Here's our summary of key economic events overnight that affect New Zealand with news of a changing of the guard. Countries are moving away from US Treasuries as a core reserve asset, replacing it with gold. At the same time, crypto values including for bitcoin, seem to be fading fast.
But first up today, there was a full dairy auction overnight, one that brought slightly lower overall prices, with the USD index falling -0.6% mainly on -3% lower SMP prices. Milk fat products like AMF, butter and cheddar all rose, offsetting the fall in powder prices. But the NZD has also strengthened, so the result in NZD terms was a -2.0% fall. A pull-back in demand from China is part of this story too.
In the US, they reported a surge in April job openings, their most in 18 months, notably in California and other western states. It is a services related thing, with manufacturing jobs not really participating.
Meanwhile, the US RCM/TIPP economic sentiment survey fell slightly in June from may, but to its lowest in two years.
And the US Logistics Managers Index is showing the full impacts of the current supply-chain disruptions and stockpiling. It held in May at its highest since the pandemic stress period. It is increasing at an increasing rate for inventory costs, warehousing capacity, and freight prices.
In China, we should note that it is wheat harvest season and that they expect a bumper result. At the same time, both Australian and US farmers are hesitating in their plans for wheat as high fertiliser and fuel costs threaten to make the prospects very uncertain.
In the EU and as expected, CPI inflation firmed up to 3.2% in May from 3.0% in April. Their core inflation rose as well. It seems to be only about rising fuel costs at present with the spread wider quite limited. Will the ECB hike its policy rate on June 11? Markets are betting 100% it will.
In Australia, they have slipped into their first trade deficit since 2017 in the March 2026 quarter. Exports of minerals fell (except for gold) while imports of data center equipment surged.
Globally, it is worth noting again that aluminium, zinc, copper and tin are all now either at record highs or at post-pandemic highs.
The UST 10yr yield is now just on 4.46%, down -1 bp from this time yesterday. The key 2-10 yield curve is now at +41 bps (-1 bp). Their 1-5 curve is now at +37 bps (unchanged) and the 3 mth-10yr curve is at +77 bps (also unchanged). The China 10 year bond rate is holding at just under 1.71%. The Japanese 10 year bond yield is down -11 bps at 2.57%. The Australian 10 year bond yield starts today at 4.92%, up +2 bps from yesterday. And the NZ Government 10 year bond rate is up +3 bps at 4.58%.
Wall Street has hesitated today with the S&P500 up just +0.1% but still enough to claim another new record high. The Nasdaq is little-changed. European markets were between Paris's +0.8% and London's +0.3%. Yesterday Tokyo ended down -0.3%. Hong Kong however zooned up +2.5%. Shanghai ended up only +0.4% however, while Singapore was up another strong +1.2%. The ASX200 ended down -0.1%. The NZX50 was down -0.6%.
The price of gold will start today down -US$9 at US$4482/oz. Silver is down -50 USc at just over US$75/oz.
Interestingly, an ECB analysis released overnight has highlighted that after the run-up in the gold price, at the same time as the value of US Treasuries fell, gold was the largest single asset held for 'foreign reserves'. (see Chart 7)
Oil prices are up another +US$2 just under US$93.50/bbl in the US, while the international Brent price is now on US$96/bbl and up +US$1.50. Hormuz remains shut.
The Kiwi dollar is lower from yesterday at this time at 59.2 USc, down -30 bps. Against the Aussie we are down -40 bps at 82.5 AUc. Against the euro we are down -10 bps at just under 51 euro cents. That all means our TWI-5 starts today at just over 62.7 which is down -20 bps from yesterday.
The bitcoin price starts today at just on US$67,464 and down a sharp -5.9% from this time yesterday and falling. Crypto funds are getting excess redemptions at present. Volatility over the past 24 hours has been high at just under +/- 3.5%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
13 Comments
Bitcoin was 96k on the 15th Jan and now 66k. If you think the cost of living crisis is bad with 4% annual inflation, if Bitcoin was our currency we would have had 45% inflation in 5 months!
It was 105k a year ago, that’s 60% inflation in a year.
Despite it's ardent fans, it was clear that the only value in crypto currencies was through demand. There are a lot of myths about fiat being used to prop up crypto, and no doubt plenty bought into it. But it was a gamble, even more fraught than the share markets. How much did Musk put into Bitcoin, at what cost and how much has he made or lost now? A quick google search suggests he's lost $307 million, but most of his companies hold stocks bought at around $35K so they haven't lost - yet. Time to bail?
Happy I didn't buy any, especially at $126K!
It’s the new fad these days; you only invest in something because everyone else is, not because of its underlying value. I feel gold is going the same way; some invested for genuine reasons (safe haven), that pushed prices up, then the hoards followed. When the global economy recovers (impossible I hear you say, we’ll see), gold prices will plummet and the later investors will lose a fortune.
You're part-way there.
Just remember that fiat-issued debt - any currency - is also only faith-backed. From your 'price' comments, you are still steeped in the idea that 'money is a store of wealth' - .your 'price' is presumably in fiat-issued $, right? What makes you believe in that, vs anything else?
Fiat is only supported by people - like apparently you - believing in its 'underlying value'. Which is increasingly arbitrary. Yet so many don't see that, presumably driven by a need to self-justify.
I have a feeling fiat currency is state-backed. As in 'Fiat!' That's how it differs from crypto and stablecoins. Sure, a currency crumbles when its fiating state goes crazy with the printing press, but that's different from crypto, conjured out of nothing, backed only by avarice.
"Fiat is only supported by people believing in its 'underlying value'."
PDK you're perpetuating one of the myths put out by the crypto crowd. FIAT is backed by real physical assets and less physical stuff too. Because FIAT is issued by a government, it is supported by all the economic assets of that government, as well as the quality of the government and the overall impact of that on the nation. This means that the NZ$ is backed by all the economic activity that occurs in NZ, and is affected by the direction and quality of what that produces. This also includes the quality and impacts of all the regulation and legislation that is in place too.
That is not 'belief' but rather real quantifiable and qualifiable assets with measurable value.
No, it isn't. Indeed, can't be. It is levered, for starters - that by definition is very clearly not 'backed'.
And that's in the region of 1:5 if I remember correctly, 'backing'to proxy.
Then there is the little matter of the backing fraction: What is that on-the-line house REALLY worth? That too, is nominal (and in my book, already OOM inflated.
Then the final question: measurable in what?????????????? The same fiat?
You I regard as a better thinker than most - come on, think it through.
Also, Space X will IPO at nearly $3 TRILLION NZD.
TRILLION
And a couple of AI shops will IPO at $1 TRILLION each.
Sounds like a lot of NZ KiwiSaver funds will ape in via indexing.
The whole system is broke, but maybe BTC is one of the less broken parts of it
The US and worlds greatest welfare queen needs more cash for his planetary objectives. Where's DOGE when you need it?
JJ: Some days ago you did call it being in the sixes this week.
Gold resurgent at US trearuries expense
I don't understand this main headline, when the price of Gold actually dipped and the UST yields also went down overnight. Surely, DC, to justify this headline, Gold would have to rise and US bonds would have to drop (meaning yields would have to rise rise)
Countries are moving away from US Treasuries as a core reserve asset, replacing it with gold.
Is this meant to be a comment about a general trend over time perhaps, just not true for today's news?
It actually links to the crypto thing, doesn't it?
Everyone - elite, governments, Ma and Pa, even struggle street - are aiming to preserve their buying-power (at the bottom end for existential reasons, further up more for status).
Buying of what? is the obvious question. And what are the trends of those whats?
Out of bonds into gold? Out of gold into crypto? Out of all into local fiat? They all eventually expect to buy some what.
Of which there is less, daily. So we are seeing an increasingly frenetic game of musical chairs - some of which are illusions and actually have no legs. But if you end up sitting on one - say NZ fiat - you need to believe it will hold you up. Military force influenced some of that belief, for the last few decades; the $$$ of the dominant hegemony was regarded as 'gold'. No longer, increasingly. But the new belief-narrative is no clear or cohesive - and more than one cohort want to claim that space. While things rumble on, I'd back the yuan as likely winner (not that I've ever invested any proxy in anything other than physical materials).
Ultimately, small players tend to realise that physical possession of material assets is the best move, just before the elites run the enclosures and divest them of same.
But yes, it is reasonable that US debt - in the light of the current administration and likely trajectory - is becoming increasingly less-valued.
It's a headline Yvil, not an in depth exposee. The ongoing trend of countries ditching US treasuries is hardly new.
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.