Here's our summary of key economic events overnight that affect New Zealand with news the Americans are talking up apparent signals from Tehran that will allow them to declare victory and go home. Markets are taking all this at face-value.
But first today, there was a dairy Pulse auction overnight where prices dipped from the prior week with WMP down -1.5%, SMP down -1.9%, and butter down -6.8%. Results in NZD limited these USD drops.
In the US, the Conference Board's survey of consumer sentiment rose marginally in March from its recent lows. That was despite surging inflation expectations, now well over 5%, and a continuing decline in consumers' future expectations.
Meanwhile, US job openings in February retreated and by a bit more than expected. Quits fell too as job security fears rose. Hiring decreased.
The Chicago Business Barometer fell in March but from a near four-year high in February but the dip wasn't anticipated. Still, it is the third consecutive month of growth in Chicago's economic activity, rare since 2022, though the pace of expansion slowed significantly. New orders and output continued to grow, but at a slower pace, while jobs decreased.
However the Dallas Fed services PMI took quite a tumble to its steepest contraction in almost a year, and a big retreat from February for both their activity and outlook measures. Costs there are rising much faster than prices.
The US is getting no relief from petrol and diesel prices, as they hit another high milestone. The gap between WTI and Brent is unusually narrow at present.
In Canada, and perhaps unexpectedly. they reported a small expansion in economic activity in January from December (+0.1%) and a slightly faster expansion in February from January (-0.2%). In the face of the threats and bullying from their obnoxious southern neighbour, this is resilience that few expected.
In China, major property developer Vanke posted an enormous loss for 2025, and said it is facing a wall of funding maturities. Vanke has survived because of Shenzhen government ownership support, although that is being dialed back too.
Meanwhile, China reported better than expected industrial expansions, in their case for their official March factory PMI. And their services PMI also recorded improvement into expansion, again unexpected. Typically these official surveys have been more pessimistic than the unofficial ones from S&P Global, which won't be released for March until later today. They too are expected to record expansion.
Japanese data for industrial production and retail sales, both for February, sagged and by a bit more than anticipated.
In Korea, they reported industrial production data that was surprisingly weak in February.
Global air passenger travel rose a strong +6.1% in February from the same month in 2025, bolstered by the timing of Chinese New Year. In fact, domestic travel within China in February was up +12.5%. Overall international passenger travel was up +5.9% with the Asia/Pacific region rising +8.6%. Likely much of this expansion will be upended now with the March disruptions and sentiment retreats.
The UST 10yr yield is now just on 4.31%, down -3 bps from yesterday. The key 2-10 yield curve is marginally flatter at +50 bps (-1 bp). Their 1-5 curve is unchanged at +25 bps and the 3 mth-10yr curve is now flatter at +59 bps (-4 bps). The China 10 year bond rate is little-changed at 1.81%. The Japanese 10 year bond yield is down -1 bp at 2.35%. The Australian 10 year bond yield starts today at 4.95%, down -7 bps from yesterday. And the NZ Government 10 year bond rate starts today at 4.76% and down -5 bps from yesterday.
Wall Street started its Tuesday with the S&P500 up +2.5% on the idea that Trump will actually abandon his Iran adventure despite his bluster. Overnight European markets all rose +0.5%. Yesterday Tokyo closed its Tuesday session down -1.6%. Hong Kong was up +0.2% but Shanghai fell -0.8%. Singapore dipped -0.2%. The ASX200 ended its Tuesday session up +0.2%. And the NZX50 ended up +1.3%.
The price of gold will start today up +US$94 from yesterday, now at US$4641/oz. Silver is up +US$4 to US$74.50/oz.
American oil prices are down -US$1 at just on US$101.50/bbl, while the international Brent price is down -US$7.50 at just on US$104.50/bbl. Ship transit traffic in the Strait of Hormuz seem to be slowly returning, but on Iran's terms.
The Kiwi dollar is +30 bps firmer against the USD from yesterday, now at 57.4 USc. Against the Aussie we are down another -20 bps at 83.2 AUc. We are little-changed against the yen. Against the euro we are down -30 bps at just on 49.6 euro cents. That all means our TWI-5 starts today up +10 bps at just over 61.2.
The bitcoin price starts today at US$67,646 and up +0.4% from this time yesterday. Volatility over the past 24 hours has been moderate at just over +/- 1.8%.
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15 Comments
Is there any way to buy put options in NZ?
Yeah, it's called "don't over extend yourself in something you can't get out of quickly"
Over night Trump told countries to go get their own oil. On social media as he always does.
Unbelievable. What can a world do to stop a power like the US with a moron as it's head, from flailing around and screwing everyone else in the process? The midterms may change the political landscape in the US, but there can be little or no certainty that they will stop Trump or even slow him down. Their courts and policing agencies are all becoming increasingly partisan. A nation of laws implies everyone is equal under those laws, but in the US that is increasingly not the case.
And as usual, we will suffer what we must.
I thought he had a reasonable point to be honest.
Really? He started an illegal war for his own ego. For other nations to step in and help the US secure the area would only buffer his ego. We would be better off going to the Iranian authorities directly, letting them know we do not support or sanction what the US is doing and negotiate for them to allow tankers through the strait for our oil. We could form a block of nations to achieve that. It is clear that the Chinese and Pakistanis are doing this, perhaps the Indians too. That would send a message to the US too.
I don’t think we know for sure why he started the war, there are several possible reasons, one possibility was to save the world (particularly Israel) from nuclear threat.
But if countries like us are stupid enough to be dependent on an Iranian straight for energy it’s kinda our problem isn’t it? It seems like we no longer consider the US an ally so why would they help us?
He is a ball of dementia-ridden, incoherent rage at the moment. Any reasonable points are purely coincidental and will be directly contradicted in the next outburst.
The French language is rather good at summing things up in English. On this occasion, in these circumstances, Trump is now impuissant. Gone in, can go no further and can’t get out. Or in plain English, up shit creek.
He was put there because the US - indeed the whole of the First World - were told a lie. That lie was that economic growth was perpetual, and the tag-on was that if you wait long enough your boat will be lifted.
For a while the bottom-end bought the story. For a while, so too did the 3rd world, at least as reported. But the reality is that wealth soaks upward and creates ever-greater stratification. Ally that to resource-raiding (both legit an illegit) causing displacement, and you get frustration. Maga is one form of that frustration; the various ME militias are another.
It was inevitable that (an apparently) serial liar was put in charge of defending the serial lie - and inevitable that such a defender would make little sense. Goes with the rise and rise of fundy religious types in first-world politics, our own included. The need to believe is becoming a prerequisite
He’s good at getting his own way, so he’s smart in a way.
I've met some toddlers who are good at getting their own way too, through sheer exhaustion of those around them. I think Trump uses similar strategies.
Only trouble is the toddlers don't have to worry about maintaining alliances and whether the USD remains the reserve currency, or what happens to its enormous debt pile if that status is lost. Maybe his position calls for a more subtle approach.
Reasonable point?
They were getting the oil until Netanyahu outwitted him (not difficult) into starting a war. Without asking them.
This is the latest take on what WE should be doing. From a real engineer:
https://energyandresilience.substack.com/p/the-limits-to-the-energy-tra…
Can I ask that everyone here - particularly the $$$$$-fixated - reads the above link carefully? It is perhaps the most important paper to come out re NZ, ever.
He does put some points you and I have agreed on and argued for rather well.
I do agree we need to reset, but use the available energy to build the future base of a new economy that is less dependent on fossil fuels.
I don't think it'll happen. Our politicians are too wed to the conventional narrative that has dominated since at least the 40s, corrupted and entrenched by the Free market BS.
We can only educate the public and pray they listen and demand change of the politicians, and vote accordingly
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