Here's our summary of key economic events overnight affect New Zealand, with news the oil price, and benchmark interest rates have both risen on the renewed tensions between the US and Iran.
But first today, the IMF has updated its global economic forecasts, and they are virtually unchanged from the main release in April. They note the world economy’s stronger-than-expected resilience to the Iran war and robust AI-related investment. They see global growth coming in at +3.0% in 2026 with the 2027 growth outlook revised up to marginally 3.4% from 3.2%. Despite the slight upgrades, the IMF warned that risks remain tilted to the downside, and the full economic impact of elevated tensions, including renewed US-Iran strikes, are still to be revealed. Global headline inflation is now expected to reach 4.7% in 2026, up from 4.1% in 2025, before easing to 3.9% in 2027.
Australia gets little mention in this update except to note that its 2026 growth is forecast to come in at +1.9% (down -0.1%) and 2027 at +1.7% (unchanged). New Zealand gets no mention at all. For the US it is +2.3% and +2.2% for the same two year, both unchanged. For China it is +4.6% and +4.1% (marginally higher). For Japan it is +0.6% and +0.7% (little-changed). Malaysia was noted as a positive mover where their economy is projected to grow at a rate of +4.7% in 2026, benefiting from data center activity and the upturn in the global technology cycle.
US mortgage applications fell again last week, especially refinance applications.
US crude oil stocks actually rose last week with a modest gain which ended a ten consecutive string of declines. But their strategic oil reserve continued to fall at the same fast pace.
The modest US consumer debt expansion recorded to April shrank to nothing in May, an unexpected weakness, and a significant variation from the continued expansion expected. However a one month hesitation occurs occasionally so we will need to wait for the June release to know if this is a significant indicator. The big mover was a sharp fall in credit cards and other revolving debt, also quite unexpected.
The minutes of the June Fed meeting were released today, revealing that most officials broadly agreed they would need to raise interest rates if inflation remained elevated this year due to the war in the Middle East, tariffs, or strong demand from the AI-driven investment boom. And that included new boss Kevin Warsh.
In Japan, their official sentiment survey of professionals recovered in June after three prior months of downbeat views
In Australia, rents are rising faster, especially house rents. The increase was both stronger than seasonal norms and relatively abrupt in some cities, pointing to a step-change in pricing behaviour rather than a gradual tightening in market conditions.
In a now somewhat dated update due to the renewed Middle East hot conflict, the New York Fed's global supply chain pressure index eased back in June after its April and May spikes. (Of course, with today's resumption by the US of its bombing of Iran, this is likely to flare up again in July.)
The UST 10yr yield is now just on 4.56%, up +8 bps from this time yesterday. The key 2-10 yield curve is now at +36 bps (down -1 bp). Their 1-5 curve is now at +25 bps (-3 bps) and the 3 mth-10yr curve is at +94 bps (+6 bps). The China 10 year bond rate is unchanged at 1.73%. The Japanese 10 year bond yield is now at 2.88%, up +4 bps and at new 30 year-high levels. The Australian 10 year bond yield starts today at 4.94%, up +10 bps from yesterday. And the NZ Government 10 year bond rate is at 4.54%, up +8 bps from yesterday.
Wall Street has been softish again on the S&P500, down -0.4% while on the Nasdaq it is little-changed. Overnight, European markets fell hard between London's -1.7% and Frankfurt and Paris's -2.2% fall. Yesterday Tokyo ended down -2.1% for a second day. Hong Kong rose +3.0% however while Shanghai was down -0.5%. Singapore was up +0.5%. The ASX200 ended its Wednesday down -0.2%. Meanwhile the NZX50 ended down -0.7%.
The price of gold has fallen to US$4067/oz, down -US$78/oz from yesterday. Silver is now under US$58.50/oz, down -US$2.50 from yesterday.
Oil prices are up +US$3 from yesterday at just on US$73.50/bbl in the US, while the international Brent price is now just over US$78/bbl and up +US$4. Hormuz transits have picked up sharply in a rush to get out despite the risks and renewed uncertainties with 35 crude or product tankers exiting over the past 24 hours (8 dark with transponders off) but only 16 entering for new loads (2 dark). Interestingly. All this comes as attacks on ships in transit become daily events, so the rise in oil prices isn't surprising. Red Sea activity near Yemen has fallen again to even lower levels on added risks there too.
The Kiwi dollar is up +10 bps from this time yesterday at just over 57 USc. Against the Aussie we are up +30 bps at 82.3 AUc. Against the euro we are up +10 bps at just on 49.9 euro cents. That all means our TWI-5 starts today at just on 60.9 which is up +20 bps from this time yesterday.
The bitcoin price starts today at US$62,052 and down -3.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.1%.
Please note there will be no video version today. That feature will resume in August.
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15 Comments
The IMF doesn't count remaining stocks. Or the entropy rate of existing infrastructure.
At best it extrapolates rates of past-year flows, and projects. And it includes in this ignorance, virtual stuff as if it were real stuff.
It is a little like they've been measuring the height of a youngster from age 23 to 24, and assuming continuance. Why do we still worship this approach?
"Why do we still worship this approach?"... PDK.
The vast majority of mainstreet in the West swallows these contrived FIC (Financial Industrial Complex) narratives because they are so hopelessly brainwashed.
The IMF is just another US-controlled component of this overarching mechanism that tries to hide the fact that the fiat currency experiment is on its last legs - all of them have already lost more than 98% of their purchasing power. Even the global central banking establishment can see the writing on the wall.
Which exposes the huge FIC irony. For the private banking cartels allocated/unencumbered physical gold bullion carries a 0% risk weighting, giving it the same safety status as Tier-1 cash when calculating capital adequacy.
Basel Rules, IMO, make a ludicrous distinction between "Capital Adequacy" and "HQLA" (High Quality Liquid Assets), especially when you know that physical gold has ZERO counterparty risk, because nobody can default on it.
This is where the entire charade gets completely crazy. The BCBS (Basel Committee on Banking Supervision) excludes gold from Level-1 HQLA... wait for it... "because it fails the strict price stability metric".
Crazy shite, because physical gold has held an incredibly stable value in terms of what goods and services an oz will buy for more than 5000 years. On the other hand, the historical all-time average lifespan of ALL the fiat currencies that ever existed, is a mere 35 years - meaning that the US$ is already 20 years overdue for implosion.
And so fiat currencies pass their "strict price stability metric" and unencumbered gold bullion doesn't - go figure!
Globally, CBs, at least those with half a brain between them, began gold stacking years ago, which is why physical bullion has overtaken USTs as the largest global reserve asset.
NZ and Aus, meanwhile, didn't get the memo, and the US Fed works in the shadows, through its owner/collaborator commercial bullion banks like JPMC, HSBC, and Goldman Sucks, who dominate the COMEX and London paper gold 'markets' (sic), routinely holding massive short positions, as part of their commercial, market-making and hedging activities.
Now that the gold pricing mechanisms are eastward bound, along with the thousands of tons of physical bullion, and an organic physical price discovery is set to displace the artificial paper markets, the writing is on the wall for any country or CB that has not positioned itself for the coming global reset.
BTW, the reset will be dominated by the RoW, BRICS+ bloc, and they won't even need to invent a new trade currency - they already have one - its called GOLD.
Which is precisely why Hong Kong is just one of the many international hubs that are expanding their physical vaulting services - in their case, up from 200-2000 tons - clearly they don't need all that infrastructure to store paper promises.
Mr Musk is asking some very important questions...
The US 250 year anniversary accompanies a fork in the road for the empire, as 2026 promises to be the most fascinating/scary year in the history of our species.
The Trump admins actions, in both the ME and Ukraine, will tell us all which fork the US has chosen - half way through the year and it is not looking good.
Musk has the inside word from the Orange Swan. He’s fully aware that change is coming, this middle east conflict is far from finished.
Trump even openly mocked the arrangement during his July 4th address at Mount Rushmore, stating the US granted Iran a “week off” from military hostilities simply to allow for the state funeral of former Supreme Leader Khamenei.
The timing of the MOU looks like theatre when reviewing the events that followed the announcement:
- Trumps 80th Birthday
- USA’s 250th birthday
- FIFA World Cup kicks off in the US
- SpaceX IPO (Musk is Trump's biggest donor)
- Dual Venezuelan earthquakes & the enactment of oil deregulation
- CERN shuts down
Reminiscent of the twin towers. Too many mezzanine floors and too much aluminium.Bin Laden took both note, and pleasure in that. Mind you in Christchurch, High Street a new high story building post the EQ’s was deficiently designed and EQ susceptible. Believe it took an engineer visiting Christchurch and strolling past to notice that. Best not to repeat here that 1980s English pub slang toast about engineers starting with “cheers.”
The rest of the world seems to be doing OK while NZ is in a real funk. At what point will we decide to go out and spend again? Every green shoot dies off not long after its germinated. Oil prices heading down but now the RBNZ has decided to kill off any hope.
Two posts upthread, relating to things physical; things engineering-wise.
yet.............
The economy is starting to pick up again, which should be reflected in the next GDP and business confidence reports.
Sounds like a recipe for higher future interest rates then given CPI outside mandate.
Yes, agreed.
This from BBC, is this relevant in NZ? Are people excluded from opening a bank account?
It would certainly be tough to open a bank account in NZ without a physical address or ID due to our KYC/AML regulations
I see we are going to have to re rebuild a chunk of infrastructure in north Canterbury......at least the sea levels arnt rising very fast.
Sea level rise is definitely not a north Canterbury problem.
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