Here's our summary of key economic events over the weekend that affect New Zealand with news of plenty of trade and economic action, some good, some not so.
But first, some official data will start to be released locally this week, with building permits and employment indicators, both for November, and the monthly December "selected price increases" covering mainly food and rent. We get the latest update to the NZIER business confidence survey this week too.
In Australia, they will also release building permit data, job vacancy data and household spending data, all for November too. The Westpac consumer sentiment survey will come as well, along with inflation expectation survey results.
China's trade data for December will come out this week, and we expect the 2025 surplus to exceed US$1 tln. They will also release December new yuan lending data, expected to be better than November.
From Japan we will get machine tool order data. In India, it will be about inflation data.
In the US, the early Q4-2025 earnings reports will come from their big banks. Retail sales data is also due. But most eyes will be on the US December CPI result which is expected to be unchanged at 2.7%, although it is from an agency where the President inserted a lackey to keep an eye on their data.
That same agency released their December US non-farm payrolls report over the weekend and it was something of a damp squib, but markets seemed to like it. The US economy added just +50,000 payroll jobs in December, less than a downwardly revised +56,000 in November and below forecasts of +60,000. These are the seasonally adjusted numbers. The raw data shows payrolls falling -192,000 and quite different to the equivalent small rise in December 2024. The broader population survey has overall employment falling -335,000 in December (double the 2024 change).
The US unemployment rate ended the year at 4.4%, a tick less than November's 4.5% but well above December 2024's 4.1% (and December 2023's 3.8%). Average weekly earnings rose +3.8% from a year ago, keeping pace with inflation.
Most analysts now see almost no chance of a rate cut at the Fed's January 29, 2026 meeting. Trump's inserted Miran remains an almost lone voice.
US consumer debt trends are showing similar signs of stress and are looking topped-out. Total debt rose by only +US$4.2 bln in November and well below market expectations of a modest +$10 bln rise. It is equivalent to a +1% annual rise. Revolving debt (credit cards, etc) fell at an annual rate of -1.9% while nonrevolving debt, which includes car and student loans, went up +2.0%.
So the latest update of a key consumer sentiment survey (this one from the University of Michigan) remained very low but little-changed in January from December and -25% lower than year-ago levels, -17% lower than two years ago.
And we should note that markets are now expecting the US Supreme Court to rule on its tariff case possibly on Thursday.
In Canada, employment was little-changed in December, up a minor +8200. But full-time employment grew +50,100 while part-time jobs shrank -42,000. It will be a rebalancing they will welcome. Their employed workforce is 21.1 mln, up +1.1% from a year ago. Analysts see much less of a chance of interest rate hikes in 2026 after this labour market result.
In Japan, household spending was expected to bounce back in November after the weak October result. It did, but by very much more than expected. That was enough to take it up +2.9% from a year ago and very much better than the market expectations for a -0.9% decline. It was the steepest rise since May, supported by higher winter-related purchases and easing inflation pressures on some essential goods.
Chinese CPI inflation is staying very low even if it did rise slightly in December. It came in +0.8% higher than year ago levels, marginally higher than in November. Beef prices were up +6.9% however from a year ago, sheepmeat prices up +4.4% on the same basis. Milk prices (now bundled into "dairy products") were down -1.8% on that annual basis. All these food price rises were a key reason for the overall CPI rise.
Taiwanese exports were up +43% in December from a year ago, rising to the second-highest monthly level on record. The pace slowed from an unusual +56% burst in November. It says a lot about expectations in Taiwan that analysts were expecting a +46% rise.
Indian bank lending rose +14.5% in December from a year ago, the most in two years.
In Europe, retail sales rose at a + 2.3% year-on-year volume rate in November, up from a revised +1.9% in October and well above market expectations of just +1.6%. The return of rising consumer spending will be welcomed in the bloc. This impulse is broadly back to what they had in the 2017-2019 period.
We should note as well that the EU, after overcoming deep dissension among its members (especially by France), gave the green light to a sweeping free trade deal with four South American countries (Brazil, Argentina, Paraguay and Uruguay) to create one of the largest free-trade zones in the world, connecting markets with more than 700 million people. The deal probably got over the line because of reaction to Trump's isolationist policies. It is interesting that this deal includes Argentina, which the US is propping up financially.
The UST 10yr yield is now just over 4.17%, down -1 bp from this time Saturday, down -2 bps from a week ago. The key 2-10 yield curve is still at +63 bps. Their 1-5 curve is now at +24 bps and the 3 mth-10yr curve is little-changed, now by +55 bps. The China 10 year bond rate is holding at 1.89%. The Japanese 10 year bond yield is also holding at 2.09%. The Australian 10 year bond yield starts today at 4.68%, up +1 bp from Saturday but down -14 bps from this time last week. The NZ Government 10 year bond rate starts today at 4.44%, unchanged from Saturday, down -7 bps from a week ago.
The price of gold will start today at US$4508/oz, and up +US$8 from Saturday, up +US$195/oz from a week ago. Silver is now up at US$80/oz. Aluminium is on the move up as well at US$3148/tonne and apart from the pandemic distortion, that is a new record high.
American oil prices are down -50 USc from Saturday at just over US$59/bbl, while the international Brent price is still at just under US$63.50/bbl.
The Kiwi dollar is unchanged from Saturday, now at just under 57.3 USc. Against the Aussie we are also unchanged at 85.7 AUc. Against the euro we are little-changed as well at just under 49.3 euro cents. That all means our TWI-5 starts today just on 61.4, and unchanged from Saturday, down -30 bps from a week ago.
The bitcoin price starts today at US$90,953 and down -0.5% from this time Saturday. Volatility over the past 24 hours has been very low at just on +/- 0.4%.
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22 Comments
Meanwhile, in the real (I mean REAL) economy:
https://resourceinsights.blogspot.com/2026/01/venezuela-and-greenland-s…
'What the current U.S. administration is doing, though probably unwittingly, is saying the quiet part out loud. As the natural resources that the modern world depends on become more and more scarce, countries will more and more resort to openly violent methods to secure access to those resources.'
Ah, but...
G R O W T H
Somehow I don't think Trump will give up his quest for a Nobel prize. With his attitude it is laughable that he thought he was worthy of the Peace Prize, but he hasn't subdued Venezuela. He can talk all he likes about putting US companies in there to run their oil industry (to the benefit and profits of the US companies, not so much the Venezuelan) but Venezuela has to agree and the workers will have to be safe. Already the US companies are pushing back, arguing that the US can in no way guarantee their investment.
I suspect most Venezuelan citizens would appreciate a better government, but being a US vassal?
The US has had a modus-operandi for years.
The CIA stir up trouble. The US goes in on a short-sound-byte pretext. The underlying resources - usually oil - are annexed. Control is thenceforth by patsy despot, or military thuggery. Or both. We have ignored it fairly well thus far, but cellphones have overtaken censorship (so far) and we are being confronted with the inconvenient truth - we live at the expense of others (both now and future).
Those who throw off the US yoke, are immediately 'embargoed' - so the citizenry will, conveniently, protest their living conditions. An intelligent citizenry will trace their conditions to the cause; a lesser so one may not. But it's colonisation by any other name. The question is: Will the Empire collapse internally, before it flares up one last time?
Last week I saw a You tube Clip of Jeffery Sachs addressing the UN Security Council, laying out the US's history of interfering in other countries. Not really a surprise as we've discussed this often in the past, but in that forum it's an eye opening condemnation of the actions against Venezuela.
ICE's actions in the US will be the catalyst against Trump's regime, so unless they get dialled back strongly, and get held accountable for their actions, the fracturing of the empire is likely to escalate.
In Iran the push back is escalating again. Considering the regime has shut down the internet, it is an interesting statement from their Ayatollah that the people are doing Trump's bidding.
Obviously it was a brilliantly executed military mission. But at this point as far as taking over the shop, it is no more than a smash and grab. The squeeze will be applied by Venezuela being virtually embargoed internationally. It is a complex country, socially, geographically and economically in an entrenched state of ruin. Just how Trump & Co think that they can rejig all of that for the better in a matter of months is beyond belief.
There is no depth of intellect in the Trump administration.
Which is what we were always going to get, when a false narrative got terminally exposed. They were at it through every President - even Carter.
Try: The Secret History of the American Empire (Perkins); Dismantling the Empire (Johnson) and While America Sleeps (Kagan x2).
There is a degree of desperation beneath the bombast.
"There is no depth of intellect in the Trump administration."
I certainly agree with you there.
The desperation on display indicates how close we are to 'the system' ceasing to function
Would the Brent crude value hovering around $60-$65 for the last long time have a negative effect on the enthusiasm for Big Oil to breeze into Venezuela and increase world supply dramatically?
To reach into a state of “madness in the methods” it might be that a surge of Venezuelan oil onto to global markets would drastically undermine Russian supply of the same type of crude which might cause Mr Putin to stop and think a bit. Just speculating.
It could also give the US more leverage against Canada who currently supply most of the heavy crude they need. I think there's unlikely to be a step change in Venezuelan production in this Presidential term though, so this is only relevant if the next President also goes down the adversarial path with Canada. Democrats are favorites for 2028 at the moment, so that is far from guaranteed.
Don't discount the option of Trump suspending elections due to some crisis or other.
Yes it's a risk. He's currently at 4% to win the 2028 election on Polymarket, which should be constitutionally impossible so clearly things are already pretty rotten over there. Looking at his health scares, age, exercise and diet habits, and history of attracting would-be assassins, I wonder if his biggest challenge is dealing with the Grim Reaper rather than the Democrats.
Firstly, 'Brent' is a euphonism for Light Sweet Crude. The field itself has been emptied:
Brent Field Decommissioning Programme | About Shell UK
Venezuela is heavy crudes, requiring more refining (therefore of lower EROEI). Most refineries can only handle one or the other - meaning this is a game involving existing refinery capacity (because at or beyond the peak of flow, we obviously already have enough refinery capacity to handle a reducing supply - so no/less Capex business case.
Would the Brent crude value hovering around $60-$65 for the last long time
But its supply, if China attack Taiwan it can close down international oil via many routes, very hard to stop Ven oil to US route , its a long way from China and limited navy (needed in taiwan straits etc), It makes it that much harder for China to successfully take Taiwan.
USA is a net exporter of oil (i.e. it produces more than it requires). The grab of Venezuela is a money grab as USA has capacity to process heavy crude in its refineries that border the gulf of Mexico. USA produces mainly sweet light crude (for example from fracking) but if it can get heavy crude for cheap/free from Venezuela it can process that oil in its refineries (currently at low capacity) and make money (mainly for Trump and his backers/donors).
The USA is a net importer of crude oil, it is a net exporter only if you include the refined petroleum products.
USA oil would need to be around US$85/bbl (currently US$59) to make any long term investment in Venezuela by the big oil companies attractive. The heavy crude that comes out of Venezuela can be processed by US refineries in the Gulf of Mexico (America?) but it won't be cheap and the big players are hesitant to invest billions to increase supply because of the current price and the fact that oil assets have already been seized twice by Venezuela and a third seizure is likely (unless USA stations 10,000 troops in the country indefinitely).
Of course if the amount paid to Venezuela for oil is US$0 a barrel the numbers could work. The big oil companies may hold back to see if Trump "wins" a third term in 2028 following his proposed US$500B increase in war spending to US$1.5T annually.
Anyone else remember being told Trump would bring peace, balance the budget and reduce government debt? Boy would my face be red if I voted for him on that pretext.
This is the overarching, if not soon overwhelming, problem. All the safeguards implanted by the founding fathers to prevent the ascension of a president wielding unassailable power have been swept aside by a weak, dissolute and complicit Congress and Senate with to boot, a Supreme Court ever eager with the rubber stamp. The immunity Trump now possesses obviously doesn’t make him infallible but as far as he is concerned he is certainly impregnable which is even better.
That was one of the factors mentioned. The current price barely makes the investment required a viable proposition.
USA oil companies got burnt not once but twice in Venezuela in the past, I think that's the main reason they are not enthusiastic about having another go. It would be a long-term project, and by the time the systems are fully functional in Venezuela, Trump will most likely be gone, and replaced by .....? Who knows.
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