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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52 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
"He even makes it sound like the European Union was a US idea and plan."
Newsflash, Murray... it was.
It is common knowledge among geopolitical circles that the EU was a CIA-hatched plot to help enable the US to control the entire region, through one political body rather than through ~27 somewhat fractious individual governments.
The EC (European Commission) is the executive cabinet of the EU, formed in 1958, and HQ'd in Brussels.
The 27 commissioners are appointees, and they oversee an administrative body of about 32,000 European Civil Service employees. By having this executive branch in its pocket, along with a string of PM/Presidential/Chancellor lackeys, the US has effectively been able to talk them into committing financial hare kare.
Their masterstroke was when the US persuaded them to participate in the destruction of the Nord Stream Pipeline. That move effectively quadrupled their energy costs when their incredibly affordable and reliable piped supply from Russia was replaced by US-supplied so-called "Freedom Gas".
Oh, the irony of that farcical label. This was, in reality, the end of the one remaining competitive advantage that some European industries still had over their competitors.
I'm curious. If the Westernization of Ukraine was driven by the US for energy reasons, why has the US almost entirely withdrawn support for Ukraine under the Trump administration? Is Ukraine no longer important, or is this just a reflection of the Trump administrations close ties with Russia - no longer an adversary, and perhaps a source of energy itself?
Good questions.
I think that back in 2014, the US thinking was still that they needed to repel boarders and continue hegemonic dominance.
I think times have moved on - we've added a billion people since then and depleted perhaps 1/4 of the then-remaining oil. As the US hegemony has descended the entropy track, the rust-belt threw up Trump, he appointed family/cronies/sycophants, and now it isn't about the US, so much as it's about a small cabal of insider elites, advancing themselves sans conscience. As the first link said - they're pi..ed that they're losing so they're upending the board.
Add in the obvious mental decline of the toddler Why pulling US troops out of Germany goes beyond 'punishing' their leader | Simon Marks
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.
It's standard coalition politics. A year blaming the last lot and destroying everything they did (Winston even managed to complain about laws drafted by NZ First ministers in the last labour/nz first govt), a year doing your own stuff, then a year getting ready for the campaign. Have their been any governments with Winston that haven't ended in constant infighting?
TP. I'd argue that there's been very limited infighting (at least that we know about) within the coalition until recently. This latest play from Winston is a calculated bid for shelf space in the public's mind rather than the damaging policy schism the media is presenting it as. Peters is in the last chance saloon having a final drink before he heads out into the election badlands.
Winston informed everyone of this 2 and half years ago when he chose to be deputy for the first half of the term....nobody should be surprised.
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.
I'm all for nuclear as a technology, but don't see how the economics can stack up for an economy our size. Im interested what the impact of a 1GW generator would be on the reserve market, i think it would triple the needed reserves? Then there's maintenance shutdowns. Too large compared with the total market size, simply too big for our economy. SMR meanwhile would be far too expensive to operate. We have plenty of other non fossil resources we could be investing in.
Are you aware, Murray, that Peters is a Privy Council Member - ie, one of the most neoconservative and imperialist old-school organisations on planet Earth?
Doesn't this make your last paragraph, within the NZ context, contradictory in the extreme?
IMO, he is the most blatant example of doublespeak and opportunistic NZ politicians in my lifetime.
That said, I agree 100% with your closing two sentences...
"Our best protection is to protect ourselves by becoming more self reliant and resilient. The alternative is a total loss of identify and freedom."
That doesn't stop him having more clarity with respect to global politics Colin. You have a tendency to be too extreme. Too all or nothing. I try to consider all aspects. Most thing are less black and white.
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 generations.
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.
I think the biggest problem with what is proposed is that you're suddenly crediting the US with being able to work to a distant time horizon. Something they've historically not been able to do. China however is another matter. American politics globally tends to create chaos as egos run rampant. Trump is demonstrating that now, by creating a quagmire (yes I know Hesgeth hates the term - it is defeatist dontcha know?) that even whoever replaces Trump will find, they cannot easily extract themselves.
The China theory? China may well see the impending results and take action preemptively, and their current capability doesn't make it certain the US can or will prevail without escalating to nukes.
Kim Hill! - my god, PDK.
Have you not seen her disgraceful attempted hatchet job on Pilger?
I would rate her as the most disgraceful neocon talking-head, ever to fein journalism in NZ.
https://www.nzonscreen.com/title/face-to-face-with-kim-hill-john-pilger…
Sey Hearsh has done some magnificent work in the past, especially re the My Lai Massacre coverup, and the Nord Stream Pipeline bombing, but according to Laurence Wilkerson, his judgment has taken a huge dive lately.
Yes - and I've challenged her myself - The Paddock - a critique of New Zealand journalism | interest.co.nz
I agree with Murray - things aren't black or white, and even good journalists are human. Doesn't mean they aren't good journalists.
Having seen hundreds of Kim Hill ibnterviews over the years it's fairly safe to say she is nothing like your "Neocon" characterisation. Having also seen many Pilger interviews also over the years I would class him as an arrogant prick and very difficult to converse with.
But we're on about journalism here
Just sayin'
And Pilger did more exposing than most.
Yes, he did say some things that needed saying. But he was a prick!
PDK... You said...
"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."
I agree with you, 110%.
Re your final link on Patman, PDK, it makes me wonder if he has had a brain transplant since he and Sean Plonker were fawning all over the neo-Nazi orchestrated coup in Ukraine, which led to the Russian SMO trying to clean up this US/NATO-installed cesspool on their Western Border - an intolerable situation that threatened the security of their entire civilisation.
At 4:20... "And so we (NZ) have a big stake in Zelenski (Ukraine) prevailing and joining NZ, togther with other small and middle-sized countries, in saying enough is enough, let's get this UNSC sorted out where 5 powers have the ability to block anything they don't like."
At 14:50 ... Plonker... "The PM (Ardern) is in New York at the moment, maybe going down to Washington. In real terms, how significant are visits like this, or is it largely fluff?
Patman... "No, I think it is very significant.. ... and Jacinda Ardern is held in very high esteem by th Biden Admin, and Dr Kurt Campbell the Indo-Pacific Coordinator for the NSC of the US has publically spoken about how much he admires her leadership - I think that view is widely held in the Biden Admin, and also by the SOS Anthony Blinken. I think this is more than fluff.... so I think we would like to diversify away from China as much as we can, and that is a stated objective of the NZ Govt."
I shudder at the thought of this clown advising anyone, let alone the NZ govt, on its international diplomacy and trading future. Where on Earth does the Uni of Otago find people like this?
Pro fascist huh?
Where on Earth does the Uni of Otago find people like this?
I mean, they took on Robbo for a decent chunk of change after the last election, so that may be an indicator of the quality of their procurement process.
"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"
All Nats have to do is show up to the Whitehouse on bended knee, kiss the ring while clutching a bible and back up the truckload of baubles. You know this wouldn't be a problem for them. In fact they'd bask in the spotlight with the gold loving Messiah for their 30 seconds.
Some of them, of course - Luxon, Brown come to mind - are predilected to religious belief anyway.
I, and increasingly more of the public, believe that Luxon doesn't have the required 'baubles' for the task.
"we need to be as divorced from the f(l)ailing hegemony as possible"
Yes, agree, but seems at odds with your desire to see Ukraine absorbed by the murderous invading thugs wanting a new Russian empire?
NZ needs independence, but Ukraine needs genocide and subjugation? Oddly incongruous?
Because I see Russia as defending, not attacking.
Same as I saw Hamas doing the October thing; defending, not attacking.
Think: Has Russia sought to expand the fight?
Why would they expand the fight when they are wasting so much blood and treasure making at best incremental progress against their current enemy?
There's no room on their plate for more conflict.
Well you'd be wrong. Russia makes no secret of it's desire to expand its territories and influence. Do you support Russian daily bombing of civilian targets and it's winter campaign to freeze the Ukraine population?
I ask if it would have happened if Russia hadn't been sc..wed over by the West since its collapse?
Scoping is always good, 'dratted others' is almost always not scoped enough...
You didn't answer the question? Do you believe Russia invading and killing Ukraine civilians and destroying infrastructure is a defensive operation?
Ultimately, yes.
You persist in restricting the scope.
Read: While America Sleeps (Kagan and Kagan - one of them is married to Victoria Nuland. Check out their ethnicity. Checy out where she was, doing what, in/around 2014. This is cross-Party - Hunter Biden was there too.
As I said, alle same Hamas/October.
Scope.
You have an obsession with Nuland, while denying the people of Ukraine their right to self determination. If Ukraine wanted the little mafia dictator in Moscow running the country, his advance units would have been showered in rose petals instead of bullets on the road to Kyiv.
Any country under the Kremlins boot couldn't wait to get away after the USSR collapse. There's a reason for that, and it's fully displayed with the Russian butchery in Ukraine!
You are spot on PDK, but it is a complete waste of time, breath, and energy debating this subject with seething Russiaphobes.
This cult remains clueless that it is their brand of bigotry and ignorance that is being used by the global elite to help sow global division and chaos, with the express purpose of perpetuating the global MIC and, of course, the forever wars required to justify their continued existence.
These people insist on equating the communist regime, USSR, an entity that hasn't existed for some 35 years, with the Russian Federation.
The RF has zero appetite for extra territory. Just like the Iranian civilisation, their only desire is for their national sovereignty to be respected and left alone to trade with the West, in a way that could significantly increase the prosperity of both parties and humanity at large.
In terms of intelligent independent world leaders, there are really only two adults in the room capable of brokering a solution to defuse these flashpoints. The longer this debacle persists, the more likely it is to escalate into a nuclear confrontation, and potentially even an existential apocalypse.
These two leaders are Putin and Xi, and yet we see these half-witted attempts to demonise both of them.
Here is UK Ret. Navy Commodore Steve Jermy observing this reality, along with the very real existential danger if humanity ignores this amazing opportunity... ~32:00...
https://www.youtube.com/watch?v=1MN7nECum_w
The RF has zero appetite for extra territory.
I'm sure a few in the Crimean peninsula would strongly disagree there.
Whatever the original Russian plans were for eventual territory to be taken they sure as hell cocked things up from the outset by ignoring their own hard won history and attempting to invade Ukraine primarily from south to north. The Dnieper and Don rivers form a funnel to the Black Sea. Atop that, the plug is Kharkov the key to SE Ukraine. That is why the Wehrmacht and Red Army fought four major battles for control. Even in the civil war the Red Army had found the Donetsk industrial/urban belt west to east in Sth Ukraine almost impossible to breach and it has obviously been built up a lot more since then. Ironically if hadn’t been for the foresight of the ill-fated Prigozhin in setting heavily mined defences the first Ukranian counter offensive, that is from north to south, may well have succeeded.
It wasn't Prigozhin that built the defensive line, it was Surovikin. I doubt the Ukraine offensive in the south had a snowflake in hells chance of succeeding. With or without the Russian fortifications. It was more of a half assed media circus intended to be splashed across western media to keep support going. I seem to remember Zaluzhnyi
was against the plan and pulled the plug as soon as the disaster unfolded. Probably cost him his job? The amount of manpower and gear lost was ridiculous, especially when considering the operation was done without air support.
Fair enough and stand corrected but in mitigation there was though the “Wagner Line” which my short attention span back then must have failed to further enquire about.
The guy has fallen from grace since the "Wagner" episode, but I don't think he's joined Prigozhin in the afterlife downunder.
Russian "liberation".
https://www.google.com/search?q=mariupol+destruction&rlz=1C1GGRV_enNZ75…
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