Here's our summary of key economic events overnight that affect New Zealand with news the US-China summit in Beijing is underway and so far the results have been underwhelming. Xi warned Trump about US support for Taiwan, and a big jet order for Boeing wasn't quite what was expected, causing Boeing's share price to fall today (-3.6%). The travelling CEO's seem to be impressed with China's opportunities, rather than Trump getting China to invest in the US. But it is only day one, so more may come of this visit.
In the US data out overnight shows there were 190,600 initial jobless claims last week, less than seasonal factors would have indicated. There are now 1.7 mln people on these benefits, less than a year ago and about the same as two years ago. Given how this is tracking so different to the US household labour force survey, part of the jobless claims easing can be attributed to tougher qualification standards.
US retail sales rose marginally in April from March to be +4.5% higher than year ago levels. Higher dollar sales at petrol stations were a key factor. The timing of one-off tax refunds probably played a part too. This is a gain that is higher than the 3.8% US CPI.
Business inventories rose as well (the data is for March). Retail inventories did too. But both are up less than the sales gains, so the inventory to sales ratio is improving.
In China, banks haven't been lending at the rate expected. New yuan loans by Chinese banks fell by a net -¥10 bln in April, and much less than the expected +¥300 bln, and less than the +¥285 bln in April 2025. This is quite an unexpectedly variation and turn down in momentum, and only the third time on record this has happened. One reason is that there is a shift to corporate bond financing, away from bank financing.
In Australia, their competition regulator has prevailed in a case it brought against supermarket giant Coles claiming its discount claims were a sham. This judgement is sure to echo in New Zealand. The ACCC has a parallel case pending against Woolworths.
Meanwhile the peak Australian labour union, the ACTU, has amended its claim for a minimum wage rise to +6% before the Fair Work Commission, taking the claimed rate to AU$26.45/hour (NZ$32.25). Obviously the change is in response to rising inflation.
Global container freight rates were up +12% last week to be +14% higher than year-ago levels. Surcharging for fuel is the key reason for the rises although this is also the time the northern hemisphere "peak season surcharges (PSS) start to be applied. Bulk cargo rates shifted higher again last week as well, up +5.4% and are now at levels we had during the pandemic stresses.
The UST 10yr yield is now just on 4.46%, down -1 bp from this time yesterday. The key 2-10 yield curve is now at +47 bps (-1 bp). Their 1-5 curve is now at +32 bps (-2 bps) and the 3 mth-10yr curve is at +80 bps (down -2 bps). The China 10 year bond rate is now at 1.75%, up +1 bps from yesterday. The Japanese 10 year bond yield is up +3 bps at 2.63% and a new 29 year high. The Australian 10 year bond yield starts today at 4.99%, down -8 bps from yesterday. The NZ Government 10 year bond rate is down -2 bps at 4.76%.
Wall Street lower today with the S&P500 up +0.8% and a new record high. Overnight, European markets were all higher between London's +0.5% and Frankfurt's +1.3%. Tokyo ended its Thursday session down -1.0%. Hong Kong was unchanged with Shanghai down -1.5%. Singapore was down -0.2%. But the ASX200 ended up a minor +0.1%. The NZX50 fell -0.3% in its Thursday trade.
The price of gold will start today down -US$12 at US$4678/oz. Silver is down -US$3 at just under US$85/oz.
American oil prices are holding up at just over US$101.50/bbl, while the international Brent price is just under US$106/bbl.
The Kiwi dollar is down -10 bps from yesterday at this time at 59.2 USc. Against the Aussie we are up +20 bps at 81.9 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 62.5 which is down -10 bps from yesterday.
The bitcoin price starts today at US$81,564 and up +2.7% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.1%.
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9 Comments
Is this Xi putting Trump in his place? Might have been a stilted conversation at the state dinner.
".......Since last night, a total of 30 vessels including more Chinese vessels have transited the Strait of Hormuz with Iran’s permission....."
https://www.southfront.press/military-situation-in-iran-on-may-14-2026-…
Probably not as far as Trump would see it himself. You see Trump doesn’t see reality, he sees nothing but himself.
I enjoyed watching the 21 gun salute and marching soldiers. All the soldiers exactly the same height.
https://youtu.be/btg-ppiLH94?t=449
Did they have dancing robots?
Would you trust a marching robot with a bayonet two inches from your back?
There was once a very seriously voiced BBC commentator reviewing some Royal occasion who then uttered the great spoonerism - that the guns will now sound a twenty one son galoot.
Honda's first loss in 70 years is quite big news. The Chinese manufacturers are starting to become a serious worry for Japan, South Korea and Germany. I just bought a new Toyota but found myself comparing the price and features with a plethora of Chinese offerings after the fact. China making big inroads into Australia and the UK. The one good thing is that it may make pricing more competitive for Toyota loyalists.
An on-to-it think-tank
We are beginning to address the making of strategic (as opposed to 'financial', which were always too remote to be reality-based) decisions. They miss a bit - the blog about food security addresses biofuel for tractors for instance, while failing to address the fragility of modern tractors themselves (you'd keep an old Fergie TEA going forever with a socket-set and a pair of pliers - the modern fleet not so).
But a good heave, and on the right track. Good to see another player in the space.
That's one of the quandaries we face today. Technology has the potential to make machinery significantly more efficient, but in many respects it also makes it less fixable. Many of us will remember playing with cars and motorbikes. I got quite good at tuning twin carbs on a motorbike, but also overhauled a number of engines for cars and hotrods. Basic and tools and a good tuning light (I still have mine) was all that is required. Today you need to throw in a computer and specialist software which isn't cheap. And if the electronics fail they generally need to be replaced because they can't be fixed.
That whole picture reduces consumption of fuels by a little, but increases consumption in other areas by a bit more I suggest. Not sure the net gain is worth it.
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