Here's our summary of key economic events overnight that affect New Zealand, with news the Persian Gulf situation is settling into a chronic stalemate after the acute hot conflict. US allies in the region are confused, Qatar's role in negotiations is questioned as to whether it can actually do anything, and Iran and Oman are moving forward with their plans for 'fees' and 'management' of the waterway. The US is getting sidelined.
One outcome seems clear however; Chinese EV's are dominating world car sales so demand for crude oil is likely to be much less in the future, and that will limit oil price pressures.
But first today, there was another dairy Pulse auction overnight, bringing lower prices again. AMF fell -2.5% from last week's event, butter was down -0.5%, SMP was down a chunky -6.2% and WMP slipped -0.6%. These build on trends we have seen since mid-May and given the rise in global milk production by the main exporters (New Zealand included), it is a trend likely to continue for a while yet.
In the US, labour market data for May about job openings was little-changed from April even if it still is near a two year high, which was slightly better than was expected.
But the June PMI report for the important Chicago manufacturing hub was quite a bit weaker than for May and what was expected. But it is only back to February levels which isn't bad at all. It was a fall away in new orders that drove the easing.
Meanwhile the Dallas Fed's regional services survey became positive - just - for the first time in five months. They reported that selling price pressures increased slightly, while input price and wage pressures grew at a faster pace.
The Conference Board sentiment survey barely moved in June from May, which actually was a result that disappointed analysts because a more marked improvement was anticipated. And that was because respondents turned negative about job prospects, with almost a quarter of them unexpectedly saying jobs are 'hard to get', the highest level since early 2021.
And we should perhaps note that the deadly screwworm cattle disease is still spreading in Texas and New Mexico, spreading to other animals too. Even though the number of animals reported as having contracted the disease remains small, the risks to cattle herds in these states in very large.
In Canada, the expectation that it was falling into recession has proven not to be the case. Canada’s GDP rebounded from a first-quarter contraction to record a +0.5% monthly gain in April making this their largest economic expansion in nine months. Their May estimate points to a further if minor + 0.1% growth.
Across the Pacific in Japan, the yen slipped into the 162-per-US dollar range yesterday for the first time in 39 years, and extending a slide that has accelerated in the past few months. A two month intervention effort isn't working, raising fresh questions about what is driving the yen's renewed weakness.
China's official PMIs posted some marginal improvements in June, actually very marginal but at least they are not contracting. Their factory PMI is expanding, just. New orders picked up slightly. And their services PMI is now not contracting. But it isn't expanding either. New orders in this version are still negative, but the overall index was bolstered by expectations for improvement and lower lead times. All other more direct elements are negative to some degree. We should note that the unofficial PMIs by S&P Global/RatingDog have tended to be more expansionary in 2026. These unofficial results will come later today (Wednesday) and Friday.
German inflation came in at 2.3% in June, down from 2.6% in May, 2.9% in April, and softer than anticipated, mainly because energy prices retreated there.
Back in the US, Rocket Lab has agreed to buy Iridium Communications, a pioneer in satellite telephones, in a broadening attempt to compete with Starlink. It combines their launch capabilities and satellite manufacturing with Iridium’s network in low-Earth orbit and valuable radio frequencies for satellite communication.
Yesterday we reported a +6% rise in May air cargo activity. But today the May air passenger travel data was released showing it declined -2.2% from a year ago, down -3.1% for international travel. The main diver of the pullback was international travel through the Middle East (-28.8%). But it is also worth noting that domestic air travel in China fell (-6.2%) as well as in the US (-1.9%).
The UST 10yr yield is now just on 4.43%, up +6 bps from this time yesterday. The key 2-10 yield curve is now at +28 bps (up +2 bps). Their 1-5 curve is now at +21 bps (+3 bps) and the 3 mth-10yr curve is at +74 bps (+5 bps). The China 10 year bond rate is up +1 bp at 1.73%. The Japanese 10 year bond yield is up +5 bps at 2.69%. The Australian 10 year bond yield starts today at 4.72%, down -2 bps from yesterday. And the NZ Government 10 year bond rate is at 4.39%, down -1 bp.
Wall Street has risen again today, up +0.9% on the S&P500, up +1.5% on the Nasdaq. Overnight, European markets were mixed between London's +0.1% and Frankfurt's +1.5. Yesterday Tokyo closed up +0.9%. Hong Kong closed down -0.6% although Shanghai was up +0.5%. Singapore was down -0.7%. The ASX200 ended its Tuesday down -0.5%. But the NZX50 ended up +0.6%.
The price of gold has risen to US$4026/oz, up a net +US$4/oz from yesterday. Silver is now under US$59.50/oz, up +US$1.50 from a day ago.
Oil prices are down -US$1.50 from yesterday at just on US$69.50/bbl in the US, while the international Brent price is unchanged at just on US$73/bbl. Hormuz transits have stayed at their lower level after the recent volatility & uncertainties with just 19 crude or product tankers exiting over the past 24 hours (5 dark with transponders off) and 23 entering for new loads (5 dark). Over the past two days, almost 70% of the exiting vessels have been headed to China.
The Kiwi dollar is up +30 bps from this time yesterday at just under 56.8 USc. Against the Aussie we are unchanged at 82.1 AUc. Against the euro we are up +20 bps at just on 49.7 euro cents. That all means our TWI-5 starts today at just on 60.6 which is up another +20 bps from this time yesterday.
The bitcoin price starts today at US$58,325 and down -3.3% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.0%.
And in case you wanted to know, there are now only 120 working days until Christmas Eve.
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48 Comments
Bitcoin at 58k, lower than October 2023 (although that was a peak).
Less than half of the peak?
Rocket Lab is interesting. the news is good for investors and this morning it has just busted back through US$100, but that still puts it more than 30% less than the peak it hit in late May. Share market volatility is pretty high, making it difficult to know where to put spare funds.
Every investment seems maxed out IMO. Not sure it's going to end well. I'm almost happy to have debt!
The thing is Jimbo, that debt can often be backed by investments. What would happen to your interest rate if the sharemarkets collapsed completely? History I think suggests the rates will go up as banks try to recover losses. Nothing especially safe these days.
A reckoning is coming, the question is when. It was concerning to see that the NASDAQ was halving the lead in period for SpaceX before it would be legally binding for index funds to buy shares as part of their indexes, and doesn't sit right with me. There's some skullduggery going on under the surface as with pre-2008, but nobody knows the catalyst for the next share market crash, despite AI being tipped to be the most likely cause.
lots of tied in spacex holders can also start selling sooninsh
SpaceX uses an unusual, staggered lock-up system for its employees and early investors rather than a standard 180-day cliff. Key dates when sellers can sell their stock depend on corporate earnings, stock performance, and specific milestones: [1, 2, 3, 4]
- After Q2 Earnings: Insiders can sell up to 20% of their eligible shares immediately following SpaceX's Q2 earnings report.
- Performance Trigger:
An extra 10% unlocks if the stock trades 30% above the IPO price ($135) for 5 out of 10 trading days after Q2 earnings. - Staged Employee Releases:
Employees holding vested stock can sell in 7% increments on pre-determined rolling dates post-IPO. - After Q3 Earnings:
Insiders can sell an additional 28% of eligible shares. - The 180-Day Mark:
All remaining restricted shares become eligible to sell
Put spare funds into solar panels obviously
Aye.
Having energy - more accurately having the forward capacity to capture energy and/or to store it - is the real wealth. The Great Reconciliation is an inevitability, money-vs-energy-wise. Given the timeframe, panels or batteries bought now, will be functioning through morph.
What we are watching is the last rounds of who gets what (looks like China played the longer game). Solar and wind energy have been ADDED to the energy mix, and EVs have been ADDED to the fleet. Individual change (ICE-to-EV) is happening, but cumulative vehicle numbers are the metric. It appears that 2018 was peak-vehicle-sales year (we're 10% down on that - think on that and what is represents). EVs are the right answer to the wrong question - they're an attempt to prolong modernity - but some folk will use them as e storage, even dedicatedly.
And even on-grid, immunising yourself from the rising 'cost' of energy (that is why council rates are outpacing incomes, when you trace it back) is agood move. The only way power prices will go is up.
Yep, hence why I doubled down on the firewood this year as you have to grab it when there's free wood around on offer, then forget for the next winter and right now, enjoy a toasty home. Amazing how many think I'm nuts spending a few weekends ringing, splitting and stacking wood. It's healthy for the body, and a form of delayed gratification that many can't understand until they pop round in winter and both see and feel the difference vs a heat pump. I count myself lucky to have grown up with the firewood cycle with multiple generations helping each other for wood each year, and I feel for those in urban upbringings who don't understand. But hey ho, it's the simple thins in life that are the most satisfying right.
Love it. Im urban, grew up rural, and enjoy the splitting. Dont have the gear for doing rounds. Recently decided I need more exercise and first thought was it might as well be productive exercise and I need to buy in some rounds to split ready for drying over the summer. Now who sells rounds ....
Network network network and they come to you to get rid of em.
Funny was thinking that last night, you can always cut back on power use....if you really had to you could survive on a 10kw system I think.
I've lived on 0.3kw, for over 20 years. Started with 0.05kw. And 4x 100ah batteries. What do you do with it all?
Admittedly I do firewood and the house is extreme passive-solar, plus my workshop has a separate 0.3kw system.
But even still, 10?
How do you cook PDK? .3 isn't much in winter after a week of cloud?
Firewood (see above).
And solar - we have a solar cooker - but not often enough to count. It's really best slow-cooking/hot-potting and the outdoor pizza-oven does good baking.
Basically, it is asking a lot to do low-entropy heat from solar (exactly my argument down-thread).
We have an old '50s(?)Wellstood range. Bit annoying it's designed for coal, doesn't burn wood very efficiently. I keep it going 24/7 over winter and it keeps the kitchen toasty and the water hot, but the missus sees it as a bit of a novelty cooking wise. Burn a mixture of wood on it. Can certainly tell which types have the best energy content. Always have heaps of poplar. Always limbs being ripped off every NW. Bloody useless stuff though. Eucs burn really hot. Could certainly cook with that in lieu of coal. It is there if the grid goes down though. The economics of a new more efficient wood burning stove really don't stack up. If I had the ready cash I'd do it for resilience sake.
See if you can get someone to make you a deeper grate.
I planted a euc forest 30 years ago - it's the best.
Don't think a deeper grate would help? The fire box goes from a nice bed of hot burning embers to those embers dying down and falling through the grate too quickly. With poplar it probably needs topping up every 45mins, euc maybe 90 mins. It can burn for 6-8 hours shut right down but the clean air inspectors would hemorrhage if they saw it. Burnt through 4m3 since April.
Poplar spits and leaves too much ash for my liking. Pine, Macro and gum is the usual, plus whatever other free wood is around but the three are the mains ones that seem to be going. Got a Firenzo ULEB fire as I had to, but it is so much more efficient than the large firebox I grew up with (burn less wood = less to split, stack or less the next year due to high leftover stash) and can stay hot all night to be re-lit the next morning. the stigma around ULEBs is in no way warranted by my measure, once you get a decent one (has cast iron top, side tiles etc for thermal mass/retains heat after going out) you wouldn't go back.
HOUSTON, June 30 (Reuters) - U.S. crude oil production rose to 13.93 million barrels per day in April, the highest on record
US in-ground fuel stocks fell by 13.93 million barrels yesterday - and are now at a RECORD low.
A record they break every day.
Until...
Edit - and the US CONSUMES slightly over 20 million barrels a day.
Now let me see, does that back up the 'net exporter' claim? Hmmm. Hard one, that.
In 2020, the United States became a net exporter of petroleum for the first time since at least 1949.
https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-…
HOUSTON, June 11 (Reuters) - The United States has become the world's largest oil exporter, upending a decades-old order long dominated by Saudi Arabia and Russia, a shift that tightens American companies' grip on energy markets as Washington's war with Iran reshapes global energy trade.
America's ascendancy to the top spot marks a stunning reversal for a country that was dependent on Middle Eastern oil for decades and suffered from an oil embargo imposed by some OPEC members in 1973 to retaliate against U.S. support for Israel.
https://www.reuters.com/business/energy/once-an-arab-oil-embargo-victim…
You can't have it both ways.
If 13mbpd was a record, you can't claim 'producing 20mbpd' in a prior time - it doesn't make sense.
So either the definition has changed (source/type?) or someone is playing the fudge game.
Either way, my comment stands: every day their in-ground stock is being depleted - by at least 13mbpd. That's a temporary arrangement - in a country already not able to maintain its infrastructure.
It's fudged. The US has an excess of sweet light crude from fracking, but has to import heavy crude for blending. The US has a 51st state in Venezuela now, so don't know if V production is included on the import side of the equation?
It will take time to get their tendrils into that stock, as production fell years back after the military coup.
Chinese EV's are dominating world car sale
After testing multiple European brands I have bought a Chinese Zeekr 7X Performance 2 weeks ago. The advantages over the fancier badges were just too compelling to ignore.
Don't know that brand but BYD are certainly impressing some of the informed commentators
Zeekr is the premium brand of the Geely group. They own Volvo, Lotus, Polestar, 10% of Mercedes and Smart. Giltrap is the main dealer in Auckland.
I am awaiting delivery of an MG Urban to replace our 9 year old Leaf.
What a car. Business must be good!
Record EV exports from China in April & May
https://www.evinfrastructurenews.com/ev-fleet/china-exports-record-448-…
Just to let folk know Foxglove appears to have been hacked and has been replaced in name by Outsider. Now I am definitely not, and never have been, an insider but sending me to Coventry is hardly fair. Anyway until it is sorted I will suspend myself, inside, outside is too cold at present, and thus immediately & immensely improve the average of daily quality of comment.
You may have missed out on space ex if you were offline.
Here is an investment alternative, along the same lines:
Not sure that would have been a safer bet? Too late to buy Iridium too.
Spike was great in his day. I almost wish they had a real sound track.
Loved the instant labour department evacuation on rumours of a job. :-)
Sorry to hear Foxy. Hope you sort it soon.
Scientists demonstrate solar-powered plastic recycling at real-world scale
“What surprised me was, after all the optimisation, just how simple it is,” said Mohamad Annuar. “We just have this huge panel, we spray our catalyst on it, put it into our solution, put it under the sun, and it produces hydrogen and other valuable chemicals just from plastic waste. It’s just simple and scalable.”
https://www.cam.ac.uk/research/news/scientists-demonstrate-solar-powere…
Why do we need solar powered plastic recycling? The world is awash with clean fossil carbon to burn, right?
Let's leave aside that most folk will go cross-eyed trying to follow the paper. Let's also leave aside that the poster seems to be fed stuff which supports the continuance of the fossil feedstock industry.
First principles tell us that about 1kw falls on 1sq/m perpendicular to clear sunlight. Less with less clarity; less with a reduction of perpendicularity. And as they state, sunlight is restricted to daylight hours...
Then we ask what the best retrieval percentage is - or has ever been - and we get roughly 25%. Temporary claims approach 50%, but in the field, not. And that isn't counting the mining, building and disposal of the collector.
This won't be any better - and it isn't including the collection of the plastic waste (from your bin to the truck to to to). Then they apparently make a small amount of (yet to be pressured, stored and transported) hydrogen - whoopie. We already knew that hydrogen is an energy-vector, not a source. So the same physics could be done with PV-to-electrolysis.
Either way, they run into the 2nd Law (of Thermodynamics). When you're so far up the entropy track before you start.... The same happened with CCS (Carbon Capture and Storage) a few years ago. An excuse to continue (we've got it licked) but a thermodynamic impossibility. Which is why we don't do it.
So we have yet another bunch of need-the-research-money people, giving everyone else an excuse to keep on consuming plastic tat - because someone said we'd cracked the clean-up problem. Which we haven't (I've sailed through the broken-down gloop - which would take energy to retrieve). Then scale the sunlit area needed to do same... sorry Britain; we just covered you...
If you had bothered to read the paper before commenting you would have learned it is photocatalytic reforming reaction not PV.
I bothered.
Physics is physics, energy is energy, capture is some degree of efficient. Always.
I read the whole b---dy thing before I did. Always do.
Is the world ready to abandon control of all their systems to the whims of a US determined A.I.?
What do you get by crossing an ex communist party member with a potential ACT MP? Desperation, or identity crisis?
"ACT candidate has withdrawn...........failing to declare her previous membership of a Chinese political group linked to the country's ruling communist party."
https://www.rnz.co.nz/news/regions_local-democracy-reporting/643527/act…
It's a natural fit.
Act just want to control us on behalf of a different elite
ACT are fake libertarians anyhow. Swapping government control for corporate control is antithetical to the concept of libertarianism.
This would never happen in NZ.
Treasury ditched maths test to boost candidate diversity
Numerical reasoning was removed from the graduate recruitment scheme soon after the death of George Floyd
https://www.spectator.com.au/2026/06/revealed-how-the-treasury-abandone…
https://www.thetimes.com/uk/politics/article/treasury-ditched-maths-tes…
And yet treasury "numeracy" got us here, to the point of global biosphere collapse. No economist or treasury official has been numerically competant in my living memory. Understanding the exponential function in particular seems to be outside the basic job description, in lieu of parroting the growth mantra ad infinitum........
Aye - and you can roll the exponential function out in front of those who purport to be experts in it -
And no dice.
Fiercely no dice.
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