Here's our summary of key economic events that affect New Zealand, with news the Swiss talks between the US and Iran seem to have made progress overnight, from Iran's point of view at least. The fighting in Lebanon has abated. Oil prices have fallen following the 60 days peace deal roadmap is still in place. To keep the momentum, the US Treasury Department has agreed it will not enforce their sanctions on the production, delivery and the sale of Iranian oil - for at least these 60 days. But of course, Iran has been selling oil before and after these sanctions, although it just got easier for them.
Having noted that news, ship traffic in the Strait of Hormuz has in fact changed little so far. Over 400 ships are waiting for confirmed safety before their owners will move them. And in turn, they are waiting for insurers to price their cover at more normal terms.
In the US, the Fed is actively assessing how its global dominance in financial markets can be enhanced by linking US Treasuries to USD stablecoins.
And staying in the US, we should probably note that Alan Greenspan, who led the US Fed from 1987 to 2006, has died, aged 100. His legacy is controversial, being the originator of "whatever it takes" (The Greenspan put), and which many say led to the ensuing real estate bubbles worldwide.
Canada's May CPI came in at 3.2%, higher than expected and the most since December 2023. Driving the rise was fuel costs of course. On a core basis this inflation is running at 2.2%, about what was expected and only marginally different to April's level.
The Chinese central bank has kept its key lending rates (Loan Prime Rates) at record lows for a 13th straight month in its June review. Chinese economic momentum has recently sputtered, delivering mixed economic data, so this cautious no-change was widely expected.
Meanwhile China's foreign direct investment indicates significant struggles in attracting and keeping investors from outside the country. On a year-to-date basis, FDI fell -8.3% in yuan terms, down -3.1% in USD terms. But the May activity is much weaker coming it at just a third of year-ago levels and the net was a very minor +US$6.3 bln this year. So far in 2026, these levels are the weakest in at least ten years, probably longer, continuing a trend that is off its 2022 peak. They often talk about 'opening up' but for the past three years they have been shunned and those initiatives are failing.
In Europe, consumer sentiment has recovered some in June after their deeply negative fall in May. But it is only a minor recovery and remains deeply negative.
In Australia, their housing market is slowing noticeability. This past week and weekend their auction clearance rate fell below 50% and to its lowest in six years. In Brisbane it got as low as 33%. In Sydney it was 47.4%. In Melbourne it was 50.6%. Prices are in a falling trend too. And in spite from the full-court press vested business interests have made against recent Canberra budget moves that affect housing, it looks like voters approve.
The UST 10yr yield is now just on 4.51%, up +2 bps from this time yesterday. The key 2-10 yield curve is now at +29 bps (down -2 bps). Their 1-5 curve is now at +25 bps (unchanged) and the 3 mth-10yr curve is at +88 bps (up +4 bps). The China 10 year bond rate is down -2 bps at 1.73%. The Japanese 10 year bond yield is up +3 bps at 2.68%. The Australian 10 year bond yield starts today at 4.82%, up +1 bp from yesterday. And the NZ Government 10 year bond rate is at 4.47% to be also up +1 bp.
Wall Street has opened its week down -0.5% on the S&P500 while the Nasdaq is down -1.1%. SpaceX's recent slide has taken its price back to about its IPO issue price, with almost all the post-launch froth gone now. Overnight, European markets were mixed between Paris's -0.2% dip and London's +0.7% rise. Yesterday Tokyo closed up +1.5%. Hong Kong closed down -0.7% but Shanghai closed up +1.8%. Singapore ended up +0.2%. The ASX200 ended its Monday session down -0.1%. The NZX50 ended down -0.4%.
The price of gold has held at US$4180/oz, up a net +US$25/oz from yesterday. Silver is at US$65.50/oz, up +50 USc from yesterday.
Oil prices are down -US$4 from yesterday at just under US$73.50/bbl in the US, while the international Brent price is now just on US$77.50/bbl. Hormuz transits are staying modest up with 10 crude or product tankers exiting over the past 24 hours (3 dark with transponders off) and 10 entering for new loads (2 dark). Most are ships heading for China and India. (Normal is 60 in each direction.)
The Kiwi dollar is down -30 bps from this time yesterday at just on 57.1 USc. Against the Aussie we are also down -30 bps at 81.6 AUc. Against the euro we are staying lower at just on 50 euro cents. That all means our TWI-5 starts today at just over 60.9 which is down -30 bps from yesterday, and the lowest since November 2025.
The bitcoin price starts today at US$63,388 and up +0.4% from this time yesterday. Volatility over the past 24 hours has been modest at just over +/- 1.8%.
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17 Comments
So Starmer has resigned and a council mayor will become next PM. Could National do the same with Wayne Brown?
No but McAnulty will roll hippy after 7th August
Hippy looks like he doesn’t have enough gas in the tank
Hippy has tanked full stop.
The man clearly can't read the room or he would have left a while ago. Gotta milk as much as he can form the public purse before he is shown the door of course, maybe those MP perk dates are about to roll over
UK's problems create some pretty toxic politics (are all governmental politics toxic?).
I wonder; to me it seems that the European Union created the problems, or exacerbated them, but BREXIT didn't fix them or even appeared to provide the opportunity to mitigate them?
Can anyone explain?
I think the executive summary is ten years ago they voted to be poorer and then complained that there isn't enough money for the stuff they want. The main reason for voting to be poorer was the reduce European immigration, and the Conservative government promptly replaced that with even more migration from even further away.
There's still apparently boat loads (literally) of people sitting in France trying to get across the channel, illegally. Why? Do they need to toughen up their laws? But they also need to build up their industry and resilience, same as NZ.
Maybe partly the laws, but I suspect a big part is the language and existing migrant populations. Many people around the world learn a bit of English, and there's a good chance you know someone in your extended family or friend network who has already migrated to the UK and can give you a hand getting established.
Brexit was a response to being flooded with mass immigration and the subsequent decline in quality of Brits living environment. Guess the Conservatives looked upon the desparation/exasperation as a source of easy votes, while removing any incovenient rules and regs that might limit the ability of the 1% to extract.?
Of course the exponential economic growth cult requires exponential growth of bums on seats consuming until they drop, sooooo, pack em in!
“Are all governmental politics toxic?”
Interesting spelling, as the english language contains hidden messages within its words. These encoded messages can influence our minds, especially our subconscious, without being consciously aware of it. This is why the term “spelling” is quite fitting, as words can indeed cast spells.
“Governmental”
Govern-mental = Govern the mind. It's a psy-op machine to control the masses.
The news broad-casts spells to the North, East, West and South (NEWS)
Interesting perspective on an unintended interpretation. But the pollies would probably agree that's what they're trying to achieve
Agreed.
Another one is the subconscious programming of vowels. When we are very young and start school, one of the first things we're taught is the five major vowels, and always presented in the order: A E I O U
It's no accident that the final three vowels are: I OWE YOU
"Can anyone explain?"
The end of 'growth' post GFC
Yes and no. They still need industries. Most of their heavy industry hadn't modernised and accordingly was not particularly efficient. Therefore they were vulnerable to competition. Join the EU and they couldn't compete, and wouldn't be supported by the government to rejuvenate. That was short sighted as there was always the need for employment. Now less to no employment but a growing population. Still no vision.
https://ifs.org.uk/publications/conservatives-and-economy-2010-24
"Relative to the decades leading up to the Global Financial Crisis, the performance of the economy has been very poor. Figure 2.1 highlights this. The solid line shows actual GDP per capita, the dashed line what it would have been had growth continued on its pre-financial crisis path. If this had happened, GDP would have reached £50,200 per person, a 35 per cent increase since 2008. Instead, it was £39,400, an increase of just 6 per cent over a fifteen-year period. Economic growth this slow over this long a period has no precedent in the UK since at least the end of World War II."
Wilson held a referendum in 1975 about staying in, so it looks like membership was fraught for a long time. The banking crisis would have screwed them big time, because the banks controlled so much of the money flows. Sort of emphasises the role of government doesn't it?
It does indeed. If we think of 'growth' as a synonym for credit (money) creation then the productivity decline is easily explained....the credit creation hasnt led to investment in improvements, or even maintenance but rather speculation and providing the existing. The privatisation has not led to private sector investment in other than existing assets and the state has removed itself from the investment field, consequently we see increased money supply but no consequent increase in output....some countries worse than others but the trend is global.
As PDK is wont to say, we have used the easy half and now we are seeking to apply those rules to the difficult (and less productive) remaining....aint gonna work.
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