Here's our summary of key economic events overnight that affect New Zealand with news investors are ignoring big (geopolitical) risks by taking even bigger new tech risks. [And who are these 'investors'? Probably the fund managers of your KiwiSaver or Super funds. They don't get paid for pulling back.]
On Wall Street, tech firms are reporting a profit gusher. Google (+81% rise in profits), Amazon (+56%) and Microsoft (+24%) delivered bonanza profit results yesterday, crediting AI for these outsized results. Meta was up too (+61%), but held back by a misfiring AI strategy that will require huge new investment. The positive results will likely boost valuations ever higher. In fact, Big Tech has committed to US$750 bln in new spending in the sector.
And this impulse is a big part of driving US economic activity which expanded +2% in Q1-2026 in their initial estimate, up from a modest +0.5% gain in Q4-2025 (which was revised lower at each subsequent update). However the current result was below market expectations of +2.3% growth. The outcome was driven primarily by AI investment, exports, and both consumer and government spending.
But their PCE inflation was reported for March at its highest in more than two years at 3.5%, with +0.7% of that coming in March alone, the steepest monthly increase since the pandemic distortions. Almost certainly April will have been higher, and probably by some margin.
Personal income, before adjusting for inflation, rose +4.2% while personal spending rose +5.4%. No wonder most Americans don't feel like they are making economic progress - although Big Tech won't feel the same way.
US initial jobless claims came in at 180,000 last week, a decrease and by more than seasonal factors would have indicated.
But although it was expected to continue to expand, in fact the Chicago PMI slipped into contraction in April. This unexpected shift was driven by a drop in new orders and a sharper than expected rise in input costs.
In Japan, retail sales (+1.7% vs expectations of +0.8% year-on-year) and industrial production data (+2.3% vs +0.4% in February) out yesterday for March were much stronger than any analyst was expecting. But it was only for March, and questions linger about their April data. Still it is better to lead into that with a good prior month.
There were two factory PMI surveys out for China yesterday. The official one has it expanding marginally slower and at a quite modest rate. The unofficial S&P Global version reported a slightly stronger expansion. The official services PMI showed a slightly larger contraction after the surprise tiny March expansion.
In Taiwan, they also reported GDP and it will be no surprise that it was a strong +13.7% growth, well exceeding the expected +11.3% expansion.
The EU said they expect April CPI inflation to come in at 3.0%, up from +2.6% in March and all driven by higher energy costs.
The ECB reviewed its monetary policy settings overnight and left its policy rate unchanged, as expected. (The English central bank did the same.)
In Australia, CoreLogic said its Home Value Index rose by +0.3% in April, slowing from a +0.6% increase in March and this latest level is the weakest growth in nearly a year. But values are now falling in the nation’s two largest property markets and they are easing in every other capital city. The prospect of another rate hike next Tuesday isn't helping.
Global container freight rates were little-changed last week from the prior one, and are now +6% higher than year-ago levels. There were few notable regional route changes. And bulk freight rates also held unchanged over the past week although at a high level. From a year ago these rates are up +90% however.
The UST 10yr yield is now just on 4.39%, down -2 bps from this time yesterday. The key 2-10 yield curve is now at +51 bps (+2 bps). Their 1-5 curve is now at +30 bps (unchanged) and the 3 mth-10yr curve is at +75 bps (-1 bp). The China 10 year bond rate is now at 1.75%, unchanged. The Japanese 10 year bond yield is up +6 bps at 2.52% and again a new modern record. The Australian 10 year bond yield starts today at 5.02%, unchanged from yesterday. The NZ Government 10 year bond rate is up +3 bps at 4.76%.
Wall Street was higher today with the S&P500 up +1.1% in Thursday trade. Overnight European markets were all higher too between London's +1.6% and Paris's +0.5%. Yesterday Tokyo fell -1.1%. Hong Kong fell -1.3% while Shanghai was up a minor +0.1%. Singapore rose a sharp +1.1%. The ASX200 ended down -0.2%. But the NZX50 was up +1.0%.
The price of gold will start today up +US$72 at US$4616/oz. Silver is up +US$3 at just under US$74/oz.
American oil prices are down -US$3 at just on US$103.50/bbl, while the international Brent price is down -US$9.50, and now at US$109/bbl.
The Kiwi dollar is back up +50 bps from yesterday at this time at 58.9 USc. Against the Aussie we are up +10 bps at 82 AUc. Against the euro we are up +30 bps at just on 50.3 euro cents. That all means our TWI-5 starts today at just under 62.2 which is up +30 bps from yesterday.
The bitcoin price starts today at US$76,167 and up +0.3% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.2%.
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15 Comments
We need to keep our eyes on the big picture. Two links; the first is a doozy; journalism eliciting truth as it should be done:
https://www.youtube.com/watch?v=ZZTB9-j-Cos
The second is longer, but confirms the shortfall:
https://www.youtube.com/watch?v=yriAdtE2hvg&t=3575s
The Peters/Luxon thing was important in terms of the first link; we need to be as divorced from the f(l)ailing hegemony as possible; Luxon is clearly one of a type mentioned explicitly in the link. Unfortunately the MSM treated it as a tit-for-tat leadership spat – it wasn’t, the tableau upon which it surfaced, is the more important point.
That first link is well worth the time. How we fit into that picture, is something our media – and thence we – need to be discussing.
Then this:
https://www.odt.co.nz/opinion/trump-administration-and-nz
‘In short, it is necessary for the current National-led coalition government to wake up to the reality that the Trump administration is not a traditional ally of New Zealand and that a US-led rules-based order is no longer available’
Agree that Trump isn’t a traditional ally, but the US probably will be once he’s gone (in 995 days https://logwork.com/countdown-h5o4). I get the feeling their voters are learning a few hard lessons.
Too quick - try the links before needing to opine.
The whole point is that the hegemony is disintegrating - which I think you need to not know?
Just listened to some of the first link (some of us have to work for fake money). It seems like one of many possibilities.
It’s easy to take a view (in your case this war is all about energy), then find some media articles that back you up. But I’m sure there is plenty of other information out there that says otherwise.
Do you think if the Democrats win the next election they will keep the straight closed (assuming it still is) while the American voter pays high prices for gas all to secretly screw over China? It is a democracy after all.
I'm wondering about this too. But what will be the cost to the US if the Dems don't stay the course? Will they be able to withdraw with little consequence. Perhaps they could deport Trump to Iran to be tried for war crimes there? Would that settle things down?
That first link explores your questions
:)
Re Democrats; member that Maidan was manufactured during the Obama administration. Nuland, the Kagans - this is irrespective of Party, this is hegemony/energy playing out. Murray, find the time for that first link - you'll be impressed methinks
I've watched most of it already. Yes I'm impressed, but I'm not completely ready to just accept it. Like Jimbo I'm a little sceptical. I'd like to see a couple of the Rand papers he references.
Would the European powers agree they've completely suborned by the US as he suggests? I suggest not. He even makes it sound like the European Union was a US idea and plan. Another view is that the US is alienating the majority of the western world to keep China down and perhaps become the global dictator? The scary part about that thought is that the US military has just demonstrated they will commit war crimes at the command of their CiC who is clearly not especially rational. The nation that has long trumpeted that is the defender and protector of freedom in the world is now freedom's greatest enemy?
ttps://www.rand.org
Self-justification is your playground, not mine. I started into this decades ago, with thinking that was wrong.
I learned, I changed.
I'm still learning.
China is not being screwed over, JJ, - they are laughing all the way to the bank.
In fact, the biggest beneficiaries, in terms of trade, resulting from this GOAT TOOFOO own-goal war are.... Iran, Russia, and China.
Your comment... "It (the US) is a democracy after all." - surely that is tongue in cheek? Even the polls tell us that it does not function as one.
Courtesy of Search Assist... "A majority of Americans oppose military action abroad, particularly regime change wars, with 77% advocating for caution in using military force. This sentiment reflects a growing desire to focus on domestic priorities instead."
I would describe the U$ model as a plutocratic form of bankism masquerading as a democracy, whilst it practices the most grotesque form of reverse socialism in history.
Winnie is very much a savvy player, and I suggest much more cynical than Luxon. Luxon seems too quick to fall over himself bowing and scraping to the world's major leaders. Yes he thinks he's negotiating good deals for NZ, but I suggest he's likely sacrificing much more in the long term. Prior to Luxon though, there is the CPTPP, formerly the TPP, where a concern was that our version, the one we signed effectively surrenders our sovereignty to foreign corporations. The respective PMs of the times, English and Adern, were clearly happy to throw a lot on the pile to get what scraps we could. Winnie on the other hand seems to be able to see with a clarity none of the others can, and has always been able to.
From a national resilience perspective we should be working towards more independence and less reliance on overseas powers. Yes this will mean in the short term; oil exploration to find our own supply of oil, rebuilding our defence capabilities that capitalise on our geographic position and whose focus is to deter powers from the thought of invasion, work to ensure our power supplies are distributed and primarily renewable (the Greens will choke on that) but include nukes into that mix for long term stability. A population strategy is also required to reduce the total to a sustainable level.
The shenanigans that have been happening over seas and will continue for the foreseeable future are a threat to us no matter that they are currently on the other side of the planet. Our best protection is to protect ourselves by becoming more self reliant and resilient. The alternative is a total loss of identify and freedom.
It is disappointing that after 30 months of a reasonably cohesive and workable coalition that two parts of it, six months out from an election, decide now is the time to start scrapping in a series of who said what said when said public spats. Do they not understand that in 2020 and 2023 the electorate took issue with National and Labour respectively, and sent them packing, due to obvious disunity and friction.
Fantastic post.
Why are our media (mostly - the Patman link goes some way) not at that level? This is what is being discussed but not reported, out in the real world:
Fuel, Physics, and What Comes Next | Webinar Recording
Luxon is worse than neutral - he's like a lackey, as indeed Key was before that, but Key had the savvy to clothe the wolf. Willis is as bad, indeed I can't think of a savvy intellect in the coalition and Hipkins et all are poll-driven to the point of pointlessness.
Rachel Blevins, PDK, is an excellent journo - extremely brave too in airing these home truths, especially given that she is located in Texas.
Brian Berletic is also very reliable and honest - he is American-born too, but based in Thailand these days.
The knee-jerk comment on this string, that this brand of hegemonic idiocy will likely disappear with TOOFOO's departure, demonstrates a farcical misunderstanding of history.
The U$ has been up to these tricks since soon after the end of WW2. Trump has turbocharged this criminal behaviour and removed the mask of feigned respectability, but this brand of vicious imperialism has been entrenched in America's behaviour on the world stage for generationds
The bonfire in terms of U$ political/diplomatic capital was already ablaze, Trump has simply taken it to a new level by feeding the flames with the petrodollar.
The war with Iran is really just a reinvention of the attempted continuation/combination of the 1953 coup of Mosaddegh when Eisenhauer was president, and the 2003 Iraq war prosecuted under the idiotic Baby Bush.
Remember that when there is not enough chaos and division happening around the globe, Murder Inc. is likely to stage a false flag (think 9/11), even if it means the grotesque murder of some 3000 of the hegemon's own citizens in an orchestrated attack on its own soil.
Agree re the US, but not re the JJ types.
That initial link is as good as I've seen/heard, from any slant, re fitting what we see unfolding. She is brave(r) than most claiming journalism status. I rate Fisk, Hersh, Pilger, Jack Anderson (but not always Pearson, his boss - Anderson's Confessions of a Muckraker is a classic) in the same league. I'd have to go back to Kim Hill, and sometimes Chris Laidlaw, to find such calibre locally.
I regard the JJ-types as needing to believe the status-quo they've based their statuses on, will continue (the default being that their statuses are under threat). They are the majority. But I split those into two further categories: those pimping (on behalf of political parties or business lobbies) and those needing to personally believe. The former tend to appear/ be more vocal in the run-up to elections, the latter seem to need to fiercely never re-think.
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