Here's our summary of key economic events over the weekend that affect New Zealand, with news the coming week will be largely about the Strait of Hormuz and whether the US-Iran agreements will hold and traffic resumes at scale. But we start the week with a pessimistic outlook. Iran says it has closed the Strait (again) and it will remain closed until the US honours its commitment to get Israel to stop invading Lebanon. The US seems unable to do that and responded with threats. Talks in Geneva sputter along and it is hard to know if they are meaningful. And that likely means ship traffic in the Strait will be tolled by Iran when things settle, as they eventually will.
Away from all that, the local data will focus on May's mortgage and credit card lending.
In Australia we will get important updates for CPI inflation (4.3%), jobs growth (+30,000), and household spending (+4.1%).
In China, their central bank is widely expected to keep its one-year and five-year loan prime rates unchanged in its June review. They will also release FDI data (likely at least -10% lower from a year ago).
Taiwan will update its eye-catching export order data, expected to rise to +50% in May from a year ago.
There will be many early June PMI indicators coming out this week including from the US (expect stable or easing). But the big US data will be their PCE inflation report where analysts expect them to report a May level close to 4%.
Canada will report its CPI and that is expected to come in at 2.9% but with core readings a bit lower.
Over the weekend they reported retail sales rose in April to be +3.7% higher than year-ago levels but unchanged in volume terms. Their May retail sales indicator rose a bit more, but this too may be all about fuel prices more than volume gains.
Staying in Canada, their banking prudential regulator lowered its capital buffers over the weekend with the express intent of allowing their banks to lend more to businesses "in support of Canada's economic adaptation to new opportunities".
Across the Pacific, Malaysia said it's exports rose a startling +45% in May and far better than the outsized +35% expected - and easily an all-time record high. This is all driven by electronic goods (+71%) although LNG exports were very strong too (+112%). Their traditional rural exports (palm oil, natural rubber) took a hammering however.
Meanwhile Malaysia reported CPI as up just +2.0% in May from a year ago with food prices up just +1.2%.
Germany said its May producer prices rose +2.2% from a year ago, the most since June 2023 when most of that intervening prior saw declines.
And in Europe generally, they are suffering extreme heat, early in their summer, with temperatures 40o plus in many places. It will be a long summer for them.
The UST 10yr yield is now just on 4.49%, unchanged from this time Saturday, up a net +1 bps for the week. The key 2-10 yield curve is now at +31 bps (unchanged). Their 1-5 curve is now at +25 bps (+1 bp) and the 3 mth-10yr curve is at +84 bps (unchanged). The China 10 year bond rate is also unchanged at 1.75%. The Japanese 10 year bond yield is holding at 2.65%. The Australian 10 year bond yield starts today at 4.81%, down -2 bps from Saturday, unchanged for the week. And the NZ Government 10 year bond rate is still at 4.46% to be down -4 bps for the week.
The price of gold has held at US$4152/oz, down a net -US$66/oz for the week. Silver is at US$65/oz, down -US$3 for the week.
Oil prices are holding from Saturday at just under US$77.50/bbl in the US, while the international Brent price is now just over US$80.50/bbl. A week ago these prices were US$84.50 and US$87/bbl respectively. Hormuz transits are picking up with 15 crude or product tankers exiting over the past 24 hours (3 dark with transponders off) and 17 entering for new loads (8 dark). (Normal is 60 in each direction.)
Australia said it has extended their fuel excise tax relief until the end of July.
The Kiwi dollar is unchanged from this time Saturday at just on 57.4 USc to make it a full -100 bps lower than a week ago. Against the Aussie we are little-changed at 81.9 AUc. Against the euro we are staying lower at just on 50 euro cents. That all means our TWI-5 starts today at just under 61.2 which is unchanged from Saturday, down -80 bps for the week.
The bitcoin price starts today at US$63,124 and up +1.8% from this time Saturday. Volatility over the past 24 hours has been low at just over +/- 0.6%.
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13 Comments
I almost, just almost, felt a little sorry for JD Vance trying to lead the negotiations with the Iranians and his boss is blustering and threatening them over social media. It's a little hard to do your job when your boss ins interfering and cutting your legs out from under you.
I wonder if there is a strategy to make Vance look like the smart choice at the next election, the guy who could balance Trumps craziness. Possibly Trump isn't even aware of this strategy.
Vance is looking good. But maybe it's just becue he is better (against a low comparison)
The movi of his book is great.
“We declare our rejection of any military or security operations launched from Lebanese territory outside the framework of legitimate institutions.”
The prime minister said all Hezbollah military activities are “illegal” and called upon the security forces to “prevent any attacks originating from Lebanese territory”.
https://www.aljazeera.com/news/2026/3/2/lebanese-pm-nawaf-salam-announc…
https://www.pbs.org/newshour/show/a-rare-look-inside-hezbollahs-secreti…
Ballsy of the Lebanese PM. Taking that stance in Lebanon these days is just as likely to see you "retired" permanently. The comparison of Lebanon today with that of the 60s and 70s is fairly extreme. Lebanon used to be one of the world's go to tourist destinations. somewhat in conflict with the Islamic principles but Turkey walks that path apparently with few real issues.
One day the new Iran regime are good guys, the next day he's going to blow the crap out of them.
Hollow threats. Iran are far from intimidated by Trumps ramblings.
What's the purpose? It's like the school bully threatening to beat you up for your lunch money, you don't give it to him, then he doesn't follow through. After a few months of the same occurrence you don't find him scary at all.
You have to step back and use a wide lens.
Firstly, you ask why the bully got voted for.
Twice.
And the answer is in Systems thinking: the overarching System is the exponentially-increasing consumption of parts of a finite planet. Subsequent repercussions are degradation, depletion, increasing entropy. Also exponentially-increased 'wealth' stratification.
Increasingly the narrative was a lie - increasingly therefore, it was going to be fronted by talking-heads comfortable with regurgitating script, sans conscience. From Reagan on, this has been so.
The purpose is to continue the consumption; the benefiting cohort eventually safeguarding themselves at the expense of all others - both contemporary and future. Except that it is a doomed initiative.
Wordy, but yes. This is particularly relevant; "Increasingly the narrative was a lie." Politically they could never talk about it though, because those upper layers of society were making ever more money from the status quo. The reporting that exposed it was either suppressed, or dismissed as fringe, until other evidence thrust it into the limelight.
Trump, while you suggest is a symptom, and I don't disagree, but also the very worst to put forward by those trying to protect what they had. He's turned into a accelerant. The arsonists threw petrol on the fire they were trying to distract the masses from!
Splitting (psychology)
https://en.wikipedia.org/wiki/Splitting_(psychology)
"Splitting, also called binary thinking, dichotomous thinking, black-and-white thinking, all-or-nothing thinking, or thinking in extremes, is the failure in a person's thinking to bring together the dichotomy of both perceived positive and negative qualities of something into a cohesive, realistic whole."
"Splitting is observed in personality disorders belonging to cluster B, such as borderline personality disorder and narcissistic personality disorder,..."
So there's a clinical term for it. I've just called it "extremism" in the past. More than a few who comment on this site do it. I've often thought it is more about getting noticed, getting a reaction, but it's hard to have balanced, reasonable debate when it is used.
A minor digression into past reporting. Chinese posturing over rare earths in the past has yielded results they won't be impressed with. What came out of our discussions back then was essentially the 'rare earths' weren't all that rare, just difficult and expensive to process, and only the Chinese did it. Even the US had to ship their ore to China for processing.
But now Breaking Defense are reporting the Pentagon has signed two contracts totalling US$1.2 billion combined for companies to build and process rare earths in the US. While it will take some time for production to begin, once started it'll take away Chinese influence and monopoly in the field.
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