Here's our summary of key economic events over the weekend that affect New Zealand with news the modest US inflation rate reported for January is fueling a disconnect and scepticism in US households.
But first, this is a week where we will get the next RBNZ OCR review on Wednesday, important because it is Governor Brennan's first. And she will get her first inkling of January inflation impulses on Tuesday, and may have the January REINZ data later today. And she will likely know how the bank's consumer and business surveys are tracking, especially on inflation expectations.
In Australia, the key data will come on Thursday with their January labour force updates. And the RBA will release the minutes of it February 4 meeting on Tuesday, always a potential market-moving event.
The US Fed will also release its minutes this week. And we will get the advance estimate of Q4-2025 US GDP, as well as the Fed's preferred inflation gauge, the PCE. Canada will chime in with its own key releases.
In China, markets will be closed for the week-long Lunar New Year holiday from February 16 to 23, although January foreign direct investment data is still expected to be released. Elsewhere, trade figures are due from Singapore, Malaysia, and New Zealand, while Malaysia will also publish inflation data.
Over the weekend, China reported that that price deflation in their housing market picked up in January for a third straight month at a faster pace, overall down -3.1% from a year ago. In January, the year-on-year sales price of existing homes in first-tier cities fell by -7.6%. Specifically, prices in Beijing, Shanghai, Guangzhou, and Shenzhen falling by -8.7%, -6.8%, -8.3%, and 6.5% respectively. In second- and third-tier cities, the year-on-year sales prices of existing homes fell by -6.2% and -6.1%. Prices for new-built houses fell too, but only by -2.1%.
Staying in China, and as expected, the normal January surge in new yuan lending by banks occurred again this year, but by less than expected and by a -8.2% lower level than for 2025, -4.3% lower than for January 2024. And it was -5.8% lower than what was expected. It is a soft result and is typically followed by a sharply lower level of lending in February during the Spring Festival/CNY period. 2026 is off to a languid start for them.
Meanwhile, China's export economy is still functioning at full speed. Their current account surplus widened to an unprecedented US$242 bln in Q4-2025, sharply higher than the US$164 bln recorded a year earlier.
India also released bank loan data overnight, and their firms are borrowing up big. In fact, it was up +14.6% in January from a year ago, the strongest surge in a year.
Malaysia reported that its economic activity rose +6.3% in Q4 2025 from a year ago, revised up from an initial 5.7% and accelerating from 5.4% growth in Q3. This was their sharpest expansion since Q4-2022, with broad gains in agriculture, driven by oil palm output (+16%), manufacturing, and services.
On Saturday in the US CPI inflation came in at 2.4% for the year to January, slightly below the expected 2.5%. Core inflation came in at the expected 2.5%. This result was all due to lower petrol prices and falling used car prices. However, food was up +2.9%, and rents were up +3.0%. Electricity prices were up +6.3% (thank you, AI) and home gas was up +9.8%. It will be hard for households to feel inflation is under control.
And key will be how the US Fed will interpret this data when setting their policy rates at their next meeting on March 19, 2026 (NZT). Markets currently expect a hold, and at least until the middle of the year.
And one reason food prices seem higher there than the official data is that US beef cattle herd is now at its lowest in 75 years. This helps explain why US imports are soaring, and prices are high & rising.
And don't forget, it is a long holiday weekend in the US for Washington's Birthday/President's Day. US-based activity will be low tomorrow and that will show up in our financial markets.
The UST 10yr yield is still just under 4.06%, little-changed from Saturday but it is down -15 bps from this time last week. The key 2-10 yield curve is holding at +65 bps. Their 1-5 curve is holding flatter at just over +18 bps and the 3 mth-10yr curve is flatter at +35 bps (down -2 bps). The China 10 year bond rate is up +2 bps at just on 1.82%. The Japanese 10 year bond yield is down -2 bps at 2.21%. The Australian 10 year bond yield starts today at 4.75%, up +4 bps today but down -11 bps for the week. The NZ Government 10 year bond rate starts today at 4.50%, unchanged from Saturday and down -7 bps for the week.
The price of gold will start today up +US$21 from Saturday at US$5041/oz. Silver is down -50 USc at US$77.50/oz today.
American oil prices are little-changed at just under US$63/bbl, while the international Brent price is still under US$68/bbl.
The Kiwi dollar is little-changed against the USD from Saturday, now just on 60.4 USc and down -10 bps. Against the Aussie we are unchanged at 85.4 AUc. We are down marginally again against the yen. Against the euro we are unchanged at 50.9 euro cents. That all means our TWI-5 starts today little-changed, now at 63.8 and down -10 bps from Saturday.
The bitcoin price starts today at US$68,565 and down -0.8% from this time Saturday. Volatility over the past 24 hours has been modest at just under +/- 1.5%.
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18 Comments
OCR it two days time. It will be of interest as to how the new Governor presents the accompanying comment. Not only is she new to the job, but new to New Zealand and that is of some novelty. Often what is not said is more important than what is, and the sum of those two, more important than what is actually done or not done.
A return to boring & predictable would be a refreshing change
Pretty sure she mentioned transparency when she got the job didn't she? So will the RBNZ give us the actual forecast (interest rates going up this year) which will mean the market adjusts earlier than they want, or a deceitful forecast to manipulate the market? Maybe its time they forget about trying to manipulate the market and just tell it like it is. (I'm only saying that because I am fixed for a while now!)
My first impression of Governor Brennan was a refreshing straightforward communicator. Just doing the job. A far leap from our usual convoluted and mysterious civil servant speak.
I hope she keeps it up.
The rotation away from digital business towards real world production is stunning, is it AI is it just overvaluation or is the start of something much bigger
Perhaps more people are realising that if all else fails, real physical goods and skills are of tangible value in times of crisis?
Both are having an impact as we adapt to the multipolar world and the uncertainty it brings.
It seems mid-tier tech companies are taking the hit from AI, while big tech are funding a structured build out towards tangibles. Microsoft is now a power company..
"She was earning $146,000 before AI came along. What happened next is a warning to us all"
https://www.stuff.co.nz/business/360938829/she-was-earning-65000-ai-cam…
Yes entire careers will go. Although it wouldn't be the first time, for example bank tellers were almost completely replaced by ATMs.
I think for the next 10 years AI will create more jobs that it replaces, as businesses will need people to embed AI into their toolkits. After that it could get scary.
Luxon suggesting some deep thinking is required (M/R this a.m.).
I so love an oxymoron...
Electricity supply investment is really stepping up, contact raising half a billion to support battery, solar and geothermal investment.
https://www.nzx.com/announcements/467457
I expect other gentailers to seek capital soon now the government has stated they will participate. A welcome but late development after a decade or more of government policy putting the brakes on investment.
The question is: What is maintainable?
And the answer is - perhaps not the grid, in present form.
I regard PV ownership as 'money in the bank' - but see its future as small, local and residual.
The Earl Bardsley's of this world studiously avoid this point... as do GND types...
I'm no economist but this sounds like a step in the right direction
https://www.theguardian.com/environment/2026/feb/12/economics-climate-c…
Or... it could be Skynet taking over the world.
Apparently from his CV Prof Farmer isn't an economist either ? (PhD in Physics)
"And she will get her first inkling of January inflation impulses on Tuesday, and may have the January REINZ data later today. And she will likely know how the bank's consumer and business surveys are tracking, especially on inflation expectations."
More to the point, will Brennan have any "inkling" that we are witnessing the collapse of fiat currencies globally, soon to be followed by a bond price debacle at the long end of the yield curve? I wonder how she intends to navigate this.
Humanity is in the end phase of a multitude of decades of loose monetary policy, and massive bubble blowing by central banks, in a designed-to-fail system, underpinned by spectacularly failing debt-based fiat currencies.
The average historical lifespan of all fiat currencies is a mere 35 years, and what is unfolding was always a mathematical inevitability. The recent breakouts in the physical price of gold and silver, the only two time-honoured monetary assets, are the precursors to an inevitable global monetary reset into hard-backed currencies.
The fiat crisis is a direct consequence of unsustainable debt - we will not escape this either - NZ's total debt, when we include unfunded liabilities, is over 600% of GDP. We only mention our relatively low public debt because it diverts attention away from the core problem - our total liabilities.
We will be embroiled in this crisis, and being one of the countries least prepared for this reset, we will not fare well. If you have so much as a ring on one finger, or a gold filling in your mouth, then you own more gold than NZ's entire sovereign gold reserve.
The US economy leads the global race to the bottom, with a tax take of only around 50% of what they spend. They now take a mere 70 days to add an extra $1 trillion in public debt, when it took more than 200 years to pass that initial $1 trillion milestone.
This all signals the end of their global reserve currency status and of being able to sell their debt, especially their long-dated debt - the market will now determine this saleability, and the massive multiple risk factors, including currency debasement, will have to be priced in.
There are historical precedents from as recently as the 1980s, when UK gilts reached over 15% - that scenario could never happen under massive current debt loads - anything over 5% is likely to unravel the entire facade.
Captain Chao$ and his cabinet parrot claims that the US economy is performing well - utter bollacks. Even against a dreadfully precarious currency like the Euro, YOY, the USD is down ~5%, and against the massively sanctioned Russian ruble, by a massive 15.88%. Remember too that Russia was described by the late John McCain as a "gas station masquerading as a country."
The status quo Western financial system is playing games with society, and how dovish the new US Fed Chair appointment turns out (anyone with half a clue knows the answer to that riddle), is completely irrelevant.
The real story is the financial debacle that this poor sod inherits, and the fact that the entire economy is already technically insolvent, increasingly unable to sell its long-term debt, except to itself, and has to borrow short to invest long in a giant Ponzi which is right on the cusp of going spectacularly tits up.
When I studied eCONomics back in the early 1970s, the number one reason (at in the micro sense) for insolvency, morphing into formal bankruptcy, was due to borrowing short and investing long - maybe the writing is on the macro wall now too, as the entire fiat experiment fails... spectacularly.
Regards to all
Col
PS
With the Chinese holiday beginning this week, it could be an interesting test as to whether the financial casino can once again bash the spot price down with massive shorting to try shake out the last of the weak hands and highly leveraged positions in silver and gold - time will tell.
This will also reveal when the paper prices are likely to be declared irrelevant, as the Eastern-based supply-demand-driven physical market takes over the pricing.
The days are drawing to a close where entities that didn't own gold sold paper to people who didn't want to own physical, and where that casino-driven lunacy set the global price. This, in turn, masked the fact that all along, the purchasing power of fiat currencies was continually evaporating right under our noses - is humanity finally awakening from its slumbers?
I think this question will be answered by early March. Last time I checked, the paper claims for every deliverable silver ounce were between 356 and 378:1.
How will the TBTF banks like BOA, HSBC and UBS fare with their reputed massive NET short positions? - fascinating, read scary, times indeed.
Those massive paper claim stats are so obscene, surely they have to be mostly institutional positions, as they fancy that they can continue to stack the cards and run the house. Newsflash - the "house'' is shifting hemispheres... right now.
Well
If you're really good
And eat your greens
You might see the end of the world in your lifetime.
Chloe might object...
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