Here's our summary of key economic events overnight that affect New Zealand with news intensified clashes in the Persian Gulf has oil prices rising, little transit activity in the Strait of Hormuz, and significant disconnect from Trump's claim that both sides are still negotiating. Clearly they aren't.
In the world economy, and first in the US, mortgage applications fell again last week, a third consecutive weekly easing mostly driven by lower refinance activity. Mortgage interest rates eased back however even if they remain at close to one year highs.
Ahead of this weekend's US non-farm payrolls report (expect +85,000), private businesses added +122,000 jobs in May according to the ADP survey, a new high since January 2025, compared to a downwardly revised +105,000 in April and above forecasts of +117,000. Hiring was broad-based they report and say it augers well going into the summer hiring season.
But this isn't backed up by the US services PMIs for the US.
The May ISM services PMI reported a good expansion, about the average it has been in 2026 and slightly higher than expected. Good new order flows are behind the result. But the same firms reported contracting staffing levels and faster input cost pressures. The parallel S&P Global services PMI was less upbeat, noting a muted increase in business activity, optimism faltering and employment falling solidly. Overall, it is a jobless expansion, these PMIs both say.
US factory orders are reflecting some of the stockpiling effects we have noted earlier. In April these orders rose +13.0% in nominal dollar terms above year-ago levels. But without aircraft and defense orders, they were up +5.8% - still a good result but mostly accounted for by inflation. And remember PPI rose +6.0% in the same twelve month period.
American crude oil stocks fell again, for the sixth consecutive week and the largest fall in this period. Over the past year, it has fallen more only in three specific weeks but each of those were not in a continuing series. Their strategic oil stocks are now at their lowest in 22 years.
The US Fed's Beige Book surveys for May reported most of the 12 Federal Reserve Districts had slight-to-modest increases in growth, though a handful experienced flat or slightly declining activity. Labour markets remained tight but were cooling. Business respondents said rising input costs for non-labour inputs were largely able to be passed on to consumers. Consumer spending was described as mixed, heavily influenced by affordability concerns and shifts in discretionary income.
In Canada key housing markets in Ontario, new listings have fallen, as have prices, and more homes are selling but also, more are selling at a loss.
In Japan, their central bank will meet next in a bit over a week and their Governor has indicated that rate hikes will be discussed to weigh against rising inflation, even that pushed by higher energy costs.
According to the private S&P Global (RatingDog) services PMI for China, that sector is expanding on a faster basis, much stronger than as reported by their official data. New business is expanding and they are hiring faster. But they also face their highest cost pressure since October 2023.
Meanwhile, Australia released its Q1-2026 GDP data yesterday, saying their economy expanded +2.5% in real terms over the past year. But the growth rate slowed in the March quarter from the December 2025 quarter. Rising interest rates and significantly higher fuel costs in the March month likely created an environment for more cautious consumer behaviour. This resulted in reduced spending across a range of household expenditure categories. And exports fell. The unders and overs likely balanced out but the level of spending on equipment for new data centers was so large it might have accounted for all the Q1 gain.
The UST 10yr yield is now just on 4.49%, up +3 bps from this time yesterday. The key 2-10 yield curve is now at +41 bps (unchanged). Their 1-5 curve is now at +39 bps (+2 bps) and the 3 mth-10yr curve is at +82 bps (+5 bps). The China 10 year bond rate is holding at just over 1.71%. The Japanese 10 year bond yield is up +7 bps at 2.64%. The Australian 10 year bond yield starts today at 4.94%, up another +2 bps from yesterday. And the NZ Government 10 year bond rate is up +1 bp at 4.59%.
Wall Street has hesitated again today with the S&P500 down -0.5% from yesterday even if it is still near its record highs. The Nasdaq is -0.8%. European markets were between Frankfurt's -1.3% and London's -0.4%. Yesterday Tokyo ended up a strong +2.5%. Hong Kong fell back -1.6%. Shanghai ended up only +0.2%, while Singapore was up another good +0.8%. The ASX200 ended up +0.7%. But the NZX50 was down -0.4%.
The price of gold will start today down -US$45 at US$4437/oz. Silver is down -US$1.50 at just under US$73.50/oz.
Oil prices are up another +US$2.50 just over US$96/bbl in the US, while the international Brent price is now just over US$98/bbl and up +US$2. Hormuz remains shut.
The Kiwi dollar is lower from yesterday at this time at 58.6 USc, down -60 bps. Against the Aussie we are down -30 bps at 82.2 AUc. Against the euro we are down -40 bps at just under 50.6 euro cents. That all means our TWI-5 starts today at just under 62.2 which is down -50 bps from yesterday.
The bitcoin price starts today at just on US$65,847 and down another -2.4% from this time yesterday and still falling. Volatility over the past 24 hours has been modest however at just under +/- 1.9%.
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25 Comments
Since we had the blue cost cutting team in charge, and Aus the red spend up team, how much has our GDP diverged from theirs? They must have grown at least 5% more than us in the last 3 years. Yet the blue team doesn’t seem to have a plan to grow the economy, their answer is more cuts.
Putting aside the small bit about perpetual growth in a finite world being somewhat problematic, if you listen to Luxon, he thinks he is growing the economy.
Luxon is very difficult to listen to, you know. That’s why just about every sentence includes the inarticulate gap filler “you know.” It suggests he believes we do know but he doesn’t?
It's no surprise that reducing government spending is more of a brake on GDP than continuing to get into debt to spend. It's the reasonable thing to do though. The reason why the world is in the mess it is today, is precisely because governments have been borrowing to spend money they don't have.
That's fine, but I'm sick of the grift that the economy will grow in the short term regardless.
Its all about timing. Its sensible to reduce government debt when the economy is doing well, but when its in a deep dark hole its a good time to increase government debt.
In NZ we seem to do the opposite. We vote National when the economy is doing badly so they can make it worse, and Labour when the economy is doing well so they can overheat it.
Duncan Garner backs up Thomas Cranmer 2023 paper trail. No wonder Hipkins/Ardern/Roberson didn't front public scrutiny at the Royal Commission. One wonders why they were allowed avoid the Commission and remove the August 13th meeting from their official diaries.
"6:23 And after reading through these official documents, it's clear that Hipkins is not just present at these crucial vaccine meetings, but he's the bloody chairman of them, he's running the meeting. So to believe that he knew nothing about the risks at the time.
Hipkins either had to be asleep in the meetings, not paying attention, not have read his own cabinet papers and cabinet committee papers, or he simply not told the truth. And given the meetings were strangely not minuted, he stuck to his he stuck his hands in the air and said, "We were not told. We were not told strategy." But it falls apart now that these documents have finally been released. The paperwork as far back as August the 13th, 2021 is specific about the concerns of the two jabs for teenagers."
https://www.youtube.com/watch?v=pNSt4kgu_fE
"… Why do the minutes from CV TAG’s 17 August 2021 meeting record that it was requested that references to increasing dosing intervals potentially providing some protection against myocarditis be removed from public communications? Who made the request and for what purpose?"
https://x.com/CranmerWrites/status/1643816372173172736
Time to revist this Interest article?
"Labour leader Chris Hipkins, who was Covid-19 Response Minister at the time, said the decisions made were "considered, appropriate, and guided by the best evidence available at the time".
https://www.interest.co.nz/public-policy/137573/covid-inquiry-credits-e…
As a knighted NZ high court judge once observed - Mr So & so, has a very economic view of the truth.
Hippy needs to go. There's OIA evidence now that there was a key un-minuted meeting that had an agenda for speaking on the risk to dual doses for 12-15yr olds of myocarditis. The OIA version had this point for the agenda stripped form it, not censored, but intentionally removed. The official narrative soon after by Hipkins to parliament as COVID minister also omitted this, showing he knowingly and intentionally removed it. Get him gone, he can't hide any longer behind lapsed memory or supposedly forgotten meetings. there are real world consequences for some teens as a result of his actions.
Agree. There has been far too much history that seriously questions both his credibility and integrity. Either extremely thick skinned or deluded with grandeur, probably both and flippantly so to boot.
I'd call this one a career-ender to be honest. Intentionally omitting known risks of second doses to teenagers just before they pumped the 'two shots for summer' campaign on every radio ad break, on every youtube clip, TV, it was ubiquitous a unavoidable.
There are now young people who have had their lives changed forever as a result of this omission, which, given the now-proven intent to deceive, repeated lies that he forgot or could not recall, when he himself signed off the paper to parliament as minister, is devious.
I'd call it criminal negligence considering the new facts. Time we demanded true accountability and consequences for these intentional choices. Give him the boot and make him face all the youth that got harmed by his actions, then take him to court and prosecute. What other example does it send to the public, and current and future politicians, if they can get away with such horrible, far-reaching underhanded actions as these.
Completely agree yet those points, and the whole guts of the story in truth, is being blithely ignored by just about all the major news outlets. Rather extraordinary given some of the trivia that is otherwise abundantly headlined. Harks back to the carte blanche forelock tugging the media gave the government during the pandemic. Shouldn’t be surprised when you consider that $ millions great big rescue package that was spooned out to keep them all being paid.
Copper at US14000 at tonne?
https://oilprice.com/Metals/Commodities/Copper-Tops-14000-With-Banks-Ca…
"Dr Julian Simon, formerly professor of economics and business administration at the University of Illinois, and later at the University of Maryland. With regard to copper, Simon has written that we will never run out of copper because “copper can be made from other metals.”
A message to all those exponential growthists drunk on hopium and human exceptionalism. Now might be a great time to start making copper out of other metals.
If only someone could invent fibre optic cables to replace copper wiring or invent new ways of recovering copper.
"There are two main kinds of copper-bearing rock. The most common type, sulfide ores, are typically crushed, concentrated, and then turned into pure copper in a fire-refining process. But that method isn't suitable for oxidic ores, and the industry's last big innovation came in the mid-1980s when it adapted an electro-chemical process to extract copper from oxide ores, providing a major boost to supply.
Now, Jetti aims to apply its technology to recover copper from a common type of sulfide ore that couldn’t be economically processed via either route — the copper content is too low to justify the cost of refining, while the hard, non-reactive coating prevented the copper from being extracted in the lower-cost electro-chemical or "leaching" process.
Jetti worked with the University of British Columbia to develop a chemical catalyst that breaks through the layer, so that the copper can be released using leaching without the need for high temperatures."
https://www.fastmarkets.com/insights/copper-tech-could-shrink-us-supply…
https://im-mining.com/2023/02/21/jetti-resources-to-deploy-catalytic-le…
https://www.eetimes.com/why-fiber-optics-is-replacing-copper-in-data-ce…
Copper US$14000/tonne.
Yeah, now that RCP 8.5 has been kicked to the curb it is time to put net zero out of its misery. The working man can't afford the lap classes luxury beliefs. Who ever though the ecotards would be so keen on mining?
"Projections show a massive shortfall in the supply of lithium and copper required to reach net zero emissions by 2050."
Corrections has spent $32,478,300 since 2021/22 pursuing Carbon Neutral Government targets.
https://www.taxpayers.org.nz/corrections_spends_32_million_chasing_carb…
https://www.nature.com/articles/s41467-025-61090-9
RCP8.5 hasn't been kicked to the curb though. We'll still get there. History doesn't end at 2100. It's just no longer officially acknowleged because economic cancel culture has worked it's magic. Now going to rely on synthetic Carbon capture and solar radiation management. Without these currently non existent synthetic options RCP1.9 and RCP2.6 are also kicked to the curb. So the planet is commited to 2degC warming by sometime in the mid 2030s. Onwards and upwards from there.
"If the accelerated warming rate continues, global warming of 2°C will be reached as soon as the 2030s, but it depends on the continued growth of climate forcing."
https://jimehansen.substack.com/p/2026-on-track-for-warmest-year
Technofantasists rejoice, along with the yeasty exponential growth cult.
Half that 32 million was on electric vehicles....I guess they could have bought ICE and be paying $3 + a litre currently and into the future.
So which is it Profile? "A massive shortfall in copper", or "new technology to recover copper", "an electro-chemical process to extract copper from oxide ores, providing a major boost to supply."
I realise astroturfing doesnt require consistency, but usually it's not done in consecutive conflicting posts.
Try reading to the end of a sentence or even better yet read the Nature link provided? massive shortfall in the supply of copper required to reach net zero emissions by 2050. With every prison running out to buy electric cars demand has gone up. Production in 2025 was flat compared to 2024 so you can't blame a shortfall. Ecotards protest about mining then have a sook when the price of copper based virtue signalling goes up.
Why are you adopting insulting language? Lack of intelligence?
I can read all my big sentences now!
"Overall, the impact on the economy was shown to be smaller than several of the country's more recent major downturns."
https://www.rnz.co.nz/news/business/597204/strait-of-hormuz-closure-sig…
See how easy it was to cut planet heating emissions? And it's not even that serious.
Of course when the reserve buffer starts making gurgling sounds, we'll see how good the economic crystal ball was at predicting the impacts of unavailable/unaffordable primary resource?
Question, when a factory gets an order, how does it know it's due to "stockpiling"? vs e.g. replacing stock that's been sold. Is this a value judgement being placed on the data or is there data which reveals it?
Possibly because factory orders follow a fairly consistent pattern. Orders above this pattern must either be due to increased sales, which can be tracked, or increasing inventories?
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