Here's our summary of key economic events overnight that affect New Zealand with news the Iranians seem to be sucking Trump into a place he can't extract himself from, far from his earlier claims of 'total victory'.
First up today, US existing home sales came in at a modest level again in April, and undershot what analysts were expecting. High mortgage interest rates are probably the reason for the soft demand. Still, they did sell at an annualised rate of just on 4 mln dwellings which is enough to sustain the sector. Unsold inventory is rising however, now at 16 weeks sales, and has been rising for all of 2026 and is now at 1.35 mln units.
There was another US Treasury bond auction earlier today, and it was notable that demand is flagging, down -5% from the prior event. This time this 3 year bond achieved a median yield of 3.92%, up from 3.85% at the prior equivalent event a month ago.
Inflation's impact in the US has officials scrambling. US petrol taxes are said to be on the radar for cutbacks. And the high cost of beef is pushing the US to sharply cut tariffs and quotas on imported beef. Both are effective acknowledgements that tariffs are hurting Americans more than their trading partners. However, given current demand and supply situations, it seems neither move will likely result in lower prices for US consumers.
In Canada, their central bank runs a 'market participants survey' quarterly, and in the latest of these professionals now see geopolitical tensions more of a threat to their economy than the trade tensions with the US. They also saw only a modest +1.6% economic expansion this year.
China's inflation is rising, noticeably now. Yesterday they said their April CPI came in up +1.2% from a year ago, with fuel costs up +4.6% on that year-ago basis. But in April from March, fuel costs rose +3.5% in just one month. Things are just as hot for producer costs which were up +3.5% year-on-year, and up +2.1% month-on-month. These are big sifts because they have been negative since October 2022.
China's vehicle sales came in a 2.525 mln in April, about average aver the past three years, but marginally lower than year-ago levels which was an outsized period.
On the commodities front, copper shot up to a record high today, and aluminium, nickel and zinc are also rising at the same time. Sulphur, a key ingredient for all mining and processing activity has shot up to a record high again, and approaching three times its cost of a year ago, up double from the start of Trump's Gulf War. But urea, which also spiked to mid April, has come back quite a bit since then.
Trump is on his way to Beijing for a summit with Xi, but he is going in quite a weakened state - but he probably doesn't realise it.
The UST 10yr yield is now just on 4.41%, up +5 bps from this time yesterday. The key 2-10 yield curve is now at +47 bps (unchanged). Their 1-5 curve is now at +30 bps (-3 bps) and the 3 mth-10yr curve is at +75 bps (up +5 bps). The China 10 year bond rate is now at 1.76%, down -1 bps from yesterday. The Japanese 10 year bond yield is up +3 bps at 2.51%. The Australian 10 year bond yield starts today at 4.02%, also up +3 bps from yesterday. The NZ Government 10 year bond rate is down -2 bps at 4.70%.
Wall Street has started its week with the S&P500 up +0.1%. Overnight, European markets were mixed between London's +0.4% rise and Frankfurt's -0.7% retreat. Tokyo ended its Monday session down -0.5%. Hong Kong was unchanged but Shanghai jumped +1.1%, which is a big move for them. Singapore was up +0.4%. The ASX200 ended down -0.5%. But the NZX50 rose +0.3% in its Monday trade.
The price of gold will start today up +US$8 at US$4722/oz. Silver is up +US$5 at just under US$85.50/oz.
American oil prices are up +US$3 at just under US$98.50/bbl, while the international Brent price is at just over US$104.50/bbl, up +US$3.50.
The Kiwi dollar is unchanged from yesterday, at this time at 59.7 USc. Against the Aussie we are down -10 bps at 82.2 AUc. Against the euro we are up +10 bps at just on 50.7 euro cents. That all means our TWI-5 starts today at just under 62.9 which is little-changed from yesterday.
The bitcoin price starts today at US$81,983 and up +0.6% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.4%.
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21 Comments
I read the situation as Trump will attack after the Beijing summit, unless China offers a brokered peace deal....
Strong possibility. Beijing doesn't have to do much other than let Trump do his own thing, knowing he is destroying all that was America internationally. I suspect China can't be bullied by the US anymore, and they will just wait. Patience is a Chinese virtue in strategy. Patience is something Trump lacks.
“Patience is something Trump lacks.” - along with almost everything else.
While many here worry about house prices or oil prices, I think the biggest thing to fear for western countries is a weak America that will no longer be capable of defending the western world. Trump kind of knew this, but ended up making America weaker by alienating ally’s.
The United States Spends More on Defense than the Next 6 Countries Combined
And a new force that's funded $56billion USD , focused on drones and AI warfare.
Right now, The Ukraine could probably defend the western world, hell they forced Putin to cancel his tank parade.
God still loves the Marines.
some say 8 next countries
The US Spends More On 'Defense' Than The Next 8 Countries Combined | ZeroHedge
The dominant hegemony - on whose coattails we rode and therefore whose thuggery we are, by association, guilty of - is failing. Trump is a symptom, but the descent has been trackable for some time; indeed decades and I'd suggest 5 such.
This hegemony-failing, has implications far beyond 'oil prices' - which are a false measure anyway, given that the measuring-proxy is fiat-issued at a keystroke, indexed to nothing more than notions. That 'not indexed' description applies to all western (USD-related) forward bets - like Kiwisaver. That is one threat - that the west's forward assumptions go banana-republic-ed. Overall it had to happen - exponentially more forward bets vs exponentially less mineable planet - that someone's forward bets would be unbacked/less backed; we just assumed it would be someone else's.
The biggest thing to fear, is physical non-supply of essential stuff. No financial or political construct/chicanery can conjure up that which physically isn't there.
America, defender of the Western World. Are you kidding? America is a money hungry psychopath that has murdered hundreds of millions to milk the world for every last cent it could. It's downfall cannot come soon enough.
A level of hyperbole there, considering the alternatives offered up over the last century.
Be careful what you wish for. Consider also who could replace the US & their history.
With respect, that's not the yardstick.
It's not the speed of the parachutes - it's the falling.
And back further still; it's why the falling?
J J,
alienating ally’s. In the spirit of helpfulness, the word is allies being the plural of ally.
" Unsold inventory is rising however, now at 16 weeks sales, and has been rising for all of 2026 and is now at 1.35 mln units."
On May 5 the Briefing talked about factory orders rising and I queried the reasons for it. That unsold inventory is the manifestation of the risks associated with ordering stock when the demand doesn't exist. It it is a hedging strategy then the company as the capacity of carry the cost (or it should!) if not, there's a significant crash coming.
It surprises me the people I talk to here in NZ who continue to hold the belief that Trump is a misunderstood genius, and we as NZ should be doing everything we can to support him as America 'is' the future.
My views have always been the opposite, and even more so now. Trump is trapped in Iran and Iran know that. No matter how much he claims victory the world can see the reality. The question is what next, find an exit with a Trump claimed victory or double down? If we see troops on the ground, all bets are off.
Was at Avery good friends place recently. Best to stay off politics, he's totally supportive of the misunderstood and particularly miss reported Trump. This is added to sound bites of Muslim bad, Iran bad etc.
There's a scenario were Trump wants a "Third Term". Only way is for an emergency situation where the second term can be extended indefinitely. An active war would be cause for that.
Hope it doesn't happen. Hope he wants to retire to Mar a Lago to eat cheeseburgers every meal and send outrageous tweets. But scenario A is a greater than zero possibility.
Wouldn't the 22nd Amendment added post WW2 prevent that? I'm sure if there are any loopholes Trump would do his best to exploit them but I feel it's unlikely he would succeed.
You forgot playing golf everyday and shooting -1 every round because as he keeps telling us, he is an amazing golfer, some say the best!
It is a technical possibility.
Major conflicts could result in constitutional change. My concern being that the Greater North America project looks awfully similar to the first KINGdom within the Club of Rome’s 10 Kingdoms framework from 1974. With the exception of Venezuela and its vast oil reserves, which has been tacked on.
If the Greater North America project is tied to the Club of Rome’s 10 Kingdoms, then perhaps Trump is eyeing his seat on the new throne.
Remember to separate fact from conspiracy.
The Club of Rome was - still is - concerned about the things I study; overshoot, resource depletion, pollution. Their 'proposal' was a suggestion as to how to run the planet, so we didn't end up where we currently are: grossly overshot.
Yes, we are witnessing a hegemony dying - with huge political/social ramifications for NZ. But to conspiratorially link that to some ulterior motive, is invalid.
There are, however, groups (Bilderberg, for instance) and their articulators (Cato Institute, for instance) who push to have a very few control the planet. That is a very different thing
and guilt-by-associated-smear is something we all should be aware of.
Suggest the Americans know landing troops will be both difficult and fruitless and will invite heavy casualties. The Iranians are forewarned and prepared and will not be caught out in the open like the Iraqis were twice.
I hope so.
Another consideration is the status of the US Navy vessels having been stooging around at sea for months now. Supply, maintenance, morale issues.
Rum, sodomy and the lash...
I thought that was Churchill, but I see that is not definite.
It's up his alley, though
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