Here's our summary of key economic events overnight that affect New Zealand with news conflict in the Persian Gulf has erupted again with attacks on US naval forces trying to open the waterway for US flagged vessels. Iran also hit the UAE. Iran also warned that it will tighten its control over the Strait. So far there have been 28 attacks and 6 near-misses.
The oil price has risen, equities have fallen, and benchmark interest rates rose.
How China reacts will be important now. So far they are bolstering their support of Tehran via trade and payments support, and banning their companies from respecting the US sanctions threats.
In the US, factory orders rose in March and by more than expected as the stockpiling trend got started. They are now almost +3.7% higher on a nominal basis than a year ago. This data matches the recent factory PMI data we have reported earlier.
US April vehicle sales came it at an annualised 15.9 mln rate, slightly less than for March and less than expected. This was down -7.2% from April 2025, but holding at about the post-pandemic average which in turn is about -10% lower than pre-pandemic levels.
The US Fed loan officers survey may have disappointed some observers. Earlier in the year, indications were for rising demand. But the results of the April survey found little-change. At least it didn't find softer demand.
In Canada, they have announced a $C1 bln support program for manufacturers hit by the swingeing Trump tariffs on their steel products, a sector hit particularly hard. Another C$500 mln in regional support was announced at the same time.
In South Korea, we got another very good factory PMI for April. The S&P Global version rose to 53.6 in April from 52.6 in March, the strongest expansion since February 2022. But the scramble for more orders, and production is to get ahead of incoming inflation pressure. In fact, input costs and output price inflation surged to its highest in the 22-year history of this monitoring.
In Taiwan, the same scramble is underway, with production and sales rising sharply as firms look to stockpile. That drove their factory PMI to new momentum and a five year high.
In Europe, the ECB also released a survey of bank forecasters. They found there were expectations for higher inflation in the near term, but unchanged further out. These analysts have downgraded their 2026 and 2027 growth expectations, but left longer forecasts unchanged.
In Australia, the Melbourne Institute's Inflation Gauge tracking reported a +0.6% rise from March to be 4.3% higher than a year ago. The April result was lower than the record high monthly increase at +1.3% in March, and compares with the official March monthly annual rise of 4.6%. Despite the easing, this rate remains very high and likely well above what the RBA will be comfortable with. The RBA is widely expected to raise its policy rate +25 bps to 4.35% later today, although in the past 24 hours, the market conviction has wavered.
The UST 10yr yield is now just on 4.44%, up +6 bps from this time yesterday. The key 2-10 yield curve is now at +48 bps (-1 bp). Their 1-5 curve is now at +33 bps (+3 bps) and the 3 mth-10yr curve is at +78 bps (+7 bps). The China 10 year bond rate is now at 1.75%, unchanged. The Japanese 10 year bond yield is down -1 bp at 2.50%. The Australian 10 year bond yield starts today at 5.02%, down -1 bp. The NZ Government 10 year bond rate is down -3 bps at 4.69%.
Wall Street has started its week with the S&P500 down -0.4%. Overnight, European markets were down between London's -0.1% and Paris's -1.7%. Yesterday Tokyo was closed for a holiday. Hong Kong was open and was up +1.4%. But Shanghai and Singapore were closed for holidays. The ASX200 ended down -0.4%. But the NZX50 ended up +0.5%.
The price of gold will start today down -US$92 at US$4522/oz. Silver is down -US$2 at just under US$73/oz.
American oil prices are up +US$3 at just on US$105/bbl, while the international Brent price is up +US$5.50 and now at US$113.50/bbl.
The Kiwi dollar is down -30 bps from yesterday at this time at 58.7 USc. Against the Aussie we are holding at 81.9 AUc. Against the euro we are down -10 bps at just on 50.2 euro cents. That all means our TWI-5 starts today at just under 62.1 which is down -20 bps from yesterday.
The bitcoin price starts today at US$80,587 and up +2.4% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.6%.
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5 Comments
'In the US, factory orders rose in March and by more than expected as the stockpiling trend got started. " To me this seems to be dicing with the devil. Not so bad if they're anticipating an increase in demand and it eventuates, but on the other hand if they're just trying to get ahead of pricing escalations because of the war uncertainty, then the upturn will be followed by a matching or worse downturn. Inventory costs money to store and maintain, so without some level of turnover that cost can be punishing.
Bought a few appliances and parts from Harvey Norman etc recently. Seems they have nothing in country anymore, have to wait weeks after you buy it.
This was down -7.2% from April 2025, but holding at about the post-pandemic average which in turn is about -10% lower than pre-pandemic levels.
I thought Trump was going to make the US automobile industry great again. Pass me another TACO I’m not full yet.
Trump was indeed loquacious in his electioneering that he would make his fellow Americans “better off.” The great majority of those Americans are now starting to realise that they are the opposite, and that is worsening. That dissatisfaction will outturn in the mid term elections with the Democrats likely in control of both houses. How a volatile, self contradictory and unpredictable President copes with that will be more than interesting and portends much much increased uncertainty.
IPCC drops the RCP8.5 pathway. For all the scary headlines from MSM/Interest over the years nary a mention in the media. The Reserve Bank, government and local councils will all have to get busy rewriting their chicken little plans once their relief celebrations are over. Good work Kate.
The Network for Greening the Financial System framework, used by more than 140 central banks, has utilized a “Hot House World” scenario calibrated to RCP8.5 physical risk into the bank stress tests run by the European Central Bank, the Bank of England, the Reserve Bank of New Zealand, the Banque de France, and the US Federal Reserve. The World Bank’s Climate Change Knowledge Portal, which provides the climate diagnostics that feed into the Country Climate and Development Reports for more than 100 client countries, defaults to SSP5-8.5 and SSP3-7.0.
The abandonment of the high-end legacy scenarios by CMIP7 will need to propagate through this entire infrastructure. The policy machinery built on RCP8.5 and the other implausible scenarios is systemic.
https://rogerpielkejr.substack.com/p/rcp85-is-officially-dead
For the 21st century, this range will be smaller than assessed before: on the high-end of the range, the CMIP6 high emission levels (quantified by SSP5-8.5) have become implausible
The Scenario Model Intercomparison Project for CMIP7 (ScenarioMIP-CMIP7)
https://gmd.copernicus.org/articles/19/2627/2026/#section6
https://www.interest.co.nz/public-policy/127062/katharine-moody-calls-m…
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