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%.
[We have an unresolved technical issue with updating our charts. We are investigating. Apologies for the interrupted updates.]
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
2 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.
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.