Precious metals star; US retail turns uncertain; Canada PPI rises; Japanese rates rise; China hits EU dairy with duty penalties; India & NZ agree FTA; UST 10yr at 4.17%; gold & silver zoom; oil rises; NZ$1 = 58 USc; TWI-5 = 62.1

Here's our summary of key economic events overnight that affect New Zealand, with news precious metals prices are zooming higher today, most to new all-time heights.

But first in the US, the Chicago Fed's National Activity Index is back being tracked following the shutdown and it shows activity still notably lower than its long run trend, even if it did improve in September from August. It is barely back to the same drag level it was a year ago.

American holiday retail sales for November and December are projected to grow between +3.7% and +4.2% over the same months last year, a weaker gain than last year's +4.3% increase. Revenue growth in November was about +1% compared to November 2024, with flat unit demand. Consumers are reportedly cautious, focusing spending on necessities, and higher-income consumers are driving most of the spending, while lower-income consumers remain constrained. Inflation-adjusted sales volumes are probably not growing. Ecommerce is a bright spot, with Deloitte forecasting a +7% to +9% growth for the season.

In Canada, their November PPI came in +6.1% higher than a year ago. But this result was twisted by the very sharp run-up in the costs of precious metals, and diesel (after US sanctions on Russian diesel twisted their demand for Canadian product). But even without those, they would have had more than a +4% rise.

In Japan at one point yesterday, their 10 year government bond hit 2.10% and its highest level since 1999. It has eased slightly since, but this has had a depressive impact on the Yen, and there is market talk of intervention now.

In China, their central bank held key lending rates at record lows for a seventh consecutive month in December, as expected. Earlier they had left their seven-day reverse repo rate unchanged at 1.4% and this is now their main policy rate. They seem to have less intentions for more monetary stimulus as the economy looks like it is on track to meet this year’s growth target of "around 5%".

And staying in China, they have slapped some substantial duty penalties on certain EU dairy products. The claim is that the French and Dutch subsidise their production. Although these new duties are relatively narrowly targeted, it will be a major trade escalation in the eye of the EU.

And we should also note that India and New Zealand have agreed a new substantial free trade deal. Almost all New Zealand business groups have welcomed the breakthrough, which the Indians are using as a benchmark for deep agreements with other countries. But 2026 is election year and one party, NZ First, is using the deal to promote its anti-immigration credentials.

The UST 10yr yield is now at 4.17%, up +2 bps from this time yesterday. The key 2-10 yield curve is now at +66 bps. Their 1-5 curve is still positive by +19 bps and the 3 mth-10yr curve is still positive by +53 bps. The China 10 year bond rate is up +2 bps at 1.84%. The Japanese 10 year bond yield is up +5 bps at 2.07% and a new 20 year high. The Australian 10 year bond yield starts today at 4.81%, up +5 bps from yesterday and its highest since October 2023. The NZ Government 10 year bond rate starts today at 4.60%, up +8 bps from yesterday.

Wall Street has opened its week with the S&P500 up +0.6%. But European markets were generally lower between Frankfurt's no change, and London & Paris's -0.4% dip. Tokyo ended its Monday session up +1.8%, Hong Kong was up +0.4% and Shanghai was up +0.7%. Singapore ended up a strong +0.9% for them. The ASX200 ended its Monday with a +0.9% gain. The NZX50 rose +1.3% in its Monday trade.

The price of gold will start today at US$4437/oz, and up +US$99 from yesterday and easily a new record high. Silver has surged to, up +US$2 to just under US$69/oz, and also a new record high. Platinum hit US$2115/oz earlier today, and approaching it 2008 record highs.

American oil prices are up almost +US$1.50 from yesterday at just under US$58/bbl, while the international Brent price is now just under US$62/bbl.

The Kiwi dollar is up +40 bps from yesterday, now at just under 58 USc. Against the Aussie we are unchanged at 87.1 AUc. Against the euro we are up +10 bps at 49.3 euro cents. That all means our TWI-5 starts today just under 62.1, and up +30 bps from yesterday.

The bitcoin price starts today at US$89,163 and up +0.9% from this time yesterday. Volatility over the past 24 hours has been modest, at just under +/- 1.3%.

The easiest place to stay up with event risk is by following our Economic Calendar here ».