Here's our summary of key economic events overnight that affect New Zealand with news of what seems to be an outlier jobs report that has financial markets sceptical.
US non-farm payrolls were claimed to have risen +130,000 in January in delayed data released today, far above the downwardly revised +48,000 level for December and more than double analysts' collective estimates. All the gains seem to be in their healthcare sector. If it stands, it undermines the case for Fed rate cuts.
Market reactions have not been supportive, with bond yields rising, rate curves fattening, the equity markets falling, and the USD falling.
The detail of this jobs report remains 'interesting' all the same. Raw (not seasonally adjusted) data shows payrolls actually fell -2.65 mln in January from December, down -2.85 mln from November. And nested within this data are revisions for calendar 2025 now showing employment growth for 2025 revised down to +181,000 from +584,000 previously reported, implying average monthly job gains of just +15,000.
These revisions bring the official data back looking like the private ADP data - except for the January headline result. Markets expect this to be revised sharply down in coming months.
US mortgage applications fell again last week, the third consecutive dip, although not as sharp as the prior two.
There was another US Treasury bond auction overnight, this one for their ten year Note. It was well supported. The median yield came in at 4.11%, down from the 4.13% at the prior equivalent event a month ago.
Meanwhile, the US budget deficit keeps getting worse. It will grow in fiscal 2026 to -US$1.85 tln, the Congressional Budget Office said overnight. Current policy settings are worsening the country's fiscal picture amid low economic growth, particularly the enormous tax-cuts for the rich. They say the "One Big Beautiful Bill" tax cuts will add $4.7 tln to US deficits.
Across the Pacific, there is still no inflation in China, and it has turned toward deflation faster than expected. Their annual inflation rate eased to +0.2% in January from an already very low 0.8% in the previous month. This is its lowest level since October and below market estimates of 0.4%. Food prices fell for the first time in three months (-0.7% vs 1.1% in December) while non-food inflation slowed sharply too (0.4% vs 0.8%). Meanwhile, Chinese producer price deflation eased to -1.4%.
China also released January car sales data, coming in at 2.35 mln for the month. However, that was -3.3% lower than for January 2025 and -3.8% lower than the same month in 2024. Notably soft were NEV sales in January. Perhaps we are seeing signs of maturing (or exhaustion?) in this very dynamic market. It's is hugely important to China's industrial base, selling more than 34 mln units in 2025.
In Australia, the number of new owner-occupier new home loan commitments rose +7.5% in the December 2025 quarter compared with a year ago. On a value basis, that rose +18.9%. For housing investor loans for the same periods, the number of new loans rose +24%, and their value rose +32%.
The UST 10yr yield is now just under 4.17%, and up +2 bps from yesterday. The key 2-10 yield curve is flatter at +65 bps (+5 bps). Their 1-5 curve is also flatter at just under +27 bps (+3 bps) and the 3 mth-10yr curve is also flatter at +45 bps (down -3 bps). The China 10 year bond rate is down -1 bp at just under 1.80%. The Japanese 10 year bond yield is unchanged at 2.24%. The Australian 10 year bond yield starts today at 4.78%, down -1 bp. The NZ Government 10 year bond rate starts today at 4.52%, down -4 bps from yesterday.
Wall Street has started its Wednesday with the S&P500 up +0.1%. Overnight, European markets were mixed between London's +1.1% rise and Frankfurt's -0.4%. Yesterday Tokyo didn't trade Wednesday for Foundation Day. Hong Kong was up +0.3%. Shanghai ended it up only +0.1%. Singapore also closed up +0.4%. The ASX200 ended its Wednesday up +1.7% with CBA's gains in the top 5. But the NZX50 closed little-changed.
The price of gold will start today up +US$58 from yesterday at US$5075/oz. Silver is up +US$3.50 at US$84/oz and extending its new volatility.
American oil prices are up +US$1 at just on US$65/bbl, while the international Brent price is now just under US$70/bbl.
The Kiwi dollar is up a minor +10 bps against the USD from yesterday, still just under 60.6 USc. Against the Aussie we are down -50 bps at 85 AUc. We are also down against the yen. But against the euro we are up +20 bps at 51 euro cents. That all means our TWI-5 starts today little-changed, still at about 63.9.
The bitcoin price starts today at US$65,965 and down -5.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.8%.
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33 Comments
I thought the tariffs were meant to sort the deficit? If that was the case I’d argue the US would be better with tariffs, but if the money is just being used for rich tax cuts then pointless.
They're all necessary in order to fix the real problems in the world. You know, who pees in what toilet, and migrants stealing your jobs, that sort of thing. We must give the elites more so they'll get the job done.
You insist on seeing 'money' as something real.
It isn't. It's a proxy-demand on resources and energy, both finite (or at the very least, physically limited).
So yes, the rich are displacing the poor - were, they're now eating into the middle - in relative terms, but the whole shebang is physically-limited and therefore temporary.
Which fact - FACT - you can only avoid by fixatedly believing in 'money'.
Entropy is what is killing the US:
I Explored The Empty Streets Of A Dying ARIZONA Town - Also, Wild Donkeys & The Actual London Bridge
Trading in a larger economy often bests what one can produce under their own steam, and money is the most efficient, sensible way of doing that. You don't need to believe in the underlying foundations to determine the utility.
I wouldn't say entropy is killing the US, more that as market and technologies advance, existing regions and centres may become redundant.
It's hard to change the vernacular, eh?
'Markets' and 'technologies' are just cultural methods of extracting.
Materials and energy-stocks.
From the finite.
In ever-more-complex (and therefore fragile) ways.
That's our timeline, yup.
Not sure who'd want to trade for aboriginal living.
Many however may trade aboriginal living for not living at all.
Anyone older than a young child would struggle with the transition, even without the option of choice.
People can't even work out amoung themselves that small households are extremely inefficient to resource, compared to handfuls of people living together. And that endless consumption, has no happy end.
Struggle they may...and no choice they may increasingly have.
There are a lot more temporary residents at DOC sites. I.e. not there for leisure.
Everything is temporary. But in this world that we are living in now, money and economics are quite important to our standard of living.
I don't want to live in a country that has massive government debt, even if that debt isn't something real.
Most people on here are old enough for life to deliver them at least one rug pull. In an instant, a perception you had of "how things are" gets obliterated.
If we truly have freedom from will, it's to acknowledge the world is not to our 100% liking, and yet make the most of it, for what it is.
Where did you get the link to the deficit Jimbo? Trump just wanted all the manufacturing to be brought home. His very wild bull in a china shop approach was never going to succeed.
I feel like I remember reading somewhere that "these beautiful tariffs are going to pay off our deficit". Could be mistaking...
You may be correct. I too remember something of the sort. But that would never have happened.
He would have been better off telling people that all tarriff income was to be use to support the re-establishment of manufacturing in the US. Would still have been problematic.
But sensible and logical, not a Trump strength.
They were proposed as Schrodinger's Tariffs. Simultaneously raising so much money they could remove income tax, while also reducing imports to a trickle with on-shoring, while also being just a bargaining piece to allow other strategic goals.
I think the tactic is to throw enough possibilities out that anyone who wants to support you can pick their favourite, and try to avoid the cognitive dissonance coming from all the other statements coming from the administration.
Peak Oil (Not!), Peak Dispatchability, and WEF Risks | Frankly 124 - YouTube
So we're slurping what's left, ever-faster, building a collection of infrastructure ALL dependent on? The stuff we're slurping. Doubling-time or quits...
The USS Honduras sets sail again | Donald Trump | Al Jazeera
As Carney pointed out, you are either at the table or you're on the menu. We need to decide; my vote is to distance ourselves from the thuggery.
MSNBC is reporting that the House failed to renew the bill that gave Trump all the power he needs to keep imposing tariffs. Three Republican Congressmen crossed the floor to block the bill. The bill in effect redefines the meaning of a calendar day. It seems a few in the party are waking up to the harm they're doing to the country, albeit not many. Still with majorities in both houses, there is no certainty that the tariffs will be blocked.
Mid-terms may give us an indication of the rate of disillusionment.
All else is too clouded by pre-bias (think DC re Trump 2).
And no change of governance can change the physics of their predicament - or ours.
Pretty much agree. Trump has significantly accelerated the decline. The Dems taking control will make him a lame duck which will mean his flailing will only get worse unless he is impeached and removed from office. If that happens I think we could likely expect a repeat of the Capitol riot at least.
It was clear from that riot that there is a sector of the US public who believe that the only way to restore the US to some Utopian ideal is through a violent coup. Raging nutters. History shows nothing positive has ever been gained from that approach, only worse tyrannies. The only way for the results they want is for both parties to recognise the flaws in their system and work together to correct them. But then that would threaten their power and privileges. And then there is the limits to resources which they're all in denial of.
The runes go interestingly silent, when we have run this experiment locally. The Long Count stops; Tikal gets enshrouded in forest... Rome gets down to 1100 people, livestock grazing the Colosseum... Sumer is a saline stretch of desert...
It is interesting that the Supreme Court is still dithering over a decision to that actual legality of Trump’s tariffs. Basically that such action is not available to a President as an executive order. Now there is a slight precedent that was established during Nixon’s presidency but I would wager that their dilemma is that to rule the tariffs have not been legally set then they undercut the very weapon their president is using to browbeat, extort or whatever, other nations to succumb to his demands. Trump’s reaction to that would be nothing less than explosive.
"Explosive" is bit of an understatement don't you think? They're probably afraid he'd hire a hitman to take them (the sitting judges who voted against him) out. The riots proved there are few who would seem to be more than happy to help?
I think that's what a lot of people are afraid of in the US. Trump is threatening violence to a lot of countries, but would he resort to in against his enemies inside the US when he starts losing and his power is threatened, with the possibility of being held accountable for his actions and corruption.
The problem is the SC wants to support Trump but any powers it gives him will be available to a potential future democratic president. That would be a nightmare and even the SC know inconsistent judgments depending on if the parties are democratic or republican will result the SC justices leaving a legacy of weakness mocked and reviled by future scholars and legal professionals.
This can be seen by the SC supporting California's right to gerrymander. They cannot allow Texas and other republican states to gerrymander and then draw the line at democratic states.
Trump should have selected justices with no self respect who knew the mission.
"...even the SC know inconsistent judgments depending on if the parties are democratic or republican will result the SC justices leaving a legacy of weakness mocked and reviled by future scholars and legal professionals."
That's already the SCOTUS legacy, due to the historical political appointments to the bench
The alternative to the USD
He makes sense. Getting all the countries of the world to agree would be a mission though.
We already got closer to that concept in the last century than any other point in human history, and it was still super bad apparently.
The dynamics of larger and smaller nations means you'll unlikely never get a total and fair consensus.
"We already got closer to that concept in the last century than any other point in human history, and it was still super bad apparently."
We did?....how so and when?
Your lifetime. Shit, even in my own lifetime I have seen the world become more homogenous than the other way round.
Lol....interesting response. A non answer to the questions posed and obviously because the claim is erroneous....a trade mechanism such as Bancor has not been tried, indeed in my lifetime the antithesis has existed.
We don't need "Bancor" the world already has Gold.
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