Here's our summary of key economic events overnight that affect New Zealand, with news of a surprisingly weak American jobs report for June. There is no World Cup bounce there. And economists are divided over whether Federal Reserve policymakers will be holding rates steady, lifting or lowering them over the next six months based on this latest data.
The US economy added just +57,000 jobs in June, the weakest gain in four months and far below expectations of +110,000. Their labour force participation rate dropped sharply to 61.5%, its lowest since early 2021. But seasonal adjustment has a lot to do with these headline results and the actual payroll change isn't anywhere near as weak.
However, when you broaden this view to everyone in employment, not just those on a company payroll, things don't look so good. There are now 162.7 mln people in employment in June, down -175,000 from May and down -1.2 mln from June a year ago. In fact that employed civilian workforce level is their lowest since the end of 2024.
US jobless claims rose last week, but only marginally and by about what seasonal factors would have accounted for. There are now 1.76 mln people on these benefits, pressed lower by much tighter entitlement standards, which is consistent with the employment drop.
US factory orders fell -1.3% in May and were down -4.5% for durable goods orders. But this needs to be seen in the context of rises in the prior three months, and April was revised higher. From a year ago though, the value of these factory orders were up only +1.8% overall but down -4.3% for durable goods. Given producer price inflation has been high over this period (+6.5%), these are terrible results. And surprising given the factory PMI data, so we should be sceptical of them. But don't forget this data is from agencies with imposed partisan leadership that replaced professional leadership when the President didn't like their earlier data.
Meanwhile US vehicle sales rose in June to an annualised rate of 16.5 mln, a rise from May and from June a year ago. So that demand may improve their factory order data for June. The US vehicle market is about half the size of the Chinese equivalent (which currently runs at a 31 mln annualised sales rate).
We got all this data today because tomorrow they will be on holiday for their 250th Fourth of July celebrations. It is a milestone worth celebrating but the background economy will likely take the gloss of it for those negatively affected.
In China, those huge vehicle sales numbers mask structural problems. Prices have been low to build volume, but few of these manufacturers are profitable. A dramatic shakeout is coming because sales volumes are falling now. And that is already having implications for their steel industry, among others.
In Australia, their May exports fell -6.9% from April to be just +3.1% higher than a year ago. Their imports were +2.6% higher than April to be up +13.9% from a year ago. So their merchandise trade balance shrank to -AU$1.7 bln in May, their first deficit since January 2018. They also reported that after hitting AU$7.9 bln in February, their gold exports retreated to just AU$4.5 bln in May.
Global container freight rates rose +9% last week to be +61% higher than year-ago levels. This is all about demand for outbound cargo space out of China. Bulk cargo rates fell -2.8% last week to be +72% higher than year-ago levels, although that low base will rise quickly in future weeks.
The UST 10yr yield is now just on 4.48%, unchanged from this time yesterday. The key 2-10 yield curve is now at +35 bps (up +5 bps). Their 1-5 curve is now at +28 bps (+4 bps) and the 3 mth-10yr curve is at +88 bps (+5 bps). The China 10 year bond rate is down -2 bps at 1.73%. The Japanese 10 year bond yield is up +7 bps at 2.78% and back to the 30 year-high levels we saw in May. The Australian 10 year bond yield starts today at 4.82%, up +3 bps from yesterday. And the NZ Government 10 year bond rate is at 4.48%, up +4 bps.
Wall Street is lower today, down -0.5% on the S&P500, down -1.3% on the Nasdaq. Overnight, European markets were much stronger, up between Paris and London's +1.7% and Frankfurt's +2.2%. Yesterday Tokyo closed down -2.5%. Hong Kong closed up +0.8% although Shanghai was down a chunky -2.0%. Singapore ended unchanged. The ASX200 ended its Thursday also unchanged. The NZX50 slipped -0.2%.
The price of gold has risen to US$4106/oz, up a net +US$36/oz from yesterday. Silver is now under US$60.50/oz, up +50 USc from a day ago.
Oil prices are up +50 USc from yesterday at just on US$68.50/bbl in the US, while the international Brent price is unchanged at US$71.50/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 (1 dark with transponders off) and 24 entering for new loads (3 dark). Over 84% of vessel movements are related to cargoes headed to China, Russia or are Iran-linked.
The Kiwi dollar is up +10 bps from this time yesterday at just over 56.9 USc. Against the Aussie we are unchanged at 82.3 AUc. Against the euro we are down -10 bps at just on 49.8 euro cents. That all means our TWI-5 starts today at just on 60.8 which is up another +10 bps from this time yesterday.
The bitcoin price starts today at US$61,635 and up +2.5% from this time yesterday. Volatility over the past 24 hours has again been moderate at just under +/- 2.1%.
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27 Comments
Water free, airliftable, high temp nuke startup.
https://www.reuters.com/business/energy/valar-nuclear-startup-partners-…
https://interestingengineering.com/energy/us-nuclear-reactor-generates-…
'During a demonstration at an Emery County facility, Valar Atomics routed a small amount of electrical current from its Ward 250 reactor to an Nvidia Blackwell processor. The energy was temporarily utilized to operate a web server.'
Yup - usually called spruiking; 100 years ago they'd have called it boosting.
And I note the nonsense yesterday, re 'never more oil extracted'. That has been put in context already: it's a reduction of what remains. An ever-bigger reduction just leaves ever-less remaining. Only laudable by fools.
Listened to the Hosk (accidentally) yesterday telling us that latest figures are showing we in the developed world have never been wealthier and should be very pleased with ourselves. War is over, fuel prices heading south at a rapid rate of knots, just need property gains to return to >10% and all will be good in the world.
Are we at a point where the average person simply believes nothing as it is getting near impossible to decipher fact from fiction?
You will own nothing and be happy, including information. Once the worlds knowledge is fully loaded onto paid access data centres, humans will be free to know only what the advertisers market them. Owning a book will be considered subversive, just like some here consider using cash. Little children of the hive mind.
The only saving grace is that the System is near collapse.
So the markers of wealth will become invalid. As have every historical marker/proxy.
Not clear what happens after that, though...
Shane Jones "The DoC estate has to serve an economic purpose"
3:30 https://www.youtube.com/watch?v=O-7_iJtO0bk&t=257s
I can feel the commons litterally being strip mined beneath us. Digital currency, surveilance state, subscription "ownership", flogging off land assets belonging to the community for exploitation, patented food like substances and now embedding subscription based knowledge. Freeeeeedooooom.
The collapse is already here for the "bottom feeders" and moving up the food chain.
Absolutely.
This is an A Grade MSM journalistic failure.
Growth is expressed in terms of Doubling Time; in terms of land and biological mass, we haven't a doubling left.
So they're pushing shyte uphill. Helped along by fierce avoidance of the truth - by those who have no excuse.
The joke is that it hasn't long to go. The other joke is the kind of people left championing the nonsense (would you stay in a Party with Jones in its midst? Either kind of party, come to think of it).
TBH although Peters is a pure political entrepeneur, I do kind of like the guy. Not enough to vote for him mind, but Jones? An arrogant prick to the nth degree. I can't see NZF surviving the departure of Peters.
That's why Laws
Be warned, Grasshopper...
Laws? I give you the urgency clause used increasingly by parliament under the publics nose
It's true isn't it? Look at the world vision ads, they are struggling to find malnourished kids with flies buzzing around anymore, these days they are more about education etc.
I would say we are in general a lot wealthier than we were, but not necessarily happier.
“. . . 250th Fourth of July celebrations. It is a milestone worth celebrating . . . “
It seems that if attendance at Trump’s 250 Freedom “Great American State Fair’ is any indication it is not being widely celebrated at all. There are few people attending with the state stalls empty - 10 states didnt even participate - and there are few attendees and no queues for the huge Ferris Wheel. Despite his claims of 45,000, his headline speech which replaced most performers pulling out attracted an audience of only a 1,000 and large numnbers were filmed walking out while he was talking. He doesn't even seem to be attracting his MAGA base.
The mid-terms are shaping up to be interesting for a different reason - a new echelon of Democrats are challenging the old Elite heirarchy, on behalf of the ordinary person. High on the list is pushback against the energy-grab by datacentres - essentially a physical manifestation of the ordinary person vs Elite stoush beginning to play out (historically, the Elite never survive the collapse).
If they get selected...
PDK, would you please explain this comment to the readers here..."(historically, the Elite never survive the collapse)".
My knowledge of financial history illustrates the polar opposite to your statement.
Muammar Gaddafi is on the line for a chat.
You put the word 'financial' in there. Not me. No offense, but ever since our discussion re Limits to Growth, I've regarded your output as having a flawed base-line. Lots of others have it too - I just sent in a fairly terse email to Nine to Noon on RNZ. same flaw.
All collapsed civilisations, had money systems. It goes with the territory; civilisations cannot exist without surplus energy; when you have it you get numbers beyond Dunbar's, and a stratification (rich getting richer, poor getting poorer. Eventually they overshot their surrounding resource-base (as we are currently doing globally, for the first and only possible time). As their Systems de-grew, their forward bets were unsupported. They collapsed (Romans actually welcomed the invaders at the gates) populations decline overnight; Long Counts go silent; coinage gets abandoned; mansions and monuments trashed (probably in anger).
But it is resource/population/entropy driven. And no civilisation has avoided it. Proxy is not a store of wealth. Period.
I imagine there's good people wanting to make a difference coming through the ranks. Then they'll hit the wall of donor demands and BAU will break out.
Leonard Cohen – First We Take Manhattan Lyrics | Genius Lyrics
Doesn't work...
I was thinking more along the lines of 'trying to change the System from within'
You can't. The conservationists lost, already. But nobody won, either. As a species, we stupidly shot ourselves in the ecological foot (and still worship the process).
I was thinking every one loves a clean environment, but no one wants the (pocket) consequences of voting for it.
I've listened to the capitalist rationalist branch of the Democratic party and I can't really find it in me to blame non voters for Trump.
US and NZ 10 year now level pegging on 4.48 after a few weeks of NZ debt being cheaper than US - does that happen often?
Trump loves inflation.
Mainly of his ego and fake tan
:-)
And the outcome of a blue pill
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