Here's our summary of key economic events overnight that affect New Zealand with news commodity markets are signaling more intense stress with copper and sulphur jumping to new all-time highs and aluminium jumping to near its brief pandemic spike. Tightening supply from the Middle-East standoff is driving the cost of these fundamentals up.
Today, Trump is in Beijing where heavily choreographed set pieces are play out ahead of the formal discussions. Trump got welcomed by a non-Politburo member, the first time China has done that. So far he is being treated just like any other visiting head of state, rather than the special senior welcomes by his predecessors.
And China is organising one of its tankers to exit the Strait of Hormuz in defiance of the US blockade, right at the time these meetings take place.
US mortgage applications were little-changed last week, but with this week's push higher in benchmark interest rates, they are likely to fall when reported next week.
American producer prices were up +6.0% in April from a year ago, getting a +1.4% shove in April from March. Distorted input costs from Trumps Gulf War are embedding uncompetitive pricing in American-made goods. Only the pandemic surge has been greater (also on Trump's watch.) It isn't clear right now why American producer prices are rising faster than just about everywhere else, but history will eventually explain that.
US crude oil stocks took another outsized tumble last week according to official EIA monitoring. Petrol stocks there fell sharply too. (These sharp drops are confirmed by industry data too.) The industry is raking in record profits on these lower volumes. Why the US, a net petroleum producer, is feeling the brunt of these price hikes is a classic study in oligopoly power. (And see this investigation.)
Meanwhile, UST 30yr bond yields have risen above 5% on secondary markets. Apart from the pandemic spike, this is the first time they have done so since 2007, so a two decade high. The overnight US Treasury 30 year bond auction delivered a medium yield of 4.99% (top bid 5.05%), up from 4.82% at the prior equivalent event a month ago.
And we should note that Kevin Warsh is now the Fed Chairman. But ex-boss Powell is still there. Given the Trump-induced inflation surge, he is unlikely to be able to deliver on Trump's demand for lower US interest rates.
In Canada, their central bank says they see no evidence that AI is having a material impact on their jobs market - yet, anyway. For them, the benefits are outweighing the costs.
EU industrial production rose in March from February, but that wasn't enough to counter the outlier faster rise a year ago, so it ended down -1.0% year-on-year. An outsized fall in Germany twisted these results.
In its May monthly report, OPEC cut its forecast for global oil demand growth in 2026, joining other forecasters such as the IEA in cutting expectations due to the Iran war.
In Australia, the wealthy are reeling after their latest Budget signaled a levelling of the tax playing field and the wind-down of concessions for wealth. To be fair, these are to be unwound over many years, but the big end of town is furious they are losing their perks. Certainly, those dependent on the property market can see an end to the gravy train.
The UST 10yr yield is now just on 4.47%, unchanged from this time yesterday. The key 2-10 yield curve is now at +48 bps (+2 bps). Their 1-5 curve is now at +34 bps (+1 bp) and the 3 mth-10yr curve is at +82 bps (up +3 bps). The China 10 year bond rate is now at 1.74%, down -1 bps from yesterday. The Japanese 10 year bond yield is up +4 bps at 2.60% and a new 29 year high. The Australian 10 year bond yield starts today at 5.07%, dipping -1 bp from yesterday. The NZ Government 10 year bond rate is up +4 bps at 4.78%.
Wall Street lower today with the S&P500 up +0.8%. Overnight, European markets were all higher between Paris's +0.4% and Frankfurt's +0.8%. Tokyo ended its Wednesday session up +0.8%. Hong Kong was up +0.2% with Shanghai up +0.7%. Singapore was up +1.2%. But the ASX200 ended down -0.5%. And the NZX50 slipped a minor -0.1% in its Wednesday trade.
The price of gold will start today up +US$12 at US$4690/oz. Silver is up +US$3 at just over US$88/oz.
American oil prices are holding up at just over US$101.50/bbl, while the international Brent price is at just over US$106/bbl, which is down -US$1.50.
The Kiwi dollar is down -10 bps from yesterday at this time at 59.3 USc. Against the Aussie we are down -60 bps at 81.7 AUc. Against the euro we are unchanged at just under 50.7 euro cents. That all means our TWI-5 starts today at just on 62.6 which is down -10 bps from yesterday.
The bitcoin price starts today at US$79,447 and down -1.3% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.7%.
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48 Comments
Please don't always blame Trump, DC.
He is a symptom, not a cause.
How about we discuss the cause?
No PDK, in the moment he is the cause and the catalyst. Yes there are bigger issues behind him that enabled him, or someone like him to get where he is. That doesn't absolve him from what he is doing.
I don't accept that what we are facing, the extent of it was inevitable at this time. Possibly later on down the track, but there is no real shortage of energy yet, so we are not at the precipice due to a shortage of resources. We are there because of endemic corruption, greed and ego's. Power plays by those trying to maintain their grip on power when it was becoming increasingly apparent that the general populations have had enough of the corruption and inequities flowing out from government.
If you think disparity is bad in NZ, America takes it to a whole new level. And Trump was good at creating villains to blame and persecute.
It doesn't matter if you accept it or not - the question is: what drove Trump#2? Because he wouldn't have had a look-in pre, say, 2000.
Energy Consumption and Inequality in the U.S.: Who are the Energy Burdened?
PS InstaDog 15 16x9 AUS OLV Master
Then globally:
THE CHALLENGE | Surplus Energy Economics
'This perspective is a practical one – nobody conversant with the energy-based interpretation was much surprised, for instance, when Donald Trump was elected to the White House, when British voters opted for “Brexit”, or when a coalition of insurgents (aka “populists”) took power in Rome. The SEE interpretation of prosperity trends also goes a long way towards explaining the gilets jaunes protests in France, protests than can be expected in due course to be replicated in countries such as the Netherlands. We’re also unpersuaded by the exuberant consensus narrative of the Chinese economy. The proprietary SEEDS model has proved a powerful tool for the interpretation of critical trends in economics, finance and government.'
As to your 'inevitable later but not now' comment: Dr. Albert Bartlett: Arithmetic, Population and Energy (transcript) - Global Public Media
'Second Question; if you were an average bacterium in that bottle at what time would you first realise that you were running of space. Well let's just look at the last minutes in the bottle. At 12 noon it's full, one minute before it's half full. 2 minutes before its ¼ full then 1/8th then a 1/16th. Let me ask you, at 5 minutes before 12 when the bottle is only 3% full and is 97% open space just yearning for development, how many of you would realise there's a problem?'
(sorry if the intellectual comparison offends :)
And it's even worse for those who see things through 'financial' glasses, of course - they are even slower to react. The signs are everywhere: student loans/debt; LA rates outpacing 'incomes' (an EROEI digression, nothing more); and the everything bubble; the collection of forward bets now beginning to unwind (as it was inevitably going to). There is an exponential curve going upward - demand for physical resources. There is an exponential curve going downwards: resources remaining. There is another exponential curve going upwards: maintenance demands of existing infrastructure. And remember that the 'resources' include remaining sink capacities (which the Government here is having to ignore, in a doomed attempt to prolong exponential resource-consumption growth.
I didnt get into reducing quality/concentration of resources - it too, is an upward exponential. We are at the inflection-point, or near enough that the pressures are manifesting as angst at the bottom and middle (Trump/Farage supporters) and as conflicts over 'what's left'.
Energy prices (particularly petrol) are much much higher here. Why don’t we have a Trump?
Because we have the current Government occupying that space?
I don’t think the current government could be less Trump if they tried! They are the typical centre right neo liberal mob that we’ve had in NZ for generations.
"Less Trump"? Well you possibly could say that, if you separate Trump from the movement that put him in power. The movement are getting the shift to Gilead they wanted. They love Trump because of this, although you'd have to work hard to find anyone who less embodies christian values. Must be a passage in the capitalist bible somewhere? Make a pact with the devil, if he helps force your will on the unwashed masses?
Nats are definately on board with US christian "conservatives" that are the Trump support base. Those people standing behing Trump at his press conferences. Same people. On the surface NZ Nats don't appear as extreme, because they can't get away with the same degree of evangelical nonsense here. Make no mistake, they would if they could!
You're missing the point PDK. The average American is very insular. They have no idea about global news or politics. They only see what's going on in their own back yard. Climate change? What's that? They generally just want to live their lives. The price of gas at the local gas station (I'm talking about petrol for those who miss that), how much their grocery bill costs as portions of the money they earn. They admire wealthy people and hate them at the same time. The admiration is because they have bought the American dream of wealth, the hate because they suspect the wealth comes from the modern equivalent of slave ownership, only the slaves are not Africans, but anyone middle and lower class which includes themselves. The increasing equity gap is very evident to ordinary Americans, and the incumbent politicians have failed to deliver on fixing it despite their promises.
Trump was elected because he was offered and not the usual. Their understanding of their political system is sufficient to realise a true outlier would never get to the White House. So their choice options was manipulated and slanted. The system is stacked against them, but Trump is a signifcant backfire on the incumbents too.
Edit - you didn't have time to peruse those links, Murray.
I'd be interested if your comment still holds after doing so.
Britain has become a broken, poverty-riddled 'living nightmare' | 7.30 - YouTube
it's less about the links than about human psychology and societies. I'm not saying the links are wrong, just that the "Why Trump?" question is more about ordinary American's frustrations with their politicians and corruption than about increasingly apparent limits to resources and the impacts of pollution, including climate change, on the planet.
The majority of Americans are far too insular to understand those. Those in power might, maybe, and if they do they're doing what they can to get their share before it runs out, and this is at the expense of everyone else.
The issue is not just in America, it's evident in Europe (the riots in France are one example), we can see signs of it in NZ and Australia. Yes underlying it are the limits you talk about, but superficially what we really can see is the corruption.
In support I would submit that the great majority of Americans simply vote for what’s in it for them and by and large that aligns, willy nilly, with their party loyalty, Or to put it another way, in effect the exact opposite of JFK’s famous speech note - ask not what the country can do for you - ask what you can do for the country.
It’s even worse than that. They don’t vote for what’s best for them, they vote for what’s worst for someone else. The democrats could campaign on free healthcare and increased minimum wage and poor people would vote republican
"majority of Americans simply vote for what’s in it for them"
Can't agree with that Foxy. The US electorate is extremely polarised. This is why it's basically the same 6 states that decide US elections every time. The Fox news crowd are NEVER going to vote blue. Just as educated black female liberals are never going to vote Republican. They never talk to each other. They probably never meet each other. Different universe!
The parties are identity, not policy driven.
Actually we don’t disagree. That steadfast identification with and support of one party , as you point out dominates every state except the six or so swing states, I suggest is the result of blind loyalty and motivation arising from an expectation that said party will deliver better benefit(s) for that particular voter. So, if you like somewhat obliquely, that voter is voting for what they think is going to be in it for them.
The difference is, they're not going to switch parties, even for policies that might theoretically benefit them. White trailer park inmates have been voting to trash their own healthcare system for decades. Perhaps they just view bibles in schools more important than that new hip operation? 79% of Republicans support Trumps middle east war. That certainly doesn't benefit them at the pump.
Yes, true. I see I should have added to the above that my theory is only part of it, not all of it.
The issue is not just in America, it's evident in Europe (the riots in France are one example)
Which riots are we talking about Murray? There's been plenty as we all know the french aren't ones to sit on their hands. The sad part about the french is that they have set up such generous pensions and welfare systems that they are, like many other western nations, coming up against the barrier of affordability, yet even in the face of knowing that the youth will be saddled with more and more tax burden to pay for keeping these in place, they rioted to demand no change to pensions. My guess is that when they reach force measure they will riot once again and have to be put in place by their respective govt in terms of being told, and actually having to accept that, the money isn't there, and their lack of willingness to make earlier changes will have lead them to their own conundrum.
According to AI: As of May 2026, the federal minimum wage in the USA is $7.25 per hour, a rate that has remained unchanged since 2009
If you are unskilled that’s a pretty crappy wage in such a wealthy country. And in many areas the free market won’t pay you more than minimum as there is a big supply of immigrant workers that think that’s a great wage. So you can see why the hatred occurs, especially with the insular uneducated folk, and especially when the democrats like to sweep the problem under the rug.
Very similar problems in the UK and parts of Europe. We are lucky in NZ that we don’t have many rust belt type areas. Typically unskilled immigrants in NZ do the jobs that Kiwis don’t want to do rather than take the jobs we want. Also our min wage is very decent.
We have reached the stage where there isn't enough to 'go around'.
Left-wingers and the GND brigade blame the 1% - and in societal terms they have a point, inequality is a cause for all sorts of chaos.
But even evenly-spread, we have a collective problem; we'd need 5 planets (at current rates of consumption) to raise every global human to our consumption-level. Ain't gonna happen. And thedraw-down of this one is orders-of-magnitude faster than can be maintained, already.
So that poverty in the lower-USA, is a symptom-not-a-cause itself, let alone Trump being a symptom of the symptom.
But hey, I've got an idea - let's issued untold debt for them to all spend. That'll make the planet bigger.
Oh, wait.... we did that. Didn't work. Wonder why?
You're still missing it PDK. "So that poverty in the lower-USA, is a symptom-not-a-cause itself.." No it's not. It's the result of a capitalist economic system that favours the wealthy, and dates to long before the limits to resources were visible to anyone but an academic. That economic system required an underclass to feed the wealth of the upper class, and is structured to keep the underclass 'where they belong'. The 'American dream' is mostly a myth to keep them hoping while being denied the opportunity.
Don't sweat it though, we see the same attitude in NZ about keeping people down. That's why I keep bringing up the 'Democracy' question.
We don't have a rust belt. But we do have zombie suburbs.
It’s normally easy to spot areas with bad economies just by looking at house prices. We have hardly any very cheap housing areas (Westport?), the US has loads.
Just going to make that point. The West Coast. NZ Appalachia.
Rescued by tourism and it's small size.
And minimal cost of living if you can hunt, fish, and burn coal or wood to heat your home.
So China is already speaking to Trump through the nature of his welcome. That message is a powerful one. Even if Trump misses the significance, his advisors won't. Xi will likely try, and possibly succeed, to bludgeon Trump into submission. Trump's ego, unleashed by the US Republican Party will cost the world it's stability and balance. Taiwan is right to be very concerned, but we should all be. What Trump gives away today could affect all of us.
To put it in the context of an old one, Trump has led with his chin.
Whereas they're addressing him from lower down and behind...
I disagree he's led with his chin. I think another appendage is more appropriate and it's about to get chopped off!
Perhaps not that extreme, but certainly get lashed somewhat.
That in itself might well take the form of a question mark?
or a backslash...
It’s probably a bright orange dollar sign
It’s completely ok, Luxon is onboard, what could possibly go wrong?
Compare:
‘Even When The Strait Opens…’: Singapore PM Drops Truth Bombs On Trump Iran War, Hormuz | World News
Until minute 4; absolutely on point.
Until minute 7 - not so.
Thereafter - displays the finance oxymoron in rah rah fashion.
Real story: Singapore is unmaintainable ex fossil energy, and despite the gloss, the supply is threatened.
I hope Taiwan has stocked up on Ukranian drones
"US crude oil stocks took another outsized tumble last week according to official EIA monitoring. Petrol stocks there fell sharply too. (These sharp drops are confirmed by industry data too.) The industry is raking in record profits on these lower volumes. Why the US, a net petroleum producer, is feeling the brunt of these price hikes is a classic study in oligopoly power. (And see this investigation.)"
Not paywalled...
https://thedailyoverview.com/americas-biggest-oil-field-is-becoming-a-d…
Huge backdown arising from the Trump administration’s miscalculation of the US beef market which will most likely see both tariffs and quotas suspended. US domestic beef production is down and consumption is up. The USDA and other agencies have very good data tracking that identifies early such trends but obviously that had been ignored. Said it before, and say it again don’t fiddle the price upwards of the Big Mac& Co if you want to keep Americans happy.
I have no beef with that
Don’t mince around then, go and claim your steak.
I simply watch and laugh, that the US thinks they can dictate and impose tariffs, demand favourable trade deals etc while claiming they are self-sufficient and better then the rest of the world. They can't process all of the crude they produce due to lack of refineries to manage their own grade, they import vast quantities of beef from around the world to maintain their insatiable appetite for burgers, and they live under the thumb of the 1% selling them the dream that by following the rules and working hard, they can reach that height of wealth.
The hit to the aussie banks share prices is a sure sign the government is on the correct track with their budget chagnes.
It isn't clear right now why American producer prices are rising faster than just about everywhere else
The war in Iran is distracting us from the real cause which are the tariffs. Yes, as always, the delay between cause and economic effect is underestimated. Likewise the real effects of the Straight of Hormuz closure are still well ahead of us.
Indeed...though some sooner than others
Interesting that Xi didn't meet/greet TOOFOO at the airport.
This is a massive diplomatic slur to set the tone for Trump, and his sycophants and cronies' visit to China... and all replete with an empty hand of cards to play.
And a couple of comments from the Sovereignista.com site, that I think sum up the US's position in having lost yet another illegal war of aggression. They are now desperately trying to extricate themselves from this multi-billion dollar debacle, with some measure of diplomatic capital ... fat chance - they will not be able to spin away a clusterf$%k of this monumental scale.
Interesting too, that by all accounts, T's people had not warned him that Xi wouldn't be there on the red carpet... presumably because T would have reacted with a massive tantrum and something very unpleasant being bestowed upon any hapless messenger... IOWs only tell the Clown Prince what he wants to hear. These people are merely con-men, clerks, yes-men, and courtiers, not cabinet, let alone wise council.
What a tragic comment on the demise of the Western hegemony, when the security of the entire planet is negotiated by a bunch of archetypal crooks and RE conmen like this.
https://sovereignista.com/2026/05/10/daily-chronicles-177/comment-page-…
A copy and paste...
"xvfsb 7 hours ago
“During the visit, the two heads of state will engage in in-depth exchanges of views on major issues concerning China-US relations as well as world peace and development. China stands ready to work with the US to expand cooperation and manage differences in the spirit of equality, respect and mutual benefit, and provide more stability and certainty for a transforming and volatile world.”
LoL.Xi Jinping is seriously delusional if he believes that America is a peace-loving nation and can be trusted for one millisecond. Or that the gang of American corporate bloodsuckers who are travelling with Trump are interested in any kind of mutually beneficial trade.
If anybody believes this, I have a sweetheart deal for some beach resort property I would like to sell them at the future Trump Gaza (Genocide) Resort. It will be a big, beautiful Mar-a-Lago on the Mediterranean … after those pesky Palestinians are ethnically cleansed away.
Cut through all the bullsh!t, it should be obvious that the Americans are hellbent on war–first war against Russia, now war against Iran, and ultimately war against China.
All of the USA’s wars have a singular–though disguised–motivation: American full spectrum dominance of the world. Or, to use TrumpSpeak, making the American Empire Great Again.
All other American rhetoric, rationalizations, and promises are American propaganda.
Trump threatens Iran will be “decimated” if it does not accept US-dictated deal
https://www.wsws.org/en/articles/2026/05/13/cdvh-m13.html
Reply from Jangjo 3 hours ago
Reply to xvfsb
LoL.Xi Jinping is seriously delusional if he believes that America is a peace-loving nation and can be trusted for one millisecond. Or that the gang of American corporate bloodsuckers who are travelling with Trump are interested in any kind of mutually beneficial trade.
Your speculation is on target, the underestimation of the Chinese, is not.
For China, trump is just another clown that soon will bite the dust of history’s trash bin, on their way to the realization of China’s long term plans.
Red carpet roll-out, dancers and all, is the rousing fanfare the buffoon of barbaria loves the most, and the Chinese are masters at offering that, and more.
We cannot forget the Chinese have been around for more than 10,000 years, while trump’s “civilization” is still learning to clean their stench from where the sun doesn’t shine.
China put their red lines out before trump boarded his plane.
trump has nothing to offer to the Chinese, other than blustering bluffing, infantile offers, useless threats, dead on arrival sanctions, his “art of the deal” is child play for the Chinese.
USA needs rare earth metals, among sundry other items only China can supply.
trump’s “tariffs” bluffing is over. He’s now having to pay back his childish recklessness.
And mainly, he needs China for an extrication of the morass he has created in the Persian Gulf/Strait of Hormuz.
Trump’s trip to China is a band aid on his chest’s sucking wound, caused by his defeat at the gates of the Persian empire. The Chinese are ready to sooth the pain, apply some Yunnan Baiyao to stop the bleeding, make him look like a “statesman,” calm him down a bit, and send him home with the promise “we will talk to the Persians.”
And they will…"
A big post to say what I had in one paragraph above Colin.
Art Berman on oil and the war
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