Here's our summary of key economic events overnight that affect New Zealand with news markets are betting Trump will 'declare victory' over Iran soon and walk back his war.
But the Straits of Hormuz are still effectively closed - to all but Iranian-linked vessels. Perhaps oddly, markets are assuming they will open to all 'soon'. The US Navy has escorted one tanker through. The betting on TACO is strong.
But separately today, the overnight dairy Pulse auction brought little change to last week's full auction. That means those good prices were essentially maintained, so no sign yet that the global rise in dairy supply is hurting prices.
In the US, the ADP weekly jobs report rose +15,500, the same as the prior week, a steadying after five weeks of modest gains.
Existing US home sales rose marginally in February but that was better than expectations that they would fall. That leaves them -1.4% lower than year-ago levels. Despite the recent rebound, unsold inventory rose at a sharper rate.
The NFIB Small Business Optimism Index fell for a second consecutive month in February when it was expected to rise (marginally). The net percent of owners expecting higher real sales volumes fell 8 points to a net 8%.
Today's UST 3yr bond auction brough another modest rise in yields from the prior equivalent event.
In Canada, their travel to the US is down more than -30% in February compared to the pre-tariff period, replaced by much higher travelling to other places. Interestingly, visits by American to Canada are rising. Canada is also attracting notably more tourists from other countries too, presumably those avoiding the US.
In Japan, machine tool orders remained especially strong in February, especially export orders.
China's exports rose almost +22% in February from the same month a year ago, its best rise since the pandemic. Imports were up almost +20%. Their exports to New Zealand rose only +1.6% but their imports are up almost +26%. Their exports to Australia rose +32% while their imports were up +29%. Their February trade with the US was even stronger with exports up +27% and imports up +36%.
In Malaysia, January industrial production expanded by +5.9% from a year ago, beating market estimates of a +5.4% rise and the previous month’s +4.8% increase. Their factory sector posted even stronger rises.
In Australia, the Westpac-MI consumer sentiment survey showed consumers remain firmly pessimistic, although sentiment continues to show some resilience. Daily responses in their survey show a material weakening over the survey week. The results were less pessimism on current finances and attitudes towards major purchases. On the economy it reveals more unease near-term but less concern about the medium-term. Unemployment expectations pushed up above long-run average levels, led by the over-45s.
Staying in Australia, the NAB business confidence survey found that business conditions were steady in February, but sentiment slipped, with confidence now in negative territory for the first time in almost a year, likely reflecting some caution in the wake of the February RBA rate hike. This survey didn't really pick up the more recent Middle East war effects because it was conducted from February 23 to March 2 and so only caught the very beginning of the US-Israeli attack on Iran and subsequent spike in energy prices.
The UST 10yr yield is now just on 4.14%, up +2 bps from yesterday. The key 2-10 yield curve is steeper at +56 bps (+2 bps). Their 1-5 curve is unchanged +15 bps and the 3 mth-10yr curve is now at just on +42 bps (+1 bp). The China 10 year bond rate is also unchanged at just on 1.81%. The Japanese 10 year bond yield is holding at 2.19%. The Australian 10 year bond yield starts today at 4.85%, down -3 bps from yesterday. But the NZ Government 10 year bond rate starts today at 4.60%, down -11 bps from yesterday.
On Wall Street, the S&P500 is little-changed so far. Overnight European markets were higher between Frankfurt's +2.2% and Paris's +1.7%. Yesterday Tokyo partially recovered by +2.9%. Hong Kong was up +2.2% and Shanghai was up +0.6%. Singapore recovered +2.2%. And the ASX200 rose +1.1%. But the NZX50 ended very little-changed.
The price of gold will start today up +US$126 from yesterday at US$5229/oz. Silver is up +US$5 at US$89.50/oz today.
American oil prices are down -US$9.50, at just under US$84.50/bbl, while the international Brent price is down -US$10.50 to be now just on US$88.50/bbl.
The Kiwi dollar is up +20 bps against the USD from yesterday, now just on 59.5 USc. But against the Aussie we are down a sharp -80 bps at 82.2 AUc. We are up +10 bps against the yen. Against the euro we are unchanged at 51.1 euro cents. That all means our TWI-5 starts today up +10 bps at just under 63.
The bitcoin price starts today at US$71,226 and up another +3.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.4%.
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17 Comments
I see comments are off on the finance/intelligence thread.
Oxymoronic heading aside, some may like to exercise their cranial muscles:
Infrastructure, finance, and the sale of the future - An Outside Chance
'Equity and bond markets, then, together hold vast encumbrances on the future – they are profiting today from debts that they expect other people to be repaying, ten, twenty or thirty years from now. The rules of the game protect this extraction from the future, regardless of our full awareness...
Parasitic on parasitic parasites, all spending the future, today.
While studiously avoiding accounting for that which they (we) are spending-down.
What could possibly go wrong?
What could possibly go wrong?
The potentialities are almost endless.
Big change is in the breeze. Although for today, what's currently "normal", is still pretty good. Use it wisely.
Around a couple months back, I mentioned the fundamental shift in global affairs that the Orange Man is helping bring about.
Zachnery Smith called it scaremongering and hysterical.
How we looking now Zackie? Still a case of "move on, nothing to see here"?
As the world gets more bogged down in conflicts and standoffs, we will get more conflicts and standoffs.
The world it would seem will need to adjust to and accommodate conflict being ongoing, regionally so far. In ancient times empires such as the Roman, Mongol and British set forth grabbing everything rewarding reachable which meant basically occupation and exploitation of land and people. Now we are in what I like to call the oil age those ambitions and missions are mostly focused on energy resources which are spread among the continents, nation by nation. As PDK would remark that now is the nub of the conflict which is increasing as fast as the sources are dwindling and becoming harder to extract.
Much faster, I would say. The resources are of less value if humanity loses its capacity to co-operate with one another.
The big difference in 2026 is the much greater degree of interconnectivity between all peoples of the planet. Can't get oil out of here, can't make stuff over there, can't run a hospital down the road, etc.
Ideally for NZ we want to hope the Asians are smarter than most of the rest.
My issue with your previous comments was that they were short on specifics. You were having a strong feeling of doom and refused to elaborate or give any possible scenarios whatsoever, even when pressed. Sure, something will likely turn up in the future that may justify your feeling, but it was inevitable that history would happen.
You're still being a bit hysterical.
That said, I don't think things are all that dire at the moment. Things could well work out. Don't underestimate the God-Emperor!
Ah, the old 'I need a pretty story, therefore' approach.
Lot of that about.
Usually goes with the personal narrative (peer-approval, status, mana attached) having painted itself into that corner.
Doesn't need to be pretty, just something, anything.
Imagine stopping all conflict henceforth and forever.
How are an overshot 8 billion going to divvy-up the remaining - and reducing at exponentially-increasing rates - stocks of energy and physical resources?
At what rate of draw-down, can a maintainable throughput-rate be achieved?
Who is going to break the news that modernity was therefore temporary?
Sure, something will likely turn up in the future that may justify your feeling, but it was inevitable that history would happen.
My point is the likelihood of the "somethings" happening is and will increase. I can list many possibilities, but the large amount of variables makes specifics difficult. You might as well ask me how this current conflict in the Gulf will play out. I can't really tell you, but I can highlight a handful of likely outcomes.
There's no hysteria or paranoia required. I am just just conscious of the set of circumstances that has allowed such a sustained period of peace and prosperity for humanity, and I can see it also being undone, and what the ramifications of that could be.
Even with the Straits of Hormuz closed, you can buy about 70% more crude with an ounce of gold than you could last year: https://www.longtermtrends.com/gold-to-oil-ratio/
For the people that say gold is the only real measure of value, how can this happen? Has oil decreased in value by 70% in one year? If so has demand reduced or supply increased?
Note that this has occurred not only for oil, but for almost everything. The number of Big Macs you can buy with an ounce of gold has doubled. Why has everything in the world suddenly reduced in value?
Or could it be that gold is actually a fixed supply speculative asset and hence a terrible measure of value?
Why the continued need to conflate?
Gold is a risk-times Ponzi. Why use that, now, as a reference? Versus ounces, maybe, but versus $$$$ 'value'?
Understand that a joule is a joule is a joule; a calorie a calorie. They are the only measure, the only subsequent adjustments being efficiencies and entropy. Choke the global energy-flow - by 20% - and bets on growth are on shaky ground. And they are the majority, bets-wise.
Sooner or later, a reconciliation must happen between bets-held, and energy-available.
The US navy didn't actually escort a tanker apparently https://aje.news/dp9bg1
Admittedly off track a bit but you just caused a flashback to HMS Ulysses, MacLeans best book and a very good paragraph describing the vision of an oil tanker being torpedoed mid convoy.
The book Malta Convoy is a good read too. Was a film of too.
Ohio was the tanker in that trip - only stayed floating because oil is lighter than water. Grounded as they emptied her. Roger Hill (hero Nelsonian captain of Ledbury) died in Arrowtown a few years back.
If its unavailable ( even at any price, whether you are willing to pay in gold or not) your stuffed....whether this event is temporary or not, it is the future.
"The force majeure declarations cascading across Gulf and Asian suppliers did not just mean delays to oil supplies, they void contracts, and could see fuel currently headed to New Zealand diverted to nations willing to pay more," Surendran said.
There were signs this was already happening, with reports of cargoes being diverted from Europe and Africa to Asia.
The government should take a precautionary approach, signalling possible rationing now, before shortages forced it, Surendran said."
https://www.rnz.co.nz/news/national/589195/fuel-supplies-in-nz-unless-t…
"Murat Ungor, economist at the University of Otago, said if fuel were completely cut off tomorrow, New Zealand could sustain itself for roughly a month, or just under, with the stocks on shore, assuming there was rationing and prioritisation for essential services."
https://www.rnz.co.nz/news/business/589107/how-much-fuel-does-nz-have-a…
Does anyone think that Trump has any of this in mind?
'In mind' and 'Trump' in the same sentence.
Kudos :)
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