Here's our summary of key economic events overnight that affect New Zealand with news there has been no improvement in the backdrop to the global economy.
To open the new week, oil prices have risen after Trump warned that Tehran is running out of time to reach a deal he likes, while Iranian media reports indicated the two sides remain far apart in negotiations. Shipping flows through the Strait of Hormuz remains effectively shut, keeping supplies tight.
In the US, the NY Fed's regional Business Leaders Survey shows that the service sector there is continuing to contract, but now at a lesser pace. Activity has been contracting there since late 2024. Inflationary pressures remained persistent, with firms reporting steep increases in input costs and still-elevated selling prices.
Staying in the US, the NAHB/Wells Fargo Housing Market Index, which measures builder confidence in the market for newly built single-family homes, rose in May from April (which was its lowest level since September 2025). They too complain about sharply elevated input costs.
And we should probably note that Elon Musk has lost his case against Sam Altman and OpenAI to claim the company. The jury quickly decided Musk had no case.
In China, new home prices across the 70 cities they reference shrank -3.5% in April from a year earlier, following a -3.4% decline in the previous month. This is the 34th consecutive month of contraction. It is also the sharpest contraction pace since May 2025. The weakness in their property sector goes on and on. The pace of decline in their existing home market is even faster.
Four a fourth month, China's electricity production fell from the previous month. But it was +2.6% higher than the same month a year ago. This is a good reference point to assess their industrial production, which they said rose +4.1% in April from a year ago. But that was the slowest they have reported for an April since 2022. Fixed asset investment fell -1.8% in April on that same basis.
At the same time, they said retail sales fell -0.5% in April after a -0.1% decline in March.
Chinese banks now have an average net interest margin of 1.4%, according to the latest data as at March 2026. That is news because it is a record low. (For perspective, the New Zealand industry NIM is 2.3%.)
Singapore said its non-oil exports rose a fast +24.5% in April from a year ago, up sharply from the +15.3% pace in March. This was the eighth consecutive month of growth and the fastest pace in fourteen years, with electronics the growth leader.
In Australia, Cotality reported that 1,939 capital city homes went to auction last week, an -11% drop from the previous week, but still tracking higher than a year ago (+8.7%) when 1,784 home auctions were held. The preliminary clearance rate rose 1.1 percentage points to 57.5%, still a soft result but with highly mixed outcomes across different cities. This was the fifth time in the past seven weeks that the early clearance rate had held below the 60% mark and the third lowest result for the year-to-date. The Aussie Budget signals may have contributed to the mood. (Be careful comparing Australian and New Zealand clearance rates because they will include sales made after negotiation after the hammer drop. On the other hand, we have a strict hammer-drop criteria.)
The UST 10yr yield is now just on 4.59%, down -1 bp from this time yesterday. The key 2-10 yield curve is now at +52 bps (+1 bp). Their 1-5 curve is now at +45 bps (+1 bp) and the 3 mth-10yr curve is at +95 bps (+2 bps). The China 10 year bond rate is now at 1.75%, down -2 bps from yesterday. The Japanese 10 year bond yield is up +2 bps at 2.73% and still a 30 year high. The Australian 10 year bond yield starts today at 5.08%, unchanged from yesterday. But the NZ Government 10 year bond rate is up +7 bps at 4.85%.
Wall Street has opened its week with the S&P500 down -0.2%. Overnight European markets closed up between Paris's +0.4% and Frankfurt's +1.5%. Yesterday Tokyo ended its Monday trade down -1.0%. Hong Kong fell -1.1%. Shanghai dipped -0.1%, but Singapore was up +0.2%. The ASX200 ended down -1.5%. The NZX50 ended down -1.6%.
The price of gold will start today up +US$8 at US$4547/oz. Silver is up +US$1 at just over US$76.50/oz.
American oil prices have risen +US$1.50 to just over US$107/bbl, while the international Brent price is now at just over US$110.50/bbl.
The Kiwi dollar is up +30 bps from yesterday at this time at 58.7 USc. Against the Aussie we are also up +30 bps at 82 AUc. Against the euro we are up +20 bps at just on 50.4 euro cents. That all means our TWI-5 starts today at just under 62.2 which is up +30 bps from yesterday.
The bitcoin price starts today at US$76,661 and down -1.8% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.6%.
It turns out Trump's investment partners are enabling Iran to access the global financial system and evade US sanctions. Iran’s Nobitex has processed at least US$2.3 billion through Tron and BNB Chain, blockchain ledgers started by backers of the Trump family’s World Liberty Financial. Of course there will be no Justice Department investigation.
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6 Comments
What is fascinating is the silence following Trump's trip to China. If he had gained anything positive he would have been trumpeting it all over the place. But nothing, effectively silence. The question is; what did he surrender?
In the meantime he has TACO'd again and extended the 'ceasefire'. So not change really.
'What did he surrender?'
Well, he clearly pulled back on the US stance regarding Taiwan to seemingly appease Xi Jinping.
He warned Taiwan against declaring formal independence and that he was not prepared to get dragged into any conflict involving Taiwan. He also left the status of a pending $14 billion U.S. arms package to Taiwan highly uncertain, framing it as a tool for leverage with Beijing.
Following the visit, Taiwan has every reason to be increasingly worried . . . as we all should be also.
All military type targets in Iran likely have already been bombed. Any recommencement will target civil infrastructure. The Iranians will retaliate with like targeting of that of neighbouring Gulf States, saline treatment, power and similar plants.Suggest that is why the recommencement is so far just words.
All military targets are not gone.
Some US intelligence reports indicate that Iran still possess 70% of its pre-war missiles and that it has reoccupied 30 of the 33 missile bases close to the strait.
This conflict is not going to end anytime soon.
Willis about to attempt the complete destruction of Wellington hospitality and housing markets. Cutting the government workforce by almost 20%
...after Labour increased it by ~40% 2017-2023 - with no significant improvement in public services.
A make work scheme for embedding Labours culturally aligned acolytes in the bureaucracy.
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