Here's our summary of key economic events over the weekend that affect New Zealand, with news consumer hesitations are showing up the world's largest economies.
But first, our week ahead will be dominated by Wednesday's RBNZ OCR rate review, one that is widely expected, by both analysts and financial markets, to deliver a -25 bps cut. That will flow though to floating mortgage and savings rates, but it is far less clear it will affect fixed home loan rates given we have had a full range of cuts last week.
In Australia this week it will be all about consumer inflation expectations and consumer sentiment.
Elsewhere, in the shadow of northern hemisphere vacations, Canada and Japan will release updated CPI data, and there will be a focus on the US Fed, who with guests, will be huddling in Jackson Hole, WY, again. This time the comments from the two Trump-aligned board members will no doubt hog the limelight.
All the while, PMI releases will ground us in the real economy.
And in the real economy, Chinese retail sales rose +3.7% in July from a year ago, slowing from a +4.8% expansion in June. Markets were expecting a +4.6% gain in July, so this is a disappointment. This latest result is their weakest growth since December 2024.
Meanwhile, China's industrial production expanded by +5.7% in July from a year ago, slowing from June’s three-month high of +6.8%. Expectations were for a 5.9% gain so this miss is small. But it is the softest increase in industrial production since last November. That comes after capacity curbs caused by unusually high temperatures and heavy rainfall in some regions.
The more important metric of Chinese electricity production saw it rise +3.1% in July from a year ago, a faster expansion than in June. Hydro power was down -9.8% on the same basis, coal power up +4.3%, and nuclear power up +8.3%. The smaller renewables sector's rise was much faster than all of these.
And China’s new home prices in the 70 major reference cities dropped by -2.8% in July from a year ago, easing from a -3.2% decline in the previous month. It was the 25th consecutive month of contraction, the softest pace since March 2024. Only five of those 70 cities had any increase, and those were all marginal at best. But then again, so were the dips. For resales, there were no cities showing any year-on-year gains and only one (Taiyuan, in Shanxi province) with a monthly gain.
Overall, it's a picture of a slightly slowing Chinese economy across all sectors and that will tell Beijing that its stimulus efforts so far are insufficient to keep up with the forces that are dragging it slower. But Beijing is calling the economy 'steady'.
And staying in Asia, Malaysia’s economy expanded by +4.4% year-on-year in the June quarter, matching the pace in Q1 and slightly below the initial estimate of +4.5%.
In the US economy, retail sales rose +0.5% in July from June, as expected and following an upwardly revised 0.9% rise in June. This was largely due to car buying. They are up +3.9% from a year ago but that gain has been falling from the recent +5.1% peak in March. Although tariff-taxes account for most of the gain, overall there is a small real gain here. However without cars, this would look quite negative.
In the New York region, they saw a modest rise in business activity in their factories in July based on rising new orders.
And that is supported by national industrial output data. While American industrial production edged down -0.1% in July, missing forecasts of a flat reading and following an upwardly revised +0.4% rise in June, the decline was only because the mining sector was weak. Factory output, which makes up about 78% of total industrial production, edged up +0.1% in July, after increasing +0.3% in June. From year-ago levels it is up +1.4%, similar to most of 2025.
Not so positive is American consumer sentiment and they don't like what they see ahead. The University of Michigan consumer sentiment August survey fell sharply from July and well below what was expected. It was the first fall in four months, mainly due to growing inflation concerns and sharply worse buying conditions for durable goods. Those surveyed anticipate worsening inflation and unemployment ahead. Overall this survey is more than -13% worse than year ago levels.
And in Europe, data released over the weekend shows that Ireland's exports to the US dropped by almost a quarter in June compared to a year ago. Tariffs got the blame. (But they were able to reorient about half of that drop to the UK.)
More globally, we should note that international shipping costs are starting to be roiled by the new Trump rule of tariff-extras/extra port fees for Chinese-made ships that dock there that comes into effect in five weeks. That will raise freight costs for Americans, and with extra capacity in other trades, probably bringing lower costs elsewhere.
The UST 10yr yield is now at 4.33%, up +1 bp from Saturday at this time, up +4 bps for the week. The key 2-10 yield curve is still at +57 bps. Their 1-5 curve is still inverted by -8 bps. And their 3 mth-10yr curve is still inverted by -3 bps. The Australian 10 year bond yield starts today at 4.23% and down -4 bps from Saturday. The China 10 year bond rate is up +1 bp at 1.75%. The NZ Government 10 year bond rate starts today at just on 4.45% and unchanged.
The price of gold will start today at US$3,334/oz, unchanged from Saturday, but down -US$61 for the week.
American oil prices have firmed slightly to be just over US$63/bbl with the international Brent price over US$66/bbl.
The Kiwi dollar is at just over 59.2 USc and unchanged from Saturday. But it is down -40 bps from a week ago. Against the Aussie we have dipped -10 bps to 91 AUc. Against the euro we are holding at 50.6 euro cents. That all means our TWI-5 starts today at just on 66.8, down -10 bps from Saturday and down -½c for the week.
The bitcoin price starts today at US$117,422 and down -0.3% from this time Saturday. But up +0.5% from a week ago. Volatility over the past 24 hours has been low at just under +/-1.0%.
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30 Comments
It's what people think will happen next that counts.
It feels like Auckland has lost its Mojo
Not massive confidence as we muddle along
I think that's the whole point.
That's so true - largely driven by emotive hope tinged with a little reality. But only a little.
The uncertainty continues though. After failing with Putin, Trump was going to turn on Zelensky, but Zelensky won't be alone. He's taking all the European leaders with him. So if Trump thinks he can throw Ukraine under the bus, again, he'll be doing it to Europe too. That power balance has shifted now that they've finally woken up.
Their problem is they still need US weapons because it takes time to build their own capability and capacity to make them. Ukraine has reached out and sunk a ship in the Caspian Sea that was taking drones and parts to Russia.
Internally Trump is 'militarising' (CNN's words) some cities as an expression of his power and the people don't like it. Apart from the Viet Nam War period, I don't recall a previous US President ever inspiring so many protests against him personally. But even those tended to pay at least a little overt lip service to the law.
These are one-off times. As Hubbert pointed out, you can only mine the planet once - and we're pretty much half-way through the process but running a 'doubling-time' exponential growth regime. Few see geopolitics, depletion/overshoot, energy/entropy in the same frame - but they are. They most certainly are.
Firstly, there is no equivalent substitute for fossil energy. Hence the US needing to annex Iraqi oil, but with complete disinterest as to local repercussions. Hence it is near-certain the US stopped Russian gas getting to somewhere else, because it was a depletion with no advantage to the US. The west nearly got its hands on Russian fossil energy - but was rebuffed. You can trace Putin's recent 'invasion', to that pressure-on-Russia. China doesn't have enough FF in-house; neither does India. This is Hunger Games at international level - but even the last FF-based nation standing, will ultimately fail.
The end is easy to define: humans will be living at some near point, ex fossil energy and ex what it delivers that 'renewables' can't deliver (they can't replace themselves, for important instance). The pathway through the transition-period is unclear - and the majority of the 8 billion about to transition, haven't a clue what is coming.
We're in for an interesting ride.
Certainly are in for a ride - strap in. CNN has reported that the US itself is still doing billions$ in trade with Russia; fertiliser is the biggest bit, but metals including palladium, uranium and plutonium, all of which is available from sources not Russia, as is most of the EU. While the trade is acknowledged as a lot less than it used to be, it is continuing. So Trump's hypocrisy is rampant.
in the meantime in the US many seem to be not just waking up to just what they have unleashed, but thinking about pushing back (and that has its risks). The mid terms will be telling. So the uncertainty is very high. Will the right wing try to rig the elections? what will they do if they get caught?
But one of the more worrying trends is the rise of right wing religious conservatism. This will propel the denial to higher levels and raise the risk of entrenched religious fundamentalism in the halls of power across the US. And that is a very scary thought.
So if Trump thinks he can throw Ukraine under the bus, again, he'll be doing it to Europe too.
Most Ukrainians (69%) want to stop the war at any cost. Not what Europe, Zelensky, or Aotearoa want.
Do these people have a say? Or just the whims of other people?
https://news.gallup.com/poll/693203/ukrainian-support-war-effort-collap…
The reality is that apart from a full military campaign by NATO nothing will budge Russia from what they already possess of Ukraine and likely Putin is going to be able to negotiate for even more territory. Therefore the map is already redrawn and next is the challenge of preventing further incursion. Part of that will be if the Americans are confident there are minerals etc to exploit they will then be obliged to protect those interests. Given the vast open territory establishing and maintaining a demilitarised zone will hardly be simple, but it’s going to have to be done.
It seems the West wants to continue fighting Russia, but doesn't want to man up and put its own people on the line. It wants Ukrainians to die for them and young Ukrainian men to be forcibly mobilized for that purpose. Hardly democratic.
It suits the West if Russia expends it's military machine fighting a neighboring lesser nation. But it's preference would be for no war.
And the average age of a combatant is around 45, Ukraine has intentionally excluded those in their early 20s from mobilization.
Most Ukrainians (69%) want to stop the war at any cost
The article you linked literally says they want a negotiated peace, not "at any cost". It's in the first paragraph.
The literal translation of what Ukrainians answered to in the Gallup poll is:
'To seek to negotiate an ending to the war as soon as possible' (majority)
'Ukraine should continue fighting until it wins the war' (minority)
You know that's not the same as "at any cost" though, right?
You know that's not the same as "at any cost" though, right?
Let's try some logical deduction here.
If Ukrainian people were unlikely to make concessions to Russia to end the war, they would agree with the latter statement.
This is why the question was framed as it is. In the research world, this is called a combination of single answer and 'forced choice'. it's done for a reason.
Stop digging, Pa1nter is right.
No. The Ukrainians are right. It's their voice. The majority want to stop the war at any cost.
Geezer, we all get it wrong sometimes, it happens. Just admit your first post was wrong and move on.
Yes they're getting war-weary. And that is what Europe, the US and NATO did to them. They couldn't afford to let Russia have Ukraine but they were too afraid to call Putin's many bluffs and now they've got themselves in a crack where I suspect the only real solution to ending the war in a way that doesn't threaten Europe's long term security is to face down Russia hard, essentially risking WW3, putting European troops on the ground in Ukraine and striking hard into Russia to destroy their ability to prosecute the war in any way. Russia has threatened escalation if that happens, but that needs to stood up to, and Russia needs to be told they will pay the price. Trump likes to play the bully but proves he's just a coward afraid to use the tools he has available.
Trump likes to play the bully but proves he's just a coward afraid to use the tools he has available.
Trump was never elected on a commitment to send U.S. troops to fight Russia on behalf of someone else.
Nobody suggested he was. Don't twist my words! But he did talk big on stopping the war and now he's failed repeatedly. It now looks like he intends to lean on Ukraine, and to achieve what he wants, that will mean telling Zelensky to surrender, in part or fully on Russia's terms. That will unleash a genocidal atrocity in Ukraine that will make Gaza pale in comparison. The Europeans won't let him get away with that though, so unless they're all prepared to step it up - lot, the outcome is an ongoing war of attrition which ultimately Ukraine must lose, but the cost to Russia will be huge too. Russia has shaped itself into one of the world's evil empires, and any success in Ukraine will lead to trouble down the road. Europe cannot allow that to happen.
Trump needs to be told put up or shut up.
Trump needs to be told put up or shut up.
If you were Trump, what would you do? Remember, it's not Trump's intention to go to war with Russia.
You mention genocide is going to happen, then say it's not going to happen because Europe will prevent that from happening.
I think you should consider what you're trying to say.
I'm not Trump. I'm not a bully nor am I a coward. It doesn't matter that it's not Trump's intention to go to war with Russia. Putin has forced it on him. He stepped up to the job with the war underway with big claims about stopping it. But he hasn't with any of the approaches he's used so far. so he needs to put up or shut up.
You clearly like twisting things too - I didn't say Europe will stop a genocide, I said Europe will not let Trump force Ukraine to surrender, because that will result in a security threat to Europe. Try reading it again.
Do you need help in reading comprehension?
You clearly like twisting things too - I didn't say Europe will stop a genocide, I said Europe will not let Trump force Ukraine to surrender, because that will result in a security threat to Europe. Try reading it again.
OK. Gotcha.
But Trump is not "forcing Ukr to surrender." If Zelensky wishes to fight Russia, that is his choice, even if he doesn't have support from Ukrainian people. If Europe wants to put troops on the ground to fight Russia, that is also their choice. I would prefer to see European troops fight Russia over Ukrainians who don't want any part of it.
Trump cannot and likely will not prevent this if that is their choice.
"But Trump is not "forcing Ukr to surrender."" no, but he will try. look at the videos of the meeting in the white house the last time. He tried then. Vance accused Zelensky with being disrespectful, utterly ignorant of the fact that that was exactly what he was being to the leader of a nation at war, technically a US ally, literally fighting for its life against a nation already accused of committing war crimes in its invasion. But Trump and Vance were actively choosing to side with the 'bad guy', turning decades of US history and precedence on its head. Trump has forced himself into a corner and he will still not do the right thing - face down Putin and take back control.
You should understand that Trump does not want to go to war with Russia. He made it quite clear that he wants the U.S. to take a non-interference stance in global conflict. They have the power to pick and choose what they get involved with.
You should be criticizing the EU for not confronting Russia. If they feel strongly about the Ukraine conflict and the Russian threat, they should be standing up for themselves and even going in to battle with. This is also an issue that Trump is quite clear about.
Mr Trump seems to be the only one trying to stop this stupid war. A near impossible task given the entrenched positions.
He is an outlier as usual, but I congratulate him for giving it a go.
Everybody else just seems to want the body count of young men to keep going.
China "stimulus juice losing its effectiveness" ~ Japan 2.0
"Rising gas prices mean some businesses are re-assessing their futures, and how many people they can afford to employ. A number say it is time for the government to step in and help. Gas supply has almost halved in the past decade and reserves are falling sharply. A survey of business gas consumers by the BusinessNZ Energy Council and Optima found that gas prices have risen by over 100 percent on average over the past five years, with half of the respondents having increased prices, or cut staff as a result. Kathryn speaks with two affected businesses employing hundreds of people: Steve Koekemoer, Chief Operating Officer for Talleys Group, and chair of Nature's Flame - the country's largest biomass wood pellet manufacturer; Simon Watson, General Manager of NZ Hothouse, which grows tomatoes and cucumber for the domestic market and employs 250 staff in Auckland "
https://www.rnz.co.nz/national/programmes/ninetonoon/audio/2019000377/b…
A decade(plus) of warning appears to have been insufficient for our businesses to read the writing on the wall and adapt.
Yes. There seems to be an underlying attitude in NZ of the tax payer picking up at least a piece, if not all of the risk. A legacy of old governmental 'socialist' ideology possibly? Except it's not socialism, but rather a cloaked form of capitalism.
'Nature's Flame', eh?
Trace it back for fossil (gas) energy.
Sigh - scratch greenwash and that's what you find, every time.
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