Here's our summary of key economic events overnight that affect New Zealand with news markets seem to be ignoring current economic data releases, building higher risk settings.
First, oil prices have risen despite official fanfare that strategic oil reserves are being released. Secondly, 'risk-free' benchmark interest rates are rising despite US inflation coming in unchanged. And thirdly, the sudden twist in Aussie rate expectations has seen their currency appreciate significantly, up +2.5% from the start of the week, up almost +7% since the start of 2026.
But first in the US CPI inflation in February came in at the expected 2.4% rate, unchanged from January. But of course this survey was for a period that predates the current war impacts. Their core inflation rate rose slightly in February from January, to be 2.5% in February. In this data year-on-year petrol prices fell -5.6% to give these results, and we all know they have actually risen +22% in the past month. No doubt consumers there will be wonder why, if the US is a net energy exporter. But Trump's billionaire mates won't be turning down a grift.
US mortgage applications rose for a fourth consecutive week last week, up +3.2% from the prior week, driven largely by new home purchase activity, and in spite of rising interest rates. There may by FOMO operating here, fear of even higher rates locked in for the future.
Chinese new vehicle sales fell sharply in February from January. But that sort of seasonal shift isn't unusual. However, February sales were actually -15.5% lower than February 2025, and actually even lower than in February 2016. After a very strong run over the past three years, the Chinese car-making industry will be looking at the developing 2026 trends nervously. Beijing doesn't need this sector to repeat what went on in their residential housing sector.
In Europe, ECB boss Lagarde has been out emphasising that they will be redoubling their efforts to keep inflation under control with an active monetary policy in the face of oil price pressures, and "will take the necessary measures to control inflation".
In England, we should note that their central bank's prudential regulators have given on-line fintech Revolut a full banking license. This is expected to see them attack mainline banks in their most profitable sectors, lending, although Revolut will not be encumbered with branches or any broad requirements to provide full service offerings. Revolut has been a haven for crypto transactions.
And staying in Europe, we should note there is an election in three weeks in Hungary, and EU member state. Current polling shows Prime Minister Viktor Orbán is heading for defeat. The pressure is on Orbán, and he has called for Russian help to smear his opponents.
In Australia, there are more stories about panic buying of fuel, especially diesel, as farmers and fishers worry about availability to keep their operations going. They worry that food prices will be next.
And staying in Australia, Westpac among others are suddenly forecasting that the RBA will hike its cash rate target by +25 bps on March 17 to 4.1% and again in May to 4.35%. The sudden rise in inflation threats are behind the sharp change, with their central bank "feeling compelled to act".
The UST 10yr yield is now just on 4.21%, up +7 bps from yesterday. The key 2-10 yield curve is marginally steeper at +57 bps (+1 bp). Their 1-5 curve is much steeper +20 bps (+5 bps) and the 3 mth-10yr curve is now at just on +51 bps (+9 bps). The China 10 year bond rate is also unchanged at just on 1.81%. The Japanese 10 year bond yield is lower by -3 bps at 2.16%. The Australian 10 year bond yield starts today at 4.91%, up +6 bps from yesterday. But the NZ Government 10 year bond rate starts today unchanged at 4.60%.
On Wall Street, the S&P500 is lower in Wednesday trade, down -0.4% so far Overnight European markets were lower between Frankfurt's -1.6% and Paris's -0.2%. Yesterday Tokyo partially rose +1.4%. Hong Kong dipped -0.2% and Shanghai was up +0.2%. Singapore was little-changed, up +0.1%. The ASX200 rose +0.6%. But the NZX50 ended up a strong +1.5% and the best of the equity markets we follow.
The price of gold will start today down -US$58 from yesterday at US$5170/oz. Silver is down -US$4 at US$85.50/oz today.
American oil prices are up +US$3, at just under US$87.50/bbl, while the international Brent price is now just over US$91.50/bbl. The Straits of Hormuz remain essentially closed. But even if they reopened today, the status quo is unlikely to be restored. So the echo of this crisis may last a very long time. At least, that is what markets are pricing in.
The Kiwi dollar is down -40 bps against the USD from yesterday, now just over 59.1 USc. But against the Aussie we are down -50 bps at 82.7 AUc. We are up +20 bps against the yen. Against the euro we are unchanged at 51.1 euro cents. That all means our TWI-5 starts today down -30 bps at just under 62.7.
The bitcoin price starts today at US$70,706 and down -0.7% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.6%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
11 Comments
After a very strong run over the past three years, the Chinese car-making industry will be looking at the developing 2026 trends nervously. Beijing doesn't need this sector to repeat what went on in their residential housing sector.
Well, they've sort of treated it the same. Half a trillion dollars subsidizing an industry it turns out no one wants to lead.
Up next; the US spends the same or more on AI tech no one's worked out how to make a profit from.
We've worked out how to make a loss from it, though.
In Southland.
Mind you, they started with O R...
Re oil release - remember we go through 100 million barrels a day, so that's 4 day's worth. Whoopee. Of what distillates and from where? I note we're a signatory, but they ain't getting anything from us, and we ain't gonna get anything from South Korea...
We've worked out how to make a loss from it, though.
Oh well, I'm sure we'll make the money back somewhere else.
Right?
Fiat-levered exponential growth on a finite planet.
What could possibly go wrong?
Nvidias doing ok aren’t they?
I think some of those big US tech companies are stuck between a rock and hard place. If they don’t do AI their tech will be very outdated very quickly. So AI might be more about survival than profit. For now at least.
For example if google didn’t put the very handy AI result at the top of every search their search engine would die very quickly. But god knows how much that costs to do that for every single search, and I doubt it’s boosted their revenue, that’s probably heading down too as people go straight to ChatGPT etc.
They, like the majority of activities in specialised society, are parasitic.
On energy and resource flows. As we are witnessing; it ain't money on them thar tankers. It's energy.
Just as we can trace a landlord's parasitism to a tenant's income - and maybe that income is parasitic too; the tenant is a financial journalist, say - it can always be traced back to the energy/resource underwrite, staved-off by forward betting (the latter has been limit-pushed for decades; BNPL, in all its forms). AI has arrived at a time when the gap between total bets and dwindling underwrite, is widening. So they will have to compete but they're discretionary, not essential.
Yeah nah, it’s just that their tech is becoming outdated, just like owning a horse and cart business when the motor car was invented. You either adapt (and maybe make less profit) or die.
Why would we move to energy hungry AI if energy is everything and dwindling?
Blindness is strong in that one.
Because we are pre-programmed to GROW.
Just like them pesky bacteria in the petri-dish.
Economics is blind. Fact. Because if failed to - and then chose to continue to fail to - account for reality(ies). And those who are conditioned to see through its lens, I regard as I do those exiting steepled building of a Sunday...
We don't need to read the same stuff twenty times a day.
Why would we move to energy hungry AI if energy is everything and dwindling?
Because people on the whole are lazy idiots that go for the new shiny thing that they are sold by a-holes with hidden agendas.
Prime Minister Orban of Hungary solicits Russian help. Timely. This year being the 70th anniversary of previous Russian help.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.