Here's our summary of key economic events over the holiday break that affect New Zealand with news today is all about commodity prices. Silver has jumped sharply, gold and platinum are up, copper is at a record high, and both nickel and aluminium have surged too. Tin is at a three year high. Lithium is on the move up again too after a two year slumber.
It's not only hard commodities. The overnight global dairy trade auction surprised to the upside. A small gain was anticipated but in the end we got a +6.3% rise in USD terms, +6.5% in NZD terms. There were gains across the board, but the largest was for WMP (+7.2%), followed by SMP (+5.4%). They follow a worrying string of declines that set in from August. Elevated buying from China was a key driver, but that was on top of sharp increases in demand from the Middle East.
The +6.3% rise in USD was the largest since March 2021. The +6.5% rise in NZD was the largest since September 2022. Despite these encouraging signs, overall prices are now only back to early December levels. The rises will be welcome, but on their own are unlikely to alter any farmgate payout prices. Today's recovery will need to be sustained. Don't forget, prices in USD have fallen -22% from May 2025 even after today's lift.
In the US, the S&P Global services PMI for the US retreated back to a modest expansion in December after the good expansion the previous month which was revised lower. This metric is now at an eight month low. New business growth dropped to its lowest in 20 months as inflationary pressure bit harder.
Meanwhile, the Logistics Manager’s Index retreated for a second consecutive month in December. It was the slowest expansion in the logistics sector since April 2024, with the majority of the downward pressure coming from inventory and warehousing markets. Transportation costs rose more than expected.
Total vehicle sales in the US rose to a 16 mln annual rate in December, up from a 15.6 mln rate in November. A year ago they ran at 16.9 mln annual rate, so a -5.3% decline.
In China, total vehicle sales have not yet been announced, but it is very likely they exceeded 36 mln in 2025 with growing strength in the past six months. That will be +14.6% higher than their 2024 level.
China equities hit a decade high in Tuesday trading.
Meanwhile, an historic climate shift is bringing record rainfall to China’s northern regions, overwhelming unprepared cities and upending agriculture, while leaving the traditionally lush south parched.
In Europe, food giant Nestle is recalling infant formula after serious contamination concerns.
The UST 10yr yield is now just on 4.18%, up +2 bps from this time yesterday. The key 2-10 yield curve is still at +70 bps. Their 1-5 curve has held at +24 bps and the 3 mth-10yr curve is now positive by +57 bps. The China 10 year bond rate is unchanged at 1.86%. The Japanese 10 year bond yield is up another +2 bps at 2.14%. The Australian 10 year bond yield starts today at 4.77%, down -1 bp from yesterday. The NZ Government 10 year bond rate starts today at 4.54%, down -3 bps from yesterday.
Wall Street is firm with the S&P500 up +0.6% and enough to claim a new record high. Overnight, European markets moved up as well, between London's +1.2% and Frankfurt's +0.1%. Tokyo remained enthusiastic, closing up another +1.3% in Tuesday trade, also a record. Hong Kong was up +1.4%, but Shanghai rose another +1.5%. Singapore ended up +1.3%, an unusually large gain for them. The ASX200 ended its Tuesday trade with a -0.5 fall however. The NZX50 ended up +0.6%.
The price of gold will start today at US$4487/oz, and up another +US$45 from yesterday and heading back up toward its end of year record high. Silver is up sharply to US$81.50/oz and a new record high, and platinum is also back up sharply at US$2430 and also almost at its end of year record high.
American oil prices are down -50 USc from yesterday at just over US$57.50/bbl, while the international Brent price is now at just under US$61.50/bbl.
The Kiwi dollar is down -10 bps from yesterday, now at just on 57.8 USc. Against the Aussie we are down -40 bps at 85.8 AUc. Against the euro we are unchanged at 49.4 euro cents. That all means our TWI-5 starts today just on 61.8, and down -10 bps from yesterday.
The bitcoin price starts today at US$92,515 and down -1.7% from this time yesterday. Volatility over the past 24 hours has again been modest at just on +/- 1.2%.
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26 Comments
It seems that big US oil is not necessarily buying into the US government's plan to invade countries for direct mineral extraction.
https://www.rnz.co.nz/news/world/583339/big-oil-doesn-t-share-trump-s-d…
CNN forgot that bit about Maduro's sabre rattling on Guyanan oil. And of course RNZ could find no room in their global "news" feed about the Iranian revolution - have to go to X for that.
"But Drilled reporting shows that U.S. oil majors don’t necessarily want back into Venezuela’s declining and decrepit oil fields so much as they are eager to protect their interests in neighboring Guyana, home to one of the world’s most productive oil fields, which Venezuelan president Nicolás Maduro has aggressively been trying to claim as his own over the past decade"
"X" ? "X" is a propaganda platform, not a source of actual news.
Lol. That time Yvil was unaware journalists post on X. Did you hear about the 23 year old youtuber who took down Tampon Tim, the Quality Learing Center, the Jubba Value Centre daycare auditing and exposed Democrat funding from fraudulent day care? X is about two weeks ahead of the Democrat talking points BBC - with guys like Nick Shirley no wonder governments are so keen on internet censorship.
The Guyana angle hasn't been been spoken about too much. My understanding is that even if Venezuela had tried something the Brazilians would have quickly put them in their place, but probably not without some annoying disruption for Exxon.
You don't have to rely on the whims of X's algorithm - the Iranian protests have been front page news on the BBC. I wouldn't rely on RNZ for international news myself.
The BBC seem to be doing there best to downplay the Iranian protests. I would have though it would be a major news story as it potentially could be the beginning of something very big happening in the Middle East. It is finally on the front page but in a minor way. Trump's threats toward Greenland are getting more emphasis currently.
I think that's reasonable prioritisation for a news organisation.
How many major protests has the Iranian regime seen? I've not kept count but it's certainly a familiar story to me, happens every few years. Maybe this will finally be the one to burst through and lead to change.
How many times has an American President threatened an ally and fellow NATO member with military action because they want their territory? Much more news-worthy due to its rarity.
Greenland appears to be a rather unhappy place with one of the world's highest suicide rates. My suggestion would be for the US to give every Greenlander a million dollars and for Denmark to graciously gift it to the US in the interests of Western security and the people's happiness. It would only cost 57 billion dollars.
With the opening of arctic sea routes this region is becoming much more important. Quite a few Greenlanders are open to becoming the 51st US state.
Are you trying to pitch it as a humanitarian intervention, as if it's Denmark's rule leading to suicide rather than the bleak geography?
I'm pretty agnostic to who actually runs Greenland - broadly happy to let the people decide. Personally I prefer the social policies of Denmark and would tend to lean that way over the American system. Things like universal healthcare are important to me.
What is completely unacceptable is statements like this from the White House:
"The president and his team are discussing a range of options to pursue this important foreign policy goal, and of course, utilizing the US military is always an option at the Commander-in-Chief's disposal."
Greenland is territory of a NATO ally, military action should not even be close to being on the table.
Yes, no wonder people are running from any exposure to the USA.
How many major protests has the Iranian regime seen?
Yes Ecuador is another, as Quito has relatively regular large protests and all but Al Jazeera seem not to pay attention on that front.
True "You don't have to rely on the whims of X's algorithm" just follow your own feed of people you select. There is no requirement to engage with an algorithm whatsoever.
With the current uncertainty in the world and a 20 year time frame to gain the 'predicted' productivity increase from the Venezuelan reserves would you rush to invest the billions/time required even if you disregarded the fact there is no apparent plan to maintain control of the region?
Exactly. From an ethical point of view (fabricated or genuine) I don't think miners of minerals are going to run roughshod over the likes of Greenland, on the back of the US military, just so the US can cut out the minerals middle men such as China and Australia. They have at least an ounce of self awareness of which the current US government has zero.
They have at least an ounce of self awareness of which the current US government has zero.
The US Oil Giants all play with big numbers. It costs a LOT to build a refinery, get drills over there, ensure security, exploration etc etc. They act from self-preservation as they do not have the lack of observation on a global scale that the internet has brought about and social media. They'll go there, but when the time is right and with a higher probability of a good ROI with less risk.
US oil giants aren't stupid. They don't get rich by jumping when the president suggests it would be good to put their money forward. They sit back and wait for the government to put forward what "help" they will give . Subsidies by any other name.
FWIW a comment from Ed Steer's newsletter last weekend...
In a nutshell, what the western financial system has been frantic about during this fiat currency experiment that began in August 1971, is to prevent investors from running from the paper asset side of the street -- and into hard assets of any kind...commodities in general -- and the precious metals in particular.
This is they system that is now blowing up in their faces -- and most on the short side in the COMEX futures or options market are now facing certain financial Armageddon as commodity prices continue to rise -- and more shorts start to cover, which draws in the speculators behind them. This accounts for the parabolic rise we've been witness to over the last many months.
The investment banks always believed they're invincible. And they've been emboldened by the ruling elite, even more so since the GFC. When JPM was fined USD1 billion over precious metals manipulation, it was simply a price to pay for their infinite money glitch.
Incidentally, this week Bank of America formally told wealth-management clients that up to 4% of a portfolio in Bitcoin/crypto is acceptable, but only via spot Bitcoin ETFs (paper). They don't want the sheeple to understand anything about why they should self custody.
https://finance.yahoo.com/news/bank-of-america-says-its-wealth-manageme…
Despite all their (comex) efforts to suppress the price by dramatically increasing margins silver keeps heading north.
Gold and Silver to the moon and beyond 🚀🌜
Yes, but what will the 'collateral damage' be in future? More inflation seems likely at least.
Indeed, but Gold and Silver are not the cause of this "collateral damage", they are the canary in the coal mine of the upcoming economic troubles.
Not strictly relevant - but did interest.co.nz ever hear back from MBIE on this story? Does Netflix NZ make $11m p.a? Google it! | interest.co.nz
Always relevant.....but do the powers that be wish to challenge a US company with the current admin?
CoreWeave (an AI company valued at USD40 billion) filed an 8‑K related to amendments to its credit agreement and financial covenants/liquidity.
This is not necessarily a declaration that the company is insolvent or unable to meet obligations. However, the company is extremely leveraged: roughly 14 billion dollars of debt by late 2025, against a market cap that has already deflated by tens of billions as the AI trade cooled.
But you could say the bankers are "pre" begging for an Nvidia bailout.
https://investors.coreweave.com/financials/sec-filings/default.aspx
So Trump has just granted himself 30 to 50 million barrels of oil .....great work if you can get it.
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