Here's our summary of key economic events overnight that affect New Zealand with news markets are unsure about whether public efforts to calm the financial consequences of the war on Iran will work. Just at the moment, it's a wait-and-see situation.
But first in the US, the latest inflation expectations survey for February is out, revealing very little change. In the absence of subsequent events this stability might have seemed 'positive', but it is now only of historical note.
More currently, across the US, there are sharp rises in petrol prices. Those were responding to US$90/bbl crude prices. They are now up from there.
Meanwhile, we should probably note that there is a partial US shutdown underway. Among other impacts, security screening staff at airports are in layoff, not being paid. That is making travel in and through the US particularly messy.
Across the Pacific, Taiwanese exports fell in February to 'only' US$50 bln in the month, and up only +20.6% from the same month a year ago. But much of this can be explained by how the Chinese New Year holiday occurred this year.
China's CPI inflation rate jumped +1.0% in February from January to be up +1.3% from February a year ago. That takes them to a three year high. These were much sharper rises than expected and rises were expected. If both the US and China are now in a sharp-rising inflation period (and this data preceded the Iran crisis), then there is little chance New Zealand will be avoiding this pressure. Their beef prices are up +9.6% from a year ago, lamb prices up +6.6%. (Dairy prices there are down -1.1% on the same basis however.)
Now of course, an oil shock is likely to juice their inflation with a new burst.
Meanwhile China's producer price pressure eased in February, down just -0.9% from a year ago after their third [small] consecutive rise in month-on-month. Oil prices here will have an even larger impact.
Japan’s leading economic index, which gauges the outlook for the months ahead using indicators such as job offers and consumer sentiment, rose in January to its highest level since July 2022, confirming their improving economic outlook.
And here's something we don't normally look at. Business is picking up in Japan, enough that there is a notable rise in overtime pay there, the most since 2022.
In Europe, German factory orders slumped -11.1% in January from December, far worse than market expectations for a -4.3% drop. And December was downwardly revised as well. It was the first decline since August, largely driven by a -39% plunge in fabricated metal products after large orders in the prior month created a high base. Demand also weakened for machinery and equipment. However from a year ago, German factory orders were up +3.7% in January. (All this German data is inflation-adjusted.)
In Australia, Commonwealth Bank has reported two mortgage brokers and a string of accountants to police as it works to unravel a gigantic loan fraud using fake documents and international funds that could extend to AU$1 bln, the AFR is reporting.
On the commodities front, the big overnight mover is sulphur, a key fertiliser ingredient, up another 6%, and which has now doubled from a year ago.
The UST 10yr yield is now just on 4.12%, down -1 bp from yesterday. The key 2-10 yield curve is flatter at +54 bps (-4 bps). Their 1-5 curve is flatter at just on +15 bps (-2 bps) and the 3 mth-10yr curve is now at just on +41 bps (-2 bps). The China 10 year bond rate is up +1 bp at just on 1.81%. The Japanese 10 year bond yield is up +3 bps at 2.19%. The Australian 10 year bond yield starts today at 4.88%, up +3 bps from yesterday. The NZ Government 10 year bond rate starts today at 4.71%, up +19 bps from yesterday.
On Wall Street, there is less panic and stoic resolve with the S&P500 opening its week down just -0.6% so far. Overnight European markets were down between London's -0.3% and Paris's -1.0%. Yesterday Tokyo ended down -5.2%. Hong Kong was down -1.4% and Shanghai was down -0.7%. Singapore fell hard (for them), down -1.9%. But the ASX200 fell even harder, down -2.8%. And the NZX50 was down -3.1%.
The price of gold will start today down -US$69 from yesterday at US$5103/oz. Silver is little-changed however at US$84.50/oz today.
American oil prices are up +US$3, at just under US$94/bbl, while the international Brent price is up +US$6 to be now just on US$99/bbl. In between they have been very volatile, at one point reaching US$116/bbl. Relative calm came after G7 ministers started discussing releasing some strategic oil reserves. But there is no agreement or action on that yet, only 'possibilities'.
The Kiwi dollar is up +30 bps against the USD from yesterday, now just on 59.3 USc. Against the Aussie we are unchanged at 84 AUc. We are up +50 bps against the yen. Against the euro we are up +20 bps at 51.1 euro cents. That all means our TWI-5 starts today up +20 bps at just over 62.9.
The bitcoin price starts today at US$69,073 and up +3.3% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.7%.
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15 Comments
Zollner/Espiner RNZ yesterday lunchtime. Midday Report Essentials for Monday 9 March 2026 | RNZ
She gets that energy is the ultimate underwrite. Perhaps a first, certainly the clearest so far.
For the record, the '300 million barrels strategic reserve' being wittered on about this morning, is 3 days global supply. Admittedly drip-fed/smeared, but that's all it is. If it exists physically (and hasn't been turned into paper proxy like we've done with just about everything.
And ultimately, this stoush is over who gets what of what's left. There isn't the energy resource remaining, for both China to grow and the US maintain. So ultimately the US/Israel putch is about sidelining China (cutting it from Venezuela/Iran). There is no alternative to energy (it isn't fungible like proxy) so China cannot allow that to happen. And Iranians will not allow the West to take its oil (back; the West has already commandeered it twice) without going all the way down. That may be a target too big for what remains of the US conventional arsenal. Don't worry, though, there is sanity in the White - oh, hang on...
We were always - ALWAYS - going to scrap over 'what's left'. Only those choosing blindness (for personal reasons usually) can concoct alt narratives to fool themselves. We are watching an irreversible game-change, not a spike or a blip. And 'normal' was, in hindsight, a 70-year anomaly.
To sum up then, the age of oil is not ageless but that fact is generally treated much the same as certain ex Hollywood actresses, best not to name.
A few days ago I commented that, with stocks unchanged and PMs down, assets were pricing the consequences of war incorrectly IMO. I said that stocks were overpriced and that Gold was cheap, to which some replied that I was trying to "talk Gold up". Firstly, one would have to be deluded to think that a comment on Interest could affect the price of Gold. Secondly, I view Interest as a platform of like-minded people helping each other to make good financial decisions. It's with this state of mind that I shared my belief that Gold is underpriced.
Some basic logic would come to the conclusion that wars are expensive and inflationnary, and that the only realistic way for governments to pay for the war, is to print more money, much more money. Both inflation and money printing are generally very bullish for the Gold price, even if it will not move up in an even way in the short term.
Wars are ultimately over resources; growth is exponential; sooner or later there is the war at the beginning of the last possible 'doubling-time'. Otherwise described as half-way through the planet's resources.
The US - Trump is a symptom, not a cause - has no choice if it wants to continue 'consuming' (and remember they need to parry entropy more than most and more with time; have a look at a few of these, mr r/e man: joe and nic's road trip - YouTube )
They need the energy and need China not to need the energy; there isn't enough for both at currently wished-for rates.
As for trying to add to your pile of proxy by shifting proxy - ultimately parasitically relying on others to actually do something - those days seem to be coming to an end. A reconciliation if you will, between massed hopes (forward proxy-bets) and reality. Yes, rampant inflation is assured, if of course we stave off a general systemic collapse on the way down...
Or it could just be that the Iranians were gonna nuke Israel. That is also a pretty good reason for a war.
Yeah right.
True believer.
Jim has drunk Donald's the kool aid, it's a cult after all 😂
Not a believer at all, I don't claim to know the cause. It could obviously be a resource grab, or at least that may be part of the plan. It could also be the Orange man moving attention elsewhere, which seems to be working for him. Or it could be the nuclear threat, I wouldn't want to be in a country near a nuclear capable Iran.
Wars are bloody expensive, its probably cheaper just to frack. According to AI:
The U.S. sits on immense, technically recoverable shale oil resources, with some reports suggesting it has more untapped oil than Saudi Arabia or Russia.
Israel is the country with "nukes", not Iran.
If you were Israel, wouldn't you want that to remain the case?
It’s a question of consequences. The first being if Iran did produce a nuclear weapon and successfully attack Israel, who retaliate in kind then the entire region would obviously be devastated and the world order thrown into utter chaos. The second being the current situation outcome of which is far from obvious. The third being that all that can be bombed in Iran is bombed, which likely will include another giant hit on where suspect uranium is thought to be, and the attacking forces withdraw and nothing much more than that is achieved.
Certainly there are huge cumulative risks building. The private credit saga got very little coverage due to the war and that’s not going away anytime soon. Jamie Dimon was warning of the private credit cockroaches 6 months ago. Most analysis is predicting gold over $6000 by end of the year. I think that number is conservative. Based on history silver will continue to outperform gold.
Very much agreed.
You may well be right, but I’m not convinced it’s always that simple. Gold is already up 75% in a year, that should ring some alarm bells. And even if you are right, timing the sell is often just as hard as timing the buy, and you are already a year or more late to buy. And gold makes no yield so if you hold it too long you can really miss out compared to other assets, even term deposits should do well in a high inflation environment assuming the reserve bank do their job.
I’ve seen the “buy gold as fiat is gonna collapse” theory turn out to be wrong several times, but yes this time could be different.
It matters little where the price has been, it matters much more where it's likely to go and why or why not. "term deposits should do well in a high inflation environment" I cannot agree with you there JJ.
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