Here's our summary of key economic events over the weekend that affect New Zealand with news the Middle East situation is getting worse, with the Yemen-based Houthis into the fray and the Suez entrance now also threatened with closure.
Diesel and jet fuel markets look to be particularly vulnerable to an extended loss of Middle East production and exports, given limited flexibility elsewhere to increase output. In New Zealand we apparently have 46 days of supply for diesel, 53 days for jet fuel. Both fuels could see another 4 weeks of supply coming in the next 3 weeks. In Australia, they seem to have much lower stock levels, 26 days of diesel storage, 19 days of jet fuel storage, and a massive spike in demand for diesel, as users panic buying is upending forecasts there. Their situation is looking decidedly dodgy.
The next thing for all of us to watch is ship bunker storage and capacity. And both exporters and importers will be sweating the coming surge in "freight surcharges".
Locally in the short pre-Easter week ahead we will not only get an update of the February employment indicators and building permits, we will also get the big end-of-month RBNZ data dump.
In Australia, the main data releases will be around their building permit levels, the Ai Group PMI, and updates of their March housing market activity.
Elsewhere, the week will end with the March non-farm payrolls report in the US where they are expecting a modest +50,00 jobs gain, a partial bounce back after the surprise -96,000 job loss in February. Their March ISM PMI is due out this week too.
In China, there will be March PMIs. From India, February industrial production data. But any recent data from anywhere is now less relevant for guidance about how the rest of 2026 may play out.
Back in the US over the weekend, the updated University of Michigan’s Consumer Sentiment Index fell sharply in March from February. It is now near the record lows at the end of 2025, with declines spanning all age groups and political affiliations. Households with middle and higher incomes, as well as those with stock wealth, experienced the steepest drops in confidence. The US war on Iran and the resulting uncertainty and volatility is driving the bad mood. The short-term economic outlook reported by this respected survey plunged -14%.
US petrol prices are up a third from a month ago, but their diesel prices are up +50% over the same time. Early signs on what this will do to US internal freight costs, before the recent cost bites were not good.
Meanwhile, uncertainty is keeping US oil bosses from investing in new North American oil drilling. They remember the pandemic spike with no fondness, and are trying to avoid the "value destruction" that followed that. They are happy to take the higher profits now without any effort or risk than invest upfront in new drilling and risk a sharp pullback. That view probably applies worldwide.
Uncertainty is suddenly biting consumers harder there, with a notable downturn in Las Vegas visitors - except the high-rollers of course.
Across the Pacific, China has reacted over the weekend to new US anti-trade measures aimed at them, starting new probes of its own aimed at the US. None of this augers well for the upcoming Xi/Trump summit, and anyone hoping for an easing of tensions then may need to reassess. The US policy actions all seem designed to provoke, so reactions from the Chinese should be no surprise. This is not a path to calmer trade tensions.
Profits at China’s industrial firms rose +15.2% in February from a year ago and the best start to the calendar year since 2022. A lot of this was driven by private enterprises (+37.2%), although listed companies saw only weak growth, and some foreign companies suffered retreats. SOE profits rose a modest +5.3%.
Taiwanese consumer sentiment has taken a hit, like everywhere else, now its lowest since January 2023.
Singapore and Malaysia released February producer price data over the weekend and both retreated, for Singapore its fifth straight decline, for Malaysia its 13th. But in both cases, March is unlikely to show the same direction.
India bank loan growth is remaining high, up +13.8% from a year ago in their March 29, 2026 report.
India has rolled back petrol taxes to ease local strains on households. Vietnam has done the same. So have Spain, Portugal, Brazil, and Sweden, so far.
In Melbourne, public transport will be free throughout April as part of a state government effort to encourage motorists to drive less and ease the growing fuel crisis. They follow Tasmania.
The UST 10yr yield is now just on 4.44%, unchanged from Saturday, up +5 bps from a week ago. The key 2-10 yield curve is marginally steeper at +52 bps (+1 bp). Their 1-5 curve is also marginally steeper at +30 bps (+1 bp) and the 3 mth-10yr curve is now at +75 bps (+1 bp). The China 10 year bond rate is unchanged at 1.82%. The Japanese 10 year bond yield is also unchanged at 2.38% and still at a 29 year high. The Australian 10 year bond yield starts today at 5.11%, down -2 bps from Saturday. And the NZ Government 10 year bond rate starts today at 4.80%, unchanged from Saturday and which is its highest in nearly two years.
The price of gold will start today down -US$18 from Saturday, now at US$4493/oz, and down -US$80/oz from a week ago. Silver has dipped -50 USc to US$69.50/oz, little-changed for the week.
American oil prices are up another +US$1 at just over US$99.50/bbl, while the international Brent price is up the same at just on US$112.50/bbl. Ship transit traffic in the Strait of Hormuz, already low, has dried up again. Even Chinese ships can't pass now, even empty ones.
The Kiwi dollar is holding lower against the USD from Saturday, now at 57.5 USc, but down -90 bps for the week. Against the Aussie we are unchanged at 83.6 AUc. We are little-changed against the yen. Against the euro we are still at just on 49.9 euro cents. That all means our TWI-5 starts today holding at just on 61.4, but down -70 bps for the week.
The bitcoin price starts today at US$66,456 and up +0.4% from this time Saturday, down -4.5% for the week. Volatility over the past 24 hours has been low at just under +/- 0.7%.
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25 Comments
Do the Aussies not have a refinery either?
Just two, and both apparently rely on imported crude, but only supply 20% of the national need.
Long term complacency. Helen Clark's ideological mantra about diplomacy solving all was a common theme through the 70's onwards. Denial of geo politics based on an assumption that the then, sort of, stable world order would endure. Creeping corruption in democracies (all of them) has seen the exposure of that ideology as being the fraud it was and and it's demise.
So having refineries doesn't help much if they are in a worse situation than us.
That will depend....if refined fuels shipments stop then they will at least be able to refine the oil they currently produce and continue to run critical infrastructure....we wont have that option.
True, but the flip side is that they are more likely to run out of refined fuel in the first place. Maybe we negotiated better supply contracts due to necessity? I guess we will see who ends up better off.
Of course the best option would be electrification.
Electrification is a short-term vaccine, but not a long-term health.
Because none of it has/can be supplied/maintained ex fossil energy.
And it doesn't do food, as that system is constructed, easily.
Their problem appears to be that some of their fuel was ex China which has cancelled exports, which means they are looking for fuel from new sources...especially the ones that supply us....just as with our labour they could well outbid us.
They are down to two - both Govt subsidised; Geelong and Brisbane.
The big one at Kurnell - fondly remembered from a large portion of my youth spend in the sand-dunes - is gone.
The big change globally is that when you are half-way through an extraction, you have enough capacity for the remaining half. Indeed, you'll be retiring refineries on a least-useful basis.
Edit - no, Murray. Existentially we have to move away from FF for two reasons. One is that we cannot survive as a species, in a world where all the carbon has been added to the atmosphere. We simply weren't evolved to do so. The other is that we have to have built whatever comes next, before we tap it all out.
That's not ideology; that's science-based logic.
You're missing the point a lot today PDK.
But even if we have extracted all the oil, the carbon from it will not be in the atmosphere. Data shows forests increasing across Europe, and they will be else where too. We just need to cut back on the level of consumption, on virtually everything.
I was referring to the globalisation of markets. The BS economic ideological mantra coming out of the US. It is an interesting contradiction that Helen Clark, a purported and self proclaimed Socialist, couldn't see through it to it being the capitalist tool that it was. Perhaps her own greed and ambition got in the way?
For every two mature trees we cut down globally, we plant one tiny seedling.
That contrasts with claims that forests are somehow containing more carbon, but your posit is wrong because of feed-back loops. That carbon, as the world warms, will end up in the atmosphere - as the trees burn or die. You have a better brain than that, surely?
As to HC, sorry if I misunderstood what you meant by ideology. Her ilk are indeed part of the problem (I have crossed swords - actually, they didn't respond :) with the HCF); the academic/professor echelon are rapidly moving in the direction of 'away' (per Milligan) too. Indeed, I group Trotter in with that lot. They all wanted to virtue-signal their way through a period where their own consumption was the problem. The fact that they latched on to 'renewables' makes them a notch more useful than the Bishop/Watts/Luxon dinosaurs, but not the whole answer.
Deforestation is continuing, but has slowed, not stopped. But you ignored my following comment about consumption. that is the true issue and it doesn't matter the resource being consumed. The core to that is too many people.
"BS economic ideological mantra" - people like globalisation when it creates lower prices, but not when something like this happens.
Producing fuel here adds to the price of every litre you buy, producing frozen veg here adds to the price of every pack you buy. We can't criticise fuel companies and supermarkets for charging more than other countries, and then block them from sourcing those cheaper commodities offshore. We need to choose whether we want local products that will be more expensive, or imported that are cheaper.
Other than Iran seven nations have shorelines on the Gulf Sea. Two of those the UAE & Oman actually on the Straits of Hormuz the others in a virtual cul de sac further in. However Iran’s claim of control of rights of passage has been left virtually unchallenged except for the conflict with Iraq in the 1980s. Now Iran is apparently intent on running a toll gate on passage. Those other seven nations are critically dependent on the trade route but it would seem entirely impotent to defend those interests from Iran.
Their newest demand, added over the weekend, is that Iran's territorial sovereignty of the strait be recognised. Not part of it, not to the centre line, not to within 12 NM of the other coast (which is half way across) - all of it! That's not going to happen, so where that leads will likely be more open conflict.
Meanwhile the Houthi's have entered the fray in the Red Sea, complicating the issue of tankers coming SE to the Indian Ocean. Knocking the Houthi's back will be easier than Iran though, and Saudi and other Arab states may be prepared to step up there.
God Loves the Marines!
.In 1944 my father flew General Larkin US Marines from Fiji to Samoa. They remained in touch and he visited our farm post war. According to my father he never met a gentler man on one side or tougher on the other. Certain characteristics attract certain characters.
Just remember that when the SA leader went to sign an agreement with the US and Israel, the SA populace - 99+% of them - sided with Palestine.
And MBS backed down. Nobody - no matter how autocratic, ignores that percentage.
So the SA leadership are holding a lid on a near-universal anti-West (and particularly anti-Israel) populace; no mandate for much. They do, however, have internal trans-country pipelines...
Yes that royal family is sitting on a knife edge, on top of a potential powder keg.
I recall that there was a certain level of disdain from many in the west following the 1991 and later ME wars where the Arabs didn't really want to defend themselves, just party. I do note that some Arab military units did earn a high level of respect, but most not. Perhaps that's where Vance's anti-'other people wars' attitude comes from?
Once the US Marines open the Strait of Trump (SOT) those Persian Gulf locked countries (Qatar, Kuwait etc...) will be asked to pay a US $1.9m freedom contribution per tanker to pay for the defence force needed to protect the SOT form the evil Iranians. US$100k cheaper than Iran's toll so a win-win.
My prediction: if the US launches a ground invasion, the first thing the Iranians will do is direct the Houthis to shut off the Red Sea.
what if the Red Sea is secured first? That has to be on the radar for the planners.
Secured?
You cannot secure in asymmetrical warfare.
Vietnam proved that. We got a glimpse of it towards the end of the Captain Phillips movie; a vast armada to quash a dugout or two. The EROEI is too bad to keep that up.
It depends. Oman in the 1970s was nearly over run by Chinese backed insurgents from Yemen. British SAS & similar present were sufficient to hold that off but only just. There was a regime change with the son deposing the old Sultan and then Saudi and Jordanian commenced providing aircraft, artillery and soldiers. Oman retained its sovereignty. Arab nations can cross over borders when it suits as they participated in the first Iraq conflict, Desert Storm 1990. Saudi has also been active in Yemen for quite a while now.
And burn all the Gulf State's oil and gas fields. Get ready for $5 a litre people.
It's not the price, it's the supply at all.
But price has another consequence; at some point the Capex cost outstrips the energy-return (which is needed to do the repaying). Hence no oil-co enthusiasm for Venezuela; hence no wild reboot of fracking.
In simple energy terms, western civ can no longer 'afford itself'. So it is tearing itself apart, stratifying (rich vs all else), postponing maintenance and accruing debt.
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