Here's our summary of key economic events overnight that affect New Zealand with news the US and Iran have apparently agreed a 60 day truce, pending Trump's signoff. All the while, both sides traded attacks in the region. The small number of ships transiting the Strait of Hormuz has virtually dried up.
Meanwhile, US jobless claims slipped last week to 185,600 and by about what seasonal factors would have indicated. There are now 1.68 mln people on these benefits, less than one and two years ago.
There was a sharp drop in new home sales reported for April, and they were -11.3% lower than year ago levels. Rising mortgage rates is weighing heavily on this sector.
But they reported a sharp increase in durable goods orders in April, up +19% from a year ago, up notably from March. This is where we see the full effect of stockpiling as buyers try to get ahead of rising inflation. One reason was a +41% jump in capital goods on the same basis. But excluding defense and aircraft orders, the increase was modest.
The second estimate of GDP growth for Q1-2026 is out and it was revised lower, mainly on lower consumer spending and investment levels than in the initial estimate. They now say the US economy expanded +1.6% in the period.
They also released the April data for US personal income and personal spending. This showed that personal disposable income fell from March, up +2.5% from a year ago, while personal consumption expenditures rose, up +5.9% from a year ago. In fact, their April PCE inflation measure rose to 3.8%, its highest since May 2023 and the end of the pandemic effect, and prior to that the highest since this data was collated in 2017. Undoubtedly, this has the Fed's attention, especially the accelerating nature of it.
US crude oil and petrol stocks fell again last week, but 'only' by about the levels expected. that extends the fall to five consecutive weeks, all substantial, and coming after three prior weeks of modest or no-change outcomes. Retail pump prices for petrol are still +48% higher than at the start of the Iran-US conflict and closure of the Strait of Hormuz.
There was a US Treasury 7yr note auction overnight and the yield increase was not as fierce as yesterday's event. This one delivered a median yield of 4.24% (high 4.29%), up from the 4.12% at the prior equivalent event a month ago.
In Canada, their central bank has released and updated Financial Stability Report which found that Canada’s financial system has functioned well through a challenging year. Households and businesses remain in stable financial condition, and banks have strengthened their capacity to absorb shocks.
Meanwhile they reported that average weekly earnings rose +3.5% in March from a year ago, a faster pace of increase. They have CPI inflation of +2.8% at the same time so Canadian employees are generally staying ahead of the cost pressures.
The Korean central bank kept its official rate unchanged yesterday at 2.5%, as expected.
Updated Australian household spending data for April shows it fell -1.1% month-on-month (on a current price, seasonally adjusted basis) to be +4.9% higher than in April 2025. In the same period CPI inflation rose 4.2%. The weak outcome is being attributed to the sharp hike in fuel costs, and compensating pullbacks elsewhere. It is their first fall in household spending in four months.
And staying in Australia, they said private new capital expenditure rose +6.5% in the March quarter to be +14.6% higher than the March 2025 quarter. This strong growth is largely on the back of significant investment in data centers, up +96% and a new record high. Investment in mining was flat.
The Middle East war led to a -3.4% fall in air passenger demand in April. But Asia/Pacific international demand rose +3.0% from a year ago. For air cargo, demand was up +4.0% despite the turmoil, up +11.3% in the Asia/Pacific region.
Global container shipping freight rates rose +3.2% last week from the prior week to be +12% higher than year-ago levels. This is largely driven by rates from China to the EU. Transpacific rates from China to the US West Coast actually fell last week. As did trade volumes. Meanwhile bulk cargo rates rose +4.4% last week, to be a massive +140% higher than a year ago.
The UST 10yr yield is now just on 4.45%, down -3 bps from this time yesterday. The key 2-10 yield curve is now at +43 bps (-2 bps). Their 1-5 curve is now at +38 bps (-1 bp) and the 3 mth-10yr curve is at +78 bps (-3 bps). The China 10 year bond rate is down -2 bps at 1.72%. The Japanese 10 year bond yield is up +1 bp at 2.70%. The Australian 10 year bond yield starts today at 4.85%, down -5 bps. And the NZ Government 10 year bond rate is up +3 bps at 4.65%.
Wall Street is firmer today with the S&P500 up +0.6%. The Nasdaq is up +0.9%. Overnight, European markets ended lower between Paris's -0.2% fall and London's -0.8%. Yesterday, Tokyo closed down -0.5%. Hong Kong fell a sharp -1.5% however but Shanghai managed a minor +0.1% rise. Singapore ended down -0.8%. The ASX200 ended its Thursday session down -1.4%. The NZX50 ended down -0.2% after the prior day's good jump.
The price of gold will start today up +US$57 at US$4506/oz. Silver is back up +US$1.50 at just under US$76/oz.
Oil prices have fallen -50 USc to just on US$89/bbl in the US, while the international Brent price is now at US$93.50/bbl and down -US$1.50/bbl.
The Kiwi dollar is up +40 bps from yesterday at this time at 59.3 USc. Against the Aussie we are up +20 bps at 82.8 AUc. Against the euro we are also up +20 bps at just under 50.9 euro cents. That all means our TWI-5 starts today at just under 62.8 which is up +40 bps from yesterday.
The bitcoin price starts today at US$73,455 and down -1.8% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.0%.
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60 Comments
Once upon a time 1939/40 there was a phoney war. This ceasefire extension sounds like a phoney peace but it will be really good to be proven wrong.
Watched Syriana last night - sets the flavour well.
And Luke Kemp's Goliath's Curse (I'm up to page 359 of 579) is a useful read too.
Entropy will win; we will never go back to 2025 'prices' for oil - and we weren't really 'growing' even then; not if the parrying of decay was being taken into account.
As to who ouflanks whom under the sinking lid, we have two things to think about. One is defending ourselves, from invasion (whether formal or informal). The other is internal sustainability/resilience - which is the antithesis of just-in-time-efficient-fragility.
A limiting factor is the 15,000 Americans locked in overcrowded ships sailing in circles in the arabian sea. Can't do it forever.
Soon there will be no need for the Iranians to shoot them. They will be shooting each other.
“Six months in a leaky boat.” Now that’s an old refrain, from a damn good song but more like loose ends for the US Navy.
Ship-wrecked: Six Month in a Leaky Boat & the Falklands – Undercharted
Remember?
Your post was on the money
Mostly they are not Americans, and mostly they have been repatriated by air.
https://www.nytimes.com/2026/03/06/travel/stranded-cruise-passengers-gu…
I was talking military David.
I assumed KH was referring to the US Marines. I'm pretty sure they will be able to maintain discipline for the duration.
Bet the security on the laundry rooms is tighter than a fish rear end.
Reminds me of the no one wanting to pick up the soap on the shower floor joke:-)
"The US and Iran have reached an agreement on a memorandum of understanding for a 60 day extention of the ceasefire and the launch of negotiations on Irans nuclear program, but President Trump has not given his final approval, two senior US officials and a regional source involved in the mediation told me"
Barak Ravid, Axios/CNN
So nothing then. Good enough for the S&P to head north and crude to head south though.
"US consumer sentiment has hit unprecedented lows, with surveys like the University of Michigan's index plummeting to a record-low 44.8"
The Market Super Organism gobbling the planet while ignoring those it's supposed to serve, just as it's designed to do.
Meanwhile, US Bombs Iran,
https://www.nytimes.com/2026/05/27/world/middleeast/military-strikes-so…
and Iran attacks Kuwait.
https://www.abc.net.au/news/2026-05-28/kuwait-reports-missile-attack-us…
The Claytons ceasefire.
The fearful need to believe.
And will, any chance they get.
They're probably a bit TINA-ed too. The ramifications are too awful for them to contemplate.
The S&P is acting irrationally. I have suspicion that with the growing adoption of investment into mutual funds by younger and younger people getting more despondent with the figures of a house purchase, or to grow their deposit faster, it is propping it up, but more of me thinks it is AI muddying everything and everyone piling into fewer and fewer key businesses who still are on the up. A correction will come at some point. The question being when.
Most of the time the doomsday scenarios don’t eventuate.
i paid $3 a litre for 91 a couple of days, perhaps $2.85/$2.90 next week?
How can you think so small/short?
It's a finite resource.
The best has already been burned.
And the demand - despite the GND hype - is growing.
Which is a predicament somewhat larger in scale, than 'most of the time'.
Whatever
Doomsday scenarios never eventuating never seems to be embarrassing.
You're gonna live forever, I take it?
This is why we never get anywhere with these discussions. Whether I live forever is not in the same category as doomsday predictions having a track record of being wrong. You are essentially changing the subject.
Which, using your word, "doomsday" predictions are wrong Zach? Your life is less than a gnat fart in the geological continuum of Earths existence. Just because something doesn't occur in the compressed timeframe of your particular act on the stage, doesn't mean predictions of negative outcomes never materialise. There have been 100s of millions of people throughout history suffering negative outcomes ex of their potential lifespan. The main difference historically, they were localised outcomes.
Doomsday is your obsession.
localised outcomes? Read up on the Toba eruption, or below, humans have been within a hair's breadth of being wiped out on a number of occasions.
"...Compared with other living primates, contemporary humans have startingly low genetic diversity.
...For decades researchers have suspected this arose because our ancestors went through a population bottleneck.About 1 million years ago, our distant ancestors hunted in small bands and gathered their food with sophisticated stone tools. Then, about 900,000 years ago, something happened: The number of breeding individuals dwindled to only about 1300, according to a new study modeling ancient population sizes."
https://www.science.org/content/article/human-ancestors-may-have-surviv…
Yes, and? I'm sure to the residents of Hiroshima and Nagasaki sure felt like Zacks "doomsday" scenario in 1945, as another example.
The main difference historically, they were localised outcomes. Historically, outcomes were not just localised. You're welcome.
May need to cover up there prof, your revealing verbal attire has your superiority complex showing.
More interestingly, he's assuming DC is correct.
Which in terms of economics, he is.
In physics, not so much.
I'm not the one predicting the future here!
Your point is what exactly? Are you equating doomsday with human extinction? It could be, but probably less dramatic, Or just nearly extinction? My definition is the collapse of complex civilisation which may, or may not lead to mass human die off. While Rome was busy collapsing, there were other civilisations unaware Rome existed. You're welcome.
So localized outcomes weren't the main difference or they were the main difference. Make you mind up!
The earth won’t exist forever either, regardless of what humans do or don’t do
I'd be more worried about the next few decades of human environmental destruction, rather than solar evolution boiling off the oceans in 100s of millions of years?
My point isn’t to dismiss environmental concerns
but ultimately everything is f$&ked
do what we can in the moment, sure
I'm more of an optimist. I like to think we're not f##Ked. I love this beautiful planet. Billionaire capture of leadership and capitalist techno utopian exponential growth cultism are major hurdles to survival though.
Rhetorical use of the term "exponential" detected.
Cracked records suggest lack of learning being done.
Just saying.
Try that book I mentioned upthread. Goliath's Curse...
Oh, but it is you guys that are the cracked record and never learning. I am simply offering a rebuttal.
My point is, real‑world systems never follow exponential curves for long. Population, interest rates, and economic output all show saturation, feedbacks, and transitions that break exponential behaviour.
You only have to think about it for a moment. Mathematical results and real‑world ones are different. For example, if you invest one thousand dollars at 4% for one thousand years at maturity you will have $16,000,000,000,000,000,000. An absurdly high figure! This never happens. So, why include the term if such spectacular results never happen?
"My point is, real‑world systems never follow exponential curves for long."
Ah, a glimmer of hope. Yes, that is the point! And yet the exponential economic growth cult still pursue their dogma. This dogma is destructive of Earths life support systems and humanity. In a finite space exponential growth cannot continue! That is the point!
Actually, at the far end of the growth-needing spectrum, that mention of Peter Thiel the other day - calling the likes of Greta Thunberg an antichrist and suggesting incarceration for any stymieing progress - shows where the nonsense ends up.
When people's mana/persona/status is so bound up with numbers in an accounting system that they need to system to continue even when they know enough to have a Learjet waiting to take them to a bolthole - you have to wonder at the degree some can stretch cognitive dissonance to.
Those tech oligarchs are basically insane. The scary part, they've accumulated wealth and influence to actually enact and inflict their insanity on everyone and everything.
Once they've initiated armaggedon they need to give NZ a wide berth.
So would it be okay if we just grow a fixed amount each year?
Because in the real-world over the long term that's probably how it all works out in the end.
No and no.
The way to look at is that the possibilities on a finite planet, long-term, are limited.
Non-renewable resources (including those so slowly renewing that they are non-renewable in human timescales - like FF) need to be recycled as near 100% as possible (entropy still wins, just over a longer time).
Renewable resources need to be used no faster than their renewal rate.
And sinks need to be filled no faster than they can assimilate.
Within those parameters, grow whatever you like. Just don't overshoot those limits. Which we have done for the last 200 years, in reality.
Real sustainability is orders of magnitude less throughput than we are currently indulging in. Put another way; degrowth of several orders of magnitude is on its way.
"It is the future, after all. Anyone who 'knows' what will happen in the future is a charlatan, no matter how they couch it."
https://www.interest.co.nz/bonds/138728/money-markets-bank-economists-a…
Huh? You don't believe the pusuit of exponential economic growth is exponential? That's weird?
Exponential growth
is
a mathematical pattern where a quantity increases by a consistent percentage over equal time intervals.
The primary economic growth goal for New Zealand is to
lift the long-term national growth rate to 2.3% and accelerate to 3.2%.
You need to get over your hangup over the word "exponential". The similarities to yeasty growthism are real. 2% growth rates equate to 35 year doubling times. A thinking person sould be terrified of "exponential growth" as a primary directive. An unthinking one would just censor the use of the exponential function. Burn the books.
See my comment above. Not even remotely similar to yeast. Come on, it's so obvious, just look out the window.
I see a procession of fossil-fueled trucks, transporting tatt which is mostly destined for landfills.
In science terms, I see entropy being accelerated, needlessly (wants are not needs).
What I see is temporary and will leave our children and grandchildren a stuffed home (planet).
I'd rather they thanked us for trying on their behalf, than excusing ourselves via chosen ignorance
I do look out the window. all the time. Or at least actually outside experiencing what others look out the window at. I am obseving a deterioration in the living environment. Sure, undectectable by the human experience from day to day, but compounding over weeks, years, decades. Incredibly fast to see such damage in just part of one insignificant human lifetime. Caused by the human ideological obsession with groooowth!
Rhetorical use of the word "Doomsday" detected.
Hey, it was Zen Man that used it first in the thread.
Maybe. If the Strait stays closed we'll burn through the various buffers and reserves before long, at which point price will have to rise to destroy ~10-15% of oil use across the globe. Some think $150 oil would achieve that, others more like $200 - partly depends on how much various governments subsidise oil use by doing silly things like cutting fuel taxes.
I don’t like any of the political parties right now.
what I CAN say is I want to see far more investment in to front line health and education resource. My daughter has been in Auckland hospital over night, they are all doing their best but seriously stretched.
And this:
https://www.nzherald.co.nz/nz/auckland/manurewa-high-school-to-close-ea…
I don’t really understand why our politicians, of all stripes, seem to have an allergic reaction to properly funding and resourcing such core, human needs.
It's a good question.
Their problem is a Systems one. Thinking in Systems - Donella Meadows you'll find a free dowload - it is well worth the learning.
The gist is that the dominant System - even if doomed time-wise - will subsume all others in its bid to continue whatever it is doing. That is exactly what is happening now - indeed, the rise and rise from nothing of student loans/debt, is a classic example of such subsuming. The dominant System is Economic Growth (pandered-to by all political parties) and as it hits the limits, it is devouring all others - health, education (Stanford's unthinking bricks in the wall initiative).
The dominant System is also being impacted by so many feed-back loops, that it is itself reversing - with feedbacks hitting all subservient Systems. The current mob are attempting to re-create yesterday. They will, inevitably, fail. Not will: are.
We can indeed construct a powered-down society where health and education - I mean real education; critical thinking, logic, science, Systems - are done well Why Standardized Testing Contributed to the Metacrisis – and How to Fix It | RR 25 - YouTube
but this one hasn't the spare capacity anymore.
https://worksinprogress.co/issue/magical-systems-thinking/
"Systems thinking promises to give us a toolkit to design complex systems that work from the ground up. It fails because it ignores an important fact: systems fight back.
...But, as we now know, the results were also wrong. Adjusting for inflation, world GDP is now about five times higher than it was in 1970 and continues to rise. More than 90 percent of that growth has come from Asia, Europe, and North America, but forest cover across those regions has increased, up 2.6 percent since 1990 to over 2.3 billion hectares in 2020. The death rate from air pollution has almost halved in the same period, from 185 per 100,000 in 1990 to 100 in 2021. According to the model, none of this should have been possible.
What happened? The blame cannot lie with Forrester’s competence: it’s hard to imagine a better systems pedigree than his.
...With the failure of his World Model, Forrester had fallen into the same trap as his MIT students. Systems analysis works best under specific conditions: when the system is static; when you can dismantle and examine it closely; when it involves few moving parts rather than many; and when you can iterate fixes through multiple attempts. A faulty ship’s radar or a simple electronic circuit are ideal. Even a limited human element – with people’s capacity to pursue their own plans, resist change, form political blocs, and generally frustrate best-laid plans – makes things much harder. The four-part refrigerator supply chain, with the factory, warehouse, distributor and retailer all under the tight control of management, is about the upper limit of what can be understood. Beyond that, in the realm of societies, governments and economies, systems thinking becomes a liability, more likely to breed false confidence than real understanding. For these systems we need a different approach."
Selective data alert!
Geographical restriction but ex offshoring.
A classic.
The four-part refrigerator supply chain, with the factory, warehouse, distributor and retailer all under the tight control of management, is about the upper limit of what can be understood. Beyond that, in the realm of societies, governments and economies, systems thinking becomes a liability, more likely to breed false confidence than real understanding. For these systems we need a different approach.
Saving up to four lane the ghost SH1 between Chch and Timaru. Although I guess if there's one thing gold plated super highways promise, it's more traffic.
https://www.thepress.co.nz/nz-news/361006306/government-look-four-lanin…
Promises of capital investment is sooo sexy. Illusion of government doing something resembling governing, rather than nothing.
Maintaining crumbling infrastructure..... boring! No sales pitch there!
We have mini USians running the country. The sooner we can gut publically funded health and education, the better off we'll all be.
Well put
Because their donors tell them not to.
This was well covered in the Aussie series 'Utopia'.
"we've already done the initial sod-turning twice"... Ribbon-cutting is so much more vote-gaining than keeping the sewerage works going.
Either way everyone ends up in a shitty situation
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