Here's our summary of key economic events overnight that affect New Zealand with news a new global debt cycle is underway.
First up today, the IIF reports that global debt climbed to a record US$348 tln at the end of 2025, after nearly +US$29 tln was added over the year (about as much as US GDP) in the fastest yearly build-up since the pandemic surge. (The OECD will release its own debt report later next week.)
"A powerful mix of fiscal expansion, accommodative monetary policy, and ‘lighter-touch’ regulatory simplification could drive further debt accumulation — while heightening concerns about rising leverage and overheating in parts of the market," they said.
Meanwhile, US mortgage applications were little-changed last week for a third consecutive week, split between a +4% rise in refinance activity and a -5% fall in new home purchases. Given the fall in home loan rates, down to 2022 lows, many thought this application level would have risen.
The Taiwanese jobless rate held at 3.3% in January, a level it has been at for most of the past year.
The EU CPI was reported at 1.7% in January, with the core rate 2.2%, both little-different to December. These are 16-month low levels. Rates tend to be lower in Western Europe, higher in Eastern Europe.
Malaysia's leading index rose in December, little different to the average over the past two months. That means they have good reason to expect Q1-2026 to stay very positive.
The Chinese yuan has hit a three year high against the USD, although that probably says more about the USD than the yuan.
And the Chinese have warned the US that if it imposes new tariffs by raising the 10% rate to 15% as signaled overnight, that will break its current deal with the US and China will respond. That seems enough to restrain the US at this time, for China at least. The EU has said essentially the same thing.
In Australia, their CPI inflation came in at 3.8% in January, unchanged from the December rate, but higher than the expected 3.7% dip. The largest contributor was housing related costs, up +6.8%, up from +5.5% in December. This was due to cost rises for electricity, new dwellings, and rents.. This was followed by food, up +3.1%. Recreation costs rose +3.7%. No sign of inflation easing here, and that will attract financial market speculation about the RBA's next rate review.
We continue to see the iron ore price dip, held back by Chinese pressures and official influences.
The UST 10yr yield is now just over 4.04%, up +1 bp from this time yesterday. The key 2-10 yield curve is holding at +57 bps. Their 1-5 curve is still just on +8 bps and the 3 mth-10yr curve is holding at just on +36 bps (up +2 bps). The China 10 year bond rate is up +2 bps at just on 1.81%. The Japanese 10 year bond yield is up +2 bps at 2.13%. The Australian 10 year bond yield starts today at 4.72%, up +3 bps from yesterday. The NZ Government 10 year bond rate starts today at 4.39%, up +1 bp from yesterday.
Wall Street has opened with the S&P500 up +0.8% so far in Wednesday trade. European markets were mixed between London's +1.2% rise and Paris's +0.5% rise. Yesterday, Tokyo rose +2.2%. Hong Kong rose +0.7%, which was matched by Shanghai. Singapore was fell -0.3%. The ASX200 ended its Wednesday trade up +1.2%. But the NZX50 ended essentially unchanged.
The price of gold will start today up +US$64 from yesterday at US$5208/oz. Silver is up +US$3 at US$90.50/oz today.
American oil prices are -50 USc softer at just on US$65.50/bbl, while the international Brent price is now just over US$70.50/bbl.
The Kiwi dollar is up +20 bps against the USD from yesterday, now just on 59.9 USc. Against the Aussie we are down -30 bps at 84.2 AUc. We are firmer against the yen. Against the euro we are up +10 bps at 50.8 euro cents. That all means our TWI-5 starts today up +10 bps from yesterday, now just under 63.3.
The bitcoin price starts today at US$68,080 and up +6.3% from this time yesterday. Volatility over the past 24 hours has been high at just over +/- 3.1%.
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22 Comments
Global debt rising.
Really?
Presumably the planet is getting commensurately bigger, to accommodate said proxy?
While I'm in grrr-hiss mode, I notice an increase in related blame-shift. Southand nitrate levels are apparently the fault of 'the cows'. Climate change is apparently responsible for weather changes (One comment here recently blamed the lefty/greenies for hamstringing Canty farmers - actually, the farmers are overpushing the ecological limits, using fossil energy to produce food; they are the ones depleting the real 'wealth').
Actually, it's us. We are fiercely fixated on measuring things - including life-supporting things - via 'money'. Which avoids costs if it can. And has. With now-global implications.
Time to take tea to the tillerman then?
(ps tks opportunity for alliteration so early in the day)
I'm more concerned with illiteration.
Just sayn
True but Cat (as he was then,) that album, would certainly resonate literally with your thrust?
Nitrates in southland the fault of the cows? Of course it is - for weak and shallow minds. The cows are not native so who is to blame for them? Who - the farmers you say? And why are the farmers there? And keep digging until there is no more answers to the question why?
But there is a cost to every thing, just as there is a cost to every choice. People choose to not choose, to do nothing without realising that is yet a choice, and still has consequences and a cost.
Great post.
Wide boundaries, big pictures. Can't beat 'em and every time you see someone choosing to narrow their focus (more concerned with the 'business they've built up' than peddling the truth, is a common one) ask: Why?
Go well
Murray. If you can't drink the water where you live, what's the point?
You clearly missed it. Read the post again.
The key is in how one measures cost. Fertiliser use pumps growth at the cost of a healthy natural microbiome in the soil - however the natural microbiome gives less growth (albeit with some natural ferts like seaweed that can help).
RBA will have to increase rates again.
Sure, the answer to higher housing costs is... to increase the cost of housing.
We've seen that lower housing / interest costs definitely raise housing costs...
No you haven't (see above, re wide-boundaries).
Hint: Twain was right, re land. And his comment was right, applied to everything else.
Add in the fact that we use the best, first; the closest site, the best gradient, the nearest water, most concentrated minerals, best soils, oldest trees, slowest protein-on-the-hoof, most abundant fish, easiest routes. So every 'next' is harder, further, requiring more effort, of less quality, less convenient.
I'll put that another way: Bishop is pushing an exponentially-increasing amount of brown stuff, uphill.
He gets away with it because our media steadfastly refuse to recognise the existence of a topography...
Lets target a population of two million for New Zealand. It will be a better place.
While smaller may be better it will not return those resources already used....even those renewable (in any period of near term benefit)
Haha how are we going to do that? Prevent births? Kill some off?
What age will those two million be? Who is going to change their nappy in the rest home?
Seemed to work here, our CPI is much lower than theirs as our OCR went much higher.
Sure it caused unemployment, low growth and businesses to fail, but if the goal is CPI at 2% at any cost (wouldn't be my goal), then those become necessary IMO.
"First up today, the IIF reports that global debt climbed to a record US$348 tln at the end of 2025,..."
If we have increased the money supply why arnt we all richer?
Some are, but only a few, and vastly richer beyond comprehension. Sickening wen you think about it - considering it comes at the expense of the middle class, and sold back to them as 'progress'. When a man can rent Venice for an occasion, that says it all.
Isn't that a social problem rather than an economic one? Society should be encouraging people to share their extreme wealth. I think we have that somewhat in NZ; if I somehow made more money than I could ever need I wouldn't keep it as some kind of trophy like Elon.
A lengthy read however on point
"Democracy Briefing: How Comms-driven politics broke New Zealand"
https://www.democracyproject.org.nz/p/democracy-briefing-how-comms-driv…
The short version: we are really good at spinning it, really bad at doing it, the art of the deal is to be found in continuous announcements. As the ship sinks, talk up how tough on crime you are. As the lifeboats are launched, talk about reducing the size of government. Or education or health care. Anything to distract, solving the real problems in front of us. A sobering read.
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