Here's our summary of key economic events overnight that affect New Zealand, with news the US faces a federal government shutdown as markets start to realise Trump has no problem being reckless and has no problem hurting his 'friends'.
But first, there was another Pulse dairy auction overnight. And that brought marginally weaker prices for both SMP and WMP, down a bit less than -0.5% in USD terms. In fact these prices are now at their lowest level of 2025. But because the NZD is falling, the prices achieved actually rose about the same amount in local currency.
In the US, the number of job openings in August were virtually unchanged from July at 7.2 mln as was expected.
But the Chicago PMI fell again in September, well below market expectations that it would improve. And the dip was sharp, the most in three months.
Also weaker was the Dallas Fed services sector with their retail sector retreating rather fast in an unusual move lower.
Adding to the downbeat sentiment was the September report from the Conference Board showing consumers are glummer than at any time since the start of the year. A common theme in the survey responses is the impact of rising inflation.
And the downbeat sentiment may well get worse, and quickly. The White House seems to relish a full government shutdown to start their fiscal year tomorrow with mass firings rather than furloughs. And Trump says some American cities he considers dangerous should become training grounds for American troops, proposing 'his' troops be used to fight other Americans in their home cities. It is getting toxic very fast there.
For their economy, there is a real possibility now that this weekend's non-farm payrolls release will be cancelled because the department releasing it will be closed. If that turns out to be the case, it could mask some quite weak results. Analysts now expect less than a +50,000 gain.
Financial markets are downplaying the risks of all this, mainly because there have been many 'shutdown' crises over the decades. But at least the earlier ones involved parties prepared to reach a deal. Maybe not this time.
Across the Pacific in China, their official factory PMI contracted again. But even though it is the sixth straight monthly contraction, the pace of decline was the least in that time. (Their factory PMI rose in February and March, but only by marginal levels.) Their official services PMI for September is no longer expanding. These official PMIs have been more conservative than the private surveys (RatingDog, ex Caixin) probably because they have a heavier weighting to Chinese SOEs. The private ones are more attuned to private and foreign enterprises, surveyed by S&P Global, and they report a faster expanding factory sector, and solidly expanding services sector.
Meanwhile, China has frozen imports of BHP iron ore in a pricing dispute. BHP is their third largest supplier after Rio Tinto and Brazil's Vale.
Taiwanese consumer sentiment rose in September, but to be fair the bar is low because it has been stunted since May.
In Europe, Germany said their CPI inflation edged up to 2.4% in September, marginally above the August level. But it was a rise that was slightly more than expected.
In Australia, there were no surprises from their central bank which held its cash rate target at 3.6%. But even though this hold was all priced in, there was some surprising reaction in financial markets. Somehow the decision was regarded as 'hawkish' and the AUD rose and benchmark bond interest rates fell on the news. The strong currency remained although the bond move was later reversed.
Air cargo volumes in August grew +4.1% globally, driven by a near +10% rise from a year ago in the Asia/Pacific region. But notably, North American air cargo volumes fell -2.1% on the same basis in August, the weakest global region. And the pattern was similar for passenger travel. Asia/Pacific and Latin America brought strong growth, underpinning a +4.6% expansion, but North America lagged here too, only up +0.5% from a year ago.
The UST 10yr yield is still at 4.14%, unchanged from yesterday. The key 2-10 yield curve is now at +53 bps. Their 1-5 curve is positive by +9 bps. And their 3 mth-10yr curve remains at only +1 bp positive. The China 10 year bond rate is down -2 bps at 1.86%. The Australian 10 year bond yield starts today at 4.32%, unchanged from yesterday. The NZ Government 10 year bond rate starts today at just under 4.21%, down -3 bps from yesterday.
Wall Street is little-changed in Tuesday trade, with the S&P500 level-pegging. Overnight, European markets rose between +0.2% in Paris and +0.6% in Frankfurt. Tokyo ended its Tuesday session down -0.2%. However Hong Kong was up +0.9% while Shanghai was gained +0.5%. Singapore rose a strong +0.7% for them. The ASX200 ended its Tuesday down -0.2% while the NZX50 managed a strong +1.2% gain and the best of the markets we follow.
The price of gold will start today at US$3846/oz, up +US$16 from yesterday and a new all-time high. Silver is -50 USc softer however.
American oil prices are down another -50 USc at just over US$62.50/bbl, with the international Brent price now just under US$66.50/bbl and down more than -US$1.
The Kiwi dollar is at just on 58 USc and up +20 bps from yesterday. Against the Aussie however we are down -30 bps at 87.6 AUc and a new three year low. Against the euro we are little-changed at 49.4 euro cents. That all means our TWI-5 starts today at just on 65.1, and unchanged.
The bitcoin price starts today at US$112,876 and down -0.8% from yesterday. Volatility over the past 24 hours has been low at just on +/- 0.9%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
16 Comments
Amazing. The internal disintegration of the US continues as the Secretary of Defense seems to think American troops fighting American citizens is an acceptable, perhaps even desirable thing to happen, and no one, absolutely no one is asking what their oath of office means. The real concern is that what happens in the US impacts us all. The old adage that "The US sneezes and the world catches a cold" is still valid, although less so. The political impacts of what is happening in the US is raising concerns about the increasing dominance and influence of China and Phoenix (FKA JC) pointed to concerns about China flooding markets with cheap products and stifling local competition (yesterday's stream). There is little or no apparent understanding that that is the 'free market' in action as it was designed in the US, and universally adopted by most countries. But the link Phoenix provided points to an over-reaction. It takes time to reinstate manufacturing that is efficient and capable of delivering needs, but something that every country should have been considering since the COVID crisis. China's capacity will be needed for a while after such plans are put in place. For local manufacturing there are economic tools to support and protect them and ensure they grow and develop. Just get it done.
There are areas in plenty of US cities where Hispanic, Asian, African American and other ethnic communities have hardened into urban fortresses. English is often not even the second language therein. Normal policing has tended to skirt around and rely on a policy of containment. If such as the ICE front liners are to venture into the midst of those areas they likely will need military hardware even beyond what the national Guard can provide.
I know tariffs are universally acknowledged as being damaging to the economic orthodoxy but I wonder if you tried to explain that to the 119 people in Tokoroa who will lose their jobs to cheaper overseas products into NZ whether they would prefer a tariff or something a little more protectionist for their kids and mortgage and power bills. Think outside the square and globalisation has been phenomenally good for the biggest companies is in the world but has it actually been good for communities? This isn’t a political view just a philosophical thought.
I don't agree that they are 'damaging'. That is exactly the economic tool that should have been applied to protect the jobs. The economic benefits are significant for retaining the jobs. The level of support provided could have been set at a level that did not pump the Aussie company's profits but made it more economic for them to retain the jobs. How tax is applied could have been a tool that is used too. That our government sits by and lets this happen only proves they don't understand or have the will to act to the benefit of the country. I suuggest tariffs on imported products should still be applied.
OK, let's all go back to the 1970s. The less than half of NZ households that remain net income taxpayers &/or their grandchildrens national debt should fund other peoples lifestyle choices.
Stop being an extremist. Provide a solution, not criticism.
How would you build national resilience? How would you work to ensure Kiwis can afford to live and support their families? How would you work to ensure NZ can remain politically and economically independent of external exploitation?
Don't find fault, find solutions.
If we don't have some sort of structure in place to prevent it, the rich will end up getting all the wealth. What that structure is is debatable and would need to be flexible according to the economic conditions. Perhaps two party systems achieve this and this is why we see a constant debating, fettling and evolving of policies over the years.
Too late - they have.
Except most of it is shares in their own outfits - which don't survive the morph.
So what is wealth?
Better we stop wealth buying politics.
On the current trajectories I agree, but PDK is also probably right - they already have. But for national resilience the country needs to have everyone working collectively not scrapping over their share. The wealthy will need to direct their resources to building capability in the country, and the government will need to focus on stopping it being bled away.
It's a dangerous road to go down. Every time you put in a barrier to protect jobs, the impact is felt in higher prices for everyone else in the country. The more you do that, the higher the cost of living, and the less competitive we get. Once you have protected one industry in this way, every other industry will be clamoring for their own equivalent.
I understand the instinct, but it's not without risks.
The risks need to be balanced. People without jobs will need to be supported, which is paid for by the tax payer. Jobs have significant benefits that are more than economic, such as well as social and health wise. Economies cannot work if people don't have surplus income to spend.
The level of protection should be based on the overall return to the country. As to competition, I suggest we need to be resilient and less reliant on imports first. Efficient manufacturing should be the primary goal, with a secondary one of providing well paid jobs.
In an open 'market', you have to compete with the lowest-paid. That is inadequate to support an NZ law-abiding life-style.
So you need to protect yourself(ves) as a nation.
What happened, back around the late 70s, was the market commandeered political leadership. And we are seeing the repercussions now.
But that is a rich-vs-poor stoush on a sinking Titanic, and 'well-paying jobs' is a phrase which won't apply after the foundering. Which is what really put Trump in power.
"In an open 'market'" and therein lies the problem. The market is no more 'Open' than it is 'Free'. There is political baggage left, right and centre. We need to take a leaf out of Trump's book and enact Winnie's dream - "NZ First" from the perspective of national resilience. Helen Clark's "benign strategic environment" never really existed, and definitely doesn't now. What we face could be described as existential, and has been building since the Lange government introduced the free market policies. those who debate this publicly tend to be extremists, politically biased and don't appear to understand that everything is connected.
I suggest we are at the precipice of great change, perhaps the end of this time (as you occasionally suggest), and to ensure our survival as a nation and as a people we need to be acting to ensure we have the capabilities to provide for our selves while the world copes with their own struggles. It takes time to make that change happen.
mfd - the 'cost of living' will outpace 'incomes' from here on in. Ever-more people competing for ever-less planet; it cannot be any other way.
Until the growth-predicated system collapses. As it is doing.
This months Roy Morgan reconfirming recent polls:
"Roy Morgan’s New Zealand Poll for September 2025 shows an effectively even split between the National-led Government (National, ACT & NZ First) on 48.5%, up 2% points from a month earlier, marginally in front of the Labour-Greens-Maori Party Parliamentary Opposition now on 47.5%, down 2.5% points.
Although the National-led Government is marginally in front, the tightness of the result between the two sides would result in a split Parliament with 60 seats for each side, the latest Roy Morgan New Zealand Poll finds."
Although the National-led Government is marginally in front,
I almost misread that at as 'magically' in front
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.