Here's our summary of key economic events over the long holiday weekend that affect New Zealand with news of the US mess in the Persian Gulf gets no better. Trump's latest social media post may be his most unhinged yet.
But first, the week ahead will be a very light one for economic data releases locally, except there will be an important RBNZ OCR review on Wednesday. While no change is anticipated in the rate, the way these decision-makers see the global economic stagflation storm affecting us, and their likely reactions, will be very important.
In Australia, it will be all about household spending and building consent updates for February.
More broadly, the conflict with Iran will remain in focus as it enters its sixth week. Traders will continue to assess prospects for de-escalation, as well as any concrete developments toward reopening the Strait of Hormuz, following ongoing back-and-forth in recent weeks.
In the US the economic focus will be on the FOMC minutes, CPI data, the ISM Services PMI, the preliminary Michigan Consumer Sentiment reading, and the PCE report.
Elsewhere, key releases include China’s CPI, Germany’s factory orders, and the monetary policy decisions from the Reserve Bank of India, and from Korea.
Over the weekend we got confusing US employment data. The headline data says "Payroll employment increases by 178,000 in March; unemployment rate changes little at 4.3%." But the same headline data shows February was revised lower by -133,000. For Q1-2025 this payroll data show a rise of +205,000 (seasonally adjusted) to 158,637,000 in jobs. Despite that, their participation rate fell, and average weekly hours fell. There was essentially no rise in average weekly earnings (+US$1.70 for a week).
However, a look at the official household survey data shows a seasonally adjusted employment level of 162,848,000 in March, while the revised February data is 162,912,000. By our math, that is a fall of -64,000. February fell by -185,000 on this measure, so for Q1-2026 that is a total -856,000 civilian jobs lost (seasonally adjusted). (-956,000 lost on an 'actual', unadjusted basis.) The difference is the self employed and jobs in unincorporated micro businesses. It seems this group is under extreme pressure to twist to overall data that much.
US vehicle sales recovered in March. 1,043,000 vehicles were sold in March, up from 1,224,000 in February. Cars accounted for 237,000 units in March, while light trucks totaled 1,167,000 units. This pushed the annual rate higher to its best since September.
The S&P Global US Services PMI fell to 49.8 in March of 2026 from 51.7 in the previous month, the first contraction in the sector in over three years. The decline came amid the weakest growth in new business since April 2024. The ISM services PMI isn't released yet.
US oil rig counts rose by two last week. Despite the high prices, no-one is rushing to pump more.
In the US private credit market, pressures are building as investors rush to get their money out, causing ever more 'moratoriums'. Junk bonds are feeling this exit pressure from investors too.
In China, the S&P Global services PMI growth of activity eased from February's strong pace. New business expansion was driven by domestic demand. Cost pressures remain modest, enabling lower discounting. The deflation threat that has been hanging over China seems to be easing.
In Japan, their services PMI expanded solidly again, but they are noting higher cost pressures.
In India, their factory PMI slowed again, under sharper cost rises. Their growth of factory orders and production eased.
The FAO Food Price Index rose for a 2nd straight month in March to its highest since September. Prices across all commodity groups rose, Dairy prices were up +1.2%, the first increase since July, driven primarily by higher prices for skim milk powder, butter, and whole milk powder. Meat increased +1% mainly driven by higher pork and beef prices.
The UST 10yr yield is now just on 4.35%, unchanged from Saturday. The key 2-10 yield curve is still at +50 bps. Their 1-5 curve is unchanged at +27 bps and the 3 mth-10yr curve is at +66 bps. The China 10 year bond rate is unchanged at 1.82% but is now expected to rise as their deflation threat eases. The Japanese 10 year bond yield is still at 2.38%. The Australian 10 year bond yield starts today at 5.01%. And the NZ Government 10 year bond rate is holding at 4.76%.
The Fear & Greed index is still in its 'extreme fear' state.
The price of gold will start today unchanged at US$4676/oz. Silver is still at US$73/oz.
American oil prices are still high but little-changed from Saturday at just on US$111.50/bbl, while the international Brent price is still up at just under US$109/bbl, and still lower than US prices. Ship transit traffic in the Strait of Hormuz seem to be slowly returning, but on Iran's terms.
The Kiwi dollar is unchanged at 56.9 USc. Against the Aussie we still at 82.7 AUc. We are holding against the yen. Against the euro we are at just on 49.5 euro cents. That all means our TWI-5 starts today unchanged from Saturday at just over 60.8 and its lowest since November.
The bitcoin price starts today at US$67,338 and up +0.6% from this time Saturday. Volatility over the past 24 hours has been low at just on +/- 0.9%.
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6 Comments
Gulf nations led by UAE, Bahrain, Saudi Arabia have submitted to UN Security Council forthem to sanction “defensive” actions against Iran. Likely this is anticipating Iran increasing strikes on them in retaliation for the USA strikes going even further beyond Iranian military targets. If that eventuates then it will last until Iran is completely exhausted of any offensive capability but until that happens there will be great damage, casualties and everlasting repercussions for the Middle East and if Iran’s regime is not overturned, then ongoing conflict for decades.
Leaving aside all thoughts of how those future actions appear as intelligent as the strategy of MAD preventing a nuclear exchange, and thinking only about the economic impact on NZ, can we predict the end of the supermarket duopoly? My thought is that we could begin to discuss what our food supply lines would look like under extreme fuel shortage. What economic activity has low imported fuel inputs, and absorb staff? Not building houses. Not hospo. Not tourism. Coal mining?
I wrote an article about that, a decade ago, for OrganicsNZ, titled 'The Coming Exodus'.
Dairying, as formatted, collapses. Cities need fed, food production needs more people, closer to the land. So a reversal of the influx of the last 150 fossil-fuelled years. Hub towns fill up, nodes become important again, local becomes the overarching driver, simply-repaired becomes more desirable than complexity.
then it will last until Iran is completely exhausted of any offensive capability
Question is, who will run out first? The Iranians of drones and missiles or the gulf/US/Isreal of interceptors?
For completeness I would add another possibility is that the gulf nations decide the price they are paying for supporting the US is too great and the US is asked to leave their country. Iran has stated that they want US military forces out of the middle east.
'In February 1953, Britain and America once more presented proposals to Persia...'
Persia said no. Then: CIA activities in Iran - Wikipedia
No wonder 1979, and no wonder they want the US out. And just below the House of Saud level, the rank and file throughout the ME think the same. That crony leadership layer is fragile and thin - the Arab Spring is worth remembering.
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