Here's our summary of key economic events overnight that affect New Zealand with news the global economy is in 'somewhat normal' mode today, despite war flare-ups in many places, like between the US and Iran, Thailand and Cambodia, and a new overnight declaration of war by Afghanistan on Pakistan (not to mention the ongoing hot war on Ukraine by Russia).
And it is probably worth keeping an eye on a growing purge of senior officers in the Chinese military.
All this background noise is reinforcing a risk-off tone in financial markets, shown up by negative reactions to Nvidia's good profit result.
In the economic arena, initial US jobless claims fell last week from the previous week but not by as much as seasonal factors would have accounted for. There are now 2.15 mln people on these benefits, marginally less than year-ago levels but still well above the levels two years ago.
Meanwhile, the Kansas City Fed factory survey turned quite positive, including for new order flows. Although the change was only moderately positive, it is the first time this overall index has been above year-ago levels since 2023.
And it is worth noting that the US benchmark 30 year fixed mortgage rate has fallen below 6% for the first time since late 2022. So far at least, it isn't sparking extra life into either their new or existing home sales.
Overnight, Canada reported a surge in foreign investment in Q4-2025, largely investors buying Canadian companies. Inbound investment there is its strongest since 2007.
Also overnight, the Korean central bank reviewed monetary policy, but left its policy rate unchanged at 2.5%. And they signaled that this rate is likely to be on hold for an extended period.
Singapore said its industrial production was up +16.6% in January from a year ago, continuing its strong recent expansion.
They also reported Q4-2025 GDP rose a bit more than expected and ended up +5.0% higher than year-ago levels.
Global container freight rates dipped another minor -1% to be -28% lower than a year ago. Most major routes saw little-change in the past week. Bulk cargo rates are up +3% over the past week but remain just over double year-ago levels
The UST 10yr yield is now just over 4.02%, down -2 bps from this time yesterday. The key 2-10 yield curve is holding at +57 bps. Their 1-5 curve is still just on +7 bps and the 3 mth-10yr curve is now at just on +34 bps (down -2 bps). The China 10 year bond rate is up +1 bp at just on 1.82%. The Japanese 10 year bond yield is up +3 bps at 2.16%. The Australian 10 year bond yield starts today at 4.67%, down -5 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 the S&P500 down -1.1% so far in Thursday trade and falling. European markets were mixed between Frankfurt's +0.4% rise and Paris's +0.7% rise. Yesterday, Tokyo rose +0.3%. Hong Kong down -1.4% however, while Shanghai was unchanged. Singapore was fell -0.9%. The ASX200 ended its Thursday trade up +0.5%. And the NZX50 ended up +1.1%.
The price of gold will start today down -US$28 from yesterday at US$5181/oz. Silver is down -US$3 at US$87.50/oz today.
American oil prices are up +US$1 at just on US$66.50/bbl, while the international Brent price is up +US$1.50 now just over US$72/bbl.
The Kiwi dollar is down -20 bps against the USD from yesterday, now just on 59.7 USc. Against the Aussie we are unchanged at 84.2 AUc. We are softer against the yen. Against the euro we are down -10 bps at 50.7 euro cents. That all means our TWI-5 starts today down -10 bps from yesterday, now just under 63.2.
The bitcoin price starts today at US$66,709 and down -2.0% from this time yesterday. Volatility over the past 24 hours has been moderate, also at just over +/- 2.0%.
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26 Comments
Re Canada - it's not 'in' vestment, it's 'out' vestment.
Nobody 'buys' (read: pays interest on debt for) a company offshore, unless they can extract/retrieve more than they sent. And if the activity is reducing Canada's resource stocks...
It's a loss.
1:40 on...
Growth...
"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.)"
https://www.interest.co.nz/economy/137373/gigantic-surge-global-debt-us…
An increase in debt is not growth, no matter how you try to spin it. It is a bet against future economic activity. If as PDK persists in reminding us, available resources are drying up that bet might take longer to pay off than expected, or it will be like Bitcoin, what ever the debt is held against will be prettied up, have a bit of lipstick put on it in the hope some other sucker will come along and pay you more for it than what you paid. Clear the debt and have a profit to show for it. long term its definitely a suckers game. Short term it might be too.
Whenever the powers that be say 'growth' it is the increase in debt to which they refer.
"Growth' is measured as GDP and GDP is measured in debt.
Is it? Isn't GDP a measure of CURRENT economic activity. True some portion of that activity will be the generation of debt. But it remains that debt itself is a bet against future economic activity. To call current debt a measure of growth is specious. Debt produces nothing but a cost. Debt may be used to pay for the construction of a factory, hire staff and pay wages. But the overhanging debt guts the gain from that economic activity. It would only be when significant gains are made over and above the debt that any level of growth could be acclaimed. That scenario makes it look like Bitcoin. It looks valuable, many think it is, but when you lift it's skirts you find there is little to nothing holding it up.
Making things look pretty to sell them on is a common business practice. But that also includes hiding or burying the problems so they are not easily found until some time down the track.
How is GDP measured?....by value (currency)
What is currency in a fiat system?....debt
We cannot increase GDP without an increase in debt (be that internal or external)....the link between output (real production) and debt was disconnected decades ago....the financialisation of the economy or asset speculation if you prefer.
"To call current debt a measure of growth is specious. Debt produces nothing but a cost. Debt may be used to pay for the construction of a factory, hire staff and pay wages."
Anything but specious...debt provides the ability to transact at a value....interest is the cost, not the debt per se...and debt dosnt distinguish what it is used for, it may be productive or it may not.
Is currency a debt? I know that is how it is treated in accounting, but in reality it is a trading medium issued by a government and backed by all the economic assets of that economy. Its value fluctuates depending on the quality of the assets of that economy based on accumulated assessment of various parties. Does that qualify it as a debt? A net positive balance is seen by banks as a liability rather than an asset. So on a macro scale fiat currency isn't really a debt. On other scales it will be how a debt, e.g. a mortgage, is measured.
Linking your first two comments and that runs true. But if currency is not a debt, the GDP could be increased without debt. I knew a business owner years ago who was dyslexic and because of that he didn't like working with banks. He built his company without debt. Grew it from the profits he made. When I knew him he had over 20 employees and no debt! The bank he used kept trying to get him to borrow but he kept refusing. That's GDP growth with no debt!
Debt enables a transaction when the buyer doesn't have the resources otherwise. That is a bet against the future more than the present and is not in itself growth. It depends on what the debt is applied to, but any possible growth is in the future when the debt is settled.
All currency is secured to an asset....a promise to pay on pain of forfeiture....debt.
Your business owner may well have created a business without personal debt but every dollar passing through his hands was a debt liability secured against an asset somewhere....someone elses debt.
Even state issued currency (debt) bears that risk, though the risk is much lesser.
"Debt enables a transaction when the buyer doesn't have the resources otherwise. That is a bet against the future more than the present and is not in itself growth. It depends on what the debt is applied to, but any possible growth is in the future when the debt is settled."
Debt enables a transaction if the buyer dosnt have the currency demanded....not necessarily the resources....that is for the lender to decide whether the risk is worth it (liquidity)...it may or may not be settled in the future (default)...and the security may or may not be available or seized...such is risk.
.
Actually no it's not. It's Canada selling its jewels, either crown or otherwise. The foreigners are buying up existing companies not creating new ones. So it's not really investment. It's selling the furniture.
John Clarke was a rare gem.
The first 1:40 was basically an RNZ interview with any current government minister. Listeners probably wouldn't realise it's satire if they didn't recognise the voice? How tragic is that?
Are there any satirists left out there mocking the new new age religion of growth? Or can the profhit no longer be an object of ridicule?
Why would you mock growth? I certainly prefer the times when our economy is growing compared to the times when it is shrinking.
I feel my comment was quickly vindicated. Your use of the royal "I" could be a clue? Sure many individuals do very well out of the current economic ideology of exponential growthism. It's what comes after that's the problem. The depletion, the pollution, the extinction....... The "economy" will shrink. It's physics. Some just pray/ignore it's not on their watch
As John Clark says - "Growth will give you the means to address all the other crap"!
But seriously Jimbo growth is killing us, why would we persist in pushing for it?
That’s the same answer you gave before - JC, yes I know - why - JC, because you keep asking the same question - they are not the same question - JC, yes they are, because otherwise I wouldn’t have to keep giving you the same answer
"Why would you mock growth?"
A couple of reasons....not least of which it may depend upon which side of the ledger you are on.
I regard people who make such statements, as fools.
This is a finite planet, we are a life-form.
One which is entering a 'period of consequences'.
Even though the majority seem to be entering it with eyes tightly closed and ears well covered...
A small typo?
"And it is worth noting that the US benchmark 30 year fixed mortgage rate has fallen below 5% for the first time since late 2022. "
The linked article says; " Mortgage Rates Drop Below 6% for the First Time in 3.5 Years. For the first time in three and a half years, the 30-year fixed-rate mortgage dropped into the 5% range . . . "
US news media also reporting it as below 6%
Everyone was praising the US 30 year mortgage concept a few years ago when it worked out for them. But now I'd prefer our 4.5% 1 year rate thanks.
Do you happen to know if there are break fees for a 30 year mortgage?
I don't think they do
I don't think so, but you cannot move them. if you have a cheap fix and rates are now higher the new mortgage will be at the current rate. So when rates are high, many are locked into the home they have, not being able to afford to move and pay higher rate.
"Canadian crude oil and condensate production has nearly doubled since 2010, making Canada the world’s fourth-largest producer, trailing only the U.S., Russia and Saudi Arabia. In fact, the province of Alberta on its own is the world’s #4 producer."
https://www.discoverairdrie.com/articles/smith-says-independence-refere…
Your point?
Remember this is an extraction of a finite stock.
Norway - a smarter-than-average nation - is making the same blunder, exchanging a real energy stock, for EU shares. Which in the absence of low-entropy energy, will be worth?
Jack and the family cow...
Overnight, Canada reported a surge in foreign investment in Q4-2025, largely investors buying Canadian companies. Inbound investment there is its strongest since 2007.
Growth Brian. Growth.
Apart from the sanitation, the medicine, education, wine, public order, irrigation, roads, a fresh water system, and public health, what have the Romans ever done for us?
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