Here's our summary of key economic events overnight that affect New Zealand with news we are starting to see economic bite from Trump's war on Iran. There is corrosion everywhere today.
The OECD's latest economic update says global GDP growth is expected to hold at 2.9% in 2026 before rising slightly to 3.0% in 2027, driven by strong tech investment and easing tariffs. But the ongoing Middle East conflict makes these projections wobbly due to the energy market disruptions. Inflation forecasts were revised upward, with G20 advanced economies facing 4.0% headline inflation in 2026 they say, 1.2 percentage points higher than previously anticipated.
They see American GDP expansion go from +2.0% this year to +1.7% next year. For China, they see a shift from +4.4% in 2026 to 4.3% in 2027. For Japan, it is stable at +0.9% in both years. Their forecast for Australia is +2.3% growth this year, +2.4% next year.
Back in the US, jobless claims dipped last week, but not by as much as seasonal factors would have indicated. There are now 2.04 mln people on these benefits, down from 2.07 mln a year ago but up from 1.8 mln two years ago.
Meanwhile the Kansas City Fed March factory survey was positive again in March, for a second consecutive month. The month-on-month indexes were all positive except for new export orders.
The overnight US Treasury 7yr bond auction brought similar results to the earlier 2 and 5 year events - lower offer volumes and much higher yields. This latest 7 year bond had a median yield of 4.19%, up from 3.74% at the prior equivalent event a month ago. Bad management brings higher risk premiums.
In China, state-owned China Eastern Airlines said it will buy 101 Airbus aircraft in a deal worth about US$16 bln, extending a run of big-ticket Airbus orders by major Chinese carriers. That will juice up Airbus's 2026 order book sharply.
In Singapore, manufacturing production fell by -0.1% in February from a year ago, reversing the +12.9% surge in January. This February result was the first month of decline since August last year, driven by weaker output across nearly all sectors - except electronics.
Overnight, Norway's central bank kept its policy rate unchanged at 4.0%. But they do see a hiking possibility in 2026, a turn from where a cut was more likely.
Global container freight rates rose +5% last week from the prior week, and are also now +5% higher than year ago levels. This latest rise makes these costs up +20% from the end of February. Outbound rates from China were the main driver in these latest rates and the overall index would have been much higher except for the decline in EU to US rates. That trade has shriveled to a -29% year-on-year pullback. Meanwhile bulk cargo rates rose +3% in the past week but are -22% lower than year-ago levels.
The UST 10yr yield is now just on 4.42%, up +9 bps from yesterday at this time and its highest since July 2025. The key 2-10 yield curve is marginally flatter at +44 bps (-1 bp). Their 1-5 curve is steeper at +26 bps (+7 bps) and the 3 mth-10yr curve is now at +72 bps (+9 bps). The China 10 year bond rate is down -2 bps at 1.81%. The Japanese 10 year bond yield is up +2 bps at 2.27%. The Australian 10 year bond yield starts today at 5.07%, up +15 bps from yesterday. And the NZ Government 10 year bond rate starts today at 4.76%, up +1 bp.
Wall Street is retreating, with the S&P500 with down -1.5% in sinking trade. Overnight, European equity markets were lower between Frankfurt's -1.6% fall and Paris's -1.0%. Yesterday Tokyo dipped -0.3%. Hong Kong was down -1.9%, and Shanghai fell -1.1%. Singapore was down -0.3%. The ASX200 dipped a minor -0.1%. But the NZX50 rose again, up +0.4% and the best of the markets we follow.
The price of gold will start today down -US$173 from yesterday at US$4383/oz. Silver is down -US$4.50 at US$68/oz.
American oil prices are up +US$4.50 at just over US$94.50/bbl, while the international Brent price is up +US$7 at just on US$108/bbl. Ship transit traffic in the Strait of Hormuz, already low, has dried up again.
The Kiwi dollar is -50 bps lower against the USD from yesterday, now at 57.7 USc. Against the Aussie we are unchanged at 83.6 AUc. We are down -50 bps against the yen. Against the euro we are -30 bps lower at just on 50 euro cents. That all means our TWI-5 starts today down -40 bps at just on 61.6.
The bitcoin price starts today at US$68,909 and down -3.6% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.1%.
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14 Comments
First there was Trump then along came Covid and then came Trump again. Sounds like the foreboding beginning of a doomsday novel that Snoopy might write atop of his kennel doesn’t it. A good dose of the staggers all around made to order.
The world needs younger leaders who aren't trying to take the world to the grave with them.
Instead of you know, that arsehole uncle you've got who abandoned any social graces a few decades ago.
Agree, the problem is the voters are too old. Maybe need a cutoff age. Or make it digital only and hard to use.
Weight votes based on how many years you've got till you hit your countries average lifespan.
That would be the fair thing to do. Maybe not completely linear, you still need some kind of say towards the end and at the start you don’t really know what you want. Maybe you get peak vote about 30 or so.
No Jimbo, the newer generations are coming up and taking over the older voting blocks. The problem is more fundamental than that.
First the young are rarely engaged in the political process, and generally don't have sufficient experience to use what voting power they have to the best. (Remember this is a mass generalisation, not specifics) As they age, gain some life experience, and realise the importance the societal pressures about surviving today has changed their views towards what they vote for. The other side of the coin is what the options are for them to vote for. Left, right or fringe. Many I know will vole for a main party (left or right) because in their words they don't want their vote to be wasted. More than a few argue a vote for the losing party is wasted.
The problem is education and engagement, as well as what is on offer. Democracy has been undermined for generations by the politicians, so voter cynicism is justified to a degree. What should be being discussed is how it can be changed.
the newer generations are coming up and taking over the older voting blocks
But we have an aging population, who have significantly more financial means. The ratio of over 65s is doubled compared to 60 years ago.
So the voter base is more inclined towards retaining that wealth than spending it on the future.
And also oldies have much more time on their hands to choose a party and physically vote.
At least allow online voting. If we can safely manage our bank accounts online (for decades now) I don’t see why voting is impossible.
People voted for Trump - twice. You get what you vote for (or in our case we get what America voted for).
Are we reaching a tipping point when the majority don't believe that the war in Iran is close to being resolved anymore, and that it will drag on with ensuing lasting higher oil prices affecting most of the world ?
I think that was the consensus of people aware of the conflict after a couple weeks.
For me it was day two, hence I bought about a years worth of fuel then.
Bit of a Mexican standoff now isn’t it. Iran has been hit hard but are nowhere near broken and their, shall we say trump card the Straits, remains unmoved and potent. How often have the powers overlooked the presence of a narrow stretch of navigable water can be so vital. For instance if Germany after the fall of France in WW2 had brushed aside Spain and seized Gibraltar the choking off of supply to Britain would have been in reach.
Seymour is saying that
All that stuff on the supply side, to the extent we can influence it, has been done
And yet we're burning through 0.4 days' storage every day.
At this rate of demand and supply we'll have depleted our 46 days' storage down to zero by mid July.
Any good reason why we wouldn't at least be doing voluntary rationing already, before we're forced into it?
Leaving it to the market is already failing as truck stops are already running dry
Winter is coming squirrels, how's your acorn supply looking?
Government is crossing their fingers. An overreaction would almost certainly see them outed, so the best option is to hope for the best.
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