Here's our summary of key economic events overnight that affect New Zealand with news long term bond yields are on the move higher, notably in Japan and the US.
First however, the overnight dairy auction delivered a modest gain, up +1.5% in USD terms, but up +0.4% in NZD terms as the US dollar is weakening. However, most of this rise is the same as recorded in last week's Pulse event. But it does cement a second consecutive rise in the full auction after nine consecutive declines. So +7.8% of rises after the -22.5% of falls. Also notable is the much less buyer interest from China, counterbalanced by stronger interest from most other regions.
In the US, markets have returned after a chaotic weekend politically to a weak ADP weekly jobs report, recording just +8000 jobs gains and well within the margin of error. January is starting out tough in their labour market. But at least it wasn't a decline.
The US Supreme Court issued three decisions overnight but did not decide the closely watched dispute over the legality of the Trump tariff-taxes. they gave no indication when they will. Also delayed is Trump's 'imminent decision' on his Fed boss nomination. Apparently all his candidates have issues.
Also weak is the USD. It is now under 7 CNY to the USD and its lowest since 2023.
In China, household borrowing is weak and household savings is strong, up +10% in 2025. That says a lot about the stress Chinese households are feeling going into 2026. Per capita bank deposits have now risen to over ¥118,000 (NZ$29,000). And we should probably note that Chinese smartphone shipments fell in 2025, the second year in a row this has occurred.
In Taiwan they reported export orders in December exceeding US$76 bln, far and away a new record high and +43% higher than year ago levels. The Taiwan miracle continues. For all of 2025 these export orders rose +26%.
In Malaysia, they reported good December exports too, up more than +10% from the same month a year ago to just over US$37 bln and maintaining a strong trade surplus.
In Germany, producer price deflation picked up slightly to -2.5% in December from a year ago to cap a 2025 year where it averaged -1.2%.
But overall German investor economic sentiment picked up notably in January, and that was also enough to propel overall EU investor sentiment into positive territory in this wide survey.
It is also probably worth noting that the Microsoft boss said overnight (at the WEF) the AI bubble could falter unless adoption of the technology picks up.
The UST 10yr yield is now just on 4.28%, up +1 bp from this time yesterday and now its highest since September. The UST 30 year bond is now at 4.90% and its highest in almost ten years. The key 2-10 yield curve is now at +68 bps. Their 1-5 curve is now at +30 bps and the 3 mth-10yr curve is now at +62 bps. The China 10 year bond rate is down -1 bp at 1.82%. The Japanese 10 year bond yield is up another sharp +7 bps at 2.35% and we make that its highest in 28 years. Its 40 year bond is now over 4.25% and its highest since our records began in 2007. The Australian 10 year bond yield starts today at 4.78%, up another +3 bps from yesterday. The NZ Government 10 year bond rate starts today at 4.55%, also up +5 bps from yesterday.
Wall Street has returned from its long weekend holiday with the S&P500 down a sharpish -1.6%. That Nasdaq is down a bit more than that. Overnight European markets were all lower between Paris's -0.6% and Frankfurt's -1.1%. Yesterday Tokyo closed down -1.1%. Hong Kong was down -0.3%. Shanghai was however little-changed. Singapore fell -0.1%. The ASX200 fell -0.7%. But the NZX50 ended little-changed with a small late firming.
The price of gold will start today at US$4750/oz, and up another +US$78 from yesterday and a new record. Silver is is actually marginally lower at US$94/oz and off its record high.
American oil prices are up a bit more than +50 USc from yesterday at just over US$60/bbl, while the international Brent price is just under US$65/bbl.
The Kiwi dollar is up another +50 bps from yesterday, now at just under 58.5 USc. Against the Aussie we are up +40 bps at 86.7 AUc. Against the euro we are holding at just on 49.8 euro cents. That all means our TWI-5 starts today just over 62.5, and up +50 bps from yesterday and its highest since early October.
The bitcoin price starts today at US$89,708 and down -3.8% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.8%.
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44 Comments
'the AI bubble could falter unless adoption of the technology picks up.'
and ChatGPT talking about the need to run ads.
They weren't producing anything real or essential - like so much else - and were running a Ponzi.
Those peddling GROWTH are in for a desperate year.
#317: The triumph of the material, part one | Surplus Energy Economics
"The result has been a global economy awash with monetary “claims”, but dangerously short of material resources. Going forward, the material becomes all-important, and the monetary becomes chaotic noise around the physical economic curve. Central bankers buying gold, and governments grabbing resources, understand this."
"Together, declining prosperity and ever-more-costly essentials will put relentless downwards pressure on those discretionary products and services which consumers might want, but do not need."
Who 'needs' AI?
Gold and Silver at ATH, copy and paste daily. A stunning repricing is on its way.
What price of gold did you start stacking Yvil?
I recall he did post on here about buying when it was around $US1600 so he has done pretty well.
LOL. Dr Y talking about PMs is more about cosplay than reality.
You seem to have a real bee in your bonnet about anyone else talking about precious metals. Is it like when I was a kid and got annoyed when bands I liked went mainstream? You liked gold before it was cool?
At least he bought some, not everyone has.
Read the full transcript of Carney’s speech to World Economic Forum - National | Globalnews.ca
Our view is the middle powers must act together because if we’re not at the table, we’re on the menu.
He gets it...
Quel magnifique discours !
There is so much of that speech which is quotable!
"We knew the story of the international rules-based order was partially false, that the strongest would exempt themselves when convenient, that trade rules were enforced asymmetrically, and we knew that international law applied with varied rigor, depending on the identity of the accused or the victim."
"A country that cannot feed itself, fuel itself, or defend itself has few options. When the rules no longer protect you, you must protect yourself."
"The question is whether we adapt by simply building higher walls, or whether we can do something more ambitious."
"Stop invoking rules-based international order as though it still functions as advertised. Call it what it is: a system of intensifying great power rivalry where the most powerful pursue their interests using economic integration as coercion."
So much of this is what we've debated in one form or another for a long time on this site. It is awe inspiring to see Carney speak it out loud in full internationally and publicly. This speech is worthy of a Nobel Prize; give him the Peace Prize. In this speech alone he has done more to promote world peace than Trump has ever done!
murray86,
country that cannot feed itself, fuel itself, or defend itself has few options. When the rules no longer protect you, you must protect yourself."
We certainly cannot fuel ourself or defend ourself, so what should NZ do? the US is increasingly unreliable and I doubt if we would want to ally ourselves too closely to China, so what are our alternatives? Could we, instead of increasing our miliary spending, concentrate our efforts on protecting our exclusive economic zone, on dealing with natural disasters and assisting our Pacific neighbours? Why not declare NZ to be a neutral country?
What PM Carney states is no less true. Neutrality only works if you're capable of defending it. WW2 proved that.
My view is that work closer with Aussie to form a common political perspective , exactly as Carney suggests, and says Canada is doing.
We should not merge and become a part of Aussie. We should rebuild some level of defensive capability, to at least contribute to regional defence. We must become more resilient in food and fuel. Food is not an issue, obviously. But fuel really is a significant vulnerability.
We should not sell out and subordinate our sovereignty to any one else. The question we must ask is how can we secure and maintain our sovereignty when we come under political pressure? Stated neutrality will not deliver for New Zealand. Only actions can. But those actions can only succeed when backed by strength. Self sufficiency and resilience is a requirement not a wish list item.
murry86,
Only actions can. But those actions can only succeed when backed by strength. Self sufficiency and resilience is a requirement not a wish list item"
Are you really suggesting that we could defend NZ militarily? That seem ludicrous to me. Our fuel supply route could be quickly shut down rendering us militarily helpless. I think you are simply talking nonsense.
murray86,
I apologise for saying you were talking nonsense. That was rude of me. Nevertheless, I just don't see how we could defend ourselves. Tell me how you think that is possible and how we could protect our fuel supply route.
Read the whole stream Link. Deterrence only works when the cost is too high to the aggressor. Our geographic position means we are important to Australia's defence too, but we must be able to contribute. It is not about total defence like the US thinks but being part of an alliance that makes any aggression too costly.
If in dire aggressive situations sovereignty means nothing so too does neutrality. Belgium tried it twice. Admittedly geographically the offending boots trampled in from right next door but modern offensive capability out from the coastline could achieve the same result easily enough. History proves that the most effective defence is deterrence. If you hit me you know I can hit you back just as hard or worse. That is why Australia is investing in deep water nuclear powered submarines, Sth Korea too and likely soon, Japan. Long ago pre WW1 NZ invested in protection by the Home Country by the purchase of the battlecruiser HMS New Zealand. That was in view of perceived threats to the Sth Pacific from both Russia and Germany. The equivalent today would be a share in the cost of one of those Australian subs, say HMAS Anzac. Not saying that will or should happen, just a comparison of the different issues of different times.
He gets it...
Really? What is a middle power? Canada? Aussie? The liberal democracies of Europe?
And who are the big bad wolves? U.S., Russia, China?
I never would have picked you as a fan of an elitist ex-central banker Power.
Read the speech rather than troll.
Yes, that's a good start for the list of big bad wolves. Three highest military spenders in the world, each threatening to/actually using that military power to expand their territory.
There will obviously be other smaller wolves also looking at territorial expansion as this becomes the norm again, having been largely unthinkable and rigorously punished over the last few decades with a few exceptions.
OK. Are you suggestion a 'coalition of mid-powers' to confront the US, Russia, and China militarily? That's absurd. And you are aware that Carney is promoting a strategic alliance with China.
Deterrence doesn't require a war. it only requires the aggressor to consider the cost of achieving it's goals will be too expensive.
Carney is negotiating trade agreements and alliances with China, not a military alliance. Don't try to distort the debate with half truths which equate to lies.
Edit; Would Putin have invaded Ukraine if he had known the cost before he did?
He's committed now and backed himself into a corner, but had he known or had the suggestion that it would cost what it has done, and continues to do, would he have even started?
Carney is looking to diversify Canada trade away from over‑dependence on the U.S. by using China as a second major demand anchor for agriculture, resources, and advanced manufacturing. That's all.
The idea of some loose arrangement of Western 'middle powers' banding together is ludicrous militarily. As for Carney harping on 'rules based order', he's simply talking what the Global South is already aware of. And that's largely why we're moving towards a multipolar world.
"The idea of some loose arrangement of Western 'middle powers' banding together is ludicrous militarily." Why? If it sufficient to give an aggressor pause, then it works. An old military adage- "If it's stupid, but works, it ain't stupid".
No, a military confrontation wouldn't be in their interests. It's more about using soft power to stand up against the more egregious demands of the big bad wolves. I know Trump is used to grabbing whatever he wants to, but a line has to be drawn somewhere. In terms of Russia, hopefully that line can be drawn in Ukraine and not further into Europe. For China, a Taiwan-Japan-South Korea axis could make an attack on Taiwan prohibitively damaging. Perhaps South Korea will develop nuclear weapons as an extra deterrent, they certainly have the capability.
It's more about using soft power to stand up against the more egregious demands of the big bad wolves.
'Soft power' sounds woke to me. What are you suggesting? These countries stop trading with the U.S., Russia, and China?
Soft power has been important for far longer than 'woke' has been a phrase. Trade is one aspect, for sure.
Think everything you can conceivably do in between "Yes Mr President, here's that Greenland you wanted" and deploying troops on the Canadian border and rolling into Vermont.
Soft power has been important for far longer than 'woke' has been a phrase. Trade is one aspect, for sure.
OK. So you would be up for Aotearoa to cease trading with the U.S. to prove a point?
Why do we still consume Russian oil through 3rd parties (India)?
Or is this just about virtue signaling?
A broad international trade campaign against the US could certainly work. We know Trump wants to be loved by his people, and has midterms coming up. We also know that the cost of living and inflation are major issues for the electorate. That's an obvious pressure point we could contribute to. The Greenland escapades are not at all popular in the US, and I doubt they would stomach higher food prices just because Trump wants his legacy.
Yes we should stop consuming Russian oil.
So the Supreme Court dithers and procrastinates over the legality of Trump’s tariffs right at a time that said tariffs are being weaponised, to the point of extortion, against traditional allies and NATO partners of the USA, all for the sake of the ownership of Greenland. Hardly coincidental but nevertheless lwhat a script for a fantastic, high intensity drama movie, and no need to guess the ideal leading man.
What a time to be deeply long in precious metals, as stocks are on a precipice and property values enter their 4th year of collapsing values.
Gold to 6k and Silver to $160, by years end?
AI under fire for just rehashing former knowledge. That is, creating nothing new, albeit in a new way and fast. Fair comment.
But also, modern academia, under the pressure of publish or perish, creates an avalanche of papers nobody reads. (edit. Much the same problem)
Do we need that enormous sector at all ?
It failed to warn.
So yes, academia is obsolete, per Carney's comments.
As are the folk still determinedly playing the pokies on B-Deck, while the sinking is becoming ever-more obvious.
Academia did a fair job of warning about Climate - but that is just the entropic waste-stream of the problem. Trump, of course, is the face of the front-end of said problem; too many people consuming too much too fast on a finite planet.
The media is equally at fault - there are still folk lauding anything to do with 'more consumption'.
Academia did a fair job of warning about Climate - but that is just the entropic waste-stream of the problem. Trump, of course, is the face of the front-end of said problem; too many people consuming too much too fast on a finite planet.
Larry Fink and the elites in Davos have switched from going all in on climate change to now, all in on AI. No more shilling for wind and solar, AI cannot survive on intermittent energy. They are now all in on coal burning powerplants and nuclear power.
My tertiary education is ~3 decades old however my recollection is once you grasped the foundation theory principles in the first year subsequent pass marks were about finding novel ways to appear to agree with the lecturers personal opinions & bias. I doubt that has changed significantly. In a fast changing world (business administration & i was also working full time as a manager in a multinational) most of the final years content was very slim & a decade out of date.
Academia & Academics have long been a protected species however nowadays there is no obvious reason why 80% could not be taught virtually from anywhere in the world, nor any justification for massive financial investment in bricks & mortar, admin cost etc. Teaching could be cheaper, flexible & ongoing.
Tertiary education is almost synonymous with university degree. A degree is a 3 year chunk of education; why? When we obtain compost, paint, curtain material we are not forced to buy specific quantities - 3 bags, 3 tins, 3 metres.
KKNZ, I also had my Uni education 3 decades ago. Back then, if we didn't know something, we just didn't know, period. Today though, we can know anything and everything by asking AI. Therefore, IMHO today, University should be more critical thinking based than knowledge based.
The WEF Summit is currently under way at Davos. One big propaganda fest that most people ignore, except the conspiracy theorists, who zoom in on the pageant of largesse.
You wonder what actually gets achieved as the ruling elite and politicians fly to Davos on taxpayers’ money and junkets, enjoy photo-ops and luxury stays, and return with zero real benefit. For some reason, Justin Trudeau and Katy Perry present. No idea why.
All very Game of Thrones. Ursula Von der Leyen said: "1971 was the year of the so-called Nixon shock, and the decision to de-link the U.S. dollar from gold. In an instant, (…) the entire global economic order collapsed. But it also created the conditions for what would become a truly global order. The seismic change we are going through today is an opportunity, in fact a necessity, to build a new form of Europe."
Much like a confession: fiat currencies steadily losing purchasing power; inflation hollowing out the middle class; citizens trapped in permanent obligation to the same financial architecture.
Go to PDK's link to Carney's speech at the forum. It's pure genius.
I have a book on the worlds greatest speeches and this one IMHO is worthy of being included.
I am aware that Mark Carney is flavor of the month, but important to remember his rise to political power. It wasn't young Canadians who voted for Carney as he's perceived by them as not delivering on their concerns: cost of living and housing. It was the boomers who want to preserve the status quo. Canada’s real GDP per capita grew only about 1.1% over 10 years, versus roughly 15% for the G7/OECD average, which places it near the bottom of advanced economies on a growth basis.
https://www.visualcapitalist.com/real-gdp-per-capita-growth-country-201…
So you're a Boomer conspiracy fan?
What is Carney doing that is wrong?
His political history is irrelevant as he is easily demonstrating that he has the political nous needed to work in those areas.
It seems you desperately don't like him. Why? What has he done that rankles you so much? Stand up to Trump?
It seems you desperately don't like him.
I'm suspicious of people with a pedigree of being a Vampire Squid alumni; central banking; and WEF leadership being parachuted in to lead a a nation.
And I'm sure he's a pleasant person at a dinner table.
But more importantly, why did young Canadians not trust him?
Because they don't know him, think he's an old fart or Boomer?
For what ever reason, I suggest he's proving them wrong.
As a Swiss comedian proposed (yes Swiss comedians do exist), let's rename the WEF... "WTF"
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