Here's our summary of key economic events overnight that affect New Zealand with news the bond market is dominating the news today with sharply rising long term yields as investors see no end in sight to the war inflation upon us now.
The benchmark US Treasury 10 year yield is now up to its highest since the brief October 2025 spike, and before that, it highest since 2023. In those earlier peaks, there was nothing like the fundamental inflationary pressure building now. And the US Treasury 30 bond yield is now at its highest since 2007.
And if it lasts, yield asset valuations are at risk, especially real estate. There is already severe valuation pressure in the commercial office market from low demand. A higher cost of money could do widespread damage to these market valuations, globally.
But first today, the overnight full Global Dairy Trade auction saw prices rise +0.6% in USD terms, rise +1.55% in NZD terms. This is a stable commodity in a sea of instability elsewhere. The outcome may have been helped by the low volumes on offer, down -15% from the same auction a year ago.
In the US, private employers added an average of 42,250 jobs per week in the four weeks to May 2, up from 33,000 in the prior period, according to the ADP Research. Strong hiring in healthcare is a key feature.
US pending home sales rose +1.4% in April from March to be +3.2% higher than year-ago levels. But the recent modest rises are not yet enough to make back the big falls in December and the small fall in January. The sharply rising 30 year bond rates will likely affect this market going forward.
In Canada and as expected, their headline CPI inflation rose 2.8% in April from 2.4% in March and the highest in two years, But this is notably lower than the expected 3.1% rate and probably takes the pressure off their central bank to raise rates.
In Japan, they said their GDP came in with a +2.1% (real) annual expansion are in Q1-2026, up from the +0.8% in Q4-2025. A rise was anticipated but only to +1.7%.
In China, the always excellent Bill Bishop has used AI (Claude) to compare what the Chinese think was accomplished, with what the US think. It is here. There is some overlap. But there is clearly much confusion on what was actually agreed. Basically we should expect both sides to accuse the other of reneging - and in turn, the great rivalry will just fester on.
In Malaysia, their inflation came in at 1.9% in April , at the low end of their expected level and only a modest rise from March. It was their most however since July 2024.
In Europe, they posted a smaller trade surplus than expected as exports underwhelmed in March and imports rose. It was a much lower surplus that they recorded a year earlier.
In Australia, the Westpac-Melbourne Institute consumer sentiment survey is picking up a range of recent trends. Sentiment improved marginally despite the fuel shock, but within that more people are downbeat on their economy. The Canberra Budget didn't have a big impact though. Job loss fears are still elevated even if slightly less so. But homebuyer sentiment is down sharply to deeply pessimistic levels. And consumer house price expectations have softened even if they are still positive. A key thing to watch across the ditch is the widening sentiment gap between young and old. The ‘baby boomer’ and ‘Generation X’ cohorts are extremely weak (angry). Sentiment amongst ‘Millennials’ is only modestly pessimistic. But ‘Generation Z’ is outright positive they note.
Rich people whingeing over losing their tax advantages in the latest Australian Federal Budget is becoming a feature of public discourse there, especially in the real estate sector.
The UST 10yr yield is now just on 4.67%, up +8 bps from this time yesterday. The key 2-10 yield curve is now at +56 bps (+6 bps). Their 1-5 curve is now at +49 bps (+4 bps) and the 3 mth-10yr curve is at +104 bps (+9 bps). The China 10 year bond rate is now at 1.74%, down -1 bp from yesterday. The Japanese 10 year bond yield is up +6 bps at 2.79% and new a 30 year high. The Australian 10 year bond yield starts today at 5.10%, up +2 bps from yesterday. But the NZ Government 10 year bond rate is down -8 bps at 4.77%.
Wall Street softer today, looking over its shoulder at the bond market, with the S&P500 down another -0.2%. Overnight European markets closed little-changed between Paris's -0.1% and Frankfurt's +0.4%. Yesterday Tokyo ended its Tuesday trade down -0.1%. Hong Kong rose +0.5%. Shanghai rose +0.9%, and Singapore was up +1.5%. The ASX200 ended up +1.5%. The NZX50 ended up +1.7% and the best of the markets we follow.
The price of gold will start today down -US$47 at US$4500/oz. Silver is down -US$2 at just over US$74.50/oz.
American oil prices have fallen -US$3.50 to just on US$103.50/bbl, while the international Brent price is now at just over US$110/bbl, down only -50 USc.
The Kiwi dollar is down -30 bps from yesterday at this time at 58.4 USc. Against the Aussie we are up +10 bps at 82.1 AUc. Against the euro we are down -10 bps at just on 50.3 euro cents. That all means our TWI-5 starts today at just on 61.9 which is down -30 bps from yesterday.
The bitcoin price starts today at US$76,771 and up just +0.1% from this time yesterday. Volatility over the past 24 hours has been low at just under +/- 0.9%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
24 Comments
https://news.sky.com/story/standard-chartered-to-replace-lower-value-hu…
NZ corporates thinking the same we are in a very complex recession
Standard Chartered bank could cut more than 7,500 jobs as it seeks to replace "lower-value human capital" under a technology and artificial intelligence (AI) drive.
The London-based but Asia-focused banking giant said it was to axe more than 15% of back-office roles by 2030 in favour of increased automation and adoption of new technologies including AI.
When in the 80s computers started to arrive the boss decreed that this was back up. It gave hugely faster and more accurate access to such as data, records and communication but he said it is not there to do your thinking for you, I still expect your head to contain the information, function and purpose necessary to complete and develop your work. Of course, in general it was never going to be like that and how many of us now encounter a problem when you can’t get a basic answer if who you are contacting can’t find it on the screen in front of them. And now here we all are, the computers are progressively being employed to take over all the thinking.
And that deepens the problem that has become more evident with and since COVID; democracy and national resilience. Discussion still brings up productivity without the deeper understanding of the many layers that are impacted.
For any nation people need to be gainfully employed. There are reasons for this; to support themselves and their families, to learn and grow, to not have to resort to crime to get by, to have options to better themselves rather than resent what others have.
Technology makes many things possible, but in the end it is people who make economies work by having and being able to spend money. Democracy is about making sure the national leadership understands all that. AI will be useful, but it is people who count.
'For any nation people need to be gainfully employed. There are reasons for this; to support themselves and their families, to learn and grow, to not have to resort to crime to get by, to have options to better themselves rather than resent what others have.'
Partially disagree.
We need to set up a regime which is long-term sustainable; which is physically maintainable. That requires a lot less people, each doing a lot less. Both by some orders of magnitude. Yes, people will need to feel valued by their communities; yes, they will be contributing (probably in food-production) and yes, crime will be a thorn in the side of such a society. Yes to learning - but you need to quantify 'grow' and 'better'.
I didn't talk about numbers PDK, and you already know I favour less people. The term 'grow' was people growing to the best version of themselves, not more people. You just trying to pick a fight?
Sustainability is critical. AI will help, but it is a tool. The alternative is a scenario not unlike Arnie's Terminator series, where we are ruled by the machines.
Good comment apart form the "AI will help". It should say AI could held but on nett balance will be a force multiplier of negative outcomes.
Is AI necessary for sustainable outcomes? Nope! We already have more than enough knowledge about where civilisation is situated. Science has produced the warnings, TPTB have ignored the warnings. If AI produces warnings, they'll also be ignored. In fact, the owners of AI will scrub the knowledge base to suit themselves.
A little cynical, but in the end AI is just a tool based in a computer. And a lesson from computing; garbage in - garbage out. AI will largely deliver what the users want because the questions will shape that. We've already learned that from computers so i do expect there will be stumbles, but the results will be reality intruding and people will be accountable, or should be.
And a lesson from computing; garbage in - garbage out. AI will largely deliver what the users want because the questions will shape that.
You have learnt well young Jedi
Thank you wise master.
Obsequious bow follows while trying not to trip over light sabre!
The worlds scientific organisations all agree global heating is collapsing biosphere stability. The solution, release record amounts of CO2 and vote in Trumps. Now picture AI issuing the warning that global heating is collapsing biosphere stability?
Data centres will be gobbling up all that renwable energy that could have been spent decarbonising though.
GROK is an example of where AI is headed. Unsure whether the holocaust happened, but able to create photoshopped nudes for pedos. AI is owned by psychopaths. There's no happy ending here!
"The worlds scientific organisations all agree global heating is collapsing biosphere stability."
No, the IPCC has dropped RCP8.5 from CMIP7 because it is implausible. You need to find a new scare story - not the even the implausible RCP8.5 supports your doom delusions.
"For the 21st century, this range will be smaller than assessed before: on the high-end of the range, the CMIP6 high emission levels (quantified by SSP5-8.5) have become implausible"
The Scenario Model Intercomparison Project for CMIP7 (ScenarioMIP-CMIP7)
https://gmd.copernicus.org/articles/19/2627/2026/
The biosphere is unstable now we've passed RCP2.6.
RCP8.5 was still in the last IPCC report in 2023. The next report isn't due until 2029. So no nothing has been "dropped" at least until 2029!
The only references I can find relate to climate denying wackos like Pielke and the American enterprise institute!
Perhaps read the paper above which lists the scenarios for the upcoming CMIP7 and describes RCP8.5 as implausible?
RCP2.6 2 degrees of warming since the Little Ice Age is hardly a high bar - were don't even have our historic kumara range back yet!
You are not going to read about it in the MSM - else they will have to retract all their mindless scare stories of the past decades - which you fell for hook, line and sinker.
"The IPCC has used these scenarios, known as Shared Socioeconomic Pathways (SSPs) or Representative Concentration Pathways (RCPs), in its two most recent assessment reports (AR), AR5 released in 2014 and AR6 released in 2023. The upcoming AR7 will be informed by a new set of scenarios, as described in a paper published last month in Geoscientific Model Development.
The paper is drawing widespread attention—both within the scientific community and in wider discourse—for its statement regarding one current scenario that has become familiar to anyone following climate science and policy. The scientists said the emissions levels associated with the most extreme, worst-case scenario, SSP5-8.5 (and its predecessor, RCP8.5), “have become implausible.”
https://eos.org/research-and-developments/why-the-ipcc-seems-poised-to-…
Bollocks, Profile.
Spin is very obvious - 8 was the extreme scenario.
But this is non-linear and has feed-back loops, so time factors in too.
We still have half the fossil stock - enough to fry the planet beyond our life-sustaining envelope. Ask those folk in 40+degree heatwaves (becoming commonplace) how they'll fare ex aircon?
You are going to need to get to 1370ppm. For a peak oil tragic like yourself it is laughable that you are pushing a scenario that needs more traditional hydrocarbons than proven reserves! Where are you going to get your hydrocarbons from?! Also, you need 12 billion people to get to RCP8.5. Where are you getting those people from? Find new sky to fall on your head.
"The scenario’s storyline describes a heterogeneous world with continuously increasing global population, resulting in a global population of 12 billion by 2100.
...Coal use in particular increases almost 10 fold by 2100 and there is a continued reliance on oil in the transportation sector."
RCP 8.5—A scenario of comparatively high greenhouse gas emissions
https://link.springer.com/article/10.1007/s10584-011-0149-y
Just watched an interview with the lead author of the paper profile thinks rescues denialist quacks and judases. The new models contain CDR, in other words techno utopian BS! Seems the IPCC has been so corrupted by the capitalist cult it's abandoned our future!
Best from the half way mark. The first half is really annoying to watch.
You should have watched it before you posted it. They go in to detail as to why not plausible. Not using nearly enough coal (needs to increase 6x/capita) and can't find 2-3 billion people. Fracking to the rescue!
24:10
"Housefather and Glen Peters published their paper in 2020 and we started to realize that maybe by now the emission
pathway of RCP 8.5 had become uh somewhat uh less uh plausible. We we we
simply know that it is less plausible than in 2010 when it was published simply because renewables have become
cheaper since emissions have been tracking a pathway in the middle not RCP
8.5 and so we know that it has become less plausible um
we didn't mention that yeah but what these emissions are are CO2 mainly from
coal gas oil burning And um and if you
see the the emissions up to 2011 when you published your scenario,
coal was going up up up and it was really increasing a lot and then after
2011 2012 you see it flattening. Yes. So from that perspective, at the
time you published it, um you and your colleagues published the the previous scenarios, it was much less unlikely
than it is today. um because and that's indeed because of the renewables got
much cheaper and also of course a big uh increase in in in gas natural gas
production from fracking in the in the US and and also increase in other
countries and a slowdown in economic growth in China as well of course. Yeah. Economic crisis.
Yeah. Yeah. So and and population growth.
27:08
And that scenario went to 12 billion people. Um, by now we can still end up
at 12 billion people, but it's still like it was at that time and still is
not the most likely pathway. the most likely pathway is much closer to
somewhere between 9 and 10 billion. "
29:00
"even with a lower emission scenario you can still up end up with a forcing of RC P8.5 simply as only as a result of having bad luck on the climate feedbacks and so things turning into sources, so the nature absorbing less CO2. Then there's also climate sensitivity, which can also be high. And so you could argue that the old RCP 8.5 in terms of emissions was less likely, but in temperature was still having a function. But we thought of that argument.
Yeah. Uh depending on indeed of the climate the carbon cycle feedback.
Yes. And so but we thought that the argument of having that scenario being
maybe right in temperature but for the wrong reasons was not the the way to go."
So the authors decided the social parameters of population and current fossil energy trends were enough to scrap highest case climate disaster scenarios, but consigned uncertanty in the physics, sensitivity and feedbacks, to the dustbin because they were the "wrong reasons"? What a joke! The AEI would be proud!
https://academic.oup.com/oocc/article/3/1/kgad008/7335889?searchresult=…
"Equilibrium global warming for today’s GHG amount is 10°C, which is reduced to 8°C by today’s human-made aerosols. Equilibrium warming is not ‘committed’ warming; rapid phaseout of GHG emissions would prevent most equilibrium warming from occurring. However, decline of aerosol emissions since 2010 should increase the 1970–2010 global warming rate of 0.18°C per decade to a post-2010 rate of at least 0.27°C per decade. Thus, under the present geopolitical approach to GHG emissions, global warming will exceed 1.5°C in the 2020s and 2°C before 2050."
56:45
"almost all of the models includes a significant amount of carbon removal CDR in order to stay below two degrees because most of the models without this all go up from three to five."
So using a tech that basically removes nothing today and may barely rate in the future is what these new models use as input!
Didn't you understand what I said? Or are you being an extremist?
AI is just a tool. What you use it for and take from it is up to you. That will include how you apply it. Like all tools it is up to the user. It's a bit like guns; people argue guns kill people. They don't people kill people. Guns are the tool that is used sometimes. At other times cars, knives, baseball bats and even hands are used. But guns can be used to entertain through competition, building skills, dexterity and accuracy. They can also be used to alleviate pain for animals, as well as being a defensive deterrent. AI is a tool; how it is applied is up to the user.
Perhaps "lower value" human capital should just take any spending power somewhere else and leave the robots to support the corp?
Indeed these SC low end staff prob make 150k nz and above, buy good cars take international holidsy , big mortgages consume insurance policies etc
2nd order impact of replacing human with machine based inference is the consumer economy crashes, this is a doom loop
And the US Treasury 30 bond yield is now at its highest since 2007.
This is a significant signal if there ever was one.
Place your kiwisaver accordingly
Is there such a thing as a signal now? Billions are being poured into stock makets every day by pension funds. The only thing that pricks this bubble is if listed companies collapse because their supply of energy is shut off. We'll find out in a month or two when stategic reserves start making gurgling sounds.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.