Here's our summary of key economic events overnight that affect New Zealand with news of oil jumping while equities slide as surging crude prices stoke inflation fears. Oil tankers are ablaze. Iran said it will keep the Straits of Hormuz closed and there doesn't seem much Trump can or will do about that.
And the Gulf crisis is severely disrupting global air travel.
Meanwhile the IEA says "The war in the Middle East is creating the largest supply disruption in the history of the global oil market." (OPEC however seems to be ignoring the folly.)
In the US, jobless claims were little-changed last week at the headline level, the small actual decrease accounted for by seasonal factors. There are now 2.15 mln people on these benefits, very similar to a year ago but a big increase from two years ago.
US housing starts rose in February, just as they did in the same month a year ago and to the same levels.
US exports and imports eased slightly lower in January. Their overall trade deficit fell to -US$ 55 bln in the month largely because services exports rose. From a year ago their deficit is +-US$75 bln lower (-0.2% of GDP.)
Canadian exports fell and their trade surplus with the US narrowed in January while the deficit with other countries widened. They reported a January trade deficit of -C$3.7 bln mostly due to fewer car exports to the US.
India reported CPI inflation of 3.2% for February, up from 2.7% in January and that takes it back to levels they had in April 2025.
In Australia, inflation expectations ticked up further in the March Melbourne Institute survey, up to 5.2% for the year ahead. While this is 'only' a rise from the 5.0% rate in February, it is the highest looking-ahead level this survey has reported since January 2023, and is a significant rise from the 3.6% rate in March 2025. It only adds fuel to the expectations the RBA will hike next week at its review on March 17. Aussie equities fell, benchmark AGB yields rose further, and they were rising even before this news broke.
And in the upcoming Australian budget, talk is they will assume CPI inflation in the "high 4s" for the year ahead.
Global container freight rates rose +8% last week to be now only -10% lower than year-ago levels. Outbound China to the EU was up +19%, to the US West Coast up just +4%. Rates to China fell. Bulk cargo rates fell -14% in the past week as demand dried up. From a year ago these rates are now +36% higher, although the base was weak in 2025.
The UST 10yr yield is now just on 4.26%, up +5 bps from yesterday. The key 2-10 yield curve is little-changed at +57 bps. Their 1-5 curve is holding at +20 bps and the 3 mth-10yr curve is now at just on +54 bps (+3 bps). The China 10 year bond rate is also unchanged at just on 1.81%. The Japanese 10 year bond yield is up +2 bps bps at 2.18%. The Australian 10 year bond yield starts today at 4.97%, up another +6 bps from yesterday. And the NZ Government 10 year bond rate starts today up +9 bps at 4.69%.
On Wall Street, the S&P500 is lower in Thursday trade, down -1.3% so far Overnight European markets were lower between Frankfurt's -0.7% and Paris's -0.2%. Yesterday Tokyo partially fell -1.0%. Hong Kong dropped -0.7% and Shanghai was down -0.1%. Singapore was down -0.2%. The ASX200 fell -1.3%. And the NZX50 ended down -0.7%.
The price of gold will start today down another -US$52 from yesterday at US$5119/oz. Silver is down -50 USc at US$85/oz today.
American oil prices are up +US$7.50, at just under US$95/bbl, while the international Brent price is now just over US$99.50/bbl. Update: they are now over US$100/bbl. The Straits of Hormuz remain essentially closed, the situation even worse now. The internationally coordinated release of strategic reserves has had essentially no effect.
The Kiwi dollar has slid another -50 bps against the USD from yesterday, now just over 58.6 USc. But against the Aussie we are unchanged at 82.7 AUc. We are down -60 bps against the yen. Against the euro we are down -30 bps at 50.8 euro cents. That all means our TWI-5 starts today down -40 bps at just over 62.2.
The bitcoin price starts today at US$70,437 and down -0.4% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.4%.
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57 Comments
The US is discovering hitting something really hard doesn’t necessarily mean it breaks. The Iranians after last June likely foresaw this attack and too that there was no option other than to hunker down. What the US has failed to understand id that the Iranian Republican Guard is the predominant power. Established nearly fifty years ago and developed to protect the regime it actually is now more or less the regime. Why else would the new Ayatollah need their approval. As long as the IRG is intact, operative and in control the streets the regime is unthreatened. Having taking all that has been thrown at them the Iranians have realised that the USA has left its solar plexus unguarded and has now delivered a counter punch to vital oil supplies that hardpress the entire world. The Americans it seems hadn’t much thought about that beforehand and it would be indeed galling if they have to now negotiate with Iran to get trade and oil flowing again
Uh, oh - Foxy got hit by a drone mid-sentence
American or Iranian?
The Iranians after last June likely foresaw this attack and too that there was no option other than to hunker down.
The Iranians have been planning for this sort of warfare for decades.
That's how the US loses. Their President is transactional, try stuff and if it works, good, if it becomes too hard move onto the next cluster.
The Iranians are far more strategic. And if you appoint a new leader, who's father, wife, child and other relatives just got killed by your opponent, a peace deal is very, very far away.
The accuracy of that guess is very concerning. It was a bloody big blow fly and a great defensive swipe upended the coffee. Sort of resonates with my comment a bit doesn’t it.
True. The Iranians were turning away Westerners at their borders several months ago. They knew what was coming. One only has to look at Afghanistan to know these regimes are happy to sit it out and wait for the US public to run out patients and the US government to burn hundreds of billions of dollars, then pull the pin.
"public to run out patients"
Was that an intentional mispell??!!
Yes. Missed the "of".
And public support for this is far lower than it was going into the Iraq and afghan wars.
And if the US does bring its navy into the straits, in range, and a couple of vessels get whacked and there are casualties, then there will be an uproar undoubtedly. Only need to think about the Falklands war and what then a fairly primitive Exocet missile could achieve.
It would interesting to know what Iran's capabilities are around that strait. Could they take out a US navy vessel? Who knows.
Talking simply strategy; the only way to secure the Hormuz strait is to occupy the land on both sides to a depth that prevents the launch of short range weapons. This would also require the establishment of defense systems to take out longer range weapons. And then there are the drone boats and aircraft.
Can't see any of that happening. Trump doesn't want to invade Iran, and I doubt the other Arab states do either. They don't have the resources. Trump has opened a can of worms to find the worms have teeth, and the can is much deeper than his pea brain could handle. He's going to call the "war" won when in fact he's just created a humongous mess for the rest of the world to clean up.
The Iranian military won’t get drawn out into the open as the Iraqi forces were. They will instead use the cities and towns as strongholds, the citizens therein as shields. Nor will there be any form of internal uprising as occurred in Libya and Syria. At this point Trump’s campaign remains inconclusive. Likely they will just repeat the earth shaker bombs on where the uranium and facilities are suspected to be and call that a victory. Of course the Iranian resolve to strike back will now have been even more precipitated and there are about, bogeyman holders of nukes such as Nth Korea in need of both funds and oil.
Folly, DC?
They're fighting over the last half - the worst half; we've consumed the best - of an essential-to-modernity energy resource-stock. The isn't room for multiple hegemonies on the down-elevator and China is busy booking the ground floor.
How vulnerable is New Zealand to a global oil shock? | The Front Page - YouTube
Inevitability is the more-accurate word.
They're fighting over the last half - the worst half
That's involved but it's disingenuous to limit what's going on to it.
This is global hegemony fracturing into regional hegemony.
Assuming we don't all get glassed back to the stone age, a new era of growth will occur once things calm down.
"Assuming we don't all get glassed back to the stone age, a new era of growth will occur once things calm down."
Possibly, but that (potential) 'growth' will be but another (brief) interlude on the downward trajectory.
https://www.resilience.org/stories/2011-01-20/onset-catabolic-collapse/
Possibly, but that (potential) 'growth' will be but another (brief) interlude on the downward trajectory.
Which is sorta like saying beating cancer is of no importance or resolve, as you're gonna die eventually anyway.
I spose glassing us would be the only way to silence needing to overlay this subject into every discussion.
"I spose glassing us would be the only way to silence needing to overlay this subject into every discussion."
Or we could recognise the likelyhood and attempt to prepare as opposed to sticking our heads in the sand.
What would a wise ape do?
We're not really wired to think that way. Like, we can, but the frontal cortex gets used more for making excuses for the rest of our behaviour than actually taking responsibility for things and adjusting to suit. Hence we are just repeating the same cycles again and again.
You have met other people before right?
We will get wiser soon. But likely only temporarily again. Hardware doesn't change that fast.
To use your cancer analogy....we know we have cancer but we are refusing to treat it because we will die anyway.
Leaders are people, some whom I have met.
Most every person is engaging in some form of behaviour that's got a good chance of being detrimental to their health, despite knowing otherwise.
That's the level of hurdle to cross even before you get into modifying behaviour and expectations about much wider events that are well beyond most people's ability to rationalize (again, cause we're not wired to).
But circumstances can definitely adjust willing mindsets. Our current political approach to governing will need some level of rationalisation.
But highly likely we will get to that the hard way.
The change more likely needs to be cultural.
For example, we've been hammering messages about renewables, sustainability, etc for quite some time now, but consumers expect to behave the same so long as they do a few token gestures like using a recycling bin and driving your EV to the mall.
Fuel rationing. Time to buy a motorcycle to commute on instead of the Ranger.
I'm glad I didn't listen to my wife and kept my fleet of bicycles and Honda 50 scooters.
Motor?
;)
We're not really wired to think that way. Like, we can, but the frontal cortex gets used more for making excuses for the rest of our behaviour than actually taking responsibility for things and adjusting to suit. Hence we are just repeating the same cycles again and again.
Just because we as a species have innate flaws in our behaviour and memories, doesn't preclude is from the capacity of forethought and planning. We already build electrical capacity for a growing population in the past, and set up society to allow for free education, mas public housing and more in the past. It is the unravelling of this from the 1980;s that has been our downfall, but again, it does not preclude us from changing tact and making big decisions for the benefit of the majority over the few.
We seem to be content with letting the neoliberal mindset dictate our way of life without considering the world our children, and their children will inherit, simply on the basis that we won't be around to have to deal with it. Why do we as humans need mass suffering and loss (war) to regain such egalitarian mindsets en masse is bereft of logic and reason.
Just because we as a species have innate flaws in our behaviour and memories, doesn't preclude is from the capacity of forethought and planning.
Sure.
But we make a new religion every however many years for a reason.
We will push limits till we pop then maybe learn some forgettable lessons.
We seem to be content with letting the neoliberal mindset dictate our way of life without considering the world our children, and their children will inherit, simply on the basis that we won't be around to have to deal with it. Why do we as humans need mass suffering and loss (war) to regain such egalitarian mindsets en masse is bereft of logic and reason.
Because memories are short and human contemplation is shorter. It's why more people fear sharks than heart attacks, even though the latter is way more likely.
Are you saying our electricity network and houses were better before neo-liberalism? Even education; our kids public school is very flash compared to the one I had growing up, they seem to have loads of money.
I suspect neo-liberalism has just caused the expected standard to go up, you can't win in that scenario. I'm reading a book about India based 20 years ago, gee it makes you appreciate what poverty really is. I have heard it is a lot better there now, same with China. Maybe they aren't neo-liberal as such but they are a hell of a lot closer to it, all to their benefit.
I guess at least all our bodies can compress into new oil reserves for the next era on earth.
No, it won't, at least not relative to current combined activity.
Energy going into the system has peaked. I used to go to a lot of physics/energy lectures/seminars, 10-20 years ago. One of the points always made, was that post FF, there would never be enough energy for a re-boot (as per coal in Britain initially). You can't lever enough surplus energy off firewood...
And you'd be processing the last - and worst - mineral deposits to do so, anyway.
Specialist discussions are only valid, if they fit within the bigger picture - your 'growth would re-boot' one, for instance..... didn't.
:)
No, it won't, at least not relative to current combined activity.
Well potentially not as we don't know the outcome, there could be billions less people.
But death and rebirth is quite the thing. It seems unlikely we'll get another global hegemony, so what rises from the ashes will likely incorporate a lot of reshoring or re-homing of industrial activity and processes. That's likely a decades long undertaking, with various winners and losers (likely a net loss from today's status quo).
But yes, yes, eventually it'll all end.
Aussie inflation in the high 4s and they aren’t panicking. If ours gets above 3 everyone’s calling for the emergency handbrake. It will be interesting to see which approach works better, but at the moment I give the points to the Aussies.
Objection: Irrelevance.
Seriously.
Try telling an unemployed kiwi it’s irrelevant that they would have kept their job with Australia’s settings.
The Aussies verge more towards anger than anxiety.
"Economics teams at major banks Commonwealth, NAB, and Westpac have forecast two 0.25 percentage point hikes in March and May, which would raise the cash rate to 4.35 per cent."
https://www.abc.net.au/news/2026-03-11/rba-forecast-to-hike-interest-ra…
Watch as it keeps rising, their housing bubble bursts as mortgage rates rise and as with NZ, many see friends and family in financial turmoil due to high mortgage debt to service, and they will follow the same path as NZ has, albeit with likely a faster response to the inflation through floating mortgages (instant drop in disposable income to change spending behaviours), and mineral resources to mine and use to buffer the bottom of the economic cycle.
I agree their housing bubble is a big problem, that is where our government have done things (mostly) right by allowing more supply.
I can only repeat myself, I definitely believe that the sharemarkets are not fully pricing in the consequences of this war and the associated increase in oil prices. I would absolutely liquidate all my shares if I had any.
Depends on the sector, no? Holding oil producers not exposed to the Strait of Hormuz is a useful hedge. Holding stocks involved in alternative energy supplies is a useful hedge (battery metals, uranium etc). Holding defense companies would be a useful hedge (although I don't own any of them myself). Some other sectors are certainly at risk.
'Holding stocks involved in alternative energy supplies is a useful hedge (battery metals, uranium etc)'
Uranium perhaps aside - why not hold the real stuff yourself and eliminate the ticket-clippers and the once-removed uncertainty?
I cannot think of a better 'store of wealth' than a stack of PV panels, kept dry and dark, and a controller or two.
Not silly, although electricity isn't as much of a problem as propulsion. And if things go kaka, we won't be using as much electricity anyway.
But will be a boom time for anyone selling anything like battery's, panels etc.
If things go tits up, those who already invested in solar and batteries will have 20-30years (maybe more) of free electricity to manage with, albeit with the potential complication of decreased battery max capacity across this timeline. The cheapest time to invest in this was yesterday, but speaking to many colleagues, friends, and teammates (sport), many have panels already and are considering batteries given the current oil squeeze, and continuous electricity price increases making them think. Personally I don't think the masses understand the potential benefits of solar+battery as they have no exposure, and monitoring and planning times for electricity use takes conscious through as opposed to just turning something on whenever.
Yeah, that's fair. I got some panels on the roof a couple of years ago and the returns are much better than the stock market tends to be, although I haven't gone so far as being off-grid yet.
"Depends on the sector, no?"
I get your point mfd, but when the proverbial hits the fan and stocks really crash, none seem to be immune in the short term.
Yep, true. Could be some nasty corrections even where it doesn't make sense.
In the NZ context there's the added complexity of keeping trading to a minimum to avoid being labelled a trader and having to pay tax on any capital gains, so it can make sense to ride out the high frequency stuff.
I can only repeat myself, I definitely believe that the sharemarkets are not fully pricing in the consequences of this war and the associated increase in oil prices
Of course not. The market follows headlines and at the moment that's only a reflection of one story.
Plus, this is going to have impacts going on years. We won't know the full effect till it's actually happening. At the moment things are being priced based on January 2026 assumptions.
At the moment things are being priced based on January 2026 assumptions."
Probably true, but this seems crazy to me.
Well, we usually take peace and prosperity for granted
Wow. We agree again.
The analogy with the GFC are strikingly similar here.
Switch the subprime resi mortgages with the subprime private credit, to bad businesses and heap on a peaking oil price, to break the camel's back.
Valuation of companies are still sky high......until they are not!
What about Tesla and BYD?
They're the right answer to the wrong question.
Put that another way: nobody has yet - nor will, methinks - produced EVs, PV, batteries, windmills or dams, using same.
So to put some of the remaining FF into building a fleet of inevitably-stranded vehicles/infrastructure, is arguably a waste of something worth way more than gold. Or anything.
BYD should hold up, they seem to be very innovative with EV's and have the cheapest home battery setups to my knowledge which demand is continuing for, and may increase withe the world seeing how reliant we are on oil.
This video with expert Robert Pape is worth watching for people interested in the USA Israel Iran war and its escalation.
https://www.youtube.com/watch?v=8hCKv3HbTjA Trump IS TRAPPED In Iran Escalation Nightmare
IMO this war is going to be massively long term destructive internationally including on New Zealanders. The USA and Israel can try fighting their way out of the problem they have created but have no escape.
The USA can just leave. The Israelis have less choice.
I'd probably put my money on the Israelis being the prevailing power in the region.
Why financial markets have thrown logic to the wind
https://www.abc.net.au/news/2026-03-11/why-financial-markets-have-throw…
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