Here's our summary of key economic events overnight that affect New Zealand with news financial markets are relatively calm today mainly because the Persian Gulf situation has slipped into a stalemate with no new developments good or bad.
But first up today, the overnight dairy auction brought little change in overall prices, but there was surprising variation between the commodities on offer. The net result was a tiny +0.1% gain in USD, +0.4% in NZD. But AMF rose +6.4% and SMP rose +5.2%. Offsetting these was WMP which dropped -4.0%. These shifts are much larger than the derivatives market signaled. In fact, the AMF price is back up to late 2024 levels, and the SMP is now at its elevated October 2022 levels - and apart from those pandemic distortions, back to the unusual 2014 levels. The WMP shift, which seems big, actually isn't when viewed from a slightly longer perspective.
There was good demand, mainly from precautionary buying, and from everywhere except from China. That deserves watching.
In the US, ADP weekly jobs report showed some weakness with just a +9000 gain nationally, far less than the expected gain and almost half what it has recorded over the past four weeks. They say there is a noticeable slowing in hiring.
Business activity continued to decline significantly in the New York region’s service sector in March, according to firms responding to the New York Fed’s Business Leaders Survey.
US pending home sales picked up marginally in February from January but are still -1.4% lower than year-ago levels. But there is wide variation, with the West (California) rising notably, the South and Mid West with minor gains, but the North East had notable declines.
In Canada, their real estate markets did it tough in February, from both the economic uncertainty and prolonged bad weather.
Elsewhere and as expected, the central bank of Indonesia held its policy rate at 4.75% where it has been since September 2025.
In Germany there has been a huge drop in confidence as recorded by the ZEW sentiment index, all related to Trump's war in the Middle East and the downstream consequences for Europe. But perhaps somewhat surprisingly though, the negative reading was very minor.
And as expected, the RBA raised its policy rate late yesterday by +25 bps to 4.1%. But what wasn't expected was how close the vote on the hike was. Five members voted for the rise, but four wanted to hold. In the end it was the growing risks of inflation that tipped the scale, made worse by the Middle East tensions and consequences. All the major banks have now announced pass-though rises to their variable rates.
Globally, it is also probably worth noting that the airline industry's forecasts show that air travel is expected to double by 2050. Obviously that assumes the current geopolitical tensions subside. They see an outsized share of the expansion will come from China.
The UST 10yr yield is now just on 4.20%, down -3 bps from yesterday at this time. The key 2-10 yield curve is holding at +54 bps. Their 1-5 curve is flatter at +15 bps (-4 bps) and the 3 mth-10yr curve is now at +50 bps (-3 bps). The China 10 year bond rate is little-changed at just over 1.83%. The Japanese 10 year bond yield is down -2 bps at 2.27%. The Australian 10 year bond yield starts today at 4.90%, down -6 bps from yesterday. And the NZ Government 10 year bond rate starts today also down -6 bps at 4.71%.
Wall Street has started Tuesday trade with the S&P500 up +0.4% so far. Overnight, European markets were also up, between London's +0.8% and Paris's +0.4%. Yesterday, Tokyo closed down -0.1%. Hong Kong ended its Tuesday session up +0.1%, but Shanghai fell -0.9%. Singapore ended up a large +1.4%. The ASX200 closed up +0.4%. And the NZX50 closed on Tuesday up +0.1%.
The price of gold will start today up +US$17 from yesterday at US$5001/oz. Silver is down -US$1 at US$79.50/oz.
American oil prices are down -50 USc, at just on US$95/bbl, while the international Brent price is still just on US$102/bbl. The Straits of Hormuz remain no-go areas for most with the situation still extremely unstable. The ships transiting are those approved by Iran, which holds all the cards at present.
The Kiwi dollar has risen today, up +10 bps against the USD from yesterday, now just on 58.6 USc. Against the Aussie we are down -40 bps at 82.5 AUc. We are up +10 bps against the yen. Against the euro we are down -10 bps at 50.8 euro cents. That all means our TWI-5 starts today little-changed at just on 62.2.
The bitcoin price starts today at US$74,160 and up +0.5% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.8%.
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13 Comments
So the US president has created a quagmire that threatens the rest of the world, and is now flailing around for help, while notably telling everyone he doesn't need help, to fix the mess he has created. To cap his day another rat is jumping from his sinking ship as the Director of the National Counter Terrorism Centre Joe Kent resigns. Kent's parting gift speaks volumes when he says “Iran posed no imminent threat to our nation ...." Trump's response is typical; saying Kent wasn't very smart or savvy because he didn't see Iran as a threat.
The entire psychology of this is fascinating in that the people, the military and amazingly the majority of the politicians with some power are all continuing to support him and do as he directs. It seems that collective stupidity is the dominant trait in America at the moment. The frightening component of all this is that it affects the whole world.
Yes it does, but as I've said once or twice, Trump is a symptom, not a cause. The same can be said of this wee stoush; there was always going to be a scrap over energy resources and ultimately - given our species' 5-7x overshot-tedness - a scrap over who gets to live at what level of comfort.
This is made harder to see, because of our fierce clinging to seeing things through a $$$$$$ lens, which chooses not to account (we've seen that in knock-on form; people opining that this is all to do with avoiding the Epstein irrelevance; they do so because they start off blind).
Was good to see the resignation - and well articulated too, considering his track-record. But that just does what it does to any bully-gang; by default the Himmlers and the Goebbels and the Rohms are all that's left. And suddenly democracy finds it has been circumvented structurally. Mind you, democracy in its increasingly bought-and-paid-for hack form, was an integral part of the GROWTH which was always going to put the squeeze on and produce competition.
And: 'show that air travel is expected to double by 2050. Obviously that assumes the current geopolitical tensions subside' No; it assumes there will be jet fuel in twice the volume, doesn't it? Which there won't be, physically. A clean example of the blindness of $$$$$$$-lens assumption.
"And: 'show that air travel is expected to double by 2050. Obviously that assumes the current geopolitical tensions subside' No; it assumes there will be jet fuel in twice the volume, doesn't it? Which there won't be, physically. A clean example of the blindness of $$$$$$$-lens assumption."
It depends upon your measure...if it is 'money' , then air travel may well double by 2050. though it may consist of a single flight from San Fran to Queenstown.
It is interesting that populations see their rights as critical without acknowledging that rights walk hand in hand with responsibilities. One couple having a child produces responsibilities to provide for that child; housing, food clothing, education etc. A government promoting population growth has responsibilities towards infrastructure to provide for sewage, water, food, transport, employment, education, healthcare and so on, and then there is the bit that everyone ignores; being able to have the ensuing communities live without poisoning the environment and then not being able to provide the requirements like food and water. As a species we're really not much better than base animals in that we don't look much past our immediate needs. But every choice has consequences.
What is truly absurd is the contortions that republican spokespeople perform to justify/support his decisions.
It seems that collective stupidity is the dominant trait in America at the moment
I'd say it's more fear.
Fear would be the consequence as they begin to realise what they've done, and what the consequences of that could be. Accountability can be a bitch. History will mark their legacy. But then if they've destroyed the world as we know it, who will record the history?
"In a letter posted to his X account, National Counterterrorism Center Director Joe Kent said that Iran posed "no imminent threat" to the US and claimed that the administration "started this war due to pressure from Israel and its powerful American lobby"."
Time we asked the question:
Do we want to be aligned with Israel's continued genocide-approach?
And as an addendum - with its cranially-curtailed pet bear?
It would seem that Canada and the EU and the British people (therefore Starmer reluctantly) are of a mind to distance themselves. We could do worse than join them.
Do we want to be aligned with Israel's continued genocide-approach?
Depends if the objection is going to war to defend Iran, or just doing something token like flying a flag on the weekends.
Trump says the decision to bomb Iran came after advice from Jared Kushner, Steve Witkoff and Pete Hegseth.
A real estate developer. A television host. And the president’s son-in-law.
Maybe they were all on the piss together and did it for a dare.
The lack of intelligence in both senses is a replay of the wmd invasion of Iraq by Bush junior. In his first term Trump eliminated General Soleiman perceived correctly as the powerhouse of the IRG. The IRG was formed in 1979 and developed with in mind exactly the circumstances of today. That is the central unbreachable control of Iran as a nation. Did it not seem obvious that the ill fated General Soleiman would not be alone, there would be many others in the ranks so attuned, ready to step up. Now the old Ayatollah is gone, his successor has been implanted by the IRG and they are not far off an actual military dictatorship. Not the negotiating types either, complete opposite in fact.
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