Here's our summary of key economic events overnight that affect New Zealand, with news tankers in the Red Sea have been hit by missiles fired from Yemen. This is unnerving global markets today, and oil prices have jumped everywhere. Bond yields are surging, pushing up mortgage rates and weighing on equity valuations, especially for tech firms.
But first in the US, there were 192,000 initial jobless claims last week, a notable drop and far lower than seasonal factors would have accounted for and lower than expected. There are now 1.85 mln people on these benefits, also lower than a year ago but actually an increase from a week ago as claimants are staying on benefits longer even if it is now much harder to get initially qualified.
The Chicago Fed's National Activity Index came in slightly below trend, but enough to suggest the US economic expansion was still in place in June. But if the Atlanta Fed's GDP Now tracking is to be believed, that expansion is at a modest level. Consensus forecasts are being trimmed too.
The US Treasury 10 year TIPS yield of inflation-protected bonds jumped about +30 bps today and back to the highs we last saw in the pandemic and prior to that in the GFC.
Canadian retail sales expanded in June, extending their positive track to six consecutive months. This was for both value and volume terms, to be +5.9% higher than year ago levels. Canadian CPI is running at 2.8%.
Across the Pacific, China's foreign direct investment rose +US$11.1 bln in June, better than expected and better than the -US$7.6 bln fall in the same month in 2025.
Meanwhile, China's consumer trade-in subsidy program is losing momentum as appliance and car demand weakens.
South Korea said its economic activity expanded an impressive +3.7% in Q2-2026, almost the same as the +3.8% in Q1. This is their fastest expansion since Q4-2021, and came in above market estimates of +3.5%. Strong exports were a key factor in this result.
Singapore's June CPI came in at +1.9% in June and although that was its highest since August 2024 it was less than the 2% expected. And that was because there was no change from May.
In India, we should keep an eye on youth protests, because they are spreading and gaining surprisingly wide support.
In Europe and as expected by many, the ECB left its key interest rates unchanged at its July meeting overnight, following the +25 bp hike in June. Since then, policymakers have struck a more cautious tone, adopting a "wait-and-see" approach as softer inflation, wage growth, economic activity, and inflation expectations have reduced the urgency for another move. But that may have changed today with the unexpectedly large spike in oil prices. But who knows how fast that may change again? Markets anticipate another ECB rate hike in September.
Staying in the EU, consumer sentiment improved in July. That is to say it got less negative.
And in a decision likely to intensify trans-Atlantic trade tensions, European Union regulators overnight hit Google with a €890 mln fine for illegally undercutting competition through its dominance in search. Google will not be hurt by this directly in the short term because it reported almost +US$41 bln in profits in Q2-2026 alone. If it is hurt, it will be from their heavy cash burn for its AI buildout.
The Australian labour market grew surprisingly strongly in June, adding +76,300 new jobs, far better than the +15,000 expected. Their jobless rate was stable at +4.4%. More than half the new jobs were in NSW, with good gains also in Queensland and Western Australia. But Victoria shed jobs in the month. This strength will add spine to the RBA's fight against rising inflation (4.0%) because they will be now less worried about a weak economy. The RBA next meets on August 11, 2026 - 17 days away.
Global container freight rates fell -4% last week to be +74% higher than year ago levels. Outbound rates from China were the basis of the pullback from the prior week. Bulk cargo rates were down -8% for the week, and these are now a third higher than year-ago levels.
The UST 10yr yield is now just on 4.70%, up +4 bps from this time yesterday and its highest since January 2025. The key 2-10 yield curve is now at +34 bps (down -1 bp). The UST 30 year bond is back to levels last seen in 2006. Their 1-5 curve is now at +32 bps (up +2 bps) and the 3 mth-10yr curve is at +95 bps (unchanged). The China 10 year bond rate is holding at 1.73%. The Japanese 10 year bond yield is now at 2.77%, up +3 bps and a new 30 year high. The Australian 10 year bond yield starts today at 5.08%, up +9 bps from yesterday and back to GFC levels in 2011. The NZ Government 10 year bond rate is at 4.75%, up +2 bps from yesterday.
Wall Street is -1.4% lower today on the S&P500 with the Nasdaq down -2.5%. Overnight, European markets were lower between Paris and Frankfurt's -1.6% and London's -0.7%. Yesterday Tokyo ended up +0.5%. Hong Kong was up +1.3% but Shanghai was only up +0.3%. Singapore ended down -0.2% however. The ASX200 was up +0.2%. And the NZX50 matched that, also ending up +0.2%.
The price of gold has fallen to US$4042/oz, down -US$98 from yesterday. Silver is now just on US$57.50/oz, down -US$2.50 from yesterday.
Oil prices are another +US$6 higher from yesterday at just on US$93/bbl in the US, while the international Brent price is now just on US$101.50/bbl and up +US$7. Hormuz transits are still just a trickle There have been no crude tankers and 5 cargo ships exiting over the past 24 hours (5 dark with transponders off) and 8 entering for new loads (1 dark). The Red Sea is also now effectively blocked at Yemen although a small handful of ships are still getting through (less than 20 each way). More than 700 vessels are waiting for things to calm down.
The Kiwi dollar is another -40 bps lower from yesterday at just over 57.7 USc. Against the Aussie we are also down -40 bps at 82.8 AUc. Against the euro we are down -30 bps at just over 50.7 euro cents. That all means our TWI-5 starts today at 61.6 which is down -40 bps from this time yesterday.
The bitcoin price starts today at US$64,762 and down -2.1% from this time yesterday. Volatility over the past 24 hours has been extreme at just on +/-7%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
54 Comments
Apparently no great student of history yet the present President of the United States might think to search back to a precedent of nigh on 2000 years ago and take up playing the violin. Of course that particular emperor actually played a lyre as the then centre of that empire burned, but over the consequent years, that understandably morphed into the more apt description as being a fiddle.
he could form an orchestra with the Republican party as they too fiddle while their 'Rome' begins to burn.
If the mid terms result in the Republicans losing control of both Congress and the Senate that will trigger turmoil in the Republican Party. By 2028 the Republicans will have had in Trump the only contender for the Presidency for 16 years. Such has been his dominance that the traditional lines of succession have been severed. There is plenty of unruliness amongst the Republicans, ambitions that have been suppressed, vendettas and animosity amongst its members. A barrel load of seething snakes and it is only the weight of Trump that is keeping the lid on. Daresay when does depart the aftermath is going to be neither attractive nor productive for the Republicans.
"By 2028 the Republicans will have had in Trump the only contender for the Presidency for 16 years"
Amazing when you think about it. Would they have won 2/4 elections with someone else without all the problems.
If the midterms result in the Republicans losing control of both Congress and the Senate then Trump will announce that the elections were clearly rigged, nullify the results and declare martial law.
When he carks it, Temu Himmler (Stephen Miller) takes over.
Meanwhile, the NRA will continue to wait for a tyrannical government to take over so they can implement their reason for hanging onto their guns all this time.
My guessing is he'll claim 'emergency powers' if it looks like going against him.
Which would mean the US would have abandoned democracy. Circa Reichstag in '33
Of course, Trump creating a little more chaos, shorting the market, solving that problem, more opportunities in the rigged system that Seymour et al call the market. Some estimate he made a $B last year from being the Pres.
A little life experience in any real market, say mid week in the Tuakau cattle market, you see stuff that Adam Smith never included in his book.
Does anyone still believe that mantra, a rising tide lifts all boats? My jaundiced view is that the Musks of the world take all the benefits, and increasingly are dissatisfied that my boat is allowed any water. Long term thinking, not so much.
KKnz does.
KKNZ said last week something along the lines of "...the trickle down reality is the elites p******g on people from above"
KKNZ regurgitated something last night.
Interesting spin it was - but the truth was in plain sight. The essence (it was a crowd including Ruth Richardson - say no more) was that the rich pay the most tax.
What was unstated - but was on another thread - A quarter of NZers can't cover a $500 shock, Kiwibank survey suggests | interest.co.nz is that an increasing cohort can't pay anything, thanks to the rich having soaked them. So unsurprising that the many poor, don't pay much.
Spin - so obvious. And you don't have to ask, merely to note who is behind it (I do due diligence; Richardson's book 1995 book Making a Difference - between John A Lee and Ian Wishart in my bookshelf, as it happens) to know that it is, indeed, spin.
"...thanks to the rich having soaked them"
More logical fallacy ignoring the TPU link referred to earned income tax, then conflating rich & poor (Ive been both, more than once). In saying that you're assuming (incorrectly) that earning income is a fixed sum game.
Apparently your philosophy rests on simple Marxist envy, 150years ago from a hypocritical debtor who sponged off friends & failed his own family - then blamed others. The original "others people's money" man.
"From each according to his ability, to each according to his needs." K Marx
If you're soaking a tenant, you haven't 'earned' anything.
You've been parasite-ing.
Great connection Foxy. If you want to add another layer to this, I encourage you to look into the parallels between Nero and Lucifer. Then include those parallels with Donald Trump today, because 2000 years could be interpreted as a biblical milestone.
Lucifer represented spiritual treason in the heavenly realm, while Nero represents human political treason against the kingdom of God on earth. Both are attributed to destruction by fire. Both figures were seen as creatives who let their artistic ego destroy their divine or civic purpose. Nero acts as the literal earthly proxy for Satan/Lucifer.
Lucifer’s defining sin was excessive pride and his desire to elevate his throne above God’s and be worshipped as the most high. Lucifer literally translates as “light bringer”.
Donnie Trump mirrors many sun god traits and has commissioned the tallest triumphal arch (stone arch bow) in the world with what looks like a Sun God/Lucifer mounted atop. They claim this figure to simply be Lady Liberty, however Liberty was no heavenly being with angelic wings.
Now compare each of these:
You have a fan here.
Nah. Trumpy prefers to see himself as much like that other fella from 2000 years ago. You know the one - who would also readily preach to any and all audiences, liked to think he knew better than the rest... Christ, who was that guy? The anti-trump.
Prices at the pump are not really increasing. I fueled everything up a week ago thinking prices are going to sky rocket, but today prices are actually cheaper.
Big spike in Whangavegas over the week diesel almost 20c/litre dearer.
Its coming. Expect a return to queues and hoarding in a week or two.
"How China won the car wars with cheap EVs loaded with technology"
https://www.abc.net.au/news/2026-07-24/china-dominates-ev-market/106951…
Many car manufacturers believed ICE / hydrogen would be the future. Not sure if it was wishful thinking or stupidity.
ICE cars won't go away overnight, but they will be a declining market.
Will they ever sort out rucs? At 3L/100km it's cheaper to run a toyota fielder wagon or yaris than an ev. Cheaper to purchase and cheaper to insure too
I bought a Chinese EV in May (a Zeekr 7XP). I would never go back to an ICE car, it's so blatantly obvious to me now. The value for money, the quality of the interior, the instant torque, the amazing tech which makes life so much better, it's on a different scale.
Edit: and driving past the fuel stations with a large grin :-)))
European cars used to be the high end because of the finishes. Now it seems Chinese cars are becoming the high end because of tech, but without the high end cost. And Chinese cars are probably more reliable than European (time will tell I guess).
I certainly wouldn't be buying Volkswagen shares right now.
Time will tell Jimbo. While there's been a decent uptake in EV's (seems thee new ute is the BYD Shark as they are appearing more and more), we are yet to see the cost of repair, and longer term reliabilty. Arguably the cost savings will pay the car back off compared to ICE which could nullify this, however it will be interesting to watch the second hand space for some of these vehicles. Toyota 2nd hand hybrids are still holding some value as people are starting to see the batteries go 200-300,000kms with no replacement needed.
Once a European car hits 100,000 km they are a mechanic's dream, I reckon a Chinese EV would probably do better.
Can't fault your logic there one bit. I would never touch a Citroen or Renault if I was given one brand new for free, and as for Audi and VW, everything has been put in places that, while placement may find operational efficiencies, are terrible to have to work on.
Who wants to have to remove 2-3 parts to get to an oil filter for a simple oil change vs toyota which are, for the most part, all reachable with one's arm from the outset.
Kiwibank 25% can't cope with a $500 cost shock. I posted this on that article and re post it here:
That makes a grand, alarmist headline.
But when was it really any different? This just seems like a bank trying to conjure a few likes on a post. Does the bank care? Really, I think not - they are doing very nicely thank you.
The cost of living....ahh yes. But what has this bank's, and the other bank's, actions over the last 20+ years contributed to this predicament we find ourselves in?
In my time it used to be a 40% deposit was needed to secure a mortgage to buy a home. That incentivised savings and ensured good equity levels by the purchaser. Now 10% is common. Sure there are debt to income ratios that apply now, but i suggest they are still too high.
Bank's have driven much greater ease of access to credit and, in the property arena, hyped the notion that forever capital gains will build equity, rather than having already saved a healthy level of equity. Arguably, banks have been the primary driver of the rampant growth in property values. Happily skimming their exorbitant profits for their cossetted shareholders - getting blood from the stone.
And bank's fail to acknowledge their key role in driving this debt explosion and hence the cost of living crunch. Because debt commitments drive activity to generate the funds to service that debt - spiralling rents is a case in point.
I guess banks will say that it is the borrower that ultimately decides yea or neigh to signing the mortgage document. In promoting that position, they are totally abdicating responsibility for their role leading to this point in time. Just because it is legal and one can does not mean that one should.
"But when was it really any different?"
I don't think it has been. Some people will just spend every cent they have. You could double their income and they still wouldn't have any savings.
I know a few like this, they tend to survive fine, maybe its quite nice not planning ahead, just living in the moment.
"It's not what you earn, it's what you spend" - at any income level
Wrong.
It's what you need to survive, is the bottom line.
Let them eat cake - someone got there first
Exactly Right LB.
Banks need to be kicked in the teeth!! Short the Barstards. Mike Burry styles!
Au/Nz banks will be in trouble when the housing market tanks, still further. We are amidst an epic crash.
Their financial snorkels, cannot deal with the depths of their increasingly underwater loans!
"In my time it used to be a 40% deposit was needed to secure a mortgage"
It's that little problem that economies can't afford themselves anymore, without creating exponentially greater debt over time. It's the growth thing. The aggregate of societies' nett worth grows and with it the average, but the median slips as the top end of town become trillionaires while the bottom end remain below zero and don't register as a blip on the dataset. The distortions and bubbles the financialisation of our lives causes means the essential of physical housing keeps moving up with the average, but down in affordability with the median. You can't save for a house, because interest rates paid on savings are being eaten faster by real inflation.
Privatising our financial system towards the corporatocracy. Too big to fail. All transactions in the economy passing through the syphoning machine that is the banking industry. Their mission is to lend more and more money, and the rules are created to facilitate and lubricate this transition of wealth to bank shareholders. Shareholders who are other corporates. It's all a merry go round feeding the self serving economic super organism. Ironic some politicians want to dip into yet more workers wages to feed the organism? Perhaps the are relics from a time before, when the economy was thought to serve the interest of the human community, not itself? Like a cancer the organism grows out of control at an exponential rate.
"In my time it used to be a 40% deposit was needed to secure a mortgage"
....for (95% of) investors, not owner occupiers....and is again.
"for (95% of) investors"
I'm trying to cast my mind back to the 1980s? I seem to remember banks were MUCH more careful about doling out the cash. It was like trying to extract blood as a first home buyer. I think twenty % was the minimum, but you could top it up with a second mortgage at a marked up rate?
Your recollection is much the same as mine....indeed banks were not the primary source of mortgage finance to first home buyers at all...building societies, lawyers and the state were common sources if i recall correctly
Up until the mid 80’s trading banks were prohibited from lending by way of residential mortgages. The field of home lending was Trustee Savings Banks, Building Societies, State Advances capitalisation of the Family Benefit and solicitors. In the 1970s the Trading Banks were permitted to operate internal Savings Banks and thus finance housing. Under the then RBNZ guidelines any lending to housing beyond owner occupation was considered that of a business and attracted higher commercial interest rates. Therefore under that direction all governments had followed a clear distinction between home ownership and commercial operation of property. Rogernomics dismantled all of that. The trading banks moved into open slather lending thus creating the property market we have today as being a prime investment target across the board.
You're a living encylopedia Foxy. That's correct, my first mortgage was from a Trustee bank. Topped up with a 10% vendor mortage at 20%.
Well now, to follow up, recall the by then much maligned Rob Muldoon warned of exactly what would develop. Tearing down the fabric of New Zealand’s traditional society speech if I remember correctly.
Yet another example of how councils waste ratepayers money flogging dead horses they themselves killed
https://www.stuff.co.nz/home-property/361009904/council-chases-its-own-…
A prime example of how bureaucrats become a law unto themselves and a warning as to the costs of holding them to account. Also a cautionary tale about relying on lawyers for expert advice on things other than the law. I suspect that law firm took the council at their word that there were wetlands there, understanding they had their own exspurts. In the washup though those exspurts proved just that they really were just spurts under pressure. It happens to often....
Assumedly the council is now spending more ratepayers money on new lawyers to bring proceedings against the original lawyers.
The question is: Was it a wetland before it was converted to pasture?
Looks possible, from the photograph.
The point is that if it was, pasture isn't the base-line reference-point.
Which means the Judge got it wrong.
Anthropogenic arrogance - it's why we're doomed as a species.
If it was before it was turned into pasture, then perhaps it wasn't relevant? If it was, was it converted with consent, or before consent was required? I'd suggest all these questions were asked and answered in the process.
But a waste or rate payer funds no doubt.
Grim indeed. Lots of punching down.
https://www.consumer.org.nz/consumer-rights-and-campaigns/5-grim-statis…
Also grim reading....so many reports, so little useful action
https://www.mbie.govt.nz/dmsdocument/178-chronology-of-nz-electricity-r…
Another puff piece that ignores the increases system costs by loading up the grid with feel good intermittent solar panels and wind mills. NZ en route to a UK/Aus/German style electricity supply cluster. Big end of town make out like bandits and the consumer pays the price.
For Consumer to be blaming Max Bradford is laughable their own chart shows electricity prices went down in 1999 and only started their inexorable climb in 2003 after Clarks electricity reforms. I guess it must be election year for Consumer to be trotting out these pieces.
"New Zealand operates a small power system with low inertia and a small generation base. A small imbalance can cause deviations of frequency outside of operational limits. It is of the utmost importance that the System Operator has the right information and tools to help it to achieve the critical function of balancing.
With the increase in proportion of variable and intermittent generation in the power system, i.e. wind and solar PV, actively balancing the power system will become more challenging and likely result in more frequency fluctuations.
Wind generation is highly intermittent, which can lead to generation output varying quickly due to wind gusts and potentially shut-down due to low or high wind speed.
Solar PV is affected by weather in a similar way to wind, [10] but may have a weaker correlation which will reduce the overall variable and intermittent effect. Cloud movement can cause solar PV generation to vary, and in some instances a fast fluctuation in active power output can occur.
Variability caused by clouds and wind can make it more difficult for the System Operator to predict the amount of additional generation that will be required from one hour to the next. This in turn makes it difficult to calculate exactly what the output of each generator should be to match demand each trading period.
The short-term balance (second-to-second) between demand and generation is also affected by fast changes in wind speed or cloud movement, presenting a real challenge for the System Operator to maintain frequency within the normal band of 49.8 Hz to 50.2 Hz.
Active power load forecasting, planning, scheduling and regulation will become even more important for reliable and secure operation of the power system."
https://www.ea.govt.nz/documents/1979/Appendix-A-Phase-1-final-report.p…
DOWNUNDER WE SIT AT THE END OF A VERY CONVOLUTED OIL SUPPLY LINE
The breakfast briefing reads... "Brent price is now just on US$101.50/bbl and up +US$7."
However, IMO, we need to be acutely mindful that this is a futures paper price as opposed to a physical market price.
Brent futures represent liquid financial contracts reflecting forward expectations, while physical regional prices capture immediate local refinery demand.
Some countries could already be paying close to double that Brent price on the open market.
Oman Crude: Surged to roughly $154 per barrel, trading at a $50 premium over Brent.
Dubai Crude: Reached near $130 per barrel, reflecting a $25 to $30 premium above Brent.
Physical Middle East Cargoes: Asian-delivered physical barrels saw localized prompt premiums spike by nearly $38 a barrel over their paper equivalents during peak chokepoint blockages.
We already see backwardation, with premiums paid for immediate delivery over next month’s contracts, rather than waiting. Also regional hoarding to shield domestic supply can shift local markets like Singapore into a localized squeeze.
Given that ~90% of NZ’s crude oil comes from the ME region, and because 100% of that (the last time I checked) is refined in Singapore and South Korea (SK), NZ faces a compounding price penalty and what is known technically as a “double margin squeeze’.
Since NZ's brilliant (sic) decision to completely close down all of our remaining refinery capability, we no longer purchase any raw crude. Instead we buy 100% fully refined petrol, diesel, jet fuel, etc, and as a consequence pay far more than the Brent crude price because of cost multipliers.
Refineries in Singapore and SK purchase ME raw crude that carry massive spot premiums of at least US $25-$50 above paper Brent. These refineries then pass those costs on to NZ, along with steep regional refining margins known in the industry as “crack spreads”, as well as spot cargo premiums being lumped in as well.
Here we sit Downunder at the end of a very long maritime supply chain, with war risks and choke point blockages adding to the mix. In essence, (literally) we pay the transport premium twice. First as the crude moves from the ME to the Asian refineries, and second, for the refined products moving from Asia to NZ.
NZ is now at the mercy of national political and industrial decisions made in Singapore and SK and these refineries now run at lower utilization rates forced by choked crude supply, which also drives upper-barrel refining fees.
If either Singapore or SK choose to restrict exports, or prioritise their own reserves, NZ could be forced to scramble for replacement supplies on the already hyper-expensive global spot market.
I just checked our local diesel price and it is around NZ$2.70, and super-grade (95) petrol sits at around $3.17 per litre.
Converting those prices to US dollars per US gallon, they calculate out to $5.90 and $6.94/gallon.
Before the concerted bombing of Russian oil and gas assets began, I was of the opinion that the implied redundancy (potential extra production capability) of the wider OPEC group (a total of 21 countries) could have helped fill some of the shortfall. Now that forlorn hope has gone up in smoke too.
We have a quadruple-whammy that has made my redundancy theory nothing more than a naive pipe-dream.
(i) Hormuz
(ii) Bab-el-Mandeb
(iii) The nutjobs bombing the Russian energy assets.
(iv) Russian energy exports are also facing new restrictions and tightened enforcement. The EU just announced its 21st package of restrictions against Russia, aimed at crippling their economy. This includes several oil refineries in Russia and Belarus.
Ooh, are you crying about being less able to burn the planets climate?
"The nutjobs bombing the Russian energy assets."
The cognitive dissonance is strong with this one. Why not just own up to being a closet fascist?
No, he's right about lots of things and you are too. His exception is the Limits to Growth; yours is anything to do with Putin.
:)
The societal cognitive dissonance is between the fact that fossil fuels are finite, versus the fact that most dreams are built upon them not being so.
Which makes both the growth-forever types and the Green-new-deal types, equally qualified as numpties. Add blame-directing and polarisation...
Colin I suggest provides some valuable commentary to these streams, and I'm pleased he appears to have moderated some of his extremism, but his blind spot is a belief in Putin. He seems blind to the physical evidence of what Putin is doing, and too accepting of Putin's propaganda.
Colin does have a unique perspective about right and wrong.
I have no particular focus on the Russian dictator, just those poisoned with and spreading his propaganda. I guess Colin would be okay with his neigbour burning his house down, even better should he be inside, to motivate him to exit?
"yours is anything to do with Putin."
Victoria Nuland and Hunter Biden ring a bell? ;-)
"Victoria Nuland and Hunter Biden ring a bell? ;-)"
Only the hopelessly confused or truly dense could invoke that comment and imagine that it might strengthen their argument, when it does precisely the opposite.
In instances like this I often think of an old Chinese idiom which refers to "Playing the lute for the cow".
It is used to emphasise the utter futility of offering any further explanations in certain situations.
It's also very much in keeping with Mark Twain's advice on how to handle discussions of this nature.
"both the growth-forever types and the Green-new-deal types, equally qualified as numpties."
I tend to think of it more as a sliding scale, rather than equals. Both categories also have a sliding scale within. The GND types at least understand survival on a moonscape is less than desirable. That's a position that can be worked on.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.