Here's our summary of key economic events overnight that affect New Zealand with news oil prices are still rising as the two sides dig in in the Persian Gulf with no obvious off-ramp for this toxic situation.
And hot on the heels of what is being seen as this humiliation of the US in the Middle East, Trump is heading to Beijing where the Chinese are waiting to attempt to get the US separated from Taiwan. Their chances seem better because China seems much less reliant on the inward-looking US.
But first, the overnight dairy Pulse auction brought little-change in prices from last week's full auction event.
In the US, their April CPI inflation rose slightly more than expected, coming in 3.8% higher than year-ago levels and a three year high. Trump's war pushed fuel costs up (+17.9%). But it is pushing non-fuel costs up too with core inflation its highest in 7 months. Electricity prices are up +6.1%. (Remember, this data is from the Trump-friendly 'new management', so we should remain sceptical.)
The weekly ADP Pulse monitoring reports that the private sector added +33,000 jobs in the last week of April, keeping up the pace it has reported for the prior five weeks.
And new monitoring shows it is not a good time to be young in the US.
The NFIB Small Business Optimism Index was little-changed in April and near its 11-month low of 95.8. Analysts had expected a small improvement, but it was not to be with survey respondents concerned about rising inflation, and affordability stress on their customers.
Overall US household debt was basically steady in Q1-2026 according to the latest update.
But their Federal Government debt is increasing in cost and at a faster face. The overnight auction for their ten-year bonds came in at 4.41% median yield, up from 4.23% at the prior equivalent event a month ago.
The May USDA WASDE report exposes the risks to American agriculture from creeping changes to their climate. They now concede that the US wheat crop will be sharply lower this coming season. Reductions from the EU, Argentina, and Australia are being forecast too. Corn production is likely to be lower too, although that is off this year's record harvests.
All this pressure probably means there will be no US Fed rate cuts for the foreseeable future. If there are any movements, rises are the more likely.
Across the Pacific, Japanese household spending turned worryingly lower in March as inflation started to bite and their households turned risk-averse. They are saving more. Household spending there fell -2.9% in March, much more than the -1.8% drop in February and below the expected -1.3% retreat. This is the fourth straight decrease and the largest.
India's CPI inflation rate inched up to 3.5% in April from March's 3.4%, not the big rise (to 3.8%) that was anticipated by market watchers.
In Germany, their ZEW Indicator of Economic Sentiment was expected to get more negative in May that in April, but in fact it got less negative, which was a market surprise. Economic expectations are brightening, they say.
In Australia, they released a fairly ambitious Budget overnight, doing more needed reform than anticipated. But it is still a budget in deficit, even if less so. With some unusual bravery, they are tackling stubborn policy areas and will no doubt have to use some political capital to do so. Redistribution pain will bring howls from the usual suspects at the top end of the wealth spectrum. They have been aided by stronger than expected starting point from tax flows from commodities and corporate good health. Here is one less-partisan analysis.
But accelerating cost pressures are squeezing margins and demand is cooling, with the latest NAB Monthly Business Survey signaling a tougher operating environment for Australian businesses. This April survey shows purchase cost growth lifted sharply to +4.5% in April, outpacing product price growth at +1.8%. Business conditions fell while confidence marginally but it is still deeply negative (in fact, its worst since the pandemic). Those surveyed reported that forward orders fell further in April to be down sharply since February and giving up all the gradual gains achieved over the past year. Only mining orders rose and to be fair these were outsized gains in that sector. (Later today, we expect to get the Westpac consumer sentiment survey results.)
The UST 10yr yield is now just on 4.47%, up another +6 bps from this time yesterday. The key 2-10 yield curve is now at +46 bps (-1 bp). Their 1-5 curve is now at +33 bps (+3 bps) and the 3 mth-10yr curve is at +79 bps (up +4 bps). The China 10 year bond rate is now at 1.75%, down -1 bps from yesterday. The Japanese 10 year bond yield is up +5 bps at 2.56% and a new 29 year high. The Australian 10 year bond yield starts today at 5.08%, up +6 bps from yesterday. The NZ Government 10 year bond rate is up +4 bps at 4.74%.
Wall Street lower today with the S&P500 down -0.3%. Overnight, European markets were mixed between London's no-changed and Frankfurt's -1.6% drop. Tokyo ended its Tuesday session up +0.5%. Hong Kong was down -0.2% with Shanghai down the same. Singapore was up +0.1%. The ASX200 ended down -0.4%. But the NZX50 fell a full -1.0% in its Tuesday trade.
The price of gold will start today down -US$44 at US$4678/oz. Silver is down -50 USc at just under US$85/oz.
American oil prices are up another +US$3 at just over US$101.50/bbl, while the international Brent price is at just over US$107.50/bbl, also up +US$3.
The Kiwi dollar is down -30 bps from yesterday at this time at 59.4 USc. Against the Aussie we are up +10 bps at 82.3 AUc. Against the euro we are unchanged at just under 50.7 euro cents. That all means our TWI-5 starts today at just over 62.7 which is down -20 bps from yesterday.
The bitcoin price starts today at US$80,465 and down -1.9% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.5%.
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12 Comments
A faint whiff of panic in Government circles.
Anyone note Goldsmith ramming his court-quashing concurrent with the Potaka raid on the Conservation estate? Same media bottleneck, overloaded in the same timeframe. Choreographed, for sure.
But safe - no member of that media will challenge them big-picture. They may challenge re legality and/or morality - and both in their minor way are valid; our grandchildren are going to be pi--ed.
Addressing what is driving the concurrent moves though? Nobody in the NZ MSM, so far. This Government, like all governments in the current era, is attempting yet-another 'doubling time' of growth. An increasingly impossible task. No amount of Conservation estate raiding, speed-increasing, rule-avoiding, LA-instructing (re rates) or mantra-chanting (economic growth) adds up to a doubling. Tinkering at the edges, but not a doubling - and we are witnessing the biggest reduction in global energy-input, ever, so a reversal rather than acceleration.
Time the media stepped up.
Which government?
Great description
Doesn't matter, it's just more, repetitive, depletion nonsense. It's completely false and outdated. PDK is stuck in the seventies. Global energy input isn’t collapsing. It’s at record highs, with renewables adding more new supply each year. GDP growth isn't tied to proportional energy growth. Energy intensity falls almost every year.
While PDK's comment is somewhat obtuse, I agree with him. The Government has changed the law to protect major polluters, while ordinary people will not have the same protections, but they will have to deal with the consequences from the big polluters. This is wrong.
As to Mike Smith tha activist who is highlighting this I agree with him too. I haven't always. I didn't agree with him cutting the Monterrey pine on One Tree Hill, but he made his point. This about all the people of this whenua, not just the wealthy. History tells us that if we are not careful we can poison the land for generations to come. How do we stop that?
Murray don’t you also believe in petrol subsidies?
I reckon I could explain to my 5-year-old grandchild, the difference between a stock and a flow.
Maybe a few years until he could grasp entropy - perhaps with the example of his bike being left out in the rain being a practical example. And of course, EROEI would be an easy explain - he's always hungry after a burst of pedalling.
He's already into addition - so the fact that 'renewables' (really rebuildables, using non-renewables to do the building) are being ADDED to the non-renewable flows, rather than displacing them, should be an easy explain too.
Some, obviously, take longer. Maybe they are who Stanford had in mind when she moved to curtail critical thinking and to knobble problem-solving?
Sort the priorities out. Have one or two of the disgraced and outcast British Royals buy some. That will get 90% of our media really interested.
House prices double every ten years I’m told.
That's only 7.18% a year!
At the moment it’s more like 0% a year, so lots of catching up to do. The Church of Ashley must be losing their faithful.
More and more around the world are beginning to realise the degree of Trump's failings. The trip to Beijing will be interesting. What will he have to surrender to get what he wants? I suspect Xi will offer Sweet FA, but Trump might betray Taiwan to gain the concessions he needs in the ME. Xi will make him beg I suspect, revelling in the power that Trump has given him without even asking. Stability and oil flow traded for instability in the Pacific?
Xi is putting his own people at the head of the Chinese military. That raises big questions; hawkish or dovish? What impact will it have on the South China Sea and the countries surrounding it?
In the US MAGA supporters are getting a little upset they haven't received their gold cell phones! Priorities?
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