Here's our summary of key economic events overnight that affect New Zealand with news the US-wished resumption of talks with Iran don't seem to be happening. The Strait of Homuz remains closed, and even if it was re-opened it is never going back to 'normal'. It seems Trump has effectively generated to global push necessary to transition away from fossil fuels. Oil company share prices are retreating. Big investors are trying to offload their coal assets. China's green-tech is in demand everywhere, including in the US. We are now in the age of electricity where demand is surging.
Meanwhile the Warsh confirmation hearings in the US are following the predictable partisan scripts.
But first, today's full dairy auction featured a low amount of product offered and sold. -10% less than for the same week a year ago. Overall prices were down almost -2.75% below the last full auction in USD, down -5.85% in NZD. Northern hemisphere seasonal volumes are rising so global supply is very adequate. The main weakness in today's auction were from butter (-7.9%), AMF (-9.6%) and mozzarella (-3.1%). But WMP basically held its own (-0.6%) and SMP rose (+3.2%). Demand out of China rose, offsetting the unsettled Middle East demand.
In the US there was another strong indicator from the weekly ADP employment report, the second in a row.
And US retail sales came in better than expected for March, up +4.6% from a year ago, about twice the increase as for February. And that is their biggest rise in a year. But of course much of this will be inflation-related and much just came from the spike in retail petrol prices.
US pending home sales were up in March from February although the gain was less than in the prior month. That still leaves these residential real estate sales -1.1% lower than year ago levels.
Taiwanese export orders blew past all expectations yet again coming in at US$91.1 bln for March, up +67% from a year ago and up +18.5% above the prior stunning record high. Adjectives fail to adequately describe what is happening here.
The German ZEW sentiment survey fell much sharper than the expected fall in April.
In Australia, the ACCC's court case against supermarket giants Coles and Woolworths regarding deceptive pricing practices over 'specials' is capturing attention.
The UST 10yr yield is now just on 4.29%, up +4 bps from this time yesterday. The key 2-10 yield curve is now at +51 bps (-2 bps). Their 1-5 curve is at +23 bps (+2 bps) and the 3 mth-10yr curve is at +65 bps (+6 bps). The China 10 year bond rate is now at 1.75%, down -1 bp. The Japanese 10 year bond yield is unchanged at 2.39%. The Australian 10 year bond yield starts today at 4.95%, up +2 bps from yesterday. The NZ Government 10 year bond rate up +2 bps at 4.65%.
Wall Street has opened its Tuesday trade softer with the S&P500 down another -0.2%. Overnight, European markets were even softer, down between Paris's -1.1% and Frankfurt's -0.6%. But yesterday Tokyo closed up +0.9%, Hong Kong was up +0.5% and Shanghai also rose but only by +0.1%. Singapore ended +0.2% firmer. The ASX200 closed little-changed. The NZX50 rose a very modest +0.1% again.
And we should probably note that US private credit funds are about to report their March results and especially in the direct lending sector redemptions are expected to far exceed new investment. It is notable that big-money, wealthy investors are leading the retreat and probably leaving late-arriving retail investors with very damaged positions.
Interestingly, there are similar, although not as severe, pressures in China's private credit markets too.
The price of gold will start today down -US$92 at US$4715/oz. Silver is down -US$3.50 at US$76.50/oz.
American oil prices are up +50 USc at just over US$89.50/bbl, while the international Brent price is up +US$3, and now at US$98/bbl.
The Kiwi dollar is up +10 bps from yesterday at this time at 59 USc. Against the Aussie we are up +30 bps at 82.4 AUc. Against the euro we are up +20 bps at just on 50.2 euro cents. That all means our TWI-5 starts today also up +20 bps from yesterday at just on 62.4.
The bitcoin price starts today at US$75,782 and off a minor -0.2% from this time yesterday. Volatility over the past 24 hours has remained modest also at just on +/- 1.2%.
[There will be no video version today.]
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15 Comments
Heres some spice to kick the morning off... Revelation 9:11:
“They had as king over them the angel of the bottomless pit, whose name in Hebrew is Abaddon, and in Greek is Apollyon (that is, Destroyer)."
Abaddon = A Bad Don ?
Donald Trump, 45-47 (9-11)
No Kings Protests
Trumps NYC penthouse ceiling is covered with murals of Apollo
Bottomless pit? Take a look at the 9-11 Ground Zero monument. It’s been built so that no matter where you stand, it’s impossible to see the bottom…
Trump unlocks energy funds | Otago Daily Times Online News
There's always someone swimming against the tide - but that IEA link, while interesting reading, avoids mentioning whether electricity can build out electricity? And I note - is it AI? - the gobbledygook: 'Meeting evolving system needs also requires modernised operational frameworks, including updated grid codes, refined reserve requirements and adaptive regulatory structures.'
Southland lignite to urea mentioned RNZ this a.m. Long term it is just another draw-down, but short term perhaps a way to slow-land NZ food production. The proposal is inevitably on an 'all else being equal' basis - assuming dairy as formatted, continues. That will not be the case in a world where we need to do the lignite thing in the first place, of course.
Not gobbledygook, those are changes to allow for greater penetration of intermittent generation. Nz just changed its grid code last year to allow for more residential solar.
Cheers for that.
:)
I wonder where oil prices will end up if the ceasefire expires and Iran bomb other Middle East oil assets. Could we see $6 a litre for 91 in NZ? Thats if there is any to buy.
While others here like to celebrate the housing market “crashing”, this is an event I think is worth celebrating. 🍿
Pity NZ didn’t become less dependent beforehand…
The politicians are too captured. For me the national resilience lesson was evident from COVID. The banks will be a part of that play keeping governments in check while they get richer and more powerful. This collapse was inevitable eventually unless something changed. I don't necessarily think it had to be now, but it was coming and most on this site tended to agree. The challenge now is, is it too late to reform our system as a country? I doubt we can save the world, but our geographic location does provide somewhat of a insulation to the physical effects of what is occurring elsewhere, plus we are small enough to have others not see us as a threat. Unless the threat is an idea.......
Our location is good but our oil dependence is a real problem. Need the government to step up now and go big on electrification, but I highly doubt they will as that would be woke or some crap. Easier to cross their fingers and hope the status quo returns - which it probably will but if it doesn’t…
Electric is only part of the problem. I suggest we also need to explore more around for our own supply of oil to fill part of the energy need, although not to the degree it is currently. We also need to dump our aversion to nuclear and look into the new technologies around that.
But we also need to look at constraining our population. Too many people on our relatively small land mass will make it uninhabitable all too quickly.
Yes more oil supply here if possible but I suspect it isn’t. Maybe a good time for government to build an oil refinery and charge a “levy” (not a tax) on petrol.
And yes not a good time to allow immigration.
But really the main priority is that people and freight can still move around if oil is too expensive. Electric buses, electrify the rail network, these are good investments regardless of what happens with the oil price, they need to kick this off right now. I imagine there is already a big back order for electric buses for example, other countries smarter than us, it will only get harder.
Last big oil crisis everyone went CNG, this time it needs to be electric.
We are on the same page there, with caveats (and the biggie is morphing the general obsession with money, to fit future reality).
I have long suggested that the owning of energy - privately, collectively or nationally - is money in the bank. PV, firewood and food are the obvious ones - local electrification is a no-brainer. So too is local food. Some are on the case:
What can I do in response to the Fuel Supply Crisis in Aotearoa New Zealand?
The odds are looking like being against a near-term 'return to BAU'. Too much damage-repair needing to compete with said BAU, for starters. I'm beginning to wonder if the trend is to a non-global USA, hence the efforts to annex Greenland/Venezuela/Canada. A multipolar re-formatting, in other words. Not sure how that fits with ME invasions though (although the Iraq's were arguably in the fully-global era). Maybe just a case of grumpiness going down? A last fling of the dying empire? Whatever, Carney was right - we need to look after ourselves now.
Tony Alexander thinks NZ could use a bit of good luck atm
https://www.oneroof.co.nz/news/tony-alexander-reserve-bank-has-lost-the…
We need a magician
Speaking of "We are now in the age of electricity where demand is surging."
I read this this morning. Melbourne already experiencing capacity issues.
"First, Ms Slako noticed she could only use one hotplate at a time on her induction cooktop. Then she found the microwave would not heat food at dinnertime, but would burn everything at other times."
I wonder how robust our local grids are for surging electricity uptake.
https://www.abc.net.au/news/2026-04-22/victoria-undervoltage-melbourne-…
That seems to be a local issue where lots of people in an area moved from gas to electricity and the lines company didn’t do the necessary upgrades. Just another case of lack of investment not that gas is better than electricity.
The trick is to flatten the peak (of demand). Grids have to be built to carry peak plus a margin - but mostly aren't. Local PV is a no-brainer, however the cards fall; takes the demand off the lakes, can be coerced into taking peak load off, and if it all turns to custard, can be used stand-alone privately/grouply.
Ideology put us back there (the coalition were backward-headers, not forward) for a short while - but bottom-up take up has been strong regardless. Smart folk can see where power 'prices' are going and a growing echelon understand the drivers.
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