Here's our summary of key economic events overnight that affect New Zealand with news risk aversion is prominent in markets today. Markets aren't looking at recent past economic data. They are more concerned about what lies ahead. And excessive spending on AI is part of the reason investors are growing more nervous.
But there was recent data reported. US initial jobless claims fell sharply last week to 231,000, but only by as much as seasonal factors would have indicated. There are now 2.15 mln people on these benefits, marginally lower than at the same time last year and similar to the 2024 level.
US exports fell in November from October, and imports rose in the same period, accentuating their trade deficit in goods and services to -US$57 bln and back to April levels. The American trade deficit with Asia rose to -US$71 bln in November as a shrinking deficit with China was offset by growth in Southeast Asian imports. The drivers of this shift are American multinationals.
American factory orders rose in November from October to be +4.2% higher than the same month a year ago. What is interesting about this data is that neither the ISM PMI, nor the S&P Global factory PMI picked up this rise in November. Maybe part of this is because wholesale inventories rose and perhaps intercompany orders aren't accounted for in this data.
In Canada, they booked a slightly larger trade deficit in November which was more than expected, also on falling exports.
The Monetary Authority of Singapore (their central bank) held monetary policy steady for a third consecutive review yesterday, maintaining the slope, width, and center of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, as markets expected. However, they lifted their inflation outlook for the coming year to 1% to 2%, up from the 2025 forecast range of 0.5% to 1.5%. Actual CPI inflation in Singapore came in at +0.9% in December.
In Europe, both economic sentiment and employment confidence picked up in December. Of equal importance is that this survey picked up more modest inflation expectations at the same time. In the same region, the Swedish central bank held its policy rate unchanged at 1.75%.
International air passenger travel was up +7.1% in December from the same 2024 month with Asia/Pacific travel up +10.9% and driving the overall shift. North America recorded the weakest rise at +2.1%. International air cargo traffic was up +4.2% in December, up +6.6% in the Asia/Pacific region, up just +0.8% in North America, also the weakest region.
Container freight rates fell again last week to be -37% lower than year-ago levels, mostly due to a weaker outbound China trade. Bulk cargo rates were up +14% in the past week, to be +175% higher than year-ago levels, but that is distorted by an unusually low base. In a much longer perspective, this is actually only back at levels it was 30 years ago.
The UST 10yr yield is now just on 4.23%, down -3 bps from this time yesterday. The key 2-10 yield curve is now at +69 bps (up +1 bp). Their 1-5 curve is now at +31 bps (down -2 bps) and the 3 mth-10yr curve is now at +54 bps (down -3 bps). The China 10 year bond rate is down -1 bp at 1.81%. The Japanese 10 year bond yield is up +2 bps at 2.26%. The Australian 10 year bond yield starts today at 4.79%, up +3 bps from yesterday. The NZ Government 10 year bond rate starts today at 4.65%, down -1 bp from yesterday.
Wall Street is lower with the S&P500 down -0.7% in Thursday trade on tech weakness. Overnight, European markets were quite mixed with London up +0.2%, Paris unchanged, but Frankfurt down a very sharp -2.1%. Yesterday Tokyo ended its Thursday session little-changed again. Hong Kong was up another +0.5% and Shanghai was up +0.2%. Singapore ended up +0.4%. The ASX200 dipped -0.1% again yesterday. The NZX50 fell -0.5% in its Thursday trade.
The price of gold will start today at US$5273/oz, down -US$16 from yesterday and basically holding its recent highs. Silver is down -US$1.50 to US$112.50/oz, also still holding high. Platinum has slipped slightly as well and now at US$2604.
Aluminium and tin have both hesitated today too.
American oil prices are up another +US$2 at just over US$65/bbl, while the international Brent price is also higher, now just under US$70.50/bbl. These are four month highs, spruiked by the Epstein-distraction adventures by Trump aimed at Iran.
The Kiwi dollar is up +20 bps from yesterday, now at 60.5 USc. Against the Aussie we are up +10 bps at 86.3 AUc. Against the euro we are also up +10 bps at just over 50.6 euro cents. That all means our TWI-5 starts today just over 63.9, and up +10 bps from yesterday, its highest since late September.
The bitcoin price starts today at US$84,778 and down a sharp -5.2% from this time yesterday as the general risk aversion sentiment spreads. Volatility over the past 24 hours has been high at just under +/- 3.6%.
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28 Comments
I'm trying to think of an analogous time where we've had fear based assets like gold and silver hitting highs, at the same time risk on shares are also at highs.
At least one camp should end up sad
Ouch. That is an expensive virtue signal.
"Between 2010 and 2024, Britain lost 33.3 GW of reliable dispatchable capacity from coal, gas, and nuclear. It was replaced with 44.9 GW from renewables. Yet despite astronomical investment, the unreliability of wind and solar means we are producing around 24% less electricity, while bills soar to cover yet more fruitless green investment. We are producing less with more. This is the fundamental economic fact of our current energy policy.
...At the same time, Britain became increasingly dependent on imported electricity, which rose from 2% of final consumption in 2009 to 16% of final consumption in 2024."
https://www.prosperity.com/media-publications/its-broke-fix-it/
Fossil energy is finite.
And Britain burned its best coal before you were born.
Stupidity comes in many forms - building an entire collection of infrastructure based on a finite resource, qualifies.
So are you suggesting some forms of energy are NOT finite, like solar, wind, tides etc...
No, he said fossil energy, and nothing about any other form.
I think that was the point, is any form of energy infinite.
There's finite as in 'one day the sun will expire', and there's finite as in 'my grandchildren could be fighting over the last few drops of this stuff', and I think it's fair to think about those different finites quite differently.
Just shows the value of storage needed to capture and keep this energy for night time and peak usage.
Or just tap in to your trillions of tonnes of proven coal and gas reserves? "Storage" is much more expensive to build and doesn't provide process heat for industry. This is the country that effectively banned North Sea oil and gas (78% energy profit levy) and it's biggest gas imports are from Norwegian North Sea gas. The fossil fuel meme also doesn't explain why you would shut down your nuclear plants, nor cripple oil and gas to buy it from your neighbour. It has been great for the laptop class not so great for the working man/electricity user.
https://www.reuters.com/sustainability/climate-energy/britains-centrica…
https://www.agcc.co.uk/news-article/oil-and-gas-sector-warns-it-will-be…
What is happening to Gold? It seems to have turned from a sleepy price-steady rock, to a speculative asset. It hit a high of $5,600 and a low of $5,100 within a day (+/- 10%) !!!
Nothing is happening to gold.
What is happening in the minds of folk who don't understand that, is the question.
So, what is happening in these folks minds ?
What is happening in your own? Why did you suddenly decide to start buying and promoting gold as an investment and why now do you see it as speculative?
As I said to you with housing (circa 2016-2020), I’ll know when the speculative mania is over because you will tell me by your behaviour and views (ie you will stop talking it up - that happened a few years ago). So your views and behaviours are the herds - like a bellwether telling me (and others) what the herd is thinking and doing. Might be the same with gold.
Why is gold speculative - ask yourself. You’ve rushed in with the herd and will most probably rush out with the herd - then say ‘what is going on?’ Just like the property bubble.
Just like with property, I did not "rush in with the herd when I started investing in commercial property before 2000 and when I started investing in Gold in 2023, that's where you are very wrong. Still I hope your post made you feel better about yourself, enjoy your weekend.
It was a compliment as you seem to know what markets to enter when and which to exit when.
But then you ask why prices are going up and down and its because you (and people behaving like you) are the market - and you say 'why is this happening?' when you are doing the price setting via your buying and selling and hype and promotion of what it is that the herd are buying/selling. As I say you act like a bellwether on here of the herds behavour wrt speculative assets.
Its like somebody asking 'what do I look like?' and the answer is 'look in the mirror'. Why is gold going up/down?
We seem to be talking past each other. In my opinion you stating "So your views and behaviours are the herds" does not sound like a compliment. Then just above you say "you ask why prices are going up and down". No, I'm not, not at all. I asked "what is happening to Gold? It seems to have turned from a sleepy price-steady rock, to a speculative asset" and later I asked "what is happening in these folks minds". I ask these questions to find out other readers opinions, despite having my own views on Gold's performance.
In normal times, gold is deemed a stable secure place to store wealth.
If it's rising, there's increased apprehension
If it's shooting up, the apprehension is turning into mania/paranoia.
At lest someone is getting my post.
FOMO
"Nothing is happening to gold"
I suggest you look at a 30 year graph of Gold and revisit your post "Nothing is happening to Gold"
Gold is unchanged....what some are prepared to exchange for it however...
Indeed, the premium paid for something stable (unchanged), is rising exponentially.
This occurs once the momo crowd arrive
Most of the selling in Silver is occurring during US market hours.
It seems the US market is dumping paper/digital derivatives while the rest of the world accumulates the physical.
this will crush any exchange that uses leverage as more and more want delivery
IMHO Shanghai will grow and grow, effectively becoming a default settlement mechanism for non USD trade
Seems to be heading in that direction. Hong Kong has just signed a major agreement with the SGE to launch a centralised gold settlement system.
Bitcoin being heavily sold and moving in the real, physical, Gold.
The time of the Rat chewed digital gold, is up.
Real, physical Yellas days, are golden.
Go the miners!!!!
Better make a few trips to the west coast then eh?
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