Here's our summary of key economic events overnight that affect New Zealand, with news SpaceX completed its historic Initial Public Offering earlier today on the Nasdaq exchange, listing with the ticker symbol SPCX. The stock opened for public trading at US$135/share and rose to US$161 at the close of trade today with a +19% gain and valuing the company at over US$2 tln. It only offered 550 mln shares of the 13.1 bln issued. Still, that 4% raised US$75 bln making it the largest IPO in history, and far surpassing the Aramco 2019 listing which was the previous record holder at US$38 bln.
There is still no word on any US-Iran deal being signed, preliminary or permanent.
In the real world, American consumers felt the cost of living pressure ease slightly in June as petrol prices came back off their recent war highs. The University of Michigan’s Consumer Sentiment Index rose in early June, up from May’s all-time low and a better than expected recovery. It was a modest recovery all the same with improvements seen across all age, education, and political groups. Lower-income consumers, for whom fuel represents a larger share of budgets, showed a particularly strong rebound even if it is still deeply negative and its second lowest of all time.
In Canada, the Trump Administration is still blocking the opening of a new public-owned bridge to Detroit - because a large Trump donor has a monopoly on the ownership of the one alternative.
Across the Pacific, after April's surprise decline, China's May new yuan loans resumed their growth, up +5.5% from a year ago with a modest +¥520 bln rise, about what was expected (+¥550 bln). Still, at that level it is the weakest May increase in eighteen years, as the usual suspect - the property market - continues to drag on bank lending.
Malaysia's industry is in an upswing. Its manufacturing sector expanded +9.1% in April from a year ago, expanding sharply from its +3.1% growth in March and easily beating the expected +4% result. It was their strongest expansion since September 2022, and was broad-based across all sub-sectors.
Malaysia's retail sector is on the move up as well, itself with a heady +6.3% rise in April from a year ago, substantially aided by strong car sales. Retail sales volumes rose +3.9%, confirming the impressive result.
Indian CPI inflation is rising again, up +3.9% in the year to May and slightly faster than expected. That is the highest rate since the start of 2025. Food inflation was up +4.8%. To be fair, they also have both gold and silver in their CPI basket.
India bank loan growth is now getting out of hand. It was up +17.7% in May from a year ago. It is not helping that the Indian currency is extremely weak. And that is not helped by their oil import vulnerability and the relentless devaluation is driving those with funds to shift them out of India, making the situation worse. The Indian central bank has been forced to intervene in currency markets to support the rupee. It has also been making policy changes to attract foreign investment. They are in a very difficult spot.
The UST 10yr yield is now just on 4.48%, up +3 bps for the day, down -6 bps for the week. The key 2-10 yield curve is now at +40 bps (+2 bps). Their 1-5 curve is now at +35 bps (+2 bps) and the 3 mth-10yr curve is at +81 bps (unchanged). The China 10 year bond rate was down -1 bp at 1.74%. The Japanese 10 year bond yield is down -6 bps at 2.62%, down -3 bps for the week. The Australian 10 year bond yield starts today at 4.81%, also down -3 bps from yesterday, down -14 bps for the week. And the NZ Government 10 year bond rate is softer at 4.50%, down -8 bps from yesterday, down -6 bps for the week.
Wall Street has ended its week with a +0.5% rise on the S&P500 in Friday trade, down a minor net -0.1% for the week. The Nasdaq is up +0.3% for a -0.7% decline for the week. Overnight, European markets were were all +1.8% firmer except London which was up +1.6%. Yesterday, Tokyo recovered +2.8% in Friday trade, but up only +0.1% for the week. Hong Kong rose +1.9% to be up +0.6% for the week. Shanghai rose +1.1% for a weekly +2.4% surge. Singapore was up +0.8% in Friday trade. The ASX200 closed up a full +2.0% in Friday trade to end its week up +1.1%. The NZX50 ended its Friday session up +1.5% for a weekly gain of +1.8%.
The Fear & Greed index has stayed back into the 'fear' zone where it was last week.
The price of gold has recovered +US$66 from yesterday at US$4218/oz but down -US$106 for the week. Silver is up US$2 at US$68/oz and the same as last week at this time.
Oil prices are down -US$2 from yesterday at just under US$84.50/bbl in the US, while the international Brent price is now just on US$87/bbl. A week ago these two prices were US$90.50 and US$93/bbl respectively. Hormuz transits have dried up again with only 2 in the past 24 hours after yesterday's brief stampede. And global oil reserves are draining into uncharted territory.
The Kiwi dollar is up +20 bps from this time yesterday at just under 58.4 USc, up +40 bps for the week. Against the Aussie we are up +10 bps at 82.8 AUc. Against the euro we are also up +10 bps at just on 50.4 euro cents. That all means our TWI-5 starts today at just on 62 which is up +10 bps from yesterday, up +30 bps for the week.
The bitcoin price starts today at US$63,846 and up +1.0% from this time yesterday. That is a +6.1% rise from this time last week. Volatility over the past 24 hours has been modest at just under +/- 1.3%.
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28 Comments
"no word on any US-Iran deal being signed"
The US still working out how they can spin their total surrender after giving Iran what they want. Tick, tick, tick......
At best, it will only be a MOU being signed, meaning: "we're agreeing to keep talking about signing a proper peace agreement for 60 days". This MOU will be fraught with insurmountable difficulties with two unreasonable sides, and a third side, Israel doing all it can to break any peace agreement.
Israeli attacks on Lebanon have now killed 3,711 people and wounded 11,483 as Israel’s army continues its deadly bombardment and occupation of the south.
How is that peace working out for you guys?
Seems the Trump regime is surrendering, but doesn't want anyone knowing until Trump Whitehousetm can figure how to create a Fox News campaign convincing enough for low information viewers. Or maybe it's Iran playing the Trump game of flooding the zone? But no, judging by the Trump regime response, Iran has given the US their only list of demands (basically unchanged since the beginning of Trumps war) and the synthetic hard man, along with his culty sycophants, are devising a cunning strategy to extricate themselves from their position of total weakness.
Lying like lying liars in other words. It's the christian thing to do.
"Donald Trump furiously accused Tehran of negotiating in bad faith."
https://www.rnz.co.nz/news/world/598068/iran-says-deal-with-us-closer-t…
Spot on.
It's a crazy world when the IRGC are more believable and trustworthy than the US.
If not already known, Iran has now had it definitely confirmed that firstly their present regime is unbreachable, secondly no military force is capable of mounting a credibly victorious ground invasion, thirdly Iran cab say what they like and do what they like, and if they don’t happen to agree, there is nothing much anyone can do about it and fourthly, that now will include exertion on the Straits of Hormuz.
Nonsense.
Compelling argument. I'm convinced!
It's just too early to make these claims.
And following on from Foxglove's four points above...
... paraphased/summarised from the link below...
#5 Iran using cruise missiles could completely cripple Israel, and also destroy the US air-to-air refueling planes parked at Ben Gurion Airport. This would severely hinder both Israel and the US's air attacks.
#6 Israel's entire rail system is dependent on one central hub. Iranian cruise missiles could take that out too. They are completely incapable of defending themselves from these attacks which could, if Iran chose to play these cards, have Israel on its knees, militarily, logistically, and economically, with just one coordinated attack. Iran has not played this card (yet) - I imagine because...
(i) They wish to keep civilian casualties to a minimum.
(ii) When you look around the world, the US is losing diplomatic capital, even faster than Iran is gaining it.
(iii) Iran was attacked on false pretenses. Israel and the US broke every international law, and covenant, whilst Iran has occupied the moral high ground from day one. They intend to retain this position, especially now that this reality has become so painfully clear to so much of the RoW.
#7 US munitions would only last a matter of days if the war escalated. Iran, on the other hand, is fully prepared for an escalating war that lasts for months, if not years.
#8 The word from very high up sources, is that Iran already has a nuclear capability and that they are getting ready to conduct tests on their own soil. It seems that one of their allies has provided them with this capability, because it was viewed that in terms of a deterrence, that it could avoid a rapidly escalating regional war that might quickly go nuclear anyway, given the nutcases that head the US/Israeli aggressors. Israel already possesses massive nuclear capability, and so this deterrent factor could be viewed as very important in this huge game of chicken. Israel, which is roughly the size of New Jersey, would not fare well in any kind of nuclear exchange.
#9 Iran insists on a ceasefire for all of its allies, including Lebanon, and its Hezbollah faction, and of course the Israeli attacks on Gaza, Hamas, and those related to any other Palestinian territory that is illegally occupied by Israel.
#10 Yemen is back in the equation as an ally that insists on the Israeli genocide being discontinued. They will cut off Israel's use of the Read Sea in terms trade and military supplies. They have done so in the past and can easily do so again, as well as stop US naval assets from operating in that region. See the link below - basically the Commander of Iran's Revolutionary Guards Quds Force, Esmail Qaani, stated that a new security belt of resistance will be established from the Strait of Hormuz to the Bab El-Mandeb Strait off Yemen, which is the southern choke point to the Red Sea.
#11 As Pape points out (1:00), at day 100 of this war... Iran has moved from a position of mere survival to one of ambition. They now use their own escalation dominance to put pressure on the Gulf States to withdraw US forces from their territory.
At the same time they threaten Israel - if you attack Hesbollah's strongholds in Beirut, Iran's key ally, and Iran is going to punish and retaliate. This is part of the new redline. They are not just worrying about survival in Tehran, they are installing a new architecture - a new ambition. This is now the middle game. In terms of a game of chess, they are not just going for a draw - they are going to extend their power in a much more ambitious way. This middle game, let alone the end game, will probably extend right through to January, 2027.
#12 (5:00) As Iran has gained power, America has lost strategic position - this is a direct trade-off. Trump's rhetoric is as if he is still the dominant power - he is acting as if he is still in control. The fact is that Trump is losing control as his strategic position has declined.
(i) Iran will simply ignore what Trump says about negotiations.
(ii) They don't think his narrative has any reality. Iran has laid out their demands in public, which means they are digging their heals in, and that they don't really care what Trump says any more.
(iii) In war, reality rules - you can try to have your happy talks, as Trump is doing, but this is being ignored, and now much of the US public see this too.
(iv) Trump's words have zero reality to them.
(v) Pape found Trump's claims that this debacle is "about to be settled" right back to March 29th - 72 days of hearing this dribble every day or so - that "we are only days away from a deal".
You can painly see, as Iran's ambitions grow, and in terms of its umbrella spreading its wings, exactly why Trump is losing control.
#13 Prof Pape explains -Trump's idiocy has resulted in Iran becoming a fourth global geopolitical powerbroker in a time-frame of merely a few months. This is unprecedented in world history. Usually this kind of rise in global strategic influence can take up to a century or more to develop. Iran has achieved this in less than 3 months. Trump's massive own-goal is unprecedented in terms of global political history.
#14 Pape on April 4, wrote in a piece in the NYT, that Iran is emerging as a world power, and he said it would take about 18 months of trajectory to do that. He predicted that Iran would be the 4th centre of world power , the fourth regional hegemon, and the dominant power in the ME. What does that look like? It looks like a state that has a sphere of influence, not just worrying about its own narrow protection - and what this means is it will protect its allies, which is exactly what you are seeing here. This sphere of influence extends to the Hezbollah (Lebanon) and the Houthies (Yemen) being defined.
Irans position as the 4th centre of world power will emerge drip by drip and over the summer this will get even stronger because, as the crisis hits the world economy, this will strengthen Iran's position in the region, and also within the world. You are seeing the emergence of a world power right in front of our eyes. I am not surprised that people were skeptical of this argument, because we haven't seen that in our lifetime. You would need to go back to Prussia's rise back in the 1800s to put this current event into some sort of historical perspective.
This not about Iran's GDP - this is a function of its geography and technology. Pape believes that this is one of the gigantic outcomes that will reshape the world, coming out of this war. This would not be happening had Trump not bombed Iran.
#15 This new reality will dramatically change Israel's position in which it could attack and bomb with impunity some 7 different countries within the last few years.
As Iran's security umbrella solidifies, Israels position will weaken dramatically, and for 2 reasons...
(i) The Israeli strategic position is very heavily a function of America's strategic position, and their position is weakening dramatically, this also inherently weakens Israels position at the same time.
(ii) As time goes on, you will see further innovation in the drone and missile capabilities of Iran's proxies. We are already seeing a much more sophisticated and concerted effort with those missiles and drones, and to think and act in a calibrated way how to weaken Israel.
#16 While most people have been focussing on Israel/Lebanon, Pape has been watching the Red Sea and the Houthies.
Recently the Houthies have stepped in and are now threatening any Israeli related traffic around the Red Sea choke point. This is an expansion to the theatre in a coherent way that will weaken Israel over time, because their drones and missiles can be used in a much more concerted way, and this is just the beginning for Israel. This trajectory is likely to go on for as long as the eye can see.
... end quote/paraphrase...
Note...
I can only admire Professor Pape's candid honesty and bravery in calling out this gigantic blunder by the current administration, and setting a giant bonfire to, not only the US's rapidly dwindling diplomatic capital, but also to the US economy, and now much of the global economy as well. These are monumental home truths that he is calling out.
Of course, the monumental irony is that the very countries that Trump set out to victimise and cripple, are the ones that will benefit the most. I see Pape's call on Iran as the globe's 4th strongest strategic power as being very difficult to argue against and I am sure that Pape is making this call simply because, the longer the US takes to admit defeat, the more it will cripple their economic and diplomatic standing in the world.
I also wonder how secure Pape' tenure is at the Uni of Chicago.
WIKI ...
"Robert Anthony Pape (born April 24, 1960) is an American political scientist who studies national and international security affairs, with a focus on air power, political violence, social media propaganda, and terrorism.
He is a professor of political science at the University of Chicago and founder and director of the Chicago Project on Security and Threats"
https://www.youtube.com/watch?v=6SQnX9QRu9o
If Israel could completely cripple Israel with a conventional cruise missile attack don't you think they would have done it already?
Did you not read #6?
If Israel could completely cripple Israel
Israel crippling themselves?
The USA is confused on any agreement because it was confused about why it was there in the first place.
Mind you that has never been a problem for them.
Sort of speaks for itself doesn’t it. The USA forces have been assembled now for months. A long staged naval blockade cannot have been expected to be necessary and therefore, nor can have been, the present impasse. That the USA has allowed this situation to develop illustrates that they have actually not been able to prevent it any more than they know now how to get out of it because quite obviously, if there was something they could do, they would have done it by now.
Market outlook: Why investors should be cautious despite AI and space-tech boom | Explainer
Christopher Joye being full of Joy...
That should be a sobering proposition. If private credit is wobbling when the US economy is strong, equity markets are euphoric, and the Fed has delivered material easing, what happens when the real economy finally falters?
The answer is obvious: credit rationing. The lenders that financed marginal borrowers through the zero-rate madness of 2020 and 2021 will not be able to extend and pretend forever.
As redemptions rise, liquidity disappears, and bank financing is withdrawn, the private credit punters will not be able to roll over dud loans. Borrowers will default. Collateral will be dumped. And asset prices will fall. That is how financial accidents happen. Slowly, then suddenly.
Some seemingly reliable reporting by BBC at 9.00am this morning:
"A deal with the US to end fighting in Iran is close and includes reopening the Strait of Hormuz, Iran's Foreign Minister has said. Seyed Abbas Araghchi told state TV the deal also includes the lifting of a US blockade of Iran, but that talks on Iran's nuclear programme would begin later."
Seems that that its nuclear programme could still be the current stumbling block.
Al Jazeera
- Pakistani Prime Minister Shehbaz Sharif says a “final, agreed upon text of the peace deal has been reached” between the United States and Iran, with “next steps” to be finalised.
- Iranian Foreign Minister Abbas Araghchi says the Memorandum of Understanding (MoU) with the US has “never been closer” while urging media not to speculate about its contents.
- US President Donald Trump had condemned Iran after Iranian media reported extensively on terms of the peace deal being hammered out.
So if there was actually a deal, and if fuel prices dropped back down, will that create spending and an economic improvement? I know most commentators would consider that impossible, but I reckon it’s plausible (if Trump doesn’t TACO). I certainly hope so, NZ could do with some good news.
Try thinking in engineering terms.
If the flow of energy returns to pre-war levels (wells re-opened, infrastructure repaired, logistics re-booted) then you would be back at 2025, input-wise and therefore work do-able-wise.
But in the interim, we've burned 10 billion of the best remaining oil stocks..., and entropy never sleeps; indeed, deferral has probably added to it's current demand.
Then will all the infrastructure get re-built? Would it be done ex-insurance? Who pays what of the debt?
Lastly, perhaps we need to define 'good'. If by that you mean buying churning and discarding ever-more parts of a finite planet while increasingly abdicating from responsibility (think: Luxon this last week) as 'good', then I have 'bad' news for you. If, however, you define good this way:
New episode with regenerative change practitioner Brett KenCairn out now! - YouTube then there is a possibility.
The nuclear thing is just a red herring. Trump thought he could forment regime change, send in a few suitcases of cash for the new crowd and claim Iranian energy resources, just like Venezuela. Israel cares about nukes and Israel owns Trump, but when plan A failed so completely catastrophically, it all became about nukes, nukes, nukes.... because Trump knows all you have to do with low information people is repeat, repeat, repeat..... Don't look at our failed resource grab and failed regime change. It's only ever been about the nukes! We risked global energy starvation and economic melt down because Trump tore up the Obama nuke agreement and wanted to install a Shah#2.
Seems that its nuclear programme could still be the current stumbling block.
Seems more like the US is willing to let Iran away with (not publicly ot course) its nuclear programme in order to finally, desperately be able to go home.
Iran was not making nukes. By agreement and with close inspection.
Then Trump back then cancelled the agreement. Carefully aim at foot. Pull trigger.
"SpaceX completed its historic Initial Public Offering earlier today on the Nasdaq exchange"
Great news for the planets richest ever welfare queen.
If there is a MOU signed, I hope the terms will be made public.
The side who comes out better off is more likely to make the terms of the agreement public, the side that had to make a lot of concessions will want to keep the real terms secret, so they can lie about it and fabricate a half truth.
Elon Musk on Friday became the world's first trillionaire after shares in his SpaceX rocket company soared during the biggest-ever stock market debut.
Gotta love the analysis
https://www.youtube.com/watch?v=wKXgeNwNRJ4
Whos up to spend 28K USD a year on AI and internet?
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