Here's our summary of key economic events overnight that affect New Zealand, with news that while financial markets are quiet due to the US Labor Day holiday, the data being reported in the rest of the world is actually very encouraging, especially for the factory sectors.
In China, the private Caixin PMI has a new sponsor - RatingDog. It is still produced by S&P Global. That August factory PMI showed manufacturing output returned to growth. Total new business expanded at quickest pace since March. But it also reported the fastest rise in average input prices in nine months. As has become the norm in 2025, this private PMI series is more bullish than the official PMI.
While we are noting improved factory PMIs in Australia and China, we should also note that they improved in Japan, Korea, Taiwan and Indonesia as well. The Trump tariff-taxes aren't killing these countries. In fact, because it is the American importers who are paying these taxes (and ultimately the American consumer), the whole tariff journey just shows the American's are prepared to pay a lot more for what they import, and demand isn't flagging. Yet, anyway.
Of special note is the regaining of momentum in India where their factory PMI turned notably higher on new orders and new-found momentum. This is now their fastest improvement in operating conditions in seventeen and a half years, with production growth accelerating to a nearly five-year high, supported by strong demand and better alignment of supply with orders. New orders rose at the fastest pace in nearly five years, and given they have been strong in the lead-up, this is really saying something.
Even European factories are on the move up, returning to expansion with the sharpest rise in factory output since March 2022. Their factory PMI is now at its highest in 41 months.
Australia’s factory sector expansion accelerated again in August. Higher new order levels, supported by a rise in exports, led to a solid rise in production. Confidence rose to its highest level since February 2022. The survey showed that manufacturers hired more staff and raised their purchasing and inventory levels. Meanwhile price pressures remained little problem.
And staying in Australia, their residential building consents fell -8.2% in July from June, almost double the market expectations of a -4.8% fall. This sharply ate into the upwardly revised +12.2% increase in June. The decline was largely due to a sharp fall in approvals for dwellings that weren't houses (apartments and townhouses). By state, approvals fell sharpest in New South Wales (-25%), while rising in Tasmania (+12%), Western Australia (+12%), in Queensland (+5.9%).
Lower new homebuilding is juicing up their existing-home real estate markets. Cotality reported strong August gains from July, up +0.7% for the month nationally. It's back as a strong sellers market. The rises in Brisbane and Perth are notable, but the gains in Adelaide and Sydney were not far behind them in August. The consequences for affordability for most aspiring buyers look awful.
We should probably also note that the forecast for Australia's wheat crop was raised sharply in an overnight update. Good rains recently is behind the revision.
The UST 10yr yield is now at 4.25%, up +2 bps from yesterday at this time. The key 2-10 yield curve is up at +62 bps. The last time it was this steep was in February 2022. Long dated yields are on the move higher. The UST 30 year yield is actually closing in on 2007 levels. Their 1-5 curve is still inverted by -16 bps. And their 3 mth-10yr curve is now inverted -8 bps. The Australian 10 year bond yield starts today at 4.34% and up +4 bps from yesterday. The China 10 year bond rate is down -1 bp at 1.78%. The NZ Government 10 year bond rate starts today holding at just over 4.41%, up +2 bps.
Wall Street is on holiday today but the futures market suggests the S&P500 will open tomorrow up +0.3%. Overnight, European markets were little-changed, except Frankfurt which was up +0.6%. Yesterday, Tokyo closed down -1.2%, Hong Kong closed up +2.2% and Shanghai closed up +0.5%. Singapore ended its session up +0.1%. The ASX200 ended its Monday session down -0.5%. The NZX however was up a good +1.1% after a late-session surge.
The price of gold will start today at US$3,477/oz, up +US$30 from yesterday and a new record high. Silver topped US$40/oz for the first time since 2011, also near a record high.
American oil prices are +50 USc firmer at just over US$64.50/bbl with the international Brent price holding just over US$68/bbl.
The Kiwi dollar is at just on 59 USc and unchanged from yesterday. Against the Aussie we are down -10 bps 90 AUc. Against the euro we are down -10 bps as well at 50.4 euro cents. That all means our TWI-5 starts today at just over 66.4, down -10 bps from yesterday.
The bitcoin price starts today at US$108,918 and little-changed (down -0.1%) from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.2%.
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17 Comments
'But it also reported the fastest rise in average input prices in nine months.'
A trend that will continue - and at the buying end of the pipeline we see 'house prices' (read: personal debt) on the rise again.
Well, someone has to 'pay', right?
It’s not really an issue if wages go up faster than prices. Most years that is the case.
?
Reference please.
My understanding is that the median multiple has been going backwards reasonably consistently for a quarter-century.
And that the currently-held global debt is now 1 quadrillion USD (give or take :).
Seems to me wages might just be falling behind, a tad...
Jim read this;
https://www.msnbc.com/top-stories/latest/busting-myth-economy-middle-cl…
It's about the US but i'd suggest it's likely true for all the western democracies who bought into the 'free market' BS. And it adds weight to some of what PDK argues about increasingly scare resources, and what I have argued over the years about economic diminishing people to a modern form of slavery. Governments are culpable for allowing it to occur.
...& this
by Independent_Observer | 10th Mar 25, 6:01pm
Interesting chart from Hussman - wages from incomes vs corporate profits (adjusted relative to GDP).
Like the housing market, something appeared to break in the 1990s where massive $$ flowed into asset prices or corporate profits in comparison to remuneration to workers.
https://x.com/hussmanjp/status/1898780388316909754?s=46&t=MUwQeKa7MkEJ7…
You can't really be serious.
Though I guess that belief has been sustaining the economy (sort of) for a generation. Money for nothing while laughing at the minor political parties cause they believe in money growing on trees etc.
‘The current generation? We're a bit f.....ed’
Eaqub says those trying to sell high-value properties will likely blame Bishop’s reforms for the lack of buyers.
“There's plenty of houses for sale. But they ain't moving. There's an oversupply at the expected price,” he says.
Essentially, there’s no one with the money to buy the houses from them at the price they believe it should be.
https://www.stuff.co.nz/politics/360809501/housing-no-longer-nzs-econom…
even the Herald is a bit DGM these days, will be saying they warned us by summer...
But we kept being told high house prices wasn’t a supply issue. Then they increased supply and nek minute…
First time I have heard National selling the Ponzi is over message, even selling it in Aussie.
Great that a Minister is willing to say it aloud, and I reckon that in itself promotes a behavioural nudge. I'm on the cynical fence as to whether he is trying to push the idea or just priming the base, positioning to be on the knowing side of the inevitable return to stability.
The groundwork for a slow decline has been laid over the last several years in any case.
Pity for those who maxed out and boarded the gravy train at the top, but provided they continue to live in and don't see their home as their retirement package like those before - and continue to pay into KS, they'll be fine. Albeit with some trauma to pass down about the perceived risk of property investment.
Anyone noticing sites referring to the Gulf of Mexico as the Gulf of America lately?
Jut perusing Science Daily, which I find interesting, and in an article on Sargassum weed spreading out into the Atlantic they refer to the 'Gulf of America' (https://www.sciencedaily.com/releases/2025/08/250830001159.htm).
I guess you've got to suck up to the cock in charge to keep the funding going? But really? what a cock up!
Johnny Horton Battle Of New Orleans (HQ Stereo) (1959)
Have to change that too...
Google Maps shows it as Gulf of Mexico (Gulf of America)
In Spanish it should be El Golfo de México. [el GOHL-foh deh MEH-hee-koh]. In Nahuatl it might be Āyōllohco Mēxihco. Our maps misname Japan and Germany etc so I don't see a problem. Places get renamed all the time and are called different things by different people in different locations and cultures.
It's quite the "stable genius" move to conquer the Gulf of Mexico with a simple stroke of the pen.
If the rumours are to be believed, Trump is even less stable than usual at the moment. No public appearances for days and suspicions about his health.
Yes a friend went to the USA recently and said google maps shows it as the gulf of america while there.
No surprises there...
https://www.rnz.co.nz/news/business/571780/smiths-city-in-voluntary-adm…
maybe it is a good time to buy a major household item if they auction off stock
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