Here's our summary of key economic events overnight that affect New Zealand, with news it seems Iran is going to come out of the current 'peace deal' with a very large reconstruction commitment. To end the standoff, the US is offering Iran substantial funding even if via convoluted means so that Trump can claim the US isn't involved.
The overnight dairy auction brought lower prices than at the prior full event, but not as low as at the prior Pulse event, nor what the derivatives market were expecting. Still, it was a -2.8% retreat in USD terms, down -1.4% in NZD terms and to the lowest overall level since early February. Generally the powders were softer than expected, the milk fats not as soft as expected.
In the US, their weekly ADP employment update signaled a slightly slower pace of hiring, the softest since early March. But this signal is still expanding, just slower.
The New York Fed's regional services sector survey found softer conditions in June than at the prior survey with declining activity and firms not very optimistic.
Meanwhile the US national housing start data for May revealed sharply lower activity, down -8.7% from the same month a year ago. In fact, apart from the pandemic period, this is the lowest level in 17 years and the GFC.
All eyes now turn to the US Fed and their meeting tomorrow. Many economists are betting on higher rates as Kevin Warsh takes the reins at the Fed. But it is no certainty as financial markets see no-change in their rates tomorrow, despite the high US inflation measures.
In Canada, their real estate market seems to be recovering led by Toronto and Ontario markets, with national sales rising at a rate in May not seen since 2024.
In China, new home prices were -3.5% lower in May from a year ago, matching April’s pace and that extends their consecutive decline to almost 3 years. Second hand home prices fell at a faster rate in the 70 major cities that their official data tracks. But there are new pockets where increases are starting to show up, even for pre-owned homes.
China said its industrial production expanded +4.5% in May from a year ago, better than the +4.1% in April and better than the expected +4.3%. And their electricity production rose +4.2% in the same period, giving some cred to the industrial production claims (which has been occasionally absent in previous months).
But China's retail sales actually fell -0.6% in May from the same month in 2026, following an easing pattern that started in March, and the first decline in retail sales there since December 2022. But much of this weakness is due to lower car buying which was down -16%. Sales of home appliances and audiovisual equipment was also down -16%, home improvement down -11%, gold and silver jewelry down -9%, and furniture down -8.7%. Turning up sharply were beverages and tobacco, clothing and cosmetics, comfort items popular when things are stressful.
As expected, the Bank of Japan raised its policy rate by +25 bps to 1.0% yesterday in a 7-1 majority decision. This new rate is its highest in 31 years.
In Australia, momentum in their manufacturing sector stalled heading into mid-year, with conditions slipping back neutral after a short-lived recovery. The Middle East conflict is reigniting cost pressures across the industry, according to the latest update of ACCI-Westpac Business Survey for the June quarter.
And late yesterday, the RBA agreed unanimously to hold their cash rate target at 4.35% as was widely expected.
On the commodities front we should note that while urea prices have fallen (with oil), that is not the case for sulphur, nor bitumen. Many commodity prices may stay elevated for a long time yet.
The UST 10yr yield is now just on 4.42%, down -4 bps from this time yesterday. The key 2-10 yield curve is now at +37 bps (-4 bps). Their 1-5 curve is now at +31 bps (-3 bps) and the 3 mth-10yr curve is at +78 bps (-2 bps). The China 10 year bond rate down -1 bp at 1.74%. The Japanese 10 year bond yield is up +7 bps at 2.64%. The Australian 10 year bond yield starts today at 4.78%, down -7 bps from yesterday. And the NZ Government 10 year bond rate is up +4 bps at 4.48%.
Wall Street is taking a breather with the S&P500 down -0.1% and the Nasdaq down -0.5%. But SpaceX is up again pushing it +32% above its listing price. Overnight, European markets were positive between Frankfurt's +0.1% rise and Paris's -0.8% retreat. Tokyo ended its Tuesday session up +0.1%. Hong Kong however fell -1.4% with Shanghai down -0.1%. Singapore rose +0.8%. The ASX200 ended its Tuesday session unchanged. But the NZX50 rose by +0.5%.
The price of gold has recovered further, up +US$20 from yesterday to US$4341/oz. Silver is unchanged at US$70/oz.
Oil prices are down another -US$5 from yesterday at just over US$75.50/bbl in the US, while the international Brent price is now just over US$78.50/bbl. Hormuz transits are still minimal with only six crude or product tankers exiting over the past 24 hours. Oddly however its seems the US is using an Iranian ship-transfer tactic to get some cargoes through.
And we should note that construction and other costs for electric battery storage stations have fallen below that of gas-fired power plants for the first time, as overproduction in China and a shift away from electric vehicles drove battery prices down -40% in 2025, while a turbine supply crunch is making new gas plants more costly.
The Kiwi dollar is up +10 bps from this time yesterday at just on 58.4 USc. Against the Aussie we are up +20 bps at 82.6 AUc. Against the euro we are unchanged at just under 50.3 euro cents. That all means our TWI-5 starts today at just under 62 which is up +10 bps from yesterday.
The bitcoin price starts today at US$65,878 and down -1.5% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.1%.
And we should also note that reports suggest Binance is about to lose its license to operate in the EU. Binance is controlled by Changpeng Zhao (CZ) who was convicted of money laundering in the US (and of course got pardoned there by Trump).
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26 Comments
War is good for nothing.
But one thing it has done is the Americans are starting to realize just how bloody the Israelis are.
There's a nasty report coming from some members of an aid flotilla to Gaza that was intercepted by the Israelis. Four female members are reporting being raped by Israeli servicemen. Israel's response is there's no evidence....
An eye for an eye and a tooth for a tooth. That is what the supposedly good book said under the guidance of, take your pick, Jehovah / Yawahe. We all know that what is good in any founding tome of any religion is applied in the most hypocritical interpretation possible to claim justification for horrendous activity by the yard, and if the whole damn lot of them were scrapped the world would be no worse off. It is impossible to visualise that the hostilities that involve Israel, outward and inward, will ever settle in any sustainable peace.
Within reasonal limits, I don't have an issue with Israel defending itself. But the same holds for the palestinians as well. But for many years now, Israel has gone too far. They stoop to vile acts against people who are no threat to them. They are killing innocents including children with little restraint.
https://www.1news.co.nz/2026/06/17/peace-deal-may-end-iran-war-but-what…
A good synopsis of the clusterfu$k that is this war.
Trump coming out swinging against Israel this morning too. Mossad will be taking note.
Trump got what he deserves. Think's he's a genius, got manipulated into a corner, sacked all the people who would advise him to not go there, now trapped by his own hubris. Reality is a harsh judge. America and the Republicans got what they deserve too. They put him in power and then refused to follow the constitutional mandates on restraining the executive office. Pigeons - roost.
The loss of talent will haunt them for years. They won't be able to get those people back.
Trump and Netanyahu went into the Iran conflict believing that they had cleverly manipulated the other into helping them achieve their own agendas. Both extremely self centered, narcissistic and totally blind to any potential unintended consequences, each absolutely consumed with how this could benefit them and them alone.
Are these polls even worth looking at? https://www.stuff.co.nz/politics/360993853/greens-surge-lifts-left-bloc…
"The Greens rose to 13%" - they will be back down to 10% next poll no doubt.
"The poll surveyed 1021 adults between June 1 and June 10 and has a margin of error of plus or minus 3.1 percentage points." - so one week it could be 3.1% out towards the right, the next 3.1% out towards the left, a 6.2% margin of error. Pointless.
No, they're reflections of a failed media.
Which fixates on 'the polls' while not telling the voters the truth about the future options they're voting for.
Sometime that is through ignorance - sometimes through wilful avoidance (I've had one mentioning 'my truth' as if they are entitled to another - not much different to Trump's approach, indeed no different).
Big-picture, humanity is in deep doodoo. But the media don't want to tell the voters. And the voters will often reject that which is abhorrent, anyway.
So a poll maybe tells you the level of ignorance, but probably not because all Parties are on the ignorant page (the Greens were partially on the right page, but a currently long-gone.
"No, they're reflections of a failed media."
YES! It is interesting though that there are a few journos who clearly take themselves seriously, but none of them want to do an analysis of each party's policies side by side and then explore the possible impacts.
It may be a significant piece, and I suspect a few wouldn't bother reading it in detail, but it would be a strong call to vote, even if it's for what you don't want. Might even open the eyes of a few pollies too.
Some journos are trying. this article from Heather du Plessis-Allan;
https://www.nzherald.co.nz/nz/someone-should-have-the-guts-to-sort-out-…
.
It is a single poll (data set) that was conducted between 1 and 10 June. It's not two polls each with a 3.1% margin of error but rather a single margin of error of 3.1%.
He is describing the range (rather than M.O.E)
He called it the MOE and even said MOE = 6.2% when it was clearly stated as plus or minus 3.1%.
Yes, but his point is not invalid...semantics?
It's not semantics and the point he is trying to make is not valid.
Depends whether your more interested in the outcome or the swing. If this poll is 3.1% skewed left and the next is 3.1% skewed right, it will look like a 6.2% swing right when actually there was no change at all.
It's not clear what the K-value associated with the 3.1% uncertainty is. Worst case scenario it's a single standard deviation, in which case your scenario (or worse) has something like a 5% chance of happening (32% chance of being outside a single SD, and a 16% chance of the following poll being outside an SD in the opposite direction.
If it's K=2, there is a 0.1% chance of your scenario happening. If I'm doing my maths right - stats is not a big part of my job.
It's not clear what the K-value associated with the 3.1% uncertainty is.
Don't you mean p value? In reality, polls are non-probability sampling anyway.
No, K value i.e. the number of standard deviations represented by the uncertainty level K=1, 1 SD, K=2, 2 SDs etc. Terminology might vary, but that's what we use in my area.
And yes I could easily be using an inappropriate method, my stats is pretty basic when it comes to understanding population types, distributions etc.
The different polling companies are regularly 3% different (or more) even over a similar timeframe.
Would be good if one of the MSMs averaged all the various polls, it would have a much lower error margin. But without the results swinging drastically every week they wouldn't get as many headlines.
As election approaches and polls increase they probably will....think it was RNZ that published a poll of polls series last time
RNZ are one of the biggest, blindest culprits.
And apparently incapable of internal reflection.
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