Here's our summary of key economic events overnight that affect New Zealand, with news Trump cancelled his latest planned military strikes claiming negotiating progress. That has been enough to settle financial markets today.
But first in the US, producer prices jumped +1.1% in May from April to be +6.5% higher than a year ago and to their highest since November 2022. And before the pandemic, their highest since this series began in 2009. Core PPI was up +5.1% and a similar high. These rises were more than expected.
US initial jobless claims also rose more than expected last week.to 228,400 and more than seasonal factors would have indicated. There are now 1.69 mln people on these benefits, less than a year ago and marginally less than two years ago.
In Canada, building consents were expected to fall back in April after the spurt in March, but they fell more than expected. Residential consents fell -5.5% and commercial consents fell an outsized -10.5%, both from the prior month. From a year ago, these consent levels were +2.5% higher, but that is on a value basis and construction PPI rose +2.8% in that same time.
In Europe, the ECB raised its policy interest rate by +25 bps to 2.4% as widely expected, it's first increase since 2023. It also raised its inflation expectation to 3% in 2026 and cut its growth forecast slightly to +0.8% this year and to 1.2% in 2027.
In Indonesia, their financial crisis is intensifying with their currency in freefall and their stock market too. The worry is it may drive a social crisis at our backdoor.
In Australia, the Melbourne Institutes survey of inflation expectations dipped in June to 5.5% following a dip in May after they peaked at 5.9% in April. The June result was well below the 6.5% jump some expected. But remember, their fuel tax concession (50%) is expected to end at the end of this month. If it does, it could put upward pressure on consumer inflation. (April actual CPI came in at 4.2% and the May result will be released on June 24.) In contrast wage expectations have remained unchanged for the past seven months.
The World Bank said overnight that global growth is leaking away due solely to the Middle East handbrake. It now sees 2026 expanding at 2.5%, and 2027 at 2.8%. These are slowdowns from 2025's +2.9% expansion and the prospect is slowest growth since the pandemic.
Meanwhile OPEC bravely says that world oil demand will recover quickly after the current Persian Gulf issues are resolved.
Global container freight rates rose another +3% last week to be level with the elevated rates of a year ago, when the Houthis were threatening the Red Sea access. It is all about outbound rates from China to Europe. In fact, China to the USWC rates are holding, but much lower on a year-ago basis. Bulk cargo rates fell -12% in the past week to be +68% higher than year-ago levels.
And official forecasters are now certain enough to warn of a severe El Niño climate event starting soon. The US issued its official warning after Australia said the chances are rising. We are being warned to expect 2026-27 to bring global risks of intense heat waves, sharp drops in rainfall in some key areas but deluges in other parts. India is expected to get a weak monsoon.
The UST 10yr yield is now just on 4.45%, down -9 bps for the day. The key 2-10 yield curve is now at +38 bps (-4 bps). Their 1-5 curve is now at +33 bps (-4 bps) and the 3 mth-10yr curve is at +81 bps (-8 bps). The China 10 year bond rate was unchanged at 1.75%. The Japanese 10 year bond yield is down -1 bp at 2.68%. The Australian 10 year bond yield starts today at 4.84%, down -6 bps from yesterday. And the NZ Government 10 year bond rate is firmish at 4.58%, up +1 bp from yesterday.
Wall Street has abandoned its 'fear' mode with the S&P500 recovering +1.7% in Thursday trade on a tech stock rebound. The Nasdaq is up +2.2%. Overnight, European markets were firmer between Frankfurt's +0.1% and both Paris and London up +0.5%. Yesterday, Tokyo was little-changed, up only +0.1%. However Hong Kong was down -0.7% and Shanghai eased -0.2%. Singapore recovered +0.6%. The ASX200 closed down -0.2% in Thursday trade. The NZX50 ended session down -0.4%.
The price of gold has recovered +US$54 from yesterday at US$4152/oz. Silver is up US$1.50 at US$66/oz.
Oil prices are down -US$5 from yesterday at just under US$86.50/bbl in the US, while the international Brent price is now just on US$89.50/bbl. Hormuz transits are resuming today with 69 in the past 24 hours as owners rush to get their ships out.
The Kiwi dollar is up +10 bps from this time yesterday at just under 58.2 USc. Against the Aussie we are down -20 bps at 82.7 AUc. Against the euro we are little-changed at just on 50.3 euro cents. That all means our TWI-5 starts today at just over 61.8 which is also little-changed from yesterday.
The bitcoin price starts today at US$63,223 and up +2.3% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.0%.
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11 Comments
Someone needs to push Trumps bed against the wall ‘cause he keeps hopping out a different side. Or maybe Melania should hop in.
He knows he cannot win an 'actual' war in Iran, but he does know his current situation is great for manipulating markets so he will continue to play this ridiculous game, not fully realising how dangerous it could turn out to be.
Dangerous though Trump is, he is only a symptom.
Bigger picture, the US has dominated a 'screw the 3rd world out of its resources' format since WW2. Colonisation by any other name. That always peaks (ask Rome et al) and the signals are stratification of wealth often coupled with reduction in democracy (wealth-spread is incompatible with the egalitarian ideal of one person one vote).
Trump and the polarisation in the US, then, are merely manifestations of a decaying colonial enterprise. Remove him - and even remove his top-end implants (people, not hair) and THE UNDERLYING PREDICAMENT WILL NOT ALTER.
Those who are wealthy in great excess may see the world in terms of resources, but they care not as they have the greatest access to them, and the means to manipulate policy and legislation to ensure the continuance of this. Oddly enough if they considered the long term future of the planet and their fellow man, we may not be in such a predicament, given they could use their power, wealth and influence for better, however the pathological need to hoard wealth seems an addiction so many cannot seem to shake, with their views only limited to the lifetime they will tangibly have to weather any effects of their actions.
I reckon he wants a war but his advisors tell him its a bad idea. If someone pisses him off he flips.
Self adulation brings with it many complexities and one of them is a compulsion to be never proven wrong in one’s own mind. The Iranians have been well prepared and know how to roll with the punches and play to their strengths. At present President Trump is being foiled by all of that and more, and that in itself, is something of a harbinger of the perils that will be involved in landing any force of any size on Iranian territory. To sum up, the only way out is a deal, which regardless of its content, effectiveness and reach, President Trump can conclude, in his own mind, is a great deal.
Both sides know the other's weaknesses and trying to improve their deal instead of agreeing on something that an independent would consider fair.
I do think there is the option for Trump to bomb their main assets then walk away with Iran economically crippled. It would suck for the rest of the world, hard to know whether Trump would care. And potentially the strait could open if America is out of the equation.
Everyone thinks Iran has the upper hand, but realistically they have nothing on America except high fuel prices. Iran's main threat is against their neighbouring countries.
How do you stop the fallout of a war based on a man fighting with himself... and to think the public voted for him.
No. He sees himself as an emperor; one who is unchallengeably smart and who - by inference - can make no wrong decision. The reality is that he is a narcissist, probably on the spectrum, not overly intelligent and now declining into senility. The two are irreconcilable.
There might be some body-clock stuff in it too; seems he splurges in the wee small hours, probably alone with his demons.
The danger is that we think his removal will alter what put him there in the first place. That is illogical and increasingly looks like an unwillingness to address the underlying issue(s). The danger while he is there, is the nuke button, and the steady exit-stream of sane brains between him and it.
"we think his removal will alter what put him there in the first place" - the nutters will still vote extreme, but hopefully the more sensible people in the centre will have learnt, for a few years at least. Otherwise America is heading towards civil war.
The upcoming movie "Praise be to Trump - defender of the Straight" has got some great material with Apache pilots fighting an evil burning drone in their cockpit and then been retrieved by a heroic sea drone.
https://www.telegraph.co.uk/us/news/2026/06/10/us-iran-drone-pilots/
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