Here's our summary of key economic events overnight that affect New Zealand with news bankrupt US/Israeli decisions to choose war over peaceful pressure are having global consequences.
But first, the Federal Reserve Beige Book for February reported that overall US economic activity increased at a slight to moderate pace in seven of the twelve Federal Reserve Districts, while the number of Districts reporting flat or declining activity increased from four in the prior period to five in the current period. This is not a review that found strong growth.
US jobless claims rose last week by +18,000 from the prior week to 213,000 but most of that can be accounted for by seasonal factors. There are now 2.21 mln people on these benefits, similar to this time last year, but significantly higher than the 2024 levels.
February announced job cuts were lower than in January, but together the first two months have been almost as high as the equivalent 2025 levels. This survey also tracks hiring plans and that is down more than -50% from last year.
Tomorrow the February US non-farm payrolls will be released and analysts expect a low +59,000 gain. That would be half the +130,000 January level, itself historically low.
According to AAA monitoring, average petrol prices (91) in the US are now US$3.25/gal (NZ$1.46L / AU$1.23/L) This is up +9% from US$2.98/gal a week ago, up from US$2.89/gal a month ago, or a +12.5% rise.
US natural gas prices are up +7.2% over the same time-frame but to be fair are still very low. But in Europe, these prices are up +70% (in the UK) and up 53% (in Germany) for example. In India, natural gas prices have tripled for many users over the past few days. It is natural to wonder what Trump would say if the EU (or India) took unilateral actions that imposed similar cost jumps on the US. It is no longer safe to be a 'friend' of the US, or any country that pursues policies that "put me first".
American policymakers are scrambling to assess a wide range of materials where access is at risk. And institutions more broadly are doing the same.
We need to start keeping a closer eye on supply chain pressures. The NY Fed's February monitoring shows it elevated but nothing like the pandemic period, although not yet accounting for the current stresses.
Taiwanese industrial production rose +28.5% in January from a year ago, no surprise given the export order data we have been noting. But it is their sharpest rise in at least a decade, probably longer. However, things are not positive for Taiwanese retail sales; they actually decreased in January. But this was entirely due to Chinese New Year falling in a different period this year.
Singapore retail sales data for January also got twisted by the holiday timing.
The Malaysian central bank kept its policy rate unchanged overnight at 2.75%, saying inflation there is well contained. But they are worried about Middle East conflict effects.
China said it is lowering its growth target - slightly. Premier Li Qiang is set to announce a "around 4.5 to 5%" target while delivering the government work report, a key policy document, at the opening session of the National People's Congress later today. The departure from the "around 5%" growth target for the past three years signals the start of a period of slower expansion in China.
A big focus is on stabilising their moribund real estate markets. 'Stabilising' will undoubtedly mean subsidies and incentives to unlock buyer interest in the sector again. That will be a hard ask, given the widespread pain still in recent memory.
EU retail sales rose +2.3% in January, although slightly less in the Euro Area.
In Australia, household spending rose +4.6% in January from a year ago, the slowest pace since late May, following a +5.0% rise in December. This was a smaller increase than expected.
Global container freight rates, which had been falling every week in 2026 so far, turned +3% higher last week as the early signs of the Middle East pressures started to mount. Outbound China rates are up +10% for the week. However they are still -23% lower than year-ago levels. It might be different when this weeks data is released next week, of course. More currently, bulk cargo rates are up +6% for the week. Shipping traffic in the Straits of Hormuz has ceased altogether. (Live here.) And we should note ships outside the Strait are under attack too, so the conflict stresses are spreading.
New Zealand and Australia have significant food exports into the Middle East region, and they are now disrupted. We noted the sharp rise in fertiliser costs yesterday and more broadly, that is bringing warnings of food shortage consequences.
And as if these crises aren't enough, overshadowed is the Blue Owl private credit car crash in the US, and the wider concerns about their risky loans. Some insiders are now talking about a consequential "bank run" being caused by this.
The UST 10yr yield is now just on 4.14%, up +6 bps from yesterday. The key 2-10 yield curve is holding at +55 bps. Their 1-5 curve is steeper at just on +14 bps (+5 bps) and the 3 mth-10yr curve is now at just on +44 bps (+7 bps). The China 10 year bond rate is stable at just on 1.79%. The Japanese 10 year bond yield is up +4 bps at 2.15%. The Australian 10 year bond yield starts today at 4.80%, little-changed from yesterday. The NZ Government 10 year bond rate starts today at 4.48%, up +5 bps from yesterday.
Wall Street has opened its Thursday trade with the S&P500 down -1.2% and falling. Overnight European markets were down between Paris's -1.5% and Frankfurt's -1.8%. Yesterday Tokyo ended its Thursday session up +1.9%. Hong Kong was up +0.3% and Shanghai was up +0.6%. Singapore was up +0.7%. The ASX200 ended its Thursday session up +0.4%. And the NZX50 rose +0.6%.
The price of gold will start today down -US$71 from yesterday at US$5076/oz. Silver is down -US$2 at US$82/oz today.
American oil prices are up more than +US$5.50, up +7% in a day, at just under US$79.50/bbl, while the international Brent price is up the same to be now just on US$84.50/bbl.
The Kiwi dollar is down -40 bps against the USD from yesterday, now just on 58.9 USc. Against the Aussie we are up +20 bps at 84.1 AUc. We are down -30 bps against the yen. Against the euro we are down -10 bps at 50.9 euro cents. That all means our TWI-5 starts today down -30 bps, now just over 62.6.
The bitcoin price starts today at US$71,316 and down -2.6% from this time yesterday, although holding on to a large part of yesterday's rise. Volatility over the past 24 hours has been moderate at just on +/- 2.1%.
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47 Comments
Any thoughts on the length of the war and effect on shipping across the Strait of Hormuz?
Probably best if our household buys bulk fuel before the supply chain ripples reach ol' Kiwiland
Just had a look at Gaspy. Was expecting prices to be higher, but 91 is at $2.33, similar or better than a month ago. Yeah would make sense to at least fill up the cars, not sure if it’s worth the hassle of filling containers
My car takes 95, amazing to see the price differences in just a 5k radius, $2.51 to $2.93. Adding an extra 42 cents a litre to the market price is $21 on a 50 litre tank added profit, talk about gauging, who cares about the supermarkets if the gas stations can do that!
With my Farmlands card at the truck stop the diesel can be 50c cheaper than at the BP 2 km away.
And you can be sure the big trucks filling up at the truck stop are paying a lot less than me.
Stock markets and crypto are still vastly overpriced, commodities are underpriced.
Property starting to look cheap! Could be another crazy boom there. Although you really need a global market to get the real crazies going.
Ummh. Property prices starting to look better (meaning down). In no way does that indicate they are going to climb.
Agree, but it does look cheap compared to other assets. Would you rather own a decent property that also can be lived in or rented, or a few Bitcoin, or some almost useless metal that you need to pay to hold, or some Nvidia shares that are based on a short term increase in cloud AI hardware? Or maybe some Doge or Trump coin? If aliens landed they’d probably think we’re nuts.
Satoshi Nakamoto is one of the Tall Whites
Thank goodness for some distraction.
"I explained that I had practised law in Iran until the age of 24, that I had been imprisoned, tortured and lashed by Islamic Republic thugs and that I continue working in human rights advocacy now in New Zealand.
I asked what I consider to be the central question when every peaceful mechanism has failed – when UN resolutions, special rapporteurs, Human Rights Council sessions and diplomatic negotiations have not dismantled the regime’s coercive machinery: “What is left to save us?”
https://www.nzherald.co.nz/nz/when-human-rights-rhetoric-ignores-realit…
"To suggest that voting is the pathway to change under such conditions betrays ignorance (or forgiveness) of the authoritarian reality." That is Helen Clark to a 'T', but not just ignorant, arrogant too
“What is left to save us?”
Probably not the US. It's path to extreme authoritarian fundimentalist christian nationalism may be irreversible, if the current regime can corrupt the coming mid term elections.
‘I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all’
Been that way since 1954.
It's been an evolution since then. The nature of the "god" being refered to has changed. Aways a danger when dealing with the metaphysical.
Well that is your opinion and not necessarily a fact. Thee nature of God has never changed (it is timeless) but the sanity/insanity of society fluctuates over time. You call the current views of society evolution - i would call it a move away from the teaching of the Bible (a more Godless society) and a society with high rates of untreated mental illness.
See this from an AI overview:
The percentage of the population in mental institutions in the 1950s was dramatically higher than today, with inpatient capacity for state psychiatric hospitals in the U.S. declining by over 90% between 1955 and 2005. In the mid-1950s, over half a million Americans were confined to state psychiatric institutions, whereas today that number has dropped to roughly 37,000, despite a much larger total population.
I'd suggest its a similar pattern across the west.
We currently have a lot of mentally unwell people roaming society pushing their views on others - many of which are completely insane. And most of these people disagree or are completely opposed to the views or teaching of God/Prophets. You call this new society 'evolution'. I call a Godless society with significantly high rates of mentally unwell people.
And then you will say that white Christians are the problem (see you post above) - but if you view data, you will see that white Christians have a much lower rate of mental illness/depression/suicide compared to their non-christian peers. So is it the people who are happier are the problem or who we should be worried about, or its it the people who hate God and as a result themselves and others, who our real concern should be about?
you will see that white Christians have a much lower rate of mental illness/depression/suicide compared to their non-christian peers
The Atlantic published an article suggesting in some segments of Western societies, especially among younger, educated urban populations, social-justice style identities and worldviews are partially filling functions that churches and denominations used to play, but they have not wholesale “replaced” religious affiliation at the societal level.
https://www.theatlantic.com/ideas/archive/2022/08/social-justice-new-re…
True. It is my "opinion" the nature of religion and god worship has changed, especially in the US. It may have something to do with the fact nearly everyone identified themselves as a god fearing, church attending, christian during the first half of the 20th century. The less motivated and more intellectually curious drifted away and removed their dilluting effect on the earlier church, concentrating the more extremist and unhinged in remaining congregations.
Mental health? Many people were incarcerated in mental institutions on the flimsiest pretext. Post natal depression etc. Today there are many alternatives to extreme institutionalisation. And of course the prison population went up at the same time mental health numbers went down.
"We currently have a lot of mentally unwell people roaming society pushing their views on others - many of which are completely insane."
https://www.youtube.com/watch?v=P89QaQq9PBQ
Can you give some examples of whom you are refering to?
Being an atheist environmentalist libertarian (Not to be confused with the corporate pseudo libertarians of ACT), I believe everyone has a right to their own world view. The line in the sand, forcing others to adhere to the demands of their version of the sky fairy.
Personally, I don't hate "gods", because they don't exist. I imagine ALL atheists have this view, otherwise they obviously aren't atheists. Something a theist believer obviously can't comprehend. Some theist peddlers on the other hand, are pure scum!
Concur and the one of great strengths of atheists is that they can go forward in life without any invisible means of support.
LOL.
Personally, I don't hate "gods", because they don't exist. I imagine ALL atheists have this view
I used to be an atheist, but moved to being agnostic, as I cannot deny the existence of anything.
I take comfort, insight, and guidance in and from most of the mainstream religions.
I'm not saying having faith in something outside ones own consciousness is a bad thing, just personally I don't need it.
Living things do have some sort of connection and granted, the concept of biological complexity randomly evolving from hydrogen atoms doesn't really make any more sense than an interdimensional super being travelling the universe creating stars and largely lifeless planets. Having had a life long interest in astronomy is probably the foundation of my scepticism. Images of stellar formation in deep space and time led me to doubt the 6 day alternative narrative.
I have considerable sympathy for this woman. Regardless, what will the war achieve and what state will the country be in when it’s finished - will it be better off? Netanyahu has said he’ll be quite happy if there is a civil war in Iran. Past history from Syria has shown that once the US and Israel got rid of Assad there was killing of minorities/Christians and the country’s stability remains fragile.
“Bankrupt Us/Israeli decisions.” So far so good then, air and sea supremacy attained. If there is a plan for the next stage it is fantastically well camouflaged. The existing Iranian power remains in control of the vital military, therefore the cities and the land. If there is a cache of enriched uranium it is buried deep out of harms way. How is that then to be let’s say, liberated. Twice Iraq got to this early stage and twice armed forces had to land and invade simultaneously. The parallels with Iran are not difficult to perceive. So what happens next then?
Always remember there is spin. "Weapons of Mass Destruction"
There was the announcement of discovery of a chemical weapons factory in Iraq. With pictures no less.
The story disappeared after a NZ engineer popped up and said "that's no chemical weapons factory, it's a dairy factory. I know because I built it"
Babies being thrown from incubators...
CIA do their MO and arm the Kurds and civil war ensues. This is asymmetric warfare and the Iranians can drag this out a long longer than the USA in particular. Midterms are Trumps Achilles heel.
The Kurds played a big part in overturn of Assad in Syria and got scant reward for it. In Syria & Libya the existing military land forces turned and collapsed. In Iraq it was crushed by the invading forces. Iran is a very big territory and to transit and 20,000 or so lightly armed Kurds, even with air support, cannot possibly succeed against the tanks and artillery of the hard core Iranian army if it remains loyal to the regime. Totally agree then that time is on the Iranian side and hunkering down and dragging out regional turmoil is a completely understandable strategy.
FG.There can be no credible physical invasion plan. The vast, mountainous nature of Iran renders large scale invasion impractical. Using the Kurdish forces is fraught with logistical supply challenges and the reaction from Turkiye would be hostile, although with US air power now unchallenged the Iranians would struggle to assemble forces so a limited incursion may be on. But if the fighting moved to urban areas there'd be a bloodbath. A likely outcome is that this conflict will, after destruction of Iranian military infrastructure is complete, switch to a protracted assassination and Iranian government operational degradation campaign. China will not allow Hormus to remain blockaded for too much longer and with Iran vitally dependent on oil exports I'm not sure time is on the Iranians side. Its government could well be forced to bend its neck to imperial Washington. The world could yet be forced to endure the spectacle of spectacle of Trumpist Triumphalism.
That topography challenge was well evidenced 45 years ago when Iran & Iran slogged it out inconclusively for 8 years. So the combined intelligence of Israel and the USA think they can topple the regime by aerially eliminating the leaders in power (as fast as they arrive) and decimating the military capacity. It’s more than a test of wills over time in an attritional sense though. The Iranian people will bear the brunt and while underneath it all, the Iranian rulers couldn’t care less they will nevertheless amplify internationally the resultant humanitarian plight. The juggler has quite a few balls in the air at present. Let’s see how they land if balance is lost.
FG. The Iran/Iraq war remains one of the more sickening episodes of our times, with appalling bloodshed as both sides engaged in near suicidal clashes of massed infantry. Who will forget the harrowing images of very young Iranian human wave troops advancing to certain death, their faces blankly staring at the camera. The revolution was in its infancy back then with much of the population infused with religious fanaticism but after enduring 47 years of brutal theocratic rule the views of Iranians will have undergone significant change. There would be far less fervent support for the Mullahs as existed back then, if a large scale ground war develops.
A number of sources are now identifying that Trump has no plan beyond dropping a few bombs on them. What could possibly go wrong?
S and P 500 crashes through support, none of the levels below us have been seriously tested until 6500
Markets go up by the stairs and down by the elevator
I read this today - I didn't write it and don't want to include the name of the writer to avoid any bias from the reader but I am interested if those here with more global economics understanding then I, see any truth to this point of view -I am not interested in any pro or anti Trump points of view just the economics of it.
Perhaps most significantly for future American safety and prosperity, the strikes isolated China from anywhere from 10-20% of its oil supply. Venezuela supplied another 5-10%, before President Trump toppled the Maduro regime. Almost all of Iran’s exported oil and over half of Venezuela’s went to China last year, per Politico The Iran Question is all about China: Beijing has spent years and billions of dollars building Iran into a structural asset. Everything that follows in the Middle East flows from this fact. Which is why Operation Epic Fury is the first American military campaign that threatens to sever that asset. By striking Iran directly, the Trump administration is dismantling, whether by design or by consequence, a pillar of China’s regional architecture.
For a long time, it was accepted wisdom that the United States was in decline. We were headed into a multi-polar world where America was no longer the reigning superpower. Brazil, Russia, India, and China banded together to form “BRICS” and threatened to start trading energy in a currency other than the dollar, partnering with Iran which was evading American sanctions. Well, the petrodollar is back, baby! As Axios reported, the dollar has strengthened in value against other currencies since the beginning of the Iran war. That shouldn’t be surprising.
Is Trump being manipulated? Highly likely I'd think. By whom is the question?
but from the above it sounds like these events are very much in line with America First and Maga values - why would he need to be manipulated?
MAGA values were to not have wars... the fact he has gone to war is a betrayal of that and a lot of MAGGATS are calling him out for it.
It would seem then that Magat's are not very globally savvy - it would seem that to make future America great again you would need to make the American dollar great again
Not the thinkers of society. Easily manipulated by anyone waving a bible and claiming a gods work.
Who did he speak to last?
A popular theory in the world of social media is one Benjamin Netanyahu.
But if this war is so advantageous to the American dollar and puts China on the backfoot it would seem that he might be using the Israelies as much as they are using America
I posted a couple of nights ago the recent chain of critical events. Hamas attacks Israel who retaliate which involves Hezbollah and their absence from Syria catalyses the end of the Assad regime and the end of the Russian , Chinese and Iranian positions. Israel and Iran engage in a 12 day war and the USA bombs Iran’s nuclear facilities. The USA kidnaps the Venezuelan President and takes control of the government. Israel and the USA commence full on war on Iran and Iran retaliates and attacks neighbouring gulf nations, outcome though still hardly known.but Chinese and Russian proxies in Iran have nevertheless been degraded. So it’s a sweeping series of powerful events certainly and within its orbit Russia and China have been virtually sidelined. Upshot of that is even greater dependence of the latter on the former for energy. But the author’s basic point here is that as far Syria, Venezuela and Iran is concerned, Russia & China certainly have had the rug pulled out from under their feet.
FG. Yes, no doubt control of Chinas oil supply access is being threatened but its notable that the US has so far been careful to not hit Iranian/Chinese key oil infrastructure. Regime change to more malleable actors, not physical subjugation of the country, appears to be the goal. The lessons from Afghanistan might have been learned.
"The government is considering scrapping the clean car standard altogether, months after slashing the fees importers pay to bring dirty vehicles into the country.".....
"t would make New Zealand just one of two OECD countries to not have a vehicle emissions standard - the other is Russia."
https://www.rnz.co.nz/news/political/588668/government-considering-scra…
Suspect this is not going to sit well with recent FTAs
The US has abandoned it's clean car standards.
https://www.reuters.com/legal/litigation/trump-administration-set-revok…
Importing LNG? Nats just keeping in the Orange Parasites good books. Nats want to get back to the good old fundimentalist christian duty of burning. To do anything else is ungodly and communist!
To be fair, Nats are wannabe MAGAs. Not that actual MAGAS care, or even know where NZ is.
It may be worth noting we dont have a FTA with the US despite decades of trying.
Imagine if you have linked your electricity prices to global LNG prices.
Oh wait, we won't have to imagine, we are about to do it for "energy security". National are getting more and more removed from reality everyday. No wonder their intelligent MPs are deciding to leave and join a party of sensible ideas.
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