Here's our summary of key economic events overnight that affect New Zealand with news oil prices have slid on hopes of a US-Iran deal. But despite US statements saying talks are "going nicely", Iran seems to be saying otherwise even if they are engaged in talks. But they seem to be talks-about-talks. Supposed insider information says the Strait of Hormuz will still be closed for another 60 days "for mine-clearing" (some say 30 days). And the US is adding new conditions each time the sides meet. Meanwhile, two LNG tankers have passed through the Strait in the past 24 hours.
Just a reminder that the US is on a long weekend holiday and we won't be getting data updates from there until tomorrow morning from there. Pre-market activity (futures) is still active however.
So first, like Japan, Singapore reported that their April CPI inflation pressure stayed very low and contained, up just +1.8% from a year ago, down -0.3% from March. Fuel costs are a small part of their index. The big mover was for clothing and that fell sharply.
Singapore also said its Q1-2026 expansion was +6.0% from the same quarter a year ago, bettering the +5.7% expansion in the previous quarter, and better than forecast (+5.1%). But they are much less bullish on how the year will turn out, revising that to "2%-4%" as Trump's Gulf War takes it toll.
But in Malaysia they reported a sharp jump in producer costs. Their producer prices rose +5.4% in April from a year ago, picking up from just a +1.1% rise in March. Prior to that, their PPI had fallen consistently since March 2025. This latest increase was also the most since August 2022, all driven by the mounting disruptions from the war in Iran.
In China, they said foreign direct investment fell -10.3% in the first four months of 2026 compared to the same period in 2025. Things got off to a negative start, but regained some initiative in April. (April 2025 was a particularly weak base.)
And global demand for yuan-denominated financing is rising, with panda and dim sum bond issuance climbing sharply in early 2026 as borrowers look to diversify away from costly US dollar funding. Panda bond issuance - yuan debt sold on the Chinese mainland by overseas institutions - topped US$13 bln in the first quarter, nearly half of last year’s total. Dim sum bonds are those issued outside China, in yuan. They hit US$45 bln in the quarter, also on track to beat the 2025 level. Yuan funding comes with much lower interest rates than US dollar funding..
We should probably also note that the Pope has issued an encyclical on how AI should be managed, by politicians and company managers. Like many previous Papal encyclicals, if is likely to be influential in debates about AI.
The UST 10yr yield is now just on 4.47%, down -10 bps from this time yesterday. The key 2-10 yield curve is now at +34 bps (+11 bps). Their 1-5 curve is now at +41 bps (unchanged) and the 3 mth-10yr curve is at +80 bps (-10 bps). The China 10 year bond rate is now at 1.75%, unchanged from yesterday. The Japanese 10 year bond yield is down -6 bps at 2.70%. The Australian 10 year bond yield starts today at 4.87%, also down -6 bps. And the NZ Government 10 year bond rate is down -5 bps at 4.67%.
Wall Street is closed for the holiday, but the after-market trading on the S&P500 futures indicates it will open tomorrow up +1.2%. Overnight, European markets rose Paris's +1.8% and Frankfurt's +2.0% (London was closed.). Yesterday, Tokyo closed up +2.9%. Hong Kong was up +0.9% and Shanghai was up +1.0%. Singapore was little-changed. The ASX200 ended its Monday session up +0.4%. The NZX50 ended down -0.2%.
The price of gold will start today up +US$55 at US$4563/oz. Silver is up +US$2.50at just over US$78/oz.
Oil prices have fallen -US$6.50 to just on US$90.50/bbl in the US, while the international Brent price is down -US$7.50 to just on US$96.50/bbl.
The Kiwi dollar is up +20 bps from yesterday at this time at 58.7 USc. Against the Aussie we are down -20 bps at 81.9 AUc. Against the euro we are up +10 bps at just under 50.5 euro cents. That all means our TWI-5 starts today at just on 62.1 which is up +10 bps from yesterday.
The bitcoin price starts today at US$77,502 and up +1.2% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.2%.
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64 Comments
I got AI to analyse the Pope's encyclical and it claims that it is full of category errors, false dichotomies, unexamined theological premises, metaphorical overreach and institutional self‑positioning.
Takes one to know one
:)
That sounds about right.
The ecclesiastic version of Trump, just more subtle?
Both aim to commandeer the Commons.
The first invented a circumvention for entropy - life hereafter - and peddled same while claiming portal-rights.
The second is attempting the same thing - but too late in the human trajectory for the humans involved to avoid their own entropies - and are working hard to commandeer portal-rights for themselves.
The last scene from Don't Look Up is where they end up.
The second is doing it for personal profit and aggrandisement. Doesn't give a shit about others. History will remember him, but not the way he thinks.
You talking about AI peddlers?
I reckon a subliminal driver is the need to avoid death - replicate yourself with AI, hook the chip up to a robotic frame and hey presto - eternal life.
The film which examined the consequences was Bicentennial Man.
I preferred the Big Bang version. More entertaining.
'I got AI to analyse the Pope's encyclical and it claims that it is full of category errors, false dichotomies, unexamined theological premises, metaphorical overreach and institutional self‑positioning.'
Well, in its own defence, AI would say that, wouldn't it? 😉
Getting AI to do your thinking results in intellectual atrophy.
I got AI to analyse the Pope's encyclical
Any moment now the Pope will lay off 10% of Vatican staff, quoting productivity enhances from Artificial intelligence....
Surely he'll need a bunch of high paid AI dudes to train a new model with the "real truth" first
He'll lay of the AI when it threatens to reveal the churches deep-seeded secrets
Southpress (Russian aligned) say 30+ ships have passed though the strait with Irans approval in the past day.
Bottom line, the USN is giving them asymmetry. Guaranteed losing strategy.
US has already lost. Trump's trying to walk a tight rope of letting the oil and gas flow (bowing down to Iran) while convincing as many Maga as possible that he won the war (claiming he plays 5D chess and this is a win for the USA despite Iran now getting $200m a day in tolls).
Only person who can stop this now is Bibi going it alone and scorch earthing the middle east but that would be the end of Israel.
He lost before he started. The real leaders of the US military would have advised him of the problems with what he wanted to do. They sacked them all and replaced them with 'Yes Men'. Those people with the Sec Def (sorry War) will cripple the military and in turn the US. They'll have lots of nice, flashy toys, but limited ability to apply them properly. Their own history teaches the folly with that. As i said a year or so ago, they're doing it to themselves. Xi and Putin just have to sit by and watch.
No one is paying Iran any tolls currently. International law forbids tolls in international straits. They tried it before and failed. This time has failed as well. The US is now in a very strong position having proved that global oil supplies do not rely on the Strait of Hormuz. It's looking like a strategic win for the US. The world has also recalibrated its views on the social situation in Iran.
I think the US should hold out (while enforcing the strait is closed to all). Like you say it looks like global oil supplies do not rely on the Strait of Hormuz as much as anticipated. If oil prices stay where they are now, its a one off hit of inflation (that will be reversed out at some stage) to destroy Iran economically (and possibly many other similar countries).
Flow/stock vs price
Just a hint.
Price surge has for sure materialised but the dire predictions of chronic shortages in flow not so much. Higher cost extractors, eg US oil producers operating in Venezuela, are reluctant to expand their activities, suggesting they think prices will fall back.
Or they realise the cost of exploring, setting up and defending their wells and pipelines given the threat of gangs holding them at gunpoint and commandeering their product for their own nefarious means. Mexico is an example of this, albeit rife reporting of cartel members digging down to fuel pipelines and siphoning off product.
They need Landman's Billy Bob Thornton character Tommy Norris on the job, he'd soon deal to them. Talking about Mexico I see Fisher&Paykel's update today (7.5% boost in SP, yes!) announced a planned production ramp up for their Mexican plant and I wondered how they deal with gang extortion, corruption etc, there.
Billy Bob was fantastic in Landman, great show. And I guess there'll be some F&P machines coming into the states a few kilos heavier than usual then XD
"global oil supplies do not rely on the Strait of Hormuz as much as anticipated."
That statement is not rooted in reality Jimbo. It's more like the invisible hand responds to gaslighting rather than physical data. Something I guessed decades ago.
"U.S. SPR inventories fell by 9.9 million barrels (mb) in the week ended 15 May, following a decline of 8.6 mb the previous week, taking total SPR volumes down to 374 mb and quickly approaching operational stress limits."
https://oilprice.com/Energy/Crude-Oil/StanChart-Says-Record-SPR-Withdra…
This bit is pure comedy :-)
"32 member countries of the International Energy Agency (IEA) unanimously pledged a record-breaking release of 400 million barrels of crude oil from their Strategic Petroleum Reserves (SPR) shortly after Iran’s blockade of the Strait of Hormuz triggered oil price spikes. As usual, the United States shouldered the lion’s share of the release, committing to 172 million barrels."
As "usual" the US shouldered the lions share of the release, that's meant to be funny, right?
This party has an end. Once the 400 000 000 Barrels have been burned, the IEA will look to dig deeper, having no other choice. It's just a question of whether Trump surrenders before the crisis goes super critical. I suspect the Iranians would quite like this outcome, seeing as they'd love to see the US on it's knees. Iran will be feeling severe internal stresses, but that's nothing compared to the pain they can potentially inflict.
Is this the International Law that allows you to murder the leader of a country you are negotiating terms with or bombing a country's children to make them surrender. USA is the epitome of might is right, unfortunately it has hit the limits of its might (barring going nuclear) and the economic pain Trump is causing US citizens and the rest of the world has resulted in the majority of the world rooting for Iran.
The reality is Iran has almost no broad public support in the West. Even in non Western countries Iran has very little genuine popular support. It's possible to be against the war or even support the US getting a bloody nose without being pro Iran.
Would suggest the Iranians themselves would acknowledge that quite readily. For a start underneath it all, they do not see themselves as being Arabic. The nation’s history is immense. Twice, in ancient times, they seriously threatened to invade Europe. Geographically they are situated very strategically and have the topography of a virtual fortress all of which they are currently using to their good advantage. Since the ejection of the Shah it is quite apparent that Iran is telling the world that from now on it will only be Iranians that tell Iran what to do.
Foxy. I suggest it is currently very much Iran being dictated to by the rest of the world. Decades of sanctions and corrupt/incompetent leadership have this once powerful nation on its knees. Teheran infrastructure and air quality is disastrously poor, administrative corruption and competence is endemic and much of the population lives in poverty on less than $10 a day. Its attempts to export radical Shia supremacy across the ME are in ruins. The US physical blockade is hugely amplifying the misery. While its topography does indeed provide 'a good advantage' this is only of use against a large scale land invasion, which is not coming. Hormus is its sole strategic gambit.
"Hormus is its sole strategic gambit."
True, but Hormuz the only chess piece Iran needs. It's shown how toothless the greatest military the planet has ever known is when run by grifters and idiots. Iran can bring the global economy to it's knees. Sure, long term work arounds can be implimented and Hormuz can lose it's significance, blunting the Iranian stranglehold over energy and commodity supply, however the global economy will be crushed long before this massive reorientation of infrastructure can occur.
Don't underestimate hatred as a motivating force.
If the IRGC can inflict 30 000 deaths on it's own populace in short order, I doubt preventing more death and misery is high on the priority list.
Palm. I've also been thinking about the speed at which the global economy can rejig to minimise the impact. At a micro level I see this in businesses I am involved with. One imports significant volumes of PVC product and moved with alacrity after the war started by quickly securing alternative supply from a country less dependent on Iranian oil. We had to find a few $m to finance it but within days had a dozen boxes on the water heading here. This is now likely to be a permanent arrangement. Appreciate this is just a substitution example and as such doesn't have much relevance to your wider point but if Iranian volume is displaced by other OPEC producers ramping up this should moderate the adjustment impact, at least in the medium term.
Yep that sums it up. Totalitarian, autocratic, despotic regardless of what you call it be a Tsar, Fuhrer or Ayatollah the administration and layout measure the same as in the people suffer.
Zach. I'd refine your observation further by proposing the ruling clique and the violent extremism it exports has no global support. In contrast I suggest much of the west is generally kindly disposed towards the long-suffering Iranian people, exploited as they have been first by predatory western imperialism and then by theocratic leaders whom they hoped would deliver them a fairer more prosperous life but instead revealed themselves as brutal despots.
Zachary,
No one is paying Iran any tolls currently. International law forbids tolls in international straits. Can you back that statement up with evidence? What international laws says is irrelevant.
An AI search contradicts you. It tells me that payments have been made using, Yuan, crypto currency and government to government.
I suspect that your knowledge on this is no better than mine, but you may prove me wrong.
https://www.abc.net.au/news/2026-05-25/iran-discusses-strait-of-hormuz-…
Iran says 'there is no toll' on the Strait of Hormuz..
No toll?
Iran calls the "toll" something else then obviously. Sevices for safe passage around Iranian mine fields perhaps?
https://www.lloydslist.com/LL1156720/Tehrans-toll-booth-system-is-now-c…
30 ships recently passed through the Strait. As Iran said the Strait was never closed, you just have to pay the toll to pass. As more countries become desperate for oil and gas more and more will pay the toll (30 today with more to come).
https://iranwire.com/en/news/152407-30-ships-passed-through-the-strait-…
HeavyG. Alt media is awash with claims and counter claims about alleged payment of tolls. No-one can say for sure what is actually happening but every one of those ships passing through the strait has to them submit to physical examination by the USN and by extension the formidable US intelligence apparatus. The economic consequence risk to any country (except china) paying tolls to Iran in contravention of sanctions would be enormous.
Wrong, the USN blockade only applies to ships that disembark from Iranian ports. Ships departing other GCC country ports are free to pass (as long as they have paid the Iranian toll).
See https://apnews.com/article/us-iran-war-navy-blockade-strait-of-hormuz-5…
Yeah, saw that report. Don't believe it supports a claim of me being wrong about the US having ultimate control over which ships transit the gulf nor that its world best intelligence apparatus would fairly easily determine if sanctions were being busted nor that economic consequences would deter most nations from trying it on but it does at least confirm that only a trickle is getting through.
"International law forbids" 😂
"The US is now in a very strong position" 🤣
Great comedy there Zach 👏
Anyone who had read Dismantling the Empire (Johnson / Metropolitan / 2010) would have known that the US clock was ticking. It covers the flaws of the military/industrial complex in detail.
Add in: Imperial Hubris (Anon - ex Intel - /Brassey's /2004), and The Rise and Fall of American Growth (Gordon/Princeton/2016).
Arguably they've been doomed since 1980, think: Morning in America. Book-ending buffoons, in hindsight.
Be careful what you wish for. (Human) nature abhors a vacuum
The market bets on a resolution
I think the market is wrong. Israel will do all it can to collapse any deal, such as bomb Lebanon. Even if the US gave in to most of Iran's requests, such as:
- ending the conflict on all fronts including Lebanon and Palestine
- leave enriched uranium in Iran
- lifting the US blockade
- releasing frozen funds to Iran
- paying for war damages
Which are all major losses for the US, Netanyahu will keep breaking any deal reached, as he does NOT want an end to the war, that would kill Israel's ultimate goal of expanding into other Arab counties.
If exponential economic growth was possible within a bounded arena, why would Israel need to expand?
Extrapolate...
By the way your last two posts seem at odds?
? I only wrote 1 post.
9.54 with 9.53
?
Rhetorical use of the word "exponential" detected.
Number of people in Israel/Palestine 1945: 1.7-1.9 million
Number of people in Israel/Palestine 2025: 14.8 million.
Rhetorical?
Yes rhetorical and unnecessary as the word "growth" alone is sufficient. You obviously want to give your weak statement more emotional impact by using a "doom-coded" rhetorical intensifier. With population and economic growth we don't typically see a constant rate of change. The future could well see declines. That population growth rate, if it were exponential and constant, from 1945 to 2025, was only 2.3%. It's likely to drop to zero or negative in the future.
"Exponential growth" describes rapid growth that is more than what would be compared as normal "growth". PDK is using it as an adverb indicating rapid population growth that has occurred in Palestine/Israel over the last 80 years. This seems reasonable given Palestine and NZ both had populations around 1.7m in 1945 and NZ has 5.3m in 2025 versus Palestine/Israel at 15.5m. Imagine if NZ had another 10m foreigners in its 2025 population (Winston would be going berserk).
Exponential means growing at an ever increasing rate, never slowing or stopping. The curve that forever gets steeper.
Exponential growth is simply the physical expression of percentage wise increases in the existing population. Exponential growth if carried on long enough leads to resource depletion and waste accumulation, ultimatey resulting in collapse.
Using the word "growth" alone is insufficient, as it has been popularised by the exponential growth cult to encompass a primary directive for their hive mind. Everything "growth" is propagandised as a net positive, when beyond a point it becomes oppressive and ultimately suicidal. Even recession has been sanitised as "negative growth"!
You are all wrong. Economists, population researchers or mathematician wouldn't use exponential in this particular empirical context. Look, we all know it's not going to continue at this rate.
OK. I'm convinced.
(The Oxford dictionary enters the room)
Biologists do use the exponential function in this fashion though. We are after all biological organisms.
"we all know it's not going to continue at this rate."
Do we, as he quickly whips out his AI crystal ball? It is possible you are correct population wise. We won't have the holy men of the economics/theist community to thank though.
We have reached an inflection point, where the toxicity of our living environment, caused by our clever industrialism, has reduced the fertility of our species. Not just our species either. And there's also the social factors. Many caused by our overcrowded living arrangments. So yeah, growth ultimately limits growth. Just depends on the depth of collateral damage to our living environment before we hit the limit.
The market is definitely wrong.
Wow, so the US bombs Iran during a negotiation, again, and calls it "self-defence". What a ridiculous load of caque.
Question, does being bombed for the 3rd time during a negotiation, help Iran to trust the USA, or does it hinder the negotiation process ? Anyone ?
Yes Netanyahu will break every agreement. Nuts enough to do so.
Israeli thinks it's mad war approach will protect them. I see it hurts them.
Everything they do costs them support they absolutely need. I give them less than 50 years survival.
Markets heading back down?...
https://www.japantimes.co.jp/news/2026/05/26/world/us-attacks-iran-ceas…
Gotta wonder how many times the hopes can be dashed.
Dashed hopes? Nah, this is just the market functioning as it does. Buying on dips, selling on peaks. Greater volatility, greater opportunity. The world could be smouldering ruins and the algorithms would still be looking for the dips. The market no longer serves humanity. It serves itself. Hope is for meat brains.
Until they buy on the dip that dosnt rebound....and yet we base (and are herded into ) our retirements upon these casinos.
More importantly the lifeblood of the worlds economies remains constricted.
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