Here's our summary of key economic events overnight that affect New Zealand, with news the world's largest economy is being hit today with a string of pessimistic data reports, despite one of the tech giants avoiding a breakup which saw its shares surge to a record high.
American job openings fell by 176,000 to 7.18 mln in July and that was the lowest level since September 2024 and well below market expectations of 7.4 mln. Interestingly, there was wide regional variation with openings dropping most in the South, down -161,000, while they rose in the West, up by +113,000 openings.
So it won't be a surprise to learn that mortgage applications fell again last week, the third consecutive weekly retreat. This happened even though mortgage interest rates were little-changed.
And it also won't be too much of a surprise to learn that US factory orders declined also in July from June, down an outsized -1.3% - and the June data was revised lower to be down -4.3%. New durable goods orders were down -2.8% in July. These won't be welcome trends, especially as tariffs were supposed to bolster US manufacturing. Year-on-year the July levels are up +1.8% and well below what can be accounted for by inflation. But it will be the recent sharper trends lower that are most concerning.
So the Fed's August Beige Book note of "flat to declining consumer spending because, for many households, wages were failing to keep up with rising prices. Contacts frequently cited economic uncertainty and tariffs as negative factors." will come as no surprise.
In China, all the news is about its massive military parade in Tiananmen Square. This one follows similar shows of force that started in Pyongyang on April 15, followed in Tehran on April 20, then Moscow on May 9, and Washington DC on June 14. All organised by authoritarians. It's a militarisation trend that is very retrograde. And they are massive propaganda exercises, so it is disappointing that some of our politicians want to be seen at them. But like many others, they follow the money and incentives.
Staying in China, the RatingDog (ex-Caixin) services PMI for August expanded faster than July and to a good level, better than expected and the fastest expansion in their services sector since May 2024. New orders grew at the strongest pace since May 2024, supported by a stronger rise in new export business, which increased at the fastest rate in six months. Like yesterday's RatingDog factory PMI, this survey as also better than the official services PMI.
And South Korean officials now say they want to join the CPTPP, as insurance against US tariff moves against them. The path won't be easy for them, mainly because they have built up insulations and protections against Japanese investment making inroads into their economy.
In Europe, producer prices were only up a modest +0.4% in July from a year ago, confirming they seem to have a good lid on inflation there. But the more recent indications are rises that are slightly above that (at a rate of +0.6%). At least the Europeans don't have the pressure of self-imposed tariff-taxes. Their cost competitive position vs the US is improving sharply.
Australian economic activity grew +0.6% in Q2-2025, accelerating from an upwardly revised +0.3% in Q1 and better than analyst expectations of +0.5%. Year on year Australian GDP was up +1.8%, above forecasts of +1.6% and the fastest pace since Q3 2023.
The UST 10yr yield is now at 4.22%, down -6 bps from yesterday at this time. The key 2-10 yield curve is back at +60 bps. Their 1-5 curve is now inverted by -9 bps. And their 3 mth-10yr curve is now inverted -6 bps. The China 10 year bond rate is up +1 bp at 1.78%. The Australian 10 year bond yield starts today at 4.38% and unchanged from yesterday. The NZ Government 10 year bond rate starts today at just over 4.51%, up +5 bps.
Wall Street is little-changed with the S&P500 just less than +0.1% firmer. Overnight, European markets were all higher between Frankfurt up +0.5% and Paris up +0.9%. Yesterday, Tokyo closed down -0.9%, Hong Kong closed down -0.6% and Shanghai closed down -1.2%. Singapore ended its session down -0.2%. The ASX200 ended its Wednesday session down a sharp -1.8%. The NZX however was only -0.4% lower.
The price of gold will start today at US$3,573/oz, up +US$47 from yesterday and surging to yet another new record high. Silver has moved higher too and now over US$41/oz.
American oil prices are -US$2 lower at just over US$63.50/bbl with the international Brent price holding just under US$67.50/bbl.
The Kiwi dollar is at just under 58.8 USc and up +10 bps from yesterday. Against the Aussie we are down -10 bps 89.8 AUc. Against the euro we are unchanged at 50.4 euro cents. That all means our TWI-5 starts today at just over 66.3, unchanged from yesterday.
The bitcoin price starts today at US$112,443 and up +1.4% from this time yesterday. Volatility over the past 24 hours has been low at just on +/- 0.9%.
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24 Comments
JGB 30y up get interesting if money starts to return from treasuries
WSJ led with a story that current corprate profit levels are based on reducing head count and increasing prices. Basically saying that there's not much runway to keep doing that both from an employee energy perspective and a consumer capacity to buy perspective.
Essentially we are through the post-COVID pull back and what now?
Greed is reaching the limits of what squeezing can deliver. They've pulled all the strings to increase their profits and can't pull any harder without causing a collapse of the company. Now they need to get creative, but it's likely they can't see that and will keep trying to whip the oxen.
This can't be good...
Hot mic picks up Putin and Xi discussing organ transplants and immortality | RNZ News
Very bad if you same blood type and compatible with these two.........
China's Xi projects power, says world faces war or peace | Otago Daily Times Online News
I think that says it better.
'so it is disappointing that some of our politicians want to be seen at them. But like many others, they follow the money and incentives'
Disagree, DC. When one starts from a skewed base-line, much else doesn't stack up either. We have lived on the coattails of the US Empire, since at least WW2. We have benefited from their repression, military incursions, debt-enforced extraction of resources, and offshoring of slavery. That era is coming to an end; the US hegemony is disintegrating (as they all do, when entropy overtakes surplus energy).
Key and Clark are on a different leadership/thinking/strategic grasp level than Luxon - by some way. They didn't go for the money (Key? Spare me). They went (and I find it interesting that it was 'they') to send a message - certainly to NZ, and perhaps to China.
Some of us heard it.
You're flittering on the edge of credibility here PDK. The US is collapsing internally not because of entropy (they haven't really hit those limits yet) but because internal corruption has got too rampant, and the people are pushing back. Yes things are getting dearer, but not all of that is due to resource limits. part, likely a big part is just through greed.
And Clark and Key, that's politics and the message they are transmitting is not one that is pleasant for ordinary people in anyway.
but because internal corruption has got too rampant, and the people are pushing back.
Corruption is rife across and among the Anglosphere ruling elite.
Angela Rayner used £160,000 from a trust set up to care for her disabled son to buy the £800,000 seafront flat at the centre of a sleaze inquiry.
The Telegraph has exposed this corrupt liar. She shouldn't survive this. Even The Guardian has dropped her.
https://www.telegraph.co.uk/politics/2025/09/03/rayner-used-disabled-so…
I have met a few NZ PMs in various circumstances, starting at Holland when I used to be young and lastly Moore. I have only ever encountered Clark & Key in airport lounges, fortunately not close by. My take, in comparison to their predecessors, these latter two would have ridden their egos to China, and hardly on a slow boat either.
have only ever encountered Clark & Key in airport lounges, fortunately not close by. My take, in comparison to their predecessors, these latter two would have ridden their egos to China, and hardly on a slow boat either.
Purely ego. Both would have little reason to be in Beijing for anything else. And likely unaware that in a nation to the south, they were celebrating independence - the first conventional victory of a Global South nation over a colonial power and then went on to war with China.
Nope - I think your taint comes from a military history, from memory? Ingrained, perhaps?
Ordinary people? Sadly - and they did it perhaps innocently because some folk forgot to tell them the truth - they have been living at other's expense (others elsewhere, others yet to be born).
Some of those 'others' are now powerful enough (in a grunt sense) to bypass the disintegrating hegemony (Buckminster Fuller's In-Pirate-vs-Out-Pirate essay to a T).
In-Pirates call Out-Pirates all kind of names, often ending in ...ist. But the change is happening...
Big guess on my part but perhaps some high level bureaucrats within MFAT suggested NZ send some past PM’s over to informally ‘recognise the gathering and maintain relations’ with the BRICS.
Likely
And of course, Trump is eyeing off Canada, Greenland, Ukraine and drill-baby-drill - because they're 'not there yet'?
Consider the following...the US imports over a billion barrels of crude from Canada every year.
Havn't hit their limits? I d suggest they are well aware of the resources decline and if I were Canada I wouldnt be surprised to see US troops crossing the border if they thought that supply was at risk.
Canada has heavy crude, and the US has much greater refining capability, therefore it is more efficient for Canada to export heavy crude to the US refineries and buy back the distillates, than invest in further refining capacity at home. I wouldn't necessarily assume that all that is imported from Canada is predominantly consumed in the USA.
It is a consequence of the historical refining ability of the U.S.
The light oils produced by fracking in the US are unable to be refined by the existing refineries and so is exported for refining, whereas the heavy crude extracted from Canada can be mixed and refined.
Having said that it makes no difference to the point.....the U.S. is NOT energy independent irrespective of the fact they are a (currently) net exporter of petroleum products.
LoL this party calls themselves Libertarians (maybe only outside of Tamaki and Epsom)
https://www.nzherald.co.nz/nz/politics/deputy-pm-david-seymour-says-par…
"All animals are equal, but some animals are more equal than others". Orwell
Terrible hypocrisy. I understand his electorate pushes him in this direction, but damn it must feel bad to betray everything you claim to stand for.
Cut that red tape - unless it doesn't suit your electorates! They couldn't be more hypocritical if they tried...
Red tape is only there to protect the important stuff, like well spaced-out drafty wooden boxes that happen to be more than 50 years old. Not unimportant things like animals, fish, or trees.
It would be good if that, as the only reason, was completely true. But a great deal of red tape provides ideal buffering and insulation to bureaucracy towards protecting the status of the incumbent bureaucrats, their empires and packages. Northcote - Parkinson writes both entertainingly and accurately in this field.
Political arm of the Epsom Old Boys Club.
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