Here's our summary of key economic events overnight that affect New Zealand with news financial markets are treading water today, still trying to assess where US economic policy is headed - if anywhere. The erratic nature of it is building an unsettling backlash.
First up today however, the overnight dairy Pulse auction did not bring the gains the derivatives market pricing suggested, but they held or bettered the new higher levels of the prior week's full auction. But the small push higher for SMP means it is now at its highest since December 2022.
In the US, their 'new' 10% tariff came into effect overnight as they rebuilt their tariff wall following the Supreme Court decision, but there was no sign of the 15% level threatened in an earlier Trump tweet. They may still be coming, of course. There was also no sign of refunds for illegal tariff collections, but major companies are starting to file lawsuits to claim them.
The updated ADP jobs report for last week delivered a good +12,500 rise. But it is still lower than late 2025 weekly levels.
Meanwhile the Richmond Fed's survey of factories in the mid-Atlantic states declined when a gain was expected. Largely this was because firms there are chafing under the higher costs that tariff-taxes have brought.
And the Dallas Fed's survey of services firms was not positive either, extending the negative run to nine of the past twelve months. Revenues are up but these forms say rising costs have wiped out any of those benefits.
The value of US inventories rose slightly in December according to official data, but not as fast as the value of sales. A key way firms are fighting higher costs is by turning over their smaller inventories faster.
The US Conference Board said consumer confidence edged higher in February but remained well below the heights reached in late 2024. Their analysis is worth the read.
In Canada, advance data for January shows that their manufacturing sector has taken quite a hit.
And the Chinese central bank left its benchmark lending rates unchanged for a ninth consecutive month in February, in line with what market expected, and that seems to show policymakers are not rushing to introduce broad monetary easing after their other recent targeted measures.
European new vehicle registrations also took a hit in January. Passenger car registrations there dropped -3.9% to a five-month low from the same month in 2025, reversing a +5.8% rise in the previous month. This was their first contraction since June.
The UST 10yr yield is now just over 4.03%, little-changed from this time yesterday. The key 2-10 yield curve is flatter at +57 bps (-2 bps). Their 1-5 curve is now at just on +8 bps (unchanged) and the 3 mth-10yr curve is holding at just on +34 bps (also unchanged). The China 10 year bond rate is down -2 bps at just on 1.79%. The Japanese 10 year bond yield is up +1 bp at 2.11%. The Australian 10 year bond yield starts today at 4.69%, down -3 bps from yesterday. The NZ Government 10 year bond rate starts today at 4.38%, down -1 bp from yesterday.
Wall Street has opened with a partial recovery with the S&P500 up +0.8% so far in Tuesday trade. European markets were little-changed between London's very slight dip and Paris's +0.3% rise. Yesterday, Tokyo rose +0.9%. Hong Kong fell -1.8%, but Shanghai rose +0.9% in its return from CNY. Singapore was fell -0.4%. The ASX200 ended its Tuesday trade little-changed. But the NZX50 rose another +0.8%.
The price of gold will start today down -US$64 from yesterday at US$5145/oz. Silver is up +US$1 at US$87.50/oz today.
American oil prices are -50 USc softer at just on US$66/bbl, while the international Brent price is now just over US$71/bbl.
The Kiwi dollar is little-changed against the USD from yesterday, still just on 59.7 USc. Against the Aussie we are still at 84.5 AUc. We are firmer against the yen. Against the euro we are up +10 bps at 50.7 euro cents. That all means our TWI-5 starts today up +10 bps from yesterday, now just over 63.2.
The bitcoin price starts today at US$64,023 and down another -2.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just over +/- 2.1%.
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9 Comments
It should be impossible to paint oneself into two corners at the same time but President Trump has. Firstly by use of the wrong legislation he has collected $billions of tariffs illegally and left his administration wide open to litigation. Secondly he has an extremely large flotilla in the Middle East all dressed up but not exactly sure what can be done. Times have changed since pretty basic Exocet missiles sunk warships in the Falklands and a hit in today’s form on one of those great carriers will not be received well by 99.9% of Americans. A leg in each corner and what’s in the middle then?
True. One shipping container of drones could sink $1 trillion of assets pretty quick. The world we're living in
We are about to see, American non essential staff being moved out of Lebanon. They are almost under starters orders.
My bet is on America kicking ass, Hell Yeah!
Small drones can be taken out by microwave etc hence the trailing fiber optics in Ukraine, bigger can are are shot down all the time in the middle east. I agree though swarms are more dangerous, hence they will keep bigger assets further away, most of the damage will come from cruise missiles and the bigger higher stealth bombers
I reckon this stuff has a use by date, it must be close.
And what of any use/purpose are they going to target?
Ask the Israelis they will have compiled the critical intelligence. Out of the ordinary measures being activated in that nation too would likely signal an engagement being ready.
Who knows? They may have something spectacular planned.
Most likely a spectacular own goal
I tend to agree.
There is a novel somewhere where the plot is Iran begging, borrowing, stealing a nuke from somewhere and taking out a US carrier as the starter for WW3. Reality is likely to be vastly different, but Trump is taking the world so close to the precipice that one has to be concerned the cliff will crumble beneath him. He clearly believes the world should bow and tremble before him. They have more than one carrier group in the ME and a basic defense doctrine is they are not too close together nor too far apart for mutual defense.
My bet is also that they will kick some Islamic fundamentalist butt pretty hard. My concern will be the cost. Innocents always pay the biggest cost in these types of conflicts. And as every thing is connected the cost on civilisations as a whole.
Coincidentally Fox column today advises Iran is on the brink of securing CM-302 supersonic low altitude anti ship missiles from China. Perhaps too late or perhaps some “samples” have already been delivered? Trump has quite a bit to weigh up hasn’t he and foremost is always the nagging question in a military sense, courtesy of Liddell- Hart, what’s on the other side of the hill. As long as the present Iranian regime has its military capacity intact and loyal, they believe they don’t need to concede anything and that seems to only just be dawning on President Trump who is now realising, like it or not, his hand is now going to be forced.
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