Here's our summary of key economic events overnight that affect New Zealand with news traders who claimed to foresee a Trump 'victory' over Iran are getting a lesson in their susceptibility to propaganda.
In the Middle East, US and Israeli struck a number of Iranian vessels in the Strait of Hormuz, hours after President Donald Trump had suggested negotiations with Tehran over an interim deal were progressing. Renewed aggression there and in Lebanon hardly seems to indicate talks are "going nicely". Both sides are in a chronic violent embrace, despite what they say.
Oil prices are rising again; prospects for normalisation have faded significantly.
First we should note there was another dairy Pulse auction overnight. This one saw the butter price recover notably, up +2% from the prior week's full auction, and the SMP price fall back notably, down -5% on that same basis. The WMP price dipped -1%.
In the US, the Conference Board said its survey of consumer confidence edged down in May. But this dip wasn't quite as much as analysts had expected.
Meanwhile the May Dallas Fed factory survey edged up slightly from its languid ("stable") state, a bit less than other similar surveys and less than expected.
And the National Activity Index tracked by the Chicago Fed rose in April to its best reading since March 2025.
The US Treasury's popular 2 year bond auction today brought sharply higher yields. The median yield today was 4.02% (high was 4.07%), a big shift up from the median 3.75% at the equivalent event a month ago.
Across the Pacific, Singapore said its industrial production was up a very healthy +17.6% in April from a year ago, a rising trend and an expansion that is starting to rival Taiwan.
And in Taiwan industrial production rose at a +15% rate in April from the same month a year ago, less than in March but still the third-best month ever. The base has been rising spectacularly for more than a year now so the outsized yeay-on-year growth will ease back from here. Their retail sales were up +5.2% in April, extending the outsized improvements to three consecutive months now.
In Malaysia, it appears that they have instituted a 10% tariff on imported gold bars, surprising dealers and buyers alike.
We should note that the aluminium price pushed up yet again, now very close to the brief pandemic-induced peak. Also tin prices are also near record highs, but this is nothing to do with the Middle East. Rather it relates to an Indonesian crackdown on illegal tin mining there, which has been extensive. They are going after the palm oil industry too, but over financial issues.
The UST 10yr yield is now just on 4.49%, up +2 bps from this time yesterday. The key 2-10 yield curve is now at +44 bps (+10 bps). Their 1-5 curve is now at +37 bps (down -4 bps) and the 3 mth-10yr curve is at +84 bps (+4 bps). The China 10 year bond rate is still at 1.75%, unchanged from yesterday. The Japanese 10 year bond yield is up +2 bps at 2.72%. The Australian 10 year bond yield starts today at 4.93%, up +6 bps. And the NZ Government 10 year bond rate is down -3 bps at 4.64%.
Wall Street is back open after their long weekend holiday with the S&P500 up +0.5%. The Nasdaq is up +1.1%. Both are new record highs. Overnight, European markets ended between Paris's -1.0% fall and London's +0.2% firming. Yesterday, Tokyo closed down -0.2%. Hong Kong was unchanged and Shanghai dipped -0.2%. Singapore ended down -0.8%. The ASX200 ended its Tuesday session down -0.4%. The NZX50 ended up +0.8%.
The price of gold will start today down -US$64 at US$4499/oz. Silver is down -US$2 at just under US$76/oz.
Oil prices have risen +US$3.50 to just under US$94/bbl in the US, while the international Brent price is up +US$3 to just on US$99.50/bbl.
The Kiwi dollar is down -40 bps from yesterday at this time at 58.3 USc. Against the Aussie we are also down -40 bps at 81.5 AUc. Against the euro we are down -30 bps at just under 50.2 euro cents. That all means our TWI-5 starts today at just under 61.8 which is down -30 bps from yesterday.
The bitcoin price starts today at US$75,906 and down -2.1% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.5%.
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2 Comments
“And in Taiwan industrial production rose at a +15% rate in April from the same month a year ago”
Lucky buggers must have found an exception to the 2nd law of thermodynamics.
In the 1920s Gulio Douhet an Italian general wrote that strategic air power, bombardment would cause the destruction and/or surrender of a nation. Many believed him, Goering & Harris for example. Some obviously still do so. But it has yet to be achieved by non nuclear weaponry. Iran has now confirmed some realities. The regime, the nation itself is unbreachable. Their hold over the Straits of Hormuz is much more potent than they had realised. Their traditional trade routes to the North are sufficient to engage as necessary with allies such as Russia & China and more. When they attain a nuclear weapon, either by themselves or a purchase, they might now be much more intent on putting it to use which, in quite some way, takes it back to that prophecy by that old Italian general.
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