Here's our summary of key economic events overnight that affect New Zealand, with news the US-Iran deal is being viewed with relief by financial markets, but commodity markets are less enthusiastic. Commodity prices are expected to remain higher than they were in February, before the US and Israel attacked Iran, even after this latest deal to end the war, as it will take months for risk premiums to retreat and give breathing space to commodity-importing economies.
However first today, American manufacturing output stalled in May from April to be +1.4% higher than year-ago levels and a lower improvement than expected.
Also coming in weaker than expected was the June factory survey for the New York region although they did report a small rise in new orders. The pace of input cost increases remains very elevated however.
Meanwhile NAHB survey of housebuilders was little-changed in June, remaining weak on affordability concerns.
In Canada, May housing starts dipped from the prior month but remain high on an historical basis.
Canada also said its April industrial production was strong, with manufacturing sales up +4.2% following a +3.4% rise in March. Sales rose in 17 of the 21 subsectors, led by the fuel products and food subsectors.
India said its exports rose to US$45.2 bln in May, a record high for them and +18% above the May 2025 level.
After three months of declines, industrial production rose in April in the EU in a better than expected result (even if the rise was quite minor).
And France is facing US pressure for attempting to get the US tech giant to pay some tax on their French operations. Big Tech has weaponised its support of the US President to try and avoid France's 3% digital services tax. Even that is too much for them. Relying on US tech is risky, and those risks got larger with the US banning key new Anthropic products "from export".
The UST 10yr yield is now just on 4.46%, down -3 bps from this time yesterday. The key 2-10 yield curve is now at +41 bps (+1 bp). Their 1-5 curve is now at +34 bps (-1 bp) and the 3 mth-10yr curve is at +80 bps (-2 bps). The China 10 year bond rate little-changed at 1.75%. The Japanese 10 year bond yield is down -7 bps at 2.57%. The Australian 10 year bond yield starts today at 4.85%, up +3 bps from yesterday. And the NZ Government 10 year bond rate is down -6 bps at 4.44%.
Wall Street has started its week strongly with the S&P500 up +1.8% and the Nasdaq up +2.9%. Overnight, European markets were mixed between Frankfurt's +1.4% rise and London's -0.4% retreat. Tokyo ended its Monday session up an eye-catching +5.0%. Hong Kong however only rose +0.5% with Shanghai up +1.6%. Singapore rose +1.0%. The ASX200 ended its Monday session up +1.2%. But the NZX50 eased an out-of-step -0.2%.
The price of gold has recovered further, up +US$99 from yesterday to US$4321/oz. Silver is up +US$2.50 to US$70/oz.
Oil prices are down -US$4.50 from yesterday at just under US$80.50/bbl in the US, while the international Brent price is now just over US$83/bbl. Hormuz transits are still minimal with no significant movements of crude or product tankers overnight.
The US went to war with Iran because they would not "negotiate" their surrender. Now Trump claims peace based on a negotiation with a regime he cannot defeat nor control. Likely the "worst deal ever". What could possibly go wrong?
The Kiwi dollar is unchanged from this time yesterday at just on 58.3 USc. Against the Aussie we are down -40 bps at 82.4 AUc. Against the euro we are down -10 bps at just under 50.3 euro cents. That all means our TWI-5 starts today at just under 61.9 which is down -10 bps from yesterday.
The bitcoin price starts today at US$66,868 and up +5.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.9%.
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9 Comments
In his rather good volume “Modern Times” historian Paul Johnson captions a chapter as “Waiting for Hitler.” Should he ever produce an extension of his other volume “A History of the American People,” he likely will have good reason to caption a chapter as “Waiting for Trump.” That comment is not meant to imply any profound similarity between the two individuals, just that the respective developing circumstances, made their advent inevitable.
Funnily enough there is some resemblance between Donald’s father Fred Trump and the little moustache man. Take a look at his wikipedia and scroll down to the middle of the page where it shows multiple photos of him through 1940-1950. His moustache gets even smaller during this period...
https://en.wikipedia.org/wiki/Fred_Trump
Well now, there it is, as you say funnily enough. Except reading through that account of activities and involvements, ain’t funny reading.
Likely the "worst deal ever"
Its far too early to determine this. War should be seen as a process of exploration. Plans change quickly after the first shots are fired. No doubt a lot has been learned from this war regarding drone warfare, bombing effectiveness, energy flows, the unreliability of talk of regime overthrow, Israel's influence and its dangers, Gulf Arab states military readiness and probably a lot, lot more. Of course Iran will have learned a thing or two as well.
Trump's ability to compromise, probably the only leader that can get away with this, should be appreciated rather than mocked. Although, I can appreciate that many are more fearful of a Trump success than practically anything else.
Trump only comprised after his attempt to get what he wanted by force failed. Like a school yard bully who let's you keep your lunch after you punch him in the face.
It amazes me how there are still people out there that can support this man and his administration.
More concerning, is the number of people out there who don't support, but who haven't asked: Why?
In my bookcase: How the Hell Did This Happen?: The Election of 2016 : O'Rourke, P J: Amazon.com.au: Books
Written from a libertarian stance (so many people only read for self-reinforcement), and my note-to-self in the front points that out - also that Chapter 30 is the kicker: 'The revolt against the elites targets all manner of preeminence - political elites, business elites. media elites, institutional elites and, kind reader; you.'
It was an interesting read in 2016... we were warned.
I guess the USA will now have to find someone else to bully.
They always need one to fuss over, and a few spares.
A dominant hegemony is merely a resource-suck.
The least-effort methods of commandeering are tried first (High EROEI).
The most-effort methods come later (war gives a low EROEI - but seen in a 'vis-a-vis to loser' lens, cane be seen to make sense).
They end up succumbing to entropy...
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