Crude oil prices determining benchmark interest rates and policy choices; Taiwan export orders star again; Indonesia hikes unexpectedly; UST 10yr at 4.57%; eyes on Nvidia; gold up but oil eases; NZ$1 = 58.7 USc; TWI-5 = 62.2

Here's our summary of key economic events overnight that affect New Zealand with news there is optimism the Persian Gulf oil supply may be easing as satellite data showed three supertankers crossing the Strait. Most were Chinese. But there are still 160 tankers trapped in the Gulf as Iran now effectively controls the passage. US moves now depend on Trump's latest mood change.

The latest update of US crude oil stocks showed another outsized reduction last week (-7.9 mlb barrels), and again far more than expected (-2.9 mln bbl). Petrol stocks fell too, but more modestly although that extends this decline to 14 straight weeks. US strategic reserves were reduced almost -10 mln barrels last week.

And staying in the US, mortgage applications fell last week, all on new purchase applications because home loan interest rate benchmarks jumped. Refinance activity was stable however.

Those rising interest rates are a market response to rising inflation. And the latest Fed minutes reveal that most Fed governors are worried too. A majority warned they would likely need to consider raising interest rates if inflation continued to run persistently above their 2% target. They wanted to drop its easing bias and signal its next move could be an interest-rate increase. This puts incoming Fed chairman Warsh in a tough spot because he was appointed to do the opposite. It looks like he won't have the votes.

There was a US Treasury 20 year bond auction overnight and that brought slightly higher demand, no doubt in part because the median yield rose to 5.07% with a high of 5.12%. That is up sharply from 4.84% (4.88%) at the prior equivalent event a month ago.

Across the Pacific, analysts are cottoning on to how strong Taiwan's export orders are flowing. For April they forecast a +52% rise, but it 'only' came in at +48% from year ago levels. Still these orders ran at their second highest level on record.

Meanwhile, China reviewed its loan prime rates& yesterday and kept them both unchanged at record low levels. That means they actually haven't changed in a year now.

In Malaysia, their exports surged on manufactured orders. They rose almost +37% to a record high, accelerating sharply from March’s upwardly revised +8.4% increase and far exceeding forecasts of +9% for April. This was their best export growth result since August 2022.

In Indonesia, their central bank delivered something of a surprise, hiking their policy rate +50 bps when a +25 bps rise was expected. That takes it to 5.25% and back to August 2025 levels. Driving the change was a need to strengthen the rupiah, curb imported inflation risks, and keep domestic inflation within the government’s mid-point target of 2.5% (±1%).

In Australia, a new labour market data series from employer tax filings shows there were 15.5 mln employee jobs in March, up +1.0% from a year ago, or +147,000 more. They were paid +6.0% more than a year ago. Obviously some of this is for the growth in the paid workforce, and that extra pay is before accounting for inflation.

The UST 10yr yield is now just on 4.57%, down -10 bps from this time yesterday. The key 2-10 yield curve is now at +54 bps (-2 bps). Their 1-5 curve is now at +44 bps (-5 bps) and the 3 mth-10yr curve is at +99 bps (-5 bps). The China 10 year bond rate is now at 1.74%, unchanged from yesterday. The Japanese 10 year bond yield is down -3 bps at 2.76%. The Australian 10 year bond yield starts today at 5.01%, down -9 bps from yesterday. But the NZ Government 10 year bond rate is up +6 bps at 4.83%.

Wall Street rising today, with the S&P500 recovering +0.9% and recovering some of its weekly loss. Nvidia's financial results are being eagerly awaited today after the NYSE close. Overnight European markets closed much higher, between Paris's +1.7% and London's +1.0%. Yesterday Tokyo ended its Wednesday trade down -1.2%. Hong Kong fell -0.6%. Shanghai dipped -0.2%, and Singapore was down -0.5%. The ASX200 ended down -13%. The NZX50 ended down -1.6%.

The price of gold will start today up +US$33 at US$4533/oz. Silver is up +US$1.50 at just over US$76/oz.

American oil prices have fallen -US$6 to just on US$97.50/bbl, while the international Brent price is now at just over US$104.50/bbl, down -US$5.50.

The Kiwi dollar is up +30 bps from yesterday at this time at 58.7 USc. Against the Aussie we are unchanged at 82.1 AUc. Against the euro we are up +20 bps at just on 50.5 euro cents. That all means our TWI-5 starts today at just on 62.2 which is up +30 bps from yesterday.

The bitcoin price starts today at US$77,559 and up +1.0% from this time yesterday. Volatility over the past 24 hours has been low at just under +/- 0.9%.

The easiest place to stay up with event risk is by following our Economic Calendar here ».