Here's our summary of key economic events overnight that affect New Zealand with news the real economic markers in the world's largest economy painted a very lackluster picture today.
US mortgage applications retreated again last week, for a second consecutive week. But these are still running well above year-ago levels. The refinance activity retreated but the big fall was for new purchase finance.
Private businesses in the US added just +22,000 jobs in January according to the comprehensive ADP survey, (sample size of 26 mln) following a downwardly revised +37,000 rise in December and below forecasts for a +48,000 rise. Among these lackluster totals hiring in the health care sectors was a standout, adding +74,000 jobs. It was retrenchment in many others, including manufacturing.
Remember the January non-farm payrolls report won't be released at its usual time on Saturday (NZT) due to the shutdown delays. It will now come next Thursday, February 12 (NZT).
Meanwhile the ISM services sector PMI stayed in relatively good shape in January, although December was revised lower. New order growth slowed however, and price increases, pushed by tariff-taxes, rose.
This is not translating into consumers buying cars at a higher rate. In fact, in January the annualised rate was only 14.9 mln vehicles, the slowest month since December 2022, and -4.1% lower than in January 2025.
In China, and unlike the official January services PMI which was more negative, the private S&P Global version is more positive. The RatingDog China General Services PMI rose in January to a better expansion, from December’s six-month low and better than market expectations. It's the strongest expansion in their services sector since October, driven by stronger growth in new orders, and a fresh increase in foreign sales.
Meanwhile China said its fiscal revenue fell in 2025 for the first time since the pandemic. Sharp falls in non-tax takings outweighed a modest recovery in tax revenue.
In Europe, the surging value of the euro helped push down their January CPI inflation level to 1.7%. Food, however, was up 2.7%.
Australia released some living cost indexes yesterday, following the overall 3.8% December CPI. They say living costs for 'employees' rose just +2.2% in the year to January, but for 'aged pensioners' it was up +4.2%.
The UST 10yr yield is now just on 4.27%, down -2 bps from this time yesterday. The key 2-10 yield curve is still at +71 bps. Their 1-5 curve is still at +34 bps and the 3 mth-10yr curve is now at +59 bps. The China 10 year bond rate is holding at 1.81%. The Japanese 10 year bond yield is up +1 bp at 2.26%. The Australian 10 year bond yield starts today at 4.84%, down -1 bp. The NZ Government 10 year bond rate starts today at 4.59%, down -4 bps.
Wall Street has started its Wednesday weaker with the S&P500 down -1.0% on tech sector pullbacks. Overnight European markets closed mixed between Frankfurt's -0.5% and Paris's +1.0%. Yesterday Tokyo ended its Wednesday session up another +1.0%. Hong Kong was unchanged but Shanghai rose +0.8%. Singapore up +0.4%. The ASX200 rose +0.8%. But the NZX50 only managed a +0.3% gain.
The price of gold will start today down -US$120 from yesterday at US$4860/oz. Silver is down -US$1 to US$85.50/oz. Some non-precious metals are lower too.
American oil prices are up a bit less than +US$1 at just under US$63.50/bbl, while the international Brent price is now just on US$67.50/bbl.
The Kiwi dollar is down -60 bps against the USD from yesterday, now just over 59.9 USc. Against the Aussie we are down -40 bps at 85.8 AUc. Against the euro we are also down -40 bps at just on 50.8 euro cents. That all means our TWI-5 starts today just under 63.6, and down -50 bps from yesterday.
The bitcoin price starts today at US$72,550 and down another -3.3% from this time yesterday, and falling. The last time it was this low was in November 2024. Volatility over the past 24 hours has been moderate at just on +/- 2.6%.
Please note that it is a public holiday in New Zealand on Friday, Waitangi Day. This update will not be published on Friday, but will return for the weekend edition on Saturday.
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46 Comments
Before anyone blames a person/party/ideology for Wellingtons sewerage failure...
This is entropy, fully predicted, fully predictable, and a presage of more - ever more - to come.
Seems we won't be debating it, though; blaming and pretending seems to be the preferred approach (as expressed by Sir Ian Taylor agreeing to debate Shane Jones - two speakers on one side, none on the other)
But GROWTH is all there is, eh?
Decay seems not to figure in the ledger...
Every civilisation has been built on the rubble and detritus of the one before which inevitably collapsed because of the hubris of it's leaders. Even Rome, the "greatest of all the empires" (according to them) fell under the weight of their own corruption. As the demand for growth persists, the politicians neglect the existing to protect their own power and privilege by delivering to the powerful what they demand. That this exposes the house of cards they are building is denied, obfuscated, and hidden. In this way they avoid the really important but too hard issues. Buried within all that they seek to prevent being questioned and challenged about their neglect. The current method is by trying to extend the electoral term.
My general conclusion is that the nature of larger civilisations' trend to become hierarchical power structures runs counter to the innate human proclivity to be a social animal. Hence they can't sustain.
I was doing voluntary predator control in the Te Kopahau regional park yesterday, also covering part of the south coast clifftops. The birds eye view showed the massive pollution streaming west from Moa point running right through the marine reserve towards Karori Light & Cook strait.
My guess is that the root cause will be basic human error.
Of course it will.
Try starting from a clen mental sheet - no pre-bias.
Then read my post above, then this:
Surplus Energy Economics | The home of the SEEDS economic model – Tim Morgan
BTW - your activity is a band-aid on a cancer; I was once a conservationist, still am and still do predator control - but now I understand we can never 'win'. Proof being we haven't. So someone has to say "what next?"
Sounds like a stink day of work
I suggest Wellington is an anecdote, news because it is failing. Decades of underinvestment to keep this type of infrastructure up to date.
Contrast it with Auckland (which isn't perfect and also has some catch-up to do) where Watercare continues to invest in smart, system-wide upgrades (Central Interceptor, etc) and is basically on top of these issues.
There are a variety of examples elsewhere here, both good and bad. The point is, the ones you don't hear about are the ones that don't involve an immediate crisis, or any crisis. It can be done properly, and is being done properly in may places.
Decay is normal. So is renewal. Most places can afford it. And it is easier to afford it if you reinvest continually, as a normal thing. 'Save' the reinvestment by giving a tax break to users will bite you in the future. It's just a lesson in good management.
A long time ago we built on a hill. Our builder wisely insisted we pay an extra cost for field drains around the entire foundation perimeter. That cost stretched us a bit. The neighbouring house was similar and a spec, no such drains. Coincidentally both house then went on the market a couple of years later and then came an unusual week of heavy rain, next door flooded, we didn’t. Moral of the story there is much value buried below what you can see.
It's amazing that Wgtn and a lot of other regions don't have volumetric charging. Water is 'free', and average use is much higher than AKL where usage is measured and paid for based on volume.
Devious behaviour surrounding the Queenstown sewage plant means it really just can't work. And the regional council cooperates rather than supervises.
Show what lack of principles we suffer from our 'civil servants:
Metered water is simply another council blameshifting profit centre rort. They spent over 2 decades since Helen Clark gave them "powers of general (in)competence" wasting untold ratepayers money on virtue signaling vanity projects instead of maintaining their core business - a lot in invisible underground infrastructure
Wrong.
Sorry DC, but you are.
How much infrastructure do we ADD per annum per annum? (Growth is compound).
What is the decay rate - linear? No. So demand is compound. The pressure has been on for a long while - but we fudged it with increasing debt, offshoring and avoided maintenance. Only gets you so far, and we're there already.
And the quality of the resources/material/energy stocks left to doo all this exponentially-more work with exponentially-more stuff? All within bounded systems (Earth, NZ, Wellington catchment)? This is the whole effing point: society can no longer afford itself, and we're creating conditions increasingly detrimental to sustainability - real sustainability.
And pointing to some places something is being done, is no guarantee it can be done everywhere. Understand that, and you might understand why Trump got elected. Too many places full of too many desperate people.
Couldn't agree less.
Our climate leadership is really paying off.
"China commissioned in 2025 the most coal-fired power stations in a decade. (~78 GW of new coal capacity, equal to twice the UK total electricity demand) On top, Chinese companies filled a record high number of proposals to build future coal plants."
Always reminded, when considering the pollution being belched out by the great powers versus the local outcry that NZ mustn’t emit the tiniest burp in comparison, of my father’s quote learn’t from the WW2 US Marines in the Pacific that it’s as much use as farting against thunder. That expression actually originated from US Sherman tank crews in Europe when coming up against a German Tiger tank. In summary there is very little, little New Zealand itself can do about it except set itself up as best as possible to cope with what the great powers are progressively creating.
And therein lies the basis of my argument that instead of virtue signalling, we should see and use the opportunity to rebuild our national resilience, but doing it in ways that are environmentally sound, to build a self sufficient future as much as is possible for Kiwis.
Perhaps our greatest advantage is being as far away as is possible from the mess the rest of the world is making.
Absolutely agree.
And just pointing out, as always, the fatal flaw in anything Profile-issued - Much of the burn happening in China, is to create goods for the rest of the world. That's OUR pollution.
And ironically, it's all temporary...
Being "far away" doesn't protect us from earthquakes and volcanoes - actual risks where carbon lucre should be spent. Rather than on the runaway global warming hypothesis.
But didn't the Sherman's side eventually win?
I'm with the farts ( and Murray) on this.
True, sheer numbers helped in the end but more interestingly the Brits came to the rescue by equipping with their 17 pounder gun, thus the Firefly. For example one of those took out the Tiger ace Whitman. Same story with the P51 Mustang, replacing the Allison engine with British Merlin transformed it into the best WW2 fighter.
Per capita NZ still pumps more than Chiiina. The stats are from 2023 though so maybe Chiiina has finally caught up to little ol NZ.
https://en.wikipedia.org/wiki/List_of_countries_by_greenhouse_gas_emiss…
Recall some time back the Swiss tacitly withdrew from their emissions agreement. Their general situation I believe is similar to NZ. One of the Swiss leaders stated that they couldn’t see the point in doing something about nothing when the prime causers of the problem were doing nothing about everything.
New Zealand is a net carbon sink if everything that is not allowed to be included in the climate emissions calculations is included.
"Within Australasia, Australia was a net source of 38.2 ± 75.8 TgC yr−1, and New Zealand was a net CO2 sink of −38.6 ± 13.4 TgC yr−1."
https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2023GB007845
A UK study showed 57 companies were responsible for 80% of global climate emissions – which had increased since the Paris agreement.
NZ is in a good place to adapt to climate change, despite its 0.17% share of global climate emissions.
Leftpedia! - read KKNZ link? NZ is a net sink to the tune of 7.8 t CO2/capita/annum and that is excluding our 6 million km2 continental shelf seashell deposition carbon sink. We don't pump, we suck. Carbon industry parasites like to big up our agriculture biogenic carbon cycle, but their fanciful models get found out by these empirical studies.
agupubs.onlinelibrary.wiley.com/doi/10.1029/2023GB007845
That old saw being peddled again.
Somehow you can add, but not add, all the carbon we import and burn. Somehow we can avoid counting the carbon burned on our behalf (our whiteware made in China, for example). And somehow we can arbitrarily choose a clock-start base-line (certainly not the fully-forested pre-hman one, for sure).
Bollocks.
The good people demand:
- human rights
- animal rights
- environmental rights
But only for themselves. Happy to buy products based on price that ignore all those things, especially if it's from somewhere they can't see or know about.
And then complain they're being exploited from above.
We've seen it before, such as when they banned sow crates for pig farming, making pig farming uneconomical in NZ. Solution? Well the demand for pork and bacon was still there, so the void was filled with imported frozen pigs form Europe, South America etc who do not have the same regulations. Do we think people stopped eating as much pork product due to this? I would argue not, even form those who pushed to ban the use of sow crates.
Ayup, all this virtual signalling is costly, and counter productive.
"carbon burned on our behalf" is included in the paper! - despite it not being a UNFCCC requirement - but you would know that if you bothered to read the paper. Perhaps if we had 500 million people you would have a point. We don't, and our birth rate is 25% below replacement.
"...using two approaches: bottom-up methods that integrate flux estimates from land-surface models, data-driven models, and inventory estimates; and top-down atmospheric inversions based on satellite and in situ measurements.
...we estimated non-territorial emissions, which are the emissions associated with the net trade of fossil fuels, crop, wood, and livestock to and from other countries. ...In addition, we also estimated the non-territorial emissions (ΔCNT). ΔCT and ΔCNT, together (Equation 1), represent the total net impact of territorial and non-territorial emissions (ΔCA) on atmospheric CO2."
The per head ratio makes me wonder rather obliquely about the hermit, the sole occupant of a small rocky Arctic island, who burns a good sized fire all day, every day as to how that ratio would then apply. Perhaps he or she might be per head, the greatest emitter on earth. That is until the wood and seals run out as PDK would remind.
Your hermit doesn't emit anything - the tree if not burned would decompose to CO2 and CH4. Likewise the seal would die and rot. Eating or burning them makes no difference in the carbon cycle. Just like a cow eating grass or letting it rot, CO2 and CH4 is cycled either way. Though if you get a cow to eat it less chance of a catastrophic bush fire.
Agreed. Start just before the industrial revolution say 1800; anything before that is minor. It would leave the UK, USA and Germany with more to do. And agreed about the exporting of emissions. E.G. steel in imports from China or Japan should have a CC tariff and counted as NZ's responsibility and similarly the greenhouse gases produced by our dairy exports ought to be the responsibility of the consumers of our milk power exports.
Tariffs for CC emissions would use the power of capitalism for a good cause.
I defer to Dr Patrick Moore and Prof. Plimer's take during the 2023 Heartlands Climate Conference - ie, life on earth and bountiful growing conditions are far more threatened by a lack of CO2 than too much of it.
CO2-driven climate catastrophism is nothing more than another financial con-job.
In reality, there is a proven 600 million-year downward trend in CO2 levels, and if humans have indeed helped in some small way to reverse this trend, then Planet Earth actually owes our current civilisation a debt.
Coming down from a peak of ~7500ppm, we now sit at around 400, which is uncomfortably close to the 180 red line where much life on Earth ceases to exist.
https://www.facebook.com/colin.maxwell.129/posts/pfbid056G739EzdGihDY6s…
The rub is that the plants, animals, microbes and sea life that support us now have developed very recently to suit a relatively narrow temperature band and even finer pH and temperature band if you're talking water bodies.
If you're a fisherman you can see the snapper suffering in the Hauraki Gulf with milky flesh because they and their prey struggle for food and breath with the higher water temperatures carrying less oxygen... Cold water fish put in too-warm water are like humans being forced to live in the rarified air above 5000m. That's why the salmon farms in the Marlborough Sounds are becoming unviable
On land the signs of temperature stress manifest as Tuatara only being one sex because that is determined by the temperature during the reproduction process.
Basically all useful plants are vulnerable to heat stress setting in from the high 20s, with growth completely stopping in the 30s except for the most part.
You don't need to be a scientist to see that some species in your area are stressed, or to ask why
Isn't it high time we stopped referring to the US as "the world's largest economy" and face a good dose of garden-variety reality, and the fact that China long ago emerged as the globe's largest trading nation, back in 2013?
https://www.exportimportdata.in/blogs/china-trade-partners.aspx
The IFF has recently calculated that global debt is now ~400% higher than the global GDP of ~$111 trillion.
The fact that much of that GDP figure total is comprised of casino/jiggery-pokery that has nothing to do with productive GDP makes these numbers mathematically unsustainable.
In simple terms, the globe needs ~$4 of debt for every $1 of economic activity, and a large percentage of that activity is nothing more than a financial casino, generating zero productive goods or services.
The Western financial edifice, built upon selling treasury bonds that yield negative real returns, is being exposed.
The breakout of physical gold and silver prices is the canary in the coal mine. This follows decades of massive institutional manipulation to obfuscate the fact that all fiat currencies have already lost at least 97% of their purchasing power. The mother of all Ponzi schemes is coming to an abrupt end.
The separation of the paper markets and the Eastern physical exchanges is a massive wake-up call. Historically, when currencies have failed miserably, they have been replaced by a currency that is at least partially hard-backed.
Forget about listening to the massive Chinese debt burden meme spun by the West. The cold hard facts are that the US has a debt of ~$136 trillion for an appallingly over-financialised economy with a GDP of $30.6 trillion - IOW's 445% higher than China's.
When I ran the numbers a few months ago, adding in unfunded liabilities, the total US debt came to ~640% of their totally fictitious GDP number.
Productive GDP is only a small fraction of the $30.6 trillion. Some commentators observe, that in terms of PGDP, the Chinese economy is already 300% larger than that of the US, and that India has now surpassed them too, occupying 2nd place in the pecking order.
American per capita debt stands at ~$392,000, and China's at ~$71,000 - which is 552% lower. Add in the fact that China's electricity, labour, and general production costs are a fraction of those in the US, and this means that the AI race has already been comprehensively lost.
https://www.youtube.com/watch?v=RgluM3dnQ3s
The fact that a huge percentage of US capex is being invested in a global contest that they have already lost and will also cost huge numbers of jobs, meaning they are doubling down on investing in the demise of both their real economy and their working class.
With these realities being exposed and public debt increasing by $1 trillion every 70 days (annualised that's $5.21 trillion), how on earth is the US Treasury going to refinance the $10 trillion of existing bonds over the next 12 months, let alone sell even more debt. How much of this debt will they have to purchase themselves?
Once upon a time, it took 200 years to chalk up $1 trillion of public debt, now it takes a tad more than 2 months.
The US is technically insolvent, and yet they still try to bludgeon the RoW into continuing to buy their debt. Anyone with half a brain knows that they will erode the currency. This, in turn, massively increases the risk of losses for buyers of US Treasuries due to currency shifts.
Long-dated bonds will become increasingly unsaleable - short-duration bills that can be liquidated quickly are the order of the day, as the bond buyers recognise that the writing is on the wall.
A huge predominance of short-dated debt makes their position all the more precarious. As I interpret it, the US is borrowing short, whilst investing long... in their own financial suicide.
Hard-backed currencies, with a percentage of gold, silver, durable commodities, and sound national currencies, will be the new mix in sovereign reserve portfolios, as the Western-facing casino/Ponzi continues to crumble and US dollar-tied assets are cast aside.
The US desperately flails, trying to maintain petrodollar status, hence the Venezuela/Iran drama, all the while seemingly oblivious to the fact that this antiquated hegemonic system has already gone up in smoke.
The US mode is not to build, but to try to destroy any country that is not under their thumb and particularly those that deploy a system that doesn't fit the reverse socialist Wall Street model, where obscene windfalls are capitalised by the plutocrats at the head of the financial food chain, and the casino losses are worn by the taxpayer and the working classes.
A system that is geared to reward the plutocrats at the expense of the working class and the productive economy is a recipe for a trainwreck. This will play out in 2026, as the Western profligates are no longer able to live high on the hog, using the savings of efficient PGDP countries to live wildly above their means.
The Japanese snap election this weekend (Feb 8) will be a huge call as Takaichi attempts to gain a mandate, effectively for increasing her country's debt even further, when it is their massive debt that got them into this bind in the first place. The polls are telling us that it will be a landslide win.
The leveraged Japanese Carry Trade, deploying the wealth of a highly productive economy to provide a huge amount of liquidity for the global economy, is due to unravel either way, and Japan is by far the largest owner of USTs (~$1.2 trillion). What happens when they start unloading those in order to protect their own nest?
Remember too that China's investment is $893 billion - down from $1.31 trillion in 2013. Total foreign holdings are $9.4 trillion.
Two of the three largest global economies (the US and Japan) are now on the ropes. Both due to unsustainable borrowing and far too many years of low interest rates, ZIRP, and even NIRP, which have distorted their economies and investment patterns, along with the implied concept of the financial restraints from moral hazard.
When I studied eCONomics back in the early 70s, ZIRP was utterly unthinkable. NIRP even more so. What NIRP really means is that you don't have a clue where to place 'money', and so you pay another entity to invest, in the hope that they won't lose quite as much as you could.
Crazy times
Col
Writes essay at 4:20
Blaze it Col!
As I interpret it, the US is borrowing short, whilst investing long... in their own financial suicide.
If you connected the dots, they're betting on a global table flip.
And they're arguably the most resource wealthy, strategically defensible Nation on earth. With by far and away the most proven capable military. Russia can't even handle a single front, right next door, and the last time the Chinese went to war, they lost against Vietnam.
Debt won't be worth the paper it's written on.
Everyone will lose, and they're picking they'll be one of the least impacted.
"With by far and away the most proven capable military (the US)."...
Tell me Pa1nter, when did the US last win a war?
...and... "Russia can't even handle a single front, right next door,..."
"A single front" - how foolish can you possibly get - Russia has to try to deal with the entire global raft of Western proxies, including their attack dog NATO, and a massive financial and sanction assault to boot.
3 questions...
Do you reside under a rock?
Is there an unwritten rule on writing a carefully researched essay on this site?
Or is this something that you made up because you tend to specialise in knee-jerk reactionary comments, often before even bothering to engage your brain?
Every right to disagree on here but to be so deliberately disagreeable, is something else again. Thankfully most of those type of contributors ceased after 1 March 2025, but obviously not all.
Where this claim of being "deliberately disagreeable" comes from completely escapes me.
I deal in cold hard, often uncomfortable facts, Foxglove, not happy-clappy memes, and fairy stories. If that rocks your boat, then that's your problem to deal with, not mine.
The fact that the vast majority of the West chooses to bury its head in the sand, and is not prepared to confront uncomfortable home-truths, is a major reason why the Western fiat experiment is on the cusp of a spectacular nosedive that could make the Great Depression look like a Sunday school picnic by comparison.
Do you happen to remember the monumentally insulting abuse I received on this site from the entrenched clique when I first began challenging these narratives here? - including, from one of the stalwarts who claimed that "I wasn't even capable of wiping my own arse".
Well, I most certainly do, and when I hand back barely a tiny fraction of that kind of response, I am once again the bad guy... go figure.
No issue with your right of content. But given that you take much pride in your research and resultant reasoning, that process in itself should have then brought you to realise that to lead in anger is a very poor vehicle with which to educate, debate or even enlighten.
... "lead in anger" ???
I wrote a carefully researched comment and then responded accordingly when pounced upon by the usual resident clique - those who worship the Western-centric cult-like memes of invincibility and hegemonic power, and wail like crazy if any of their own medicine is ever returned
This is precisely what I was expecting, and it also applies to your "deliberately disagreeable" claim.
It also explains why I rarely comment here any longer.
In my experience, conservative echo chambers are... your words, a "very poor vehicle with which to educate, debate or even enlighten."
Certainly, point taken, there is no better example of your argument than yourself.
those who worship the Western-centric cult-like memes of invincibility and hegemonic power, and wail like crazy if any of their own medicine is ever returned
You clearly haven't read or digested many of my posts.
I lament human f*ckery in all its forms. There's nothing overly unique about the USA. China and Russia as nations, are also empires.
You need to put some love in your heart mate. The world needs more.
Tell me Pa1nter, when did the US last win a war?
I said militarily. They lose their wars due to politics.
"A single front" - how foolish can you possibly get - Russia has to try to deal with the entire global raft of Western proxies, including their attack dog NATO, and a massive financial and sanction assault to boot
Doesn't change the facts. They can't wage that war, and support their "allies" at the same time; Iran and Venezuela are basically defenseless. Syria fell.
Do you reside under a rock?
No. I'm reasonably educated (which is irrelevant, because you negate the value of university education, and likely many facts verified within). And I've seen much of the world. Killing fields, ground zeros, extermination camps, climbed mountains to speak to wise men, kicked about in slums, witness bodies being burned on the banks of the Ganges, and helped birth children. We all mentally exist in the Zeitgeist we were born to, I have tried to educate myself formally and via experience to gain an understanding of the greater human experience.
Is there an unwritten rule on writing a carefully researched essay on this site?
No, but it's also not really a "comment", nor really something inviting of discourse. You're shouting in a megaphone then acting extremely hostile when someone wants to critique what you're saying. Really good arguments withstand the scrutiny of robust debate. You wish for none, instead shouting insults and running away. Not hallmarks of a reasonable view.
Or is this something that you made up because you tend to specialise in knee-jerk reactionary comments, often before even bothering to engage your brain?
This from the guy who wants to invoke Godwin's law before trying to speak like a big boy.
Right on cue, Rachel Blevins, interviews Larry Johnston, a former CIA analyst, to get his latest take on his country's flailing hegemonic military and financial antics...
Yeah mate, it's in plain sight, it's not secret.
WW3 is already underway. It's just not hot at the moment.
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