, the US economy is engaged in two historic revolutions at once: dramatically raising import taxes and remaking the global trading system, and at the same time leading a technology revolution — artificial intelligence — that McKinsey & Co says is part of a seismic shift reshaping the world's economy that will have 3,000 times the impact of Britain's Industrial Revolution in the 18th and 19th centuries.
And while all this is going on, Australia's current treasurer, Jim Chalmers, will next week conduct a reform roundtable, where 25 or so chosen people will be tasked with finding more tax revenue without the government being voted out, and finding a way to repeat what Keating did in the 1980s and 90s and lift productivity.
Good luck with that."
https://www.abc.net.au/news/2025-08-11/us-tariffs-keating-chalmers-prod…
Japan:
"While the world shifted to software-driven economies, "Japan, with its strengths in hardware, was slow to adapt to software and services"
...In 2018, Japan's then-cybersecurity minister sparked outrage and disbelief, when he claimed he'd never used a computer, since his secretaries did "that kind of thing"
https://www.rnz.co.nz/news/world/569547/japan-used-to-be-tech-giant-why…
Jeez, what a bunch of loser Marxist comments. You guys should all move to Russia, China, Nth Korea and see how that goes for you. The bumblers of the previous govt spent $66B in the name of Covid but actually spent just 18% of that on covid. The Greens (reds?) getting into govt with TPM and Labour would be a one way descent into economic disaster for NZ. The flight of capital (both monetary and human) out of NZ will be swift.
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