Here's our summary of key economic events overnight that affect New Zealand with news the Middle East ceasefire deal is still an imaginary figment.
Meanwhile, US real personal spending rose just +0.1% in February from January after stagnating in January. The few places of expansion were vehicle sales, healthcare, and financial services. This data shows why most Americans don't feel like they are making economic progress. Worse, real disposable personal income fell -0.5% in February.
And the final update of US Q4-2025 economic activity was revised lower yet again. You may recall it was originally touted as a +4.4% growth rate (from the prior quarter). Then the second estimate pegged it at +1.7%. This final update has dropped it to +0.5%, with revisions that reveal lower investment and consumer spending. Year-on-year in real terms, the US economy was +2.0% larger than in Q4-2024, and that is the slowest expansion since Q4-2022, and before that (and except during the pandemic), Q1-2019.
US initial jobless claims rose more than expected to 203,000 last week, far more than seasonal factors would have accounted for (188,000). There are now 1,928 mln people on these benefits, less than a year ago, but more than two years ago.
The April USDA WASDE report shows smaller US beef production, and they raised their beef import forecast based on recent trade data and continued strong demand for lean processing beef (like from New Zealand).
In Canada, there is some intriguing politics to note. Mark Carney leads a minority, coalition government. But recent defections from the Conservatives, and likely by-election results, could see his Liberal Party governing on its own very soon as a majority party. They are cashing in on Carney's surging popularity.
In Japan, consumer confidence retreated sharply in March from February which was the highest figure since April 2019. The trigger for the fallback is the global uncertainty and the latest data takes their sentiment levels back to those of May 2025.
Malaysia said its industrial production rose +3.1% in February from a year ago. This was sharply less than the +5.5% expected.
Meanwhile, German exports rose more than expected, up +2.9% in February from a year ago, and that was despite a -7.5% fall to the US and a -2.5% fall to China. Their imports rose +1.5% from a year ago.
We should also note that Anthropic's new AI model is getting eye-catching attention. It's abilities has scared even its own developers who have warned Big Tech to prepare for major disruption. Current cyber security is about to get busted big-time.
Global container freight rates rose just +1% last week from the prior week to be +2% higher than year-ago levels. And that was despite sharp increases in China-EU rates that have been roiled by the Middle East conflicts. Bulk cargo rates rose +3.3% over the past week to be +60% higher than year-ago levels.
The UST 10yr yield is now just on 4.29%, up +1 bp from this time yesterday. The key 2-10 yield curve is little-changed at +51 bps. Their 1-5 curve is lower however, down -2 bps at +22 bps and the 3 mth-10yr curve is little-changed at +65 bps (+1 bp). The China 10 year bond rate is unchanged at 1.81%. The Japanese 10 year bond yield is up +1 bp at 2.38%. The Australian 10 year bond yield starts today at 4.92%, unchanged. But the NZ Government 10 year bond rate up +7 bps at 4.73%.
Wall Street is up +0.6% on the S&P500. But European markets all finished lower overnight, between London's -0.1% and Frankfurt's -1.1%. Tokyo was down -0.7% at its Thursday close. Hong Kong fell -0.5% while Shanghai fell -0.7%. Singapore ended down -0.4%. The ASX closed its Thursday trade up +0.2%. And the NZX50 closed up +0.1%.
The price of gold will start today up +US$59 at US$4799/oz. (It's record high is US$5422/oz.) Silver is up +US$1.50 at US$76.50/oz.
American oil prices are up +US$3 at just on US$99/bbl, while the international Brent price is up a bit less at just under US$97/bbl.
The Kiwi dollar is up +40 bps from yesterday at this time at 58.7 USc. Against the Aussie we have risen +10 bps to 82.8 AUc. Against the euro we are up +10 bps at just on 50 euro cents. That all means our TWI-5 starts today up +30 bps from yesterday at just over 62.2.
The bitcoin price starts today at US$72,330 and up +0.6% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.5%.
[Please note there will be no video version today.]
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17 Comments
Year-on-year in real terms, the US economy was +2.0% larger than in Q4-2024, and that is the slowest expansion since Q4-2022, and before that (and except during the pandemic), Q1-2019
How come they are doing so well compared to us? 2% growth would not be our worst year!
Something something AI bubble something
I’m told trickle down doesn’t work, yet somehow US wages keep going up when those Silicon Valley billionaires make money. Maybe they could banish them to NZ, then we could complain about them and poverty while getting amazing growth.
And therein lies the issue of frothing over macro figures.
Productivity can be in a similar boat; for the past decade or two, wages don't rise with productivity growth. Possibly because it coincides with capital investment, and workers don't often own the capital.
But wages have risen way faster than inflation (except in NZ after the coalition took over).
Trickle down isn’t by any means perfect, the rich do way better than the poor. But the poor would also be worse off without the rich (unless you prefer to measure equality than incomes)
It seems like you're conflicting two sides against the middle Jimbo? I agree 'trickle down' doesn't work. Bezos is an example where billionaires get rich paying ordinary workers minimum wage. Silicon Valley is a little different. Most workers there are talented in technology in some way and there is a lot of competition for that talent. Pay them well or lose them. Both are extremes of sorts.
My view is Bezos could possibly afford to pay his workers better, but is his wealth from the returns of his business or like Zuckerberg, simply the proceeds of floating the business on the sharemarket while the business is not all that profitable?
Let's say Bezos was a Kiwi and founded Amazon and AWS here, you think the average NZer would be worse off?
If Bezos paid his workers more, he wouldn't be price competitive, and some other bozo would compete with minimum wage employees.
That's a part of the conundrum I mused upon. What is the profitability of his business's and how does staff wages impact there? I have literally seen employers with a poor attitude towards their employees, and equally employees and union members who don't understand that a business absolutely must be profitable for them to have a paying job and job security. It's a balance business owners must work to. One solution I heard about some years ago, was a business owner who had a very good year and at Christmas gave all his employees a significant bonus, redistributing a lot of his profits to them. One of the employees and beneficiaries of this largess was a friend of mine who was paying child support, and ended up getting screwed because of the bonus. I've heard of other perspectives too, where a retired CEO of a US company told an interviewer her had foregone a significant pay packet (in the millions) and used those funds to increase the pay of all his employees. An unexpected consequence was an increase in productivity and increased staff retention. Less costs.
Private credit bubble and continued massive US Govt deficit spending.
We are currently running modest private debt expansion and a decent govt deficit expansion - but our current account deficit is eating most of that up.
Maybe. I reckon the US government could raise their tax rate slightly and not borrow and still have good GDP growth. The right wing concept that low taxes and government debt are needed for growth doesn't stack up to me. I also don't believe that raising tax rates just leads to more private debt.
So, since the ceasefire announcement:
Iran has achieved:
- no more bombing of its land
- its regime is intact
- no control over its enriched uranium
- control and probable toll of the Straight of Hormuz which they did not have before the war
The USA has achieved:
- ..........?
I suspect that hasn’t been lost on Trump. If Iran doesn’t behave I reckon his finger could be getting trigger happy.
and what will that achieve.......?
If you're the school bully you don't let a pipsqueak show you up.
He's got the perfect excuse now. "I tried to make a deal, it was even in their favour, yet they didn't want it, so now I am dropping bombs"
When I was a kid it was getting in someone's face and then saying: you're breathing my air!
A massive distraction from the Epstein files? Although Iranian LEGO trolling videos are doing an exceptional job of keeping that in the media.
Not sure how reputable this site is but it suggests that the tolls in the Strait of Hormuz are being paid in (Chinese) Yuan, or crypto (BTC, USDT).
One point for the critics who say that crypto is only used for illicit transactions.
But also negative one point for the critics who say that crypto isn't "money" and doesn't have a real world use case.
Also, indirectly we're all crypto bros now 🤣
https://www.trmlabs.com/resources/blog/iranian-crypto-tolls-in-strait-o….
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