Here's our summary of key economic events over the weekend that affect New Zealand with news expectations of an imminent resolution of the Persian Gulf standoff have stalled. Iranian officials have reversed reopening the Strait of Hormuz after the US refused to end its blockade of Iranian ports. Ships attempting to cross the Strait of Hormuz have been fired on.
This is expected to weigh on financial markets when they open later today.
This week locally will be all about the March quarter CPI which will be released on Tuesday. Because most of that quarter didn't see the oil price spike until March, markets expect a 2.9% quarterly rate, slightly less than the 3.1% rate in Q4, 2025. It is a data series that really needs to be released monthly. It will be preceded by trade balance (today), and followed by the QSBO and an update on productivity.
In Australia, there are no major economic data releases, although we will get a flash report on their April PMI.
In the US, apart from earnings updates, they too will get a flash April PMI, and confirmation hearings for Kevin Warsh will put this billionaire in the spotlight.
In China, PMI results will also feature in a light data week. In Japan, it will be about March trade data and retail sales. Central banks will review their monetary policy settings and rates in China, Malaysia and the Philippines this week.
Over the weekend, Iran confirmed what most people understood - Trump was 'claiming victory' without any deals in place, and that is making ship transit of the Straits of Hormuz hazardous again. It looks like the progress claimed was a mirage.
In Canada, small business sentiment rose in April, an unexpected shift but likely due to local election results. The trade group that does this survey says it is still weak, but it is actually back to the levels that prevailed prior to the pandemic.
But Canadian housing starts sagged somewhat in March, coming in below February levels and what was expected. But they are now +6.9% higher than year-ago levels.
Indian loan growth reached +16.1% in the year to March according to official data released overnight. That is the fastest pace they have recorded since they started tracking this metric in April 2025.
In China, their construction machinery sector rose strongly in March with excavator sales up nearly +30%, of which domestic demand was up almost +24%.
Malaysian CPI inflation remained tame in March, up just +1.7%, although that was their highest rate since the beginning of 2025. They also reported that Q1-2026 economic activity rose +5.3%, and slightly less than the +5.5% expected.
Meanwhile, Singaporean exports were up +15.3% from a year ago, their second fasted monthly rise since mid 2024.
The UST 10yr yield is now just on 4.24%, down -1 bp from this time Saturday and the same for the week. The key 2-10 yield curve is still at +54 bps. Their 1-5 curve is still at +20 bps and the 3 mth-10yr curve is at +58 bps. The China 10 year bond rate is now at 1.77%, up +1 bp. The Japanese 10 year bond yield is unchanged at 2.42%. The Australian 10 year bond yield starts today at 5.00%, up +2 bps from Saturday. The NZ Government 10 year bond rate unchanged at 4.71% down -2 bps for the week.
The price of gold will start today down -US$28 at US$4829/oz. Silver is down -50 USc at US$81/oz.
American oil prices are down -50 USc at just under US$84, while the international Brent price is also down -50 USc, and now at US$90.50/bbl. These new levels are down -US$12 and -US$4/bbl respectively. The North American rig counts fell again. Tonight, all eyes will be on the IEA's April update of the global oil situation.
The Kiwi dollar is down -10 bps from Saturday at this time at 58.8 USc, up +30 bps for the week. Against the Aussie we are unchanged at 82.1 AUc. Against the euro we are also unchanged at just on 50 euro cents. That all means our TWI-5 starts today also unchanged from Saturday at just over 62.2 but up +20 bps for the week.
The bitcoin price starts today at US$74,842 and down -3.0% from this time Saturday. A week ago it was US$72,976. Volatility over the past 24 hours has been modest at just on +/- 1.1%.
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63 Comments
Another week, another flood. It never rains, it pours.
It was amazing to see the global 'ah, back to normal' linear-thinking brigade, early in the weekend. Funny as a fight, if you'll excuse the pun.
There we had a President with a well-demonstrated inability to differentiate fact from fiction - and clearly failing mentally - issuing tweets on a private account - and being near-universally believed.
In reality, the US has attacked Iran multiple times now, while talks were in progress. The US instigated this problem; the Straights were so open before it that most people couldn't have pointed to them on a map or chart. We can assume that the US therefore didn't want the 'peace talks' to be real ones. The US was therefore always going to keep up its blockade. So far so obvious.
And the Iranians were going to accept that blockade-but-only-on-one-party? Bollocks they were.
Yet the number of people - media, share-bettors, although I noted political caution - who thought things were 'returning to normal'. How a 30% reduction - via direct damage and season-implication dearth - of fertiliser could be regarded as 'normal' by an overshot species which has never bypassed the need to eat, is..... interesting.
Confirmation bias is perhaps something we need to be aware of.
Yes I had to wonder at that a little. There is no certainty other than more chaos driven by Trump, but people are moving on without solutions. Temporary dips in the price of fuels are red flags, not signs it is over.
Hard to know what he’s thinking. He makes a deal, then reneges on it, then tries to make another. I can only conclude it’s a ploy to look like he tried to negotiate and it failed so now he has to bomb them. Either that or he wakes up with a different personality each day, that does seem to be the case.
Not that hard.
Firstly, he's a child - a 'concrete thinker'. Manifests early as 'if I can't see it then it doesn't exist'. Most of us grow out of it.
Secondly, he has no ability to read the room, to read body-language, to grasp nuance.
Thirdly, he (and his) have a playbook based on populism - but populism has trouble when it fails to deliver - then it has to blame, or at least, blame-shift.
Then there is the Zionist layer - the legacy of all the Kissingers and Wofowitzes in the US - and Netanyahu using the child as a puppet.
Then there is the oil/energy depletion angle - China may look like the biggest consumer, but the US consumes the biggest portion of China's exported production and last I checked, was the biggest resource-consumer - 5% of global population and roughly 25% of global resource consumption. Fracking was a one-off phase, and somewhere in the US will be brains carrying the knowledge that the Middle East and Russia are about the best of the rest - Venezuela and Canada are not in that league and everything else is too minor or too fraught to be worth the effort. Whether Trump grasps that or is in thrall of the oil folk who do, is hard to tell.
He isn't the first to use propaganda re the ME, either; to call others terrorists, evil, communist etc has been a US hallmark for decades - indeed Hegseth reminds me of McCarthy; history rhymes.
As to your last point - how does he explain away destruction of civilian targets to an already-skeptical support-base? How does he exit? And what damage would Iran inflict to oil/gas infrastructure - and therefore to the global 'economy' - as retaliation? You could forget global growth - it would never recover (and likely won't anyway).
Trump isn't conducting 4D chess here, he's merely practicing that well established despot tradition of "flooding the zone", and it works. Markets hang on his every word like they're jewels from heaven, as do media, although in fairness, he has culled the press core down to gossip rags, entertainment and supporters, while the rest are scared of litigation and regulatory induced extinction.. Lots of people getting rich off the great mans jaw boning generated volatility, especially the ones sitting around his cabinet table, and dining table. There's also an element of terror in his press releases of victory. You can only gaslight your supporting cult so long that the prices paid at the pump are an illusion.
“All tyrannies run on fraud and force, but once the fraud is exposed they must rely exclusively on force.”
- George Orwell
Chairman Mao said bluntly and accurately- political power grows from the barrel of a gun. The Iranian Republican Guard has all the guns, lock stock and smoking barrel, they were always right at the top quarters of the Iranian administration and now they are the top. That is what the Americans are now up against and they are a great deal more bolshy than the political hierarchy that the Americans and Israelis assassinated.
Always?
Too short a window.
Ask why and when they evolved?
Again: Always?
Yes always, since 1979 when Ayatollah Khomeini assumed power and put into place the apparatus that would keep the regime in power. Control all the guns and control all the people. The war with Iraq was opportunity to cull and condition the military accordingly to the point whereby not much happened in Iran without that input in the form of such as the late general Soleimani. The IRG was formed, modelled and purposed for exactly the situation of the of today, control the streets, protect the regime. Hate to make the comparison but the closest body of military in format and design of duty is the Waffen SS.
Yes always since 1979, is an oxymoron.
And you know it.
:)
People need to understand that PDK is working with geological or even cosmic timescales. The rest of us mortals are working with human timescales.
This being the fatal human flaw.
Considering there was no such body prior to 1979 the point surely speaks for itself. As a matter of interest illustrating the evolvement a quick search AI or whatever indicates the late General Soleimani at the time of his death as having been the second most powerful identity in Iran.
This started when D'Arcy funded exploration in 'Persia' - so let's put 1905 in, eh?
Lightweight sarcasm aside...
One of my favourite photos and the one I start my talks with, is of the capped well-head of No7, Masjid-i-Suaiaman. It was capped - emptied - in 1927.
The Masjid‑i‑Suleiman field still produces 5,000 barrels a day and contains about 6 billion barrels. It's just that other fields are currently more economical.
FFS.
Well-head, field, the difference mean anything to you?
Nup.
That well-head 'produced nearly 7 million tons between November 1911 and April 1926.
And the peak flow from the whole field was in 1974. Nothing to do with economics - even the rich have prostate troubles.
But I sense an inability to listen, coupled with an eagerness to disprove, which doesn't give itself enough time the really learn about stuff. There was a lesson to be learned over the weekend. Just saying.
Well-head No7 was on the crest of the field. The most accessible and shallowest part. It's quite normal for one well-head in this position to appear to 'deplete' first. To say it was empty is a bit silly. Like having a tap near the top of a water tank and then claiming the tank is empty when the level goes down.
It's good for readers to understand this. I do 'listen,' then I do an analysis and report back with what I find. These discussions are particularly interesting because we are dealing with science which is readily verifiable.
Science is always good.
Edit - for those really interested, this is the kind of thing I used to peruse : http://theoildrum.com/node/9045
So too is a dispassionate approach to it.
Just remember I've studied this stuff for 20+ years, before you knee-jerk your put-downs, eh? Yes, the Field still produces (if Iran was empty, there would be no US attacks - why would they?). But like every other, it is well (:) on the way to being emptied.
Rather clashes with your hundreds of years at the current 100 million bpd claim - which is cloud-cuckoo land stuff. Just nonsense.
I don't wish to get too aggravating but would point out that there is up to a hundred years of recoverable oil and gas at current consumption rates to assist us with remaining on the runway toward energy transition. As far as I have been able to ascertain, this matches what most engineers, geologists and energy experts have calculated. So, not nonsense.
So you just added an s
gotcha
I'm off to do something useful
Just for the record: Up to a hundred years for oil and gas. Hundreds of years for uranium. Thousands of years for thorium.
by Zachary Smith | 18th Apr 26, 10:48am
It must be a disappointing day for the promoters of the collapse narrative.
I hope Zachary and the six people that liked his comment got enough celebration time in over the weekend.
Both teams are celebrating victory before the war is over.
In my defense I didn't mention anything about victory, just commenting on the news of a market surge. This shortage is still geopolitical. Things will work out. There, that's my prediction. It's pretty obvious things will go back to normal once things settle.
"Things will work out"
But for who is the important question....
I wonder what thew new "normal" will look like? My prediction, is not like the old normal.
Yeah, that was my comment Zach was replying to. Just to be clear, I wasn't celebrating anything. Merely stating the obvious based on previously established facts.
Yes Time Lord - my thoughts entirely.
The fierce need to believe is strong in some.
We all have the tendency - I had it knocked out of me by many miles of offshore sailing; 'I wish' tended to be displaced by 'I need to deal with'.
Less to deal with if you reef before dark...
Watch the Radar for rain fronts at night
Aye.
And always work upwind before it becomes a bunfight; it's money in the bank.
Teaches strategy and long games, does voyaging. No Bunnings out there.
You should watch the recorded tracks for the three kings race just run, what a race
Wilco, cheers.
Intermittent reality hitting home for the German Minister for Economic Affairs and Energy.
"One fact has been concealed for too long: an energy transition that ignores system costs will ruin the country that it pretends to save.
It can't go on like this. The renewable industry has grown up and now has to take responsibility – systemically and financially. By 2035, system costs will rise to 90 billion euros a year. The problem is structural: we have shut down 20 gigawatts of secured, low-carbon nuclear power. In addition, there are massive, politically driven network investments and a market design that ignores reality."
https://www.faz.net/aktuell/wirtschaft/katherina-reiche-jetzt-ist-zeit-…
"Alternatively, Germany could have kept the existing nuclear power in 2002 and possibly invest in new nuclear capacity. The analysis of these two alternatives shows that Germany could have reached its climate gas emission target by achieving a 73% cut in emissions on top of the achievements in 2022 and simultaneously cut the spending in half compared to Energiewende. Thus, Germany should have adopted an energy policy based on keeping and expanding nuclear power."
https://www.tandfonline.com/doi/full/10.1080/14786451.2024.2355642#abst…
Agree (for once). Nuclear is not the problem, it’s actually a big part of the solution.
A tout, and a person who believes in money.
Hmmm
As I often point out, money is not the measure. Energy is. In that light the discussion is valid, but needs to be preceded by another; what societal construct can be maintained using electricity? That includes of course, within one reiteration, the ability to build itself.
And if nuclear - proven tech, not magic - displaced/replaced fossil, how long would it last (being based on a finite resource and dissipation being an energy question).
Money talks. For example, fuel has gone up by 30% or so, and all of a sudden people are investing in electric cars. If it went up another 30% and looked permanent, EV cars / buses / trucks would increase significantly. The same thing occurred with the clean car discount (by EV price reduction).
"how long would it last" - hopefully until the next big energy technology is proven. And hopefully that one is renewable.
Your last sentences are not those of an engineer.
And certainly not of a physicist.
Exponential Economist Meets Finite Physicist | Do the Math
Nothing in JJ's comment contradicts physics or engineering.
I somewhat agree that economic growth cannot continue indefinitely (although I'm not convinced that economic growth always requires more fossil fuel energy). Where we disagree is the timeline: you think we are at (or even past) peak energy / economy / etc, but I think if that was the case the price of energy would be rising (and not because of a war). Before the war petrol was cheaper than almost any time in the past.
By your argument, an engineer would never design something made from steel as steel is a non-renewable resource. In reality an engineer will design based on the current price of the material, once it is too expensive they would look for an alternative. Engineers don't try and predict the future, that's for scientists.
Engineers design for a life - from memory truck trailers is 1.6 million k. Buildings 50 years. Dams 100.
Expensive isn't the yardstick there: time-to-failure is.
The 'cheaper' is a hard one to get across in energy terms - so many folk don't get it. But there is a 'price' above which society cannot 'repay' the 'money' because it cannot do enough future work. That point was well below $147 in 2008 $. I suspect it is well below $100, current $, given that for every $1 of GDP we are incurring more than $! of debt, globally (and that's before parrying decay).
Essentially, keystroke-issued fiat proxy can be issued as much as you want - but it is no guarantee of the availability of anything, and therefore an invalid measure on a finite planet.
Without money as a measure it would be hard for engineers to plan and execute projects.
Energy transitions don't need to happen with one "iteration". They never have in the past.
We have hundreds of years of uranium to fuel nuclear reactors. If that ran out we can use the many thousands of years of thorium reserves. It's just that uranium is more cost effective currently.
Why do we need the hundreds of years of uranuim?
Last week you assured us that we had hundreds of years of oil.
No flow/usage rates in either claim, I noted. Just an unsupported assertion.
Trump does similarly invalid cranial hopscotch; fun to watch but not to be taken seriously.
By "hundreds of years" I mean at current consumption rates with current technology. Technological advances and changing consumption rates are likely to extend those timeframes.
Changing consumption rates, you mean the non-developed world wanting to be developed?
Rising developing‑world consumption is built into the forecasts. The forecast is also that they will shift toward electrification, efficiency gains, and eventually slower population growth as they industrialise. China is already on the way.
The thing is, there is no realistic alternative. I choose to be optimistic.
Trump and his cronies have found the forever money hack by shorting oil right before each Trump announcement the Strait is open for business again.
Great incentive to keep the Hormuz thing going while juice can still be squeezed out.
The sad reality is that it is being squeezed out of greater fools taking a punt and thinking they have a valid chance to make a profit on trading oil futures when the cronies have the inside word. Better to put the humans behind the money and see the real effects downstream.
Meanwhile in the day to day world of businesses survival, a frantic race to secure oil based product supply is occurring. Alternative suppliers are being sourced, favours called in and leverage muscularly applied, with fortune favouring lateral thinkers, the quick footed and the liquid. Past customer loyalty is being rewarded with priority supply. End users without many accumulated brownie points will be coming under real stress.
Would suggest the greatest point of global stress, and increasing every day, are the now famous Straits. Iran has gone beyond realisation of the potential power it can inflict to claiming ownership of the passage to the point of legislating so in its version of a parliament. Now as not uncommon that measure contains much symbolism but the present impasse is looking rather well dug in, so to speak. Consequently there must be much stress on the other seven nations, none of whom are great pals with Iran save perhaps for Oman, that have shorelines on the gulf as their trade, commerce and revenue is largely dependent on free passage through the Straits. This is where it continues to point towards a large scale regional conflict emerging.
In recent announcements Iran have said they don't want to damage the world economy. I'm sure they understand that a large scale regional conflict could well break out. Even friends will have their limits. Economic security will trump the rights and wrongs of the situation eventually.
Zach. You are reasoning as a logical person. History shows religious/philosophical extremism over rides economic security consideration and self preservation instincts. Self immolation in the cause of a divinely instructed mission becomes a supreme honour.
FG. Not convinced the impasse is as entrenched as you perhaps suggest. Kharg storage was at about 50% capacity when Iran restricted Hormus passage. In about 8 days they will be forced to begin progressively closing down wells if the US blockade continues. Not that much digging Iran can do. As you observe the other predominately Sunni Gulf states are significantly invested in an outcome that delivers a less expansionist Shia Iran. The clock is ticking fast and crunch time approaches. It's clear IRCG now controls both the political and military strategy so there will be no repeat of the previous ambiguity in responses from Tehran. Overwhelming US military force now towers over an Iranian military which has been massively degraded. All now rests with the unpredictable individual in the White House.
It looks like a powder keg looking for a fuse . Just one slip, as Pink Floyd chorused. Have a look at flight radar. Just one chokker A380 downed, would do it.
FG. Yep, sure would. The region has form, in 1988 incompetent US navy personnel shot down an Iranian airliner not far from Hormus. Civilian flights are this time routed well away from the missile envelope. Your mention of an A380 prompts me to relate a current story (card carrying members of the enviro/marxist movement look away, your deep sympathy for my plight could cause you to choke on your fair-trade organic goat milk latte). I have a trip coming up to Europe in a few months. Booked flight hubs through Dubai. If the flight is cancelled I miss multiple expensive commitments further north. I can get an alternative though another region but would lose $5K on the via Dubai flights I've already paid for. Would you take the risk the war will be over by then or book the alternative?
Blimey, ditto. This is to be my last hurrah. We booked a month trip to Europe etd August, ages ago and like you Emirates out of CHC was too good to resist but also we did appreciate there was an element of the calculated risk. Anyway we are not well equipped to entertain uncertainty so we cancelled last week at cost and rebooked with SIA at quite a bit more cost. We understand that the alternative airlines are ratcheting up their prices as we speak. It seems, as per flight radar, that the Emirates, Qatar, Etihad are getting daily air traffic in and out reasonably consistently at present. We know friends of friends who went through Dubai last week virtually untroubled. Like you though we have an existing outlay that is not refundable and in reality it came down to safety first. I am no longer, glad to say, the risk taker of old . In your case though you could consider bringing your flights forward a few days to give yourself a bit of a buffer, create some extra time just in case. Let me know how you go or any other thoughts.
Ha, how spooky is it that the plans of a couple of random int.co fossils like us would coincide. We've done the same as you and rebooked on SIA.
The Sunni states appear to be weighing up an erratic tyrant vs a China which actually makes things to trade. The Us is rapidly looking like a rogue, pariah State, child-king included. Even ridding itself of Trump doesn't solve the malaise that put him there - twice.
The switch away from the petrodollar to the yuan or something similar, is therefore inevitable.
With ramifications.
Wishful thinking I suggest. Sunni power base Saudi Arabia is currently showing itself very accommodative of the US and most gulf states are similar or at least silent in the face of the US dismantling of Iranian military power. China is supplying the feared IRGC enemy with military equipment and is yet to display a willingness to project its vaunted but untested military forces in aid of its friends. They'd be most unwise to risk their diversified western markets for a single buyer in a non reserve currency. The shrewd heads of the gulf oil producers are well aware that China is like a python, once it gets a crush on you it usually doesn't end well. Thousands of the elites' children live and study in the west, not all that many in Beijing for some reason. Not going to happen any time soon.
Middle, I agree with your synopsis from one perspective, but consider asymmetry. Yes the US is the dominant military power in the region, but asymmetry can cripple that. It's been proven before. The IRGC doesn't really need high tech. If they have the numbers, they can overwhelm the US Nay's defences and penetrate to do damage. US forces are not good at retrenching to basic systems. They've become too dependent on flashy high tech stuff. Not sure how well they'll do without it.
Murray, agree asymmetric warfare can stymie superpower but only under some circumstances. Ground based urban fighting for example but not going to happen to any large extent this time unless Trump blunders in. The Ukrainians have demonstrated naval asymmetrical mastery but against a clumsy opponent without air dominance and lacking UKRs technical prowess. Iran has demonstrated some capability in manned and remote drone deployment but its surface small boat capability has been decimated. The narrow strait is intensely surveilled by armed drones, largely unmolested by AA missiles. Longer range missiles remain a threat, albeit now limited by attrition. Iran knows that if it strikes a major US ship the bombing response would be violently massive. The war will remain mostly stand off high tech, I don't see too much chance of large scale close in basic system fighting. In any case I'd argue the yanks have over recent decades demonstrated capability in basic patrol/footslogging combat, admittedly always with strong vehicle and close air support.
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