Here's our summary of key economic events overnight that affect New Zealand with news the US dollar is being marked down as demand for precious metal hedges rises.
But first in the US there were 260,000 initial jobless claims last week, down -71,000 from the prior week and a marginally smaller change that the -73,000 change seasonal factors would have expected. There are now 2.21 mln people on these benefits, marginally less than the 2.24 mln a year ago. Two years ago, pre-Trump, there were 1.75 mln people on these benefits.
US real personal income rose +1.0% in November from the same month a year ago. On this inflation-adjusted basis it has been flat since April 2025. But real personal consumption expenditures rose +2.6%. On an inflation-adjusted basis this is the same pace of rise that started in April 2021. It has been driven recently by services and non-durable goods. While the PCE data is still within the Fed's inflation band, the income drag will be worrying policymakers. The spending rise can't be maintained.
The latest regional Fed factory survey, this one from the Kansas City Fed, shows no improvement from its dour base. It is still negative.
Malaysia's central bank reviewed its monetary policy and related policy rate overnight and made no change to its 2.75% level. They have a strong economic expansion underway, and inflation is low.
Japan’s exports rose +5.1% in December from the same month a year ago, the fourth monthly increase and reaching a record value. As good as that was, analysts had expected a rise of +6.1%. Imports climbed +5.3% on the same basis, the fastest pace in 11 months and much faster than November’s +1.3% rise.
The EU's consumer sentiment survey for January was marginally better (less worse) than for December - again. This continues the slow grinding improvement from its depths in September 2022 and halving that negative level. But it is still negative at double the negative pre-pandemic. Still it is on an improved trajectory and that is in sharp contrast to the US where the similar UofM survey is now deeply negative with a recent deterioration and half the level it was pre-pandemic
In Australia, their labour market performed well in December. Employment increased by +65,000 in the month to 14.65 mln, with full time employment up +54,800 and part-time employment up +10,400. Hours worked rose. As a consequence their jobless rate fell to 4.1%, well below the prior 4.3% and the expected 4.4%. This probably ends any chance of a rate cut early February and brings forward the chance of a rate hike in 2026. Everything now depends on next week's CPI outcome where there is upside risk to November's 3.4% CPI rate now.
Staying in Australia, job ad portal Seek is saying their platform shows job ads dropped -1.2% in December from November, and are down -3.5% from the same month a year ago. Applications per job ad fell -0.3% in December, "demonstrating a slightly sharper year-end decline in candidate activity than usual".
And Australian unicorn Airwallex is to be investigated by the money laundering regulator AUSTRAC. They suspect "serious non-compliance" by the global payments platform, specialising in moving money internationally for dodgy clients.
And we should probably note that the Trump Administration has advanced its role in granting licenses to mine the seabed in international waters. It is currently mapping resources off Samoa, and it has granted its first license to mine in international water to a US miner. The US only recognises a 12 mile country claim, so vast areas are now open to grant permits for their firms to mine. There is potential trouble ahead on jurisdictional issues.
Global container freight rates fell -10% last week from the prior week to be -43% below year-ago levels. Bulk cargo freight rates rose +16% in the past week to be double year-ago levels.
The UST 10yr yield is now just on 4.25%, down -3 bps from this time yesterday. The key 2-10 yield curve is now at +65 bps (slightly flatter). Their 1-5 curve is now at +32 bps (slightly steeper) and the 3 mth-10yr curve is now at +58 bps (slightly flatter). The China 10 year bond rate is little-changed at 1.83%. The Japanese 10 year bond yield is down -3 bps at 2.27%. The Australian 10 year bond yield starts today at 4.84%, up +8 bps from yesterday on the labour market signals. The NZ Government 10 year bond rate starts today at 4.60%, up +1 bp from yesterday.
Wall Street is in its Thursday session with the S&P500 up +0.8% but still not back to where it started the week. Overnight European markets were higher between London's tiny +0.1% rise and Frankfurt's +1.3% surge. Yesterday Tokyo closed up +1.7%. Hong Kong was up +0.2%. Shanghai was up another minor +0.1%. Singapore rose +0.4%. The ASX200 ended up +0.7%. And the NZX50 ended up a full +1.0%.
The price of gold will start today at US$4909/oz, and up another +US$66 from yesterday and a new record again. Silver is up +US$2.50/oz at US$96/oz and also a record high.
American oil prices are down -US$1 from yesterday at just on US$59.50/bbl, while the international Brent price is now just under US$64/bbl.
The Kiwi dollar is firmer from yesterday, up +50 bps to 59 USc as the USD is devalued in financial markets. Against the Aussie we are little-changed at 86.4 AUc. Against the euro we are up +30 bps at just on 50.3 euro cents. That all means our TWI-5 starts today just on 62.9, and up +40 bps from yesterday and its highest since late September.
The bitcoin price starts today at US$89,026 and up +1.2% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.7%.
Join us later this morning when we will report the New Zealand Q4-2025 CPI result, which could set the scene for the RBNZ decisions in 2026, the next one on February 18, 2026. Markets expect a 3.0% CPI rate, right at the top end of the central bank's policy comfort level.
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4 Comments
Seabed mining tells us that economists were wrong - that's the first takeaway.
Tells us this is a finite planet, and that we've extracted, 'consumed' and dissipated, the best/easiest/closest sources. We are now dreg-bound. No economics commentator acknowledges the varying qualities of resources, be that oil or copper. Or, or, or.. (ore:)
But the reducing ROI - really EROEI, because it takes ever-more energy to get stuff - is crossing the 'this debt can be repaid in the future' graph. So CAPEX proposals will run into banks and insurance head-shaking. The US is falling apart infrastructurally even now, at this level and stage; seabed-mining is too low a return to save it. Plus which, they don't do the smelting anymore - China does. Think that one through...
But first in the US there were 260,000 initial jobless claims last week, down -71,000 from the prior week and a marginally smaller change that the -73,000 change seasonal factors would have expected. There are now 2.21 mln people on these benefits, marginally less than the 2.24 mln a year ago. Two years ago, pre-Trump, there were 1.75 mln people on these benefits.
The weeks referred to are for the week ending 17th January 2024 - 2026.
Given Trump was inaugurated on the 20th January 2025, the 2.24 million a year ago is also pre-Trump.
Like - I'm no fan of the guy, but his whole thing is saying things that are demonstrably false to fit his narrative. Let's not do that too :)
US10Y is slowing moving up
talk is that RBA closer to moving up here as well
I suspect that if NZ story of 26 is positive RBNZ will need to hike as well
“Trump Administration has advanced its role in granting licenses to mine the seabed in international waters off Samoa” with the US recognising only a 12-mile ECZ claim.
It appears that New Zealand is likely heading towards a Greenland geo-political situation in our backyard placing New Zealand in conflict with US interests.
Much of the Pacific Ocean has large areas of polymetallic nodules – such as in the Clarion-Clipperton Zone – and cobalt-rich ferromanganese crust. Many small island nations such as Kiribati and the Cook Islands have very large 200-mile EEZ internationally recognised along with ownership of resources within them.
China seems to recognise those claims and has been courting countries such as Kiribati and the Cook Islands with financial deals and exploration agreements. New Zealand has already had to react to these.
New Zealand with its long term associations with many Pacific Island nations will likely be siding with those nations.
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