Economy Watch

Trump chickening out on Iran strategy. US data soft. EU sentiment dives. Moderates start to win again in Europe.

Kia ora. Welcome to Monday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with its all about watching financial markets and their reactions to the US war on Iran and its long-term impact on US fiscal management - and their November election prospects. It is going to be volatile, yo-yo mix of gloom and temporary relief rallies. During the pandemic crisis, we had essentially a fiscal and central bank 'put' policy to deal with that crisis, an implicit policy promise where the Government and central bank acted with programs to set a floor for employment and asset prices, typically by purchasing assets to inject liquidity during market downturns. But this time there seems little appetite to reprise that if things get really unstable. In the week ahead, locally we will get some mortgage data for February, but apart from that, data releases will be light. Today's Fonterra results will be interesting however. In Australia, Wednesday's February inflation data will be the key thing we are watching. Globally, it will be all about actions and reactions during the fourth week of attritional conflict in the Persian Gulf and how that affects oil and natural gas flows. In the US, there are a range of sentiment indicators for March out this week including PMIs, the University of Michigan consumer survey, and many regional Fed surveys. In China, there isn't much data ahead this week, just industrial profit data. In Japan and Singapore, they too will update inflation data. But we need to watch US Treasury yields which jumped at the end of last week, and to their highest level in nine months. Investors seem to be coming to realise that Trump doesn't know what he is doing, and the inflation impacts from these mistakes will likely deliver a much more hawkish US Federal Reserve, despite the Warsh and Miran inserts. We may all be in for rising benchmark interest rates. And it won't help us that credit rating agencies are looking at these impacts and starting to consider downgrades, sovereign and corporate. Risk premium rises will be on top of the benchmark rises. Meanwhile, the IEA says the market disruptions from the US/Israeli "conflict has triggered the largest supply disruption in the history of the global oil market". They say we should all work from home, and if we drive, drive slowly. American petrol prices are up a third in just four weeks. That signal from the world's largest economy will be sharply inflationary. By a different means, Trump is effectively imposing a giant carbon tax on everyone. And what will flow from from that? Sharply higher inflation, and sharply lower global economic activity. That is the definition of stagflation. Everyone suffers because monetary policy needs higher interest rates to restrain the inflation risk. And that undermines the global banking system because stagflation is the worst scenario for bank lending. Meanwhile, Canadian retail sales rose in February by +0.9% from January to be +1.8% higher than year-ago levels. But Canada's producer prices rose much less than expected in February. They were up +0.4% from January when a +1.1% rise was expected. For the year they are up +5.4% however. Taiwanese export orders are still growing fast but the February rise was only +24% and by the standards of the +60% January rise, this seems a let-down. Analysts has expected another very large rise and so were disappointed. But anyone else would have been over the moon with a +24% rise. In China, foreign direct investment inflows fell -5.7% in February from a year ago to ¥161 bln, -22% lower than the same period in 2025, and its lowest for this period since 2020. There were some positive sectors in high-tech, but mostly this is a weakness Beijing won't appreciate. And Chinese customs data shows why the silver price jumped earlier in the year. China bought up 700 tonnes of the metal in January and February to shore up its strategic reserves. But the buying seems to have eased or stopped, and we are seeing the price dive now. We should probably note that with the Australia-New Zealand "Closer Defence Relations" statement, there is growing expectations that the two countries will buy its replacement frigates from Japan. In South Australia, the incumbent Labor state government has won re-election handily. Advance results show it winning 33 of 48 seats, with the Liberals suffering a heavy reduction (10). With 98% of polling booths counted, so far Pauline Hanson's One Nation Party is not ahead in any of them. And we need to note that Fitch has changed their outlook for the New Zealand economy, shifting its AA+ rating from 'Stable' to 'Negative' on the basis that debt reduction is now far less likely for either the private or public sectors. The UST 10yr yield is now just on 4.39%, unchanged from Saturday at this time, up +11 bps for the week. The price of gold will start today down -US$83 from Saturday at US$4590/oz. That is down -$528 or -10.5% in a week. And that its its largest weekly fall in more than 40 years. Silver is down another-US$2 at US$67.50/oz, a -16% weekly retreat. American oil prices are holding at just on US$98/bbl, while the international Brent price is up +US$1.50, now just over US$112/bbl. The Kiwi dollar is little-changed against the USD from Saturday, down -10 bps at 58.3 USc. Against the Aussie we are also little-changed at 83 AUc. We are down -20 bps against the yen. Against the euro we are down -10 bps at 50.4 euro cents. That all means our TWI-5 starts today down -10 bps at just on 62 but up +40 bps over the past week. The bitcoin price starts today at US$68,741 and down -1.3% from this time Saturday, down -3.3% from a week ago. Volatility over the past 24 hours has been modest at just on +/- 1.8%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora. Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news Qatar has being hit hard by Iranian missiles today, upending the global trade in natural gas. In fact, it is clear now there will be a protracted energy shock that everyone needs to adjust to. The impacts are ahead and aren't going away. Elsewhere, US initial jobless claims came in at +190,000 last week, a slightly bogger dip than seasonal factors would have expected. There are now 2.1 mln people on these benefits, marginally less than a year ago but still above two year-ago levels. The Philly Fed factory survey for March rose from February although that wasn't due to new orders, which retreated. Clearly these businesses are not involved in new home construction, because new home sales fell sharply nationally in February to their lowest level since early 2023. US wholesale inventories fell in January, and their inventory-to-sales ratio fell even sharper. So there is plenty of capability to rebuild inventories to 'normal' levels - but clearly most businesses aren't doing that, choosing to boost cashflow with lower inventory levels. Elsewhere there were a number of central bank policy rate decisions released overnight. China held its Prime Loan Rates unchanged at record low levels. Taiwan left its policy rate unchanged at 2.00%. Japan also held unchanged at 0.75%. Switzerland held at 0%. Sweden held at 1.75% (link for Governor Breman.) And the ECB was also unchanged at 2.15%. There were others, like the Czech Republic(3.5%), England (3.75%), Moldova (5.0%), and none of those changed either. In Australia, their jobless rate rose to 4.3% in February, up from the 4.1% forecast and levels seen in the previous two months. This is back to the November level. Full time jobs rose fell -30,500 while part-time jobs rose +79,500. Their participation rate hit a four-month high of 66.9%. (As at December 2025, the NZ jobless rate was 5.4% and will be updated for Q1-2026 on May 6.) And staying in Australia, the Cat5 tropical cyclone packing 260kmph winds is now hitting Far North Queensland, but it way up there above Cairns and Port Douglas which isn't taking the brunt of it. It may affect Weipa, the source of bauxite for our Bluff smelter, however. Global container freight rates were up only +2% last week to be down only -4% from year-ago levels. In fact these rates have been remarkable stable out of China. But inbound rates to Europe jumped +10%, and transatlantic rates into the US dived -35%. But twisted supply chain pressures will likely change this ahead. Bulk freight rates rose 7.5% in the past week to be +24% higher than year ago levels. The UST 10yr yield is now just on 4.28%, up +6 bps from yesterday at this time. The price of gold will start today down -US$293 from yesterday at US$4587/oz. Silver is down a massive -US$6.50 at US$70.50/oz. American oil prices are holding up at just on US$95/bbl, while the international Brent price is now just over US$107/bbl. Both were higher earlier. The Straits of Hormuz remain no-go areas for most with the situation still extremely unstable. The ships transiting are those approved by Iran, which holds all the cards at present. They are talking about charging fees to transit safely. The Kiwi dollar is little-changed against the USD from yesterday, still just on 58.4 USc. Against the Aussie we are up +40 bps at 82.9 AUc. We are down -80 bps against the yen. Against the euro we are basically holding at 50.7 euro cents. That all means our TWI-5 starts today up less than +10 bps at just under 62.1. The bitcoin price starts today at US$69,465 and down -2.6% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.4%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora. Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news deeper turmoil in the Middle East has overshadowed the US Fed meeting. But first up, in an 11-1 vote, the US Federal Reserve decided to hold its policy rate unchanged at 3.25% at todays meeting. Only Trump's insert, Stephen Miran, voted against the consensus. The immediate response from financial markets wasn't large, probably because this is the expected result. While their dot plot signals a rate cut this year, markets do not have that priced in. In fact the futures market is looking for rises. Elsewhere in the US, mortgage applications sank last week by almost -11% as rising mortgage rates killed off demand. Almost off of this pullback was for refi demand American producer prices surged +0.7% in February from January to be +3.4% higher than year-ago levels. That is the biggest rise in more than a year. If you just isolate producer prices to 'goods' only, the jump was noticeably more, up +1.1% just in one month. That makes the January factory order data look rather weak. They were up just +0.1% from a month earlier, up +3.5% from a year ago. So almost all of this is accounted for by inflation, and the recent order level growth is far less than recent inflation. Financial markets noticed and sagged. US crude stocks rose and by more than expected last week, but this had little impact on the rising oil price. But US domestic petrol inventories dived last week in a major way. Making this notable was it was the fifth consecutive weekly drop. The Bank of Canada left its overnight target rate steady at 2.25% in its March meeting, as expected. Staying in Canada, they reported that their 41.5 mln population declined by more than -100,000 in 2025 mainly due to an exodus of foreign workers.. Meanwhile the Japanese Reuters Tankan Index rose to 18 points in March from 13 points in February and its highest (non-pandemic) level since 2019. In South Korea we should note that a 66,000 member union has voted to strike at a major Samsung electronics facility in May. If it happens, it will be yet another supply chain disruption for a key global electronics supplier. This is a company union, and only the second time in its history it has voted to strike, so there must be deep dissatisfaction involved. In Malaysia, they became the first country to confirm that their special trade pact with the US is now 'void' following the US Supreme Court's tariff ruling. It will likely trigger a cascade of other countries declaring the same. In China, new official data out shows that cement production surged in February, back to 2023 levels, and perhaps a solid indication that construction activity is picking up, after a long two-year low period. In Australia, the six-month annualised growth rate in the Westpac–Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, held at +0.08% in February, unchanged from January but down from more firmly positive reads seen late last year. Of course, this metric covers periods before the US-Iran war. Meanwhile, Far North Queensland is being warned to brace for Tropical Cyclone Narelle, forecast to make landfall as a category four or five system on Friday morning, with destructive wind gusts of up to 250 kph !! Generally, we should probably note that the USD's steady devaluation against the Chinese yuan seems to have ended, with the rate holding steady for the past few weeks. The UST 10yr yield is now just on 4.22%, up +2 bps from yesterday at this time, little-changed after the Fed decision. The price of gold will start today down -US$121 from yesterday at US$4880/oz. Silver is down -US$2.50 at US$77/oz. American oil prices are up almost +US$3, at just under US$98/bbl, while the international Brent price is up +US$6, now just over US$108/bbl. The Straits of Hormuz remain no-go areas for most with the situation still extremely unstable. The ships transiting are those approved by Iran, which holds all the cards at present. The Israeli attack on Iranian gas fields has delivered a large spike in natural gas prices. The Kiwi dollar has dipped today, down -20 bps against the USD from yesterday, now just on 58.4 USc. Against the Aussie we are unchanged at 82.5 AUc. We are little-changed against the yen. Against the euro we are down -10 bps at 50.7 euro cents. That all means our TWI-5 starts today down -20 bps at just over 62. The bitcoin price starts today at US$71,293 and down -3.9% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.8%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora. Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news financial markets are relatively calm today mainly because the Persian Gulf situation has slipped into a stalemate with no new developments good or bad. But first up today, the overnight dairy auction brought little change in overall prices, but there was surprising variation between the commodities on offer. The net result was a tiny +0.1% gain in USD, +0.4% in NZD. But AMF rose +6.4% and SMP rose +5.2%. Offsetting these was WMP which dropped -4.0%. These shifts are much larger than the derivatives market signaled. In fact, the AMF price is back up to late 2024 levels, and the SMP is now at its elevated October 2022 levels - and apart from those pandemic distortions, back to the unusual 2014 levels. The WMP shift, which seems big, actually isn't when viewed from a slightly longer perspective. There was good demand, mainly from precautionary buying, and from everywhere except from China. That deserves watching. In the US, ADP weekly jobs report showed some weakness with just a +9000 gain nationally, far less than the expected gain and almost half what it has recorded over the past four weeks. They say there is a noticeable slowing in hiring. Business activity continued to decline significantly in the New York region's service sector in March, according to firms responding to the New York Fed's Business Leaders Survey. US pending home sales picked up marginally in February from January but are still -1.4% lower than year-ago levels. But there is wide variation, with the West (California) rising notably, the South and Mid West with minor gains, but the North East had notable declines. In Canada, their real estate markets did it tough in February, from both the economic uncertainty and prolonged bad weather. Elsewhere and as expected, the central bank of Indonesia held its policy rate at 4.75% where it has been since September 2025. In Germany there has been a huge drop in confidence as recorded by the ZEW sentiment index, all related to Trump's war in the Middle East and the downstream consequences for Europe. But perhaps somewhat surprisingly though, the negative reading was very minor. And as expected, the RBA raised its policy rate late yesterday by +25 bps to 4.1%. But what wasn't expected was how close the vote on the hike was. Five members voted for the rise, but four wanted to hold. In the end it was the growing risks of inflation that tipped the scale, made worse by the Middle East tensions and consequences. All the major banks have now announced pass-though rises to their variable rates. Globally, it is also probably worth noting that the airline industry's forecasts show that air travel is expected to double by 2050. Obviously that assumes the current geopolitical tensions subside. They see an outsized share of the expansion will come from China. The UST 10yr yield is now just on 4.20%, down -3 bps from yesterday at this time.  The price of gold will start today up +US$17 from yesterday at US$5001/oz. Silver is down -US$1 at US$79.50/oz. American oil prices are down -50 USc, at just on US$95/bbl, while the international Brent price is still just on US$102/bbl. The Straits of Hormuz remain no-go areas for most with the situation still extremely unstable. The ships transiting are those approved by Iran, which holds all the cards at present. The Kiwi dollar has risen today, up +10 bps against the USD from yesterday, now just on 58.6 USc. Against the Aussie we are down -40 bps at 82.5 AUc. We are up +10 bps against the yen. Against the euro we are down -10 bps at 50.8 euro cents. That all means our TWI-5 starts today little-changed at just on 62.2. The bitcoin price starts today at US$74,160 and up +0.5% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.8%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora. Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news it is becoming clearer that Iran holds the cards in the economic aspects of the Middle East conflict. Pointedly, so far no-one - not China Japan, nor NATO - has responded positively to Trump's call for naval help. Meanwhile in the US, even though crude prices retreated somewhat today, retail petrol prices there are up +0.5% today from yesterday, up +7% in a week, up +27% in a month. Away from Trump's war, American industrial production rose in February, but by far less than in January and that was enough to reduce the January year-on-year gain of +2.3% to a February equivalent of just +1.4%. This is a sharpish slowing that wasn't the expected +2.1% gain. It was their smallest month-on-month rise in six months. And the New York Fed's Empire State factory survey suggests it may have got worse in March. That survey did not grow unexpectedly. It came in with a 'steady' -0.2% dip when a +3.2 rise was expected. New order growth disappointed. Meanwhile the NAHB sentiment survey held steady at a good level as expected. But they are worried about the growing discounting required to maintain sales. In Canada, they reported a lower February CPI rate of 1.8% with their core inflation rate at 2.3%, both less than in January. Canada also reported housing starts which rose from January, maintaining a good level and about at the average level over the last five years. But they were +13.7% higher than year-ago levels, and actually their second best February level ever. The Bank of Canada meets next on Thursday (NZT) and no change to its 2.25% policy rate is anticipated. Across the Pacific, China's new home prices across 70 cities dropped -3.2% year-on-year in February, following a -3.1% decline in the previous month. Shanghai was the outlier with higher prices. But for house resales, nothing is rising, even in Shanghai which was down -6.5% for the year. Some are down almost -10% (Wuhan). But China's February retail surprised to the upside, rising +2.8% and much better than January's +0.9%. China's industrial production came in much better than expected as well, up +6.3% and well above the +5.1% expected and the +5.2% in the prior period. Beijing is pushing through 'pay reform' for middle managers at its state owned banks - and it is turning out to be far more brutal than those managers expected. Many are seeing their pay cut steeply, especially bonuses. And there is a retroactive aspect as well applying to their 2024 bonuses. Separately, India said its exports held steady in February, although its imports fell, allowing it to report a smaller trade deficit. Later today, the Australian central bank will review its cash rate target settings with a backdrop of high and rising inflation before the Middle East war started. The RBA is the first central bank of at least nine this week to review monetary policy in these changed circumstances. Markets have priced in a two-thirds chance of a +25 bps rate rise. Most analysts have come to the view it is the likely result too. The RBA is prioritising its inflation fighting mandate, they expect. The UST 10yr yield is now just on 4.23%, down -5 bps from yesterday at this time. The price of gold will start today down another -US$34 from yesterday at US$4984/oz. Silver is holding at US$80.50/oz. American oil prices are down -US$3.50, at just under US$95.50/bbl, while the international Brent price is down -US$1 just over US$102/bbl. The Straits of Hormuz remain no-go areas for most with the situation still extremely unstable. The Kiwi dollar has risen today, up +70 bps against the USD from yesterday, now just over 58.5 USc. Against the Aussie we are up +20 bps at 82.9 AUc. We are up +10 bps against the yen. Against the euro we are up +30 bps at 50.9 euro cents. That all means our TWI-5 starts today up +60 bps at just under 62.2. The bitcoin price starts today at US$73,762 and up +3.4% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.3%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Title: A week of global central bank updates ------------------------ Kia ora. Welcome to Monday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news of US$100/bbl-plus oil price is settling in as the Persian Gulf conflict itself settles in to an attritional conflict with no end in sight. And although he apparently sees no irony in it, US President Trump called for help from other countries to dig him out of the crisis he started by sending naval forces to keep the Strait of Hormuz "open and safe". But so far, no country has stepped forward with any commitment. Elsewhere, there will be a lot going on in the week ahead. The big economic event will be the US Fed decision on Thursday. This is supposed to be Chairman Powell's second last meeting where he is the boss and no change is anticipated. But Trump has been losing the court fights over his campaign to oust Powell, and Congress won't progress Kevin Walsh's nomination, so who knows how that will all play out. Central bank decisions will also come this week from Canada where no change is expected and none from any of Sweden, Switzerland, the ECB, Japan, China, or England. For all of them it is a wait-and-see situation. Russia review as well and may cut by -50 bps. Of course, locally the big one will be the RBA's cash rate target review tomorrow and market are now expecting a +25 bps hike. For economic data all eyes will be on the New Zealand Q4-2025 GDP outcome, and probably more importantly, the Aussie labour market report for February. And there will be key releases from the US for PPI and industrial production, the Eurozone trade balance, and the Canadian inflation rate. Additionally, China will release its industrial production, retail sales, unemployment rate, housing prices, and fixed-asset investment data, many of them later today. Back in the US, it will be no surprise to learn that core PCE inflation rose at a +3.1% rate in January, its most since late 2023. And the rises in December and January were at more than a +4.5% annualised rate. Given subsequent events, it seems unlikely this rate will have eased since. The rising inflation threat will be the main reason the Fed won't cut. It its second interim report, the US economy expanded an annualised +0.7% in Q4-2025, far less than the +1.4% advance estimate, and the weakest performance since a contraction in the first quarter of 2025. Downward revisions came for exports, consumer spending, government spending, and investment. Imports decreased less than previously thought. It is turning out economic expansion is far less now than at any time during the Biden presidency. The January JOLTS report showed more openings than in the five-year-low December report, but these were still -6% lower than a year ago. Meanwhile, the widely-watched University of Michigan sentiment survey fell as expected in its March edition, to a three-month low, but inflation expectations didn't fall as expected. The shifts were comprehensive across all income and age groups. War uncertainty and the rising fuel costs were the [obvious] triggers. Those petrol prices are up +18% now from a year ago, up +9% in a week. The darker mood is very obvious from two years ago (before Trump 2), with sentiment down -30%. Meanwhile the Congressional Budget Office is sounding the alarm about where US federal debt is tracking. Page 3 of their February report shows the essential corruption - personal income taxes are up +10% (and you can be sure that does not relate to billionaire 'taxpayers'), corporate income taxes are down -33%. Even the 'tariff tax' collections are essentially taxes on Americans collected at the border. These are up +US$109 bln, about the same as the rise in personal income taxes. The result seems to be that US Treasury debt held by the public is currently 101% of nominal GDP and without changes will rise to 175% of GDP in 30 years. In Canada, their labour market shrank in February and by an outsized -83,900 following a -25,000 decrease in January and sharply missing forecasts for a +10,000 gain. Job losses were concentrated in full-time positions which were down -108,400, so the report is grimmer than it first seems. It has been called a 'brutal' jobs report, and will undoubtedly end the Bank of Canada's hiking cycle. India loan growth rose +14.5% in February from a year ago, maintaining its high rate of expansion (and almost three times their GDP growth). New passenger vehicle sales in India hit a record high in February, up more than +10% from the same month a year ago, but to be fair, this overall market is nothing like China - or the US for that matter. China new yuan loans rose +¥900 bln in February, just as was expected. But that gain was slightly less than the +¥1 tln in February 2025, and much less than the +¥1.5 tln in February 2024. It won't be a surprise to know that the prices of most hard commodities are rising. But some ubiquitous ones like plastics (polyethylene +32%), steel (hot-rolled coil steel +13%), aluminium (+14%), and bitumen (+35%) have all jumped sharply in 2026. This won't be good for inflation control. The UST 10yr yield is now just on 4.29%, up +1 bp from Saturday, up +18 bps for the week.  The price of gold will start today down another -US$40 from Saturday at US$5018/oz, down -US$138 from a week ago. Silver is down -50 USc at US$80.50/oz to start today, down -US$3 from a week ago. American oil prices are up +US$2, at just under US$99/bbl, while the international Brent price is now just over US$103/bbl. The Straits of Hormuz remain no-go areas for most, although there are reports of LNG ships getting through to India. But the situation still extremely unstable. One reaction that is not happening is bringing in more US oil rigs into production in the US, even with these higher prices - not yet anyway. The Kiwi dollar has slid again, down another -30 bps against the USD from Saturday, now just over 57.8 USc. That is more than a -1c drop in a week, down -1.5%. But against the Aussie we are down -10 bps at 82.7 AUc. We are down -30 bps against the yen. Against the euro we are down -10 bps at 50.6 euro cents. That all means our TWI-5 starts today down another -20 bps at just over 61.6, down -1.3% for the week. The bitcoin price starts today at US$71,356 and down -0.9% from this time Saturday, although up more than +5% from a week ago. Volatility over the past 24 hours has been low at just over +/- 0.9%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Under the leadership of President Donald Trump there's a danger the United States will become an autocratic nation, not unlike China, Saudi Arabia or Russia, and New Zealand should strive to avoid becoming the focus of Trump's wrath, suggests David Cay Johnston. Johnston, a Pulitzer Prize winning investigative journalist, co-founder of DCReport and journalism professor at Rochester Institute of Technology, spoke to interest.co.nz in a new episode of the Of Interest podcast. Johnston first met Trump in Atlantic City in 1988, and has probed and written about the affairs of Trump for decades. Domestically he says Trump's under pressure from his MAGA (make America great again) base with the economy not doing well, and over the Epstein files and the US attack on Iran. With the US mid-term elections looming in November, Johnston says checks and balances via the likes of Congress, the courts and the Constitution supposed to limit the President's power, are failing. "The checks and balances system isn't working, plain and simple. He thinks he's the world's dictator. He hasn't consolidated his power even in the US, but that's his goal, totally consolidate his power, to be totally unaccountable, unfortunately," Johnston says. He says Trump's presidency could effectively be over if he loses control of the House and Senate in the mid-term elections, which is "weighing on his mind." Against this backdrop Johnston says voter intimidation and suppression is underway. Asked how the Trump era may end, Johnston says he fears for US democracy. "At the moment, the United States is a dictatorship. It is not fully consolidated, but it is a dictatorship. Whether we restore our democracy is not clear at this point. We may cease to be a democracy." Johnston says opposition emerged through the No Kings demonstrations, which he'll be watching closely over the coming US summer. These protests come against the backdrop of danger the US becomes "a huge autocratic nation, not unlike Xi's China, MBS's [Mohammed bin Salman Al Saud's] Saudi Arabia, [and] Putin's Russia. "And that would be a terrible thing for the whole world." For NZ, as a small, trading nation, Johnston suggests at this stage we ought to keep our heads down. "The key objective is to not become the focus of Donald's wrath because he could say, 'well, I'm going to prevent anyone from moving to New Zealand or coming from New Zealand. I'm going to ban Air New Zealand. He could do all sorts of things to make trouble. So my fundamental advice would be just try to stay off his radar, go on living your lives." In the podcast audio Johnston talks in more detail about why he believes Trump's tariffs are illegal, the US war with Iran, attack on Venezuela and other countries Trump could target, Trump and the Epstein files, the US economy, who Trump listens to and who influences him, the mid-term and primary elections and more. Johnston previously spoke to interest.co.nz about Trump in 2016 and in 2018. *You can find all previous episodes of the Of Interest podcast here.

Kia ora. Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news of oil jumping while equities slide as surging crude prices stoke inflation ‌fears. Oil tankers are ablaze. Iran said it will keep the Straits of Hormuz closed and there doesn't seem much Trump can or will do about that. And the Gulf crisis is severely disrupting global air travel. Meanwhile the IEA says "The war in the Middle East is creating the largest supply disruption in the history of the global oil market." (OPEC however seems to be ignoring the folly.) In the US, jobless claims were little-changed last week at the headline level, the small actual decrease accounted for by seasonal factors. There are now 2.15 mln people on these benefits, very similar to a year ago but a big increase from two years ago US housing starts rose in February, just as they did in the same month a year ago and to the same levels. US exports and imports eased slightly lower in January. Their overall trade deficit fell to -US$ bln in the month largely because services exports rose. From a year ago their deficit is +-US$75 bln lower (-0.2% of GDP.) Canadian exports fell and their trade surplus with the US narrowed in January while the deficit with other countries widened. They reported a January trade deficit of -C3.7 bln mostly due to fewer car exports to the US. India reported CPI inflation of 3.2% for February, up from 2.7% in January and that takes it back to levels they had in April 2025. In Australia, inflation expectations ticked up further in the March Melbourne Institute survey, up to 5.2% for the year ahead. While this is 'only' a rise from the 5.0% rate in February, it is the highest looking-ahead level this survey has reported since January 2023, and is a significant rise from the 3.6% rate in March 2025. It only adds fuel to the expectations the RBA will hike next week at its review on March 17. Aussie equities fell, benchmark AGB yields rose further, and they were rising even before this news broke. And in the upcoming Australian budget, talk is they will assume CPI inflation in the "high 4s" for the year ahead Global container freight rates rose +8% last week to be now only -10% lower than year-ago levels. Outbound China to the EU was up +19%, to the US West Coast up just +4%. Rates to China fell. Bulk cargo rates fell -14% in the past week as demand dried up. From a year ago these rates are now +36% higher, although the base was weak in 2025. The UST 10yr yield is now just on 4.26%, up +5 bps from yesterday. The price of gold will start today down another -US$52 from yesterday at US$5119/oz. Silver is down -50 USc at US$85/oz today. American oil prices are on the move up and by the time you hear this they will likely be over US$100/bbl. The Straits of Hormuz remain essentially closed, the situation even worse now. The internationally coordinated release of strategic reserves has had essentially no effect. The Kiwi dollar has slid another -50 bps against the USD from yesterday, now just over 58.6 USc. But against the Aussie we are unchanged at 82.7 AUc. We are down -60 bps against the yen. Against the euro we are down -30 bps at 550.8 euro cents. That all means our TWI-5 starts today down -40 bps at just over 62.2. The bitcoin price starts today at US$70,437 and down -0.4% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.4%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora. Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news markets seem to be ignoring current economic data releases, building up higher risk settings. First, oil prices have risen despite official fanfare that strategic oil reserves are being released. Secondly, 'risk-free' benchmark interest rates are rising despite US inflation coming in unchanged. And thirdly, the sudden twist in Aussie rate expectations has seen their currency appreciate significantly, up +2.5% from the start of the week, up almost +7% since the start of 2026. But first in the US CPI inflation in February came in at the expected 2.4% rate, unchanged from January. But of course this survey was for a period that predates the current war impacts. Their core inflation rate rose slightly in February from January, to be 2.5% in February. In this data year-on-year petrol prices fell -5.6% to give these results, and we all know they have actually risen +22% in the past month. No doubt consumers there will be wonder why, if the US is a net energy exporter. But Trump's billionaire mates won't be turning down a grift. US mortgage applications rose for a fourth consecutive week last week, up +3.2% from the prior week, driven largely by new home purchase activity, and in spite of rising interest rates. There may by FOMO operating here, fear of even higher rates locked in for the future. Chinese new vehicle sales fell sharply in February from January. But that sort of seasonal shift isn't unusual. However, February sales were actually -15.5% lower than February 2025, and actually even lower than in February 2016. After a very strong run over the past three years, the Chinese car-making industry will be looking at the developing 2026 trends nervously. Beijing doesn't need this sector to repeat what went on in their residential housing sector. In Europe, ECB boss Lagarde has been out emphasising that they will be redoubling their efforts to keep inflation under control with an active monetary policy in the face of oil price pressures, and "will take the necessary measures to control inflation". In England, we should note that their central bank's prudential regulators have given on-line fintech Revolut a full banking license. This is expected to see them attack mainline banks in their most profitable sectors, lending, although Revolut will not be encumbered with branches or any broad requirements to provide full service offerings. Revolut has been a haven for crypto transactions. And staying in Europe, we should note there is an election in three weeks in Hungary, and EU member state. Current polling shows Prime Minister Viktor Orbán is heading for defeat. The pressure is on Orbán, and he has called for Russian help to smear his opponents. In Australia, there are more stories about panic buying of fuel, especially diesel, as farmers and fishers worry about availability to keep their operations going. They worry that food prices will be next. And staying in Australia, Westpac among others are suddenly forecasting that the RBA will hike its cash rate target by +25 bps on March 17 to 4.1% and again in May to 4.35%. The sudden rise in inflation threats are behind the sharp change, with their central bank "feeling compelled to act". The UST 10yr yield is now just on 4.21%, up +7 bps from yesterday.  The price of gold will start today down -US$58 from yesterday at US$5170/oz. Silver is down -US$4 at US$85.50/oz today. American oil prices are up +US$3, at just under US$87.50/bbl, while the international Brent price is now just over US$91.50/bbl. The Straits of Hormuz remain essentially closed. But even if they reopened today, the status quo is unlikely to be restored. So the echo of this crisis may last a very long time. At least, that is what markets are pricing in. The Kiwi dollar is down -40 bps against the USD from yesterday, now just over 59.1 USc. But against the Aussie we are down -50 bps at 82.7 AUc. We are up +20 bps against the yen. Against the euro we are unchanged at 51.1 euro cents. That all means our TWI-5 starts today down -30 bps at just under 62.7. The bitcoin price starts today at US$70,706 and down -0.7% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.6%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora. Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news markets are betting Trump will 'declare victory' over Iran soon and walk back his war. But the Straits of Hormuz are still effectively closed - to all but Iranian-linked vessels. Perhaps oddly, markets are assuming they will open to all 'soon'. The US Navy has escorted one tanker through. The betting on TACO is strong. But separately today, the overnight dairy Pulse auction brought little change to last week's full auction. That means those good prices were essentially maintained, so no sign yet that the global rise in dairy supply is hurting prices. In the US, the ADP weekly jobs report rose +15,500, the same as the prior week, a steadying after five weeks of modest gains. Existing US home sales rose marginally in February but that was better than expectations that they would fall. That leaves them -1.4% lower than year-ago levels. Despite the recent rebound, unsold inventory rose at a sharper rate. The NFIB Small Business Optimism Index fell for a second consecutive month in February when it was expected to rise (marginally). The net percent of owners expecting higher real sales volumes fell 8 points to a net 8%. Today's UST 3yr bond auction brough another modest rise in yields from the prior equivalent event. In Canada, their travel to the US is down more than -30% in February compared to the pre-tariff period, replaced by much higher travelling to other places. Interestingly, visits by American to Canada are rising. Canada is also attracting notably more tourists from other countries too, presumably those avoiding the US. In Japan, machine tool orders remained especially strong in February, especially export orders. China's exports rose almost +22% in February from the same month a year ago, its best rise since the pandemic. Imports were up almost +20%. Their exports to New Zealand rose only +1.6% but their imports are up almost +26%. Their exports to Australia rose +32% while their imports were up +29%. Their February trade with the US was even stronger with exports up +27% and imports up +36%. In Malaysia, January industrial production expanded by +5.9% from a year ago, beating market estimates of a +5.4% rise and the previous month's +4.8% increase. Their factory sector posted even stronger rises. In Australia, the Westpac-MI consumer sentiment survey showed consumers remain firmly pessimistic, although sentiment continues to show some resilience. Daily responses in their survey show a material weakening over the survey week. The results were less pessimism on current finances and attitudes towards major purchases. On the economy it reveals more unease near-term but less concern about the medium-term. Unemployment expectations pushed up above long-run average levels, led by the over-45s. Staying in Australia, the NAB business confidence survey found that business conditions were steady in February, but sentiment slipped, with confidence now in negative territory for the first time in almost a year, likely reflecting some caution in the ​wake of the February RBA rate hike. This survey didn't really pick up the more recent Middle East war effects because it was conducted from February ⁠23 ​to March 2 and so only ​caught the very beginning of the US-Israeli attack on Iran and subsequent spike ​in energy prices. The UST 10yr yield is now just on 4.14%, up +2 bps from yesterday. The price of gold will start today up +US$126 from yesterday at US$5229/oz. Silver is up +US$5 at US$89.50/oz today. American oil prices are down -US$9.50, at just under US$84.50/bbl, while the international Brent price is down -US$10.50 to be now just on US$88.50/bbl. The Kiwi dollar is up +20 bps against the USD from yesterday, now just on 59.5 USc. But against the Aussie we are down a sharp -80 bps at 82.2 AUc. We are up +10 bps against the yen. Against the euro we are unchanged at 51.1 euro cents. That all means our TWI-5 starts today up +10 bps at just under 63. The bitcoin price starts today at US$71,226 and up another +3.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.4%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora. Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news markets are unsure about whether public efforts to calm the financial consequences of the war on Iran will work. Just at the moment, it's a wait-and-see situation. But first in the US, the latest inflation expectations survey for February is out, revealing very little change. In the absence of subsequent events this stability might have seemed 'positive', but it is now only of historical note. More currently, across the US, there are sharp rises in petrol prices. Those were responding to US$90/bbl crude prices. They are now up from there. Meanwhile, we should probably note that there is a partial US shutdown underway. Among other impacts, security screening staff at airports are in layoff, not being paid. That is making travel in and through the US particularly messy. Across the Pacific, Taiwanese exports fell in February to 'only' US$50 bln in the month, and up only +20.6% from the same month a year ago. But much of this can be explained by how the Chinese New Year holiday occurred this year, China's CPI inflation rate jumped +1.0% in February from January to be up +1.3% from February a year ago. That takes them to a three year high. These were much sharper rises than expected and rises were expected. If both the US and China are now in a sharp-rising inflation period (and this data preceded the Iran crisis), then there is little chance New Zealand will be avoiding this pressure. Their beef prices are up +9.6% from a year ago, lamb prices up +6.6%. (Dairy prices there are down -1.1% on the same basis however.) Now of course, an oil shock is likely to juice their inflation with a new burst. Meanwhile China's producer price pressure eased in February, down just -0.9% from a year ago after their third [small] consecutive rise in month-on-month. Oil prices here will have an even larger impact. Japan's leading economic index, which gauges the outlook for the months ahead using indicators such as job offers and consumer sentiment, rose in January to its highest level since July 2022, confirming their improving economic outlook. And here's something we don't normally look at. Business is picking up in Japan, enough that there is a notable rise in overtime pay there, the most since 2022. In Europe, German factory orders slumped -11.1% in January from December, far worse than market expectations for a -4.3% drop. And December was downwardly revised as well. It was the first decline since August, largely driven by a -39% plunge in fabricated metal products after large orders in the prior month created a high base. Demand also weakened for machinery and equipment. However, from a year ago, German factory orders were up +3.7% in January. (All this German data is inflation-adjusted.) In Australia, Commonwealth Bank has reported two mortgage brokers and a string of accountants to police as it works to unravel a gigantic loan fraud using fake documents and international funds that could extend to AU$1 bln, the AFR is reporting. On the commodities front, the big overnight mover is sulphur, a key fertiliser ingredient, up another 6%, and which has now doubled from a year ago. The UST 10yr yield is now just on 4.12%, down -1 bp from yesterday. The price of gold will start today down -US$69 from yesterday at US$5103/oz. Silver is little-changed however at US$84.50/oz today. American oil prices are up +US$3, at just under US$94/bbl, while the international Brent price is up +US$6 to be now just on US$99/bbl. In between they have been very volatile, at one point reaching US$116/bbl. Relative calm came after G7 ministers started discussing releasing some strategic oil reserves. But there is no agreement or action on that yet, only 'possibilities'. The Kiwi dollar is up +30 bps against the USD from yesterday, now just on 59.3 USc. Against the Aussie we are unchanged at 84 AUc. We are up +50 bps against the yen. Against the euro we are up +20 bps at 51.1 euro cents. That all means our TWI-5 starts today up +20 bps at just over 62.9. The bitcoin price starts today at US$69,073 and up +3.3% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.7%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora. Welcome to Monday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news of zero progress in the mess in the Middle East. In fact, it has probably gotten worse. And in the week ahead, geopolitical developments will likely dictate global market directions. Reports by the IEA and OPEC this week will reveal how the institutions see the supply shock of seaborne energy from the Persian Gulf. The spotlight on US economic data will be on consumer inflation for February (Thursday) and PCE for January (Saturday). Both are expected to rise (CPI to 2.5%, PCE to 2.9%) but everyone will know this is the base on what the March data (released on April 11) will be built on. Where US inflation goes, the bond market goes, and the cost of money locally, Of course, we will be tracking that for you. In China, they will release February inflation data, with headline CPI expected to firm to 0.8% from 0.2%, while producer prices are likely to decline at a slightly slower pace of 1.1%. They will also release new yuan loans data which is expected to decline in February, partly reflecting seasonal weakness linked to the Lunar New Year holidays. In Japan, we will get updated machine tool orders results. In Australia, it will be about consumer and business confidence, consumer inflation expectations. In India, it will also be about CPI data. Locally, apart from some retail data (card use) and more analysis on mortgage activity, data releases will be relatively quiet this week. But there will be plenty of news to follow, especially flowing from the consequences of shrinking workforces in the US, which will have global implications. The US economy shed -92,000 jobs in February at the headline level, the most in four months, following a downwardly revised +126,000 rise in January and much worse than forecasts of a +59,000 gain. From a year ago, payrolls are up +129,000 and that is unusually low. Apart from December's tiny +59,000 year-on-year gain you have to go back to the pandemic (and Trump 1) to find as weak a rise. It gets worse by broadening the view of all employment, not just payroll employment. That broader view shows overall employment down -391,000 in February from a year ago, the second consecutive shrinkage. US retail sales inched lower by -0.2% in January from December, slightly less that the expected dip. It was the first decline since October. From a year ago, they are +3.1% higher. Most of this is accounted for by 2.5% CPI core inflation. US inflation may be about to get a shock. Petrol pump prices are up today +10% from a year ago, up +18% from a month ago. And these costs are only just getting started with US crude oil up +35% in a week, up the same in a year. When US March CPI is reported, the Fed won't be able to look away.  They are facing fast-weakening labour markets and fast rising inflation. They have a dual mandate so they will have to choose what to prioritise. The simple fact is that inflation problems are harder to remedy using monetary policy tools than the labour market. Absent political pressure, they would want to fight inflation first. (If they choose the other goal, they will embed inflation for a very long time.) In Canada, their widely-watched Ivey PMI surged higher in February, a strong expansion signal, to its best since September 2025, and prior to that its best since July 2024. In the Persian Gulf, the Qatari oil minister said in the next few days they have to decide whether to declare force majeure, releasing them from obligations to deliver supplies to customers. He said that could drive crude prices to US$150/bbl. There are still no ships transiting the Straits of Hormuz - except Iran-linked ones. China's foreign exchange reserves rose to US$3.428 tln in February, a small +US$30 bln increase over the previous month and the seventh consecutive monthly gain. These are now back to their highest level since November 2015. USD weakness helped, but it is clear US efforts to 'contain China' aren't working at the most fundamental level. Meanwhile, they bought slightly more gold and now have 74.22 mln troy ounces. American missteps have juiced the price of gold of course, so the value of their holdings rose +US$20 bln to US$388 bln at the end of February, now 11% of their total reserves. After falling consistently since August, the FAO food price index rose in February, basically tracking similar levels for the start of 2025. But there is wide variation between categories. Meat prices are steady, Dairy prices are falling as is sugar. Dairy prices are now at their lowest since the start of 2024. But vegetable oils are rising, and fast, with cereal prices turning higher too. Meanwhile, metals prices are rising, led by aluminium's overnight jump, and it is now approaching the heady heights of the pandemic peaks. Copper and zinc have been rising recently too, even nickel and zinc. Sulphur is another essential commodity at a peak, even higher than the pandemic levels. This is a particular problem for China. But iron ore prices are not joining the party. The UST 10yr yield is now just on 4.13%, up +2 bps from Saturday.  The price of gold will start today up +US$28 from Saturday at US$5172/oz. Silver is up +50 USc at US$84.50/oz today. American oil prices are up +US$1, at just under US$91/bbl, while the international Brent price is up a bit less to be now just on US$92.50/bbl. The Kiwi dollar is unchanged against the USD from Saturday, still just on 59 USc. Against the Aussie we are down -10 bps at 84 AUc. We are up +10 bps against the yen. Against the euro we are up +10 bps at 50.9 euro cents. That all means our TWI-5 starts today little-changed at just over 62.7. The bitcoin price starts today at US$66,882 and down -2.0% from this time Saturday. Volatility over the past 24 hours has been moderate at just on +/- 2.5%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora. Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news bankrupt US/Israeli decisions to choose war over peaceful pressure are having global consequences. But first, the Federal Reserve Beige Book for February reported that overall US economic activity increased at a slight to moderate pace in seven of the twelve Federal Reserve Districts, while the number of Districts reporting flat or declining activity increased from four in the prior period to five in the current period. This is not a review that found strong growth. US jobless claims rose last week by +18,000 from the prior week to 213,000 but most of that can be accounted for by seasonal factors. There are now 2.21 mln people on these benefits, similar to this time last year, but significantly higher than the 2024 levels. February announced job cuts were lower than in January, but together the first two months have been almost as high as the equivalent 2025 levels. This survey also tracks hiring plans and that is down more than -50% from last year. Tomorrow the February US non-farm payrolls will be released and analysts expect a low +59,000 gain. That would be half the +130,000 January level, itself historically low. According to AAA monitoring, average petrol prices (91) in the US are now US$3.25/gal (NZ$1.46L / AU$1.23/L) This is up +9% from US$2.98/gal a week ago, up from US$2.89/gal a month ago, or a +12.5% rise. US natural gas prices are up +7.2% over the same time-frame but to be fair are still very low. But in Europe, these prices are up +70% (in the UK) and up 53% (in Germany) for example. In India, natural gas prices have tripled for many users over the past few days. It is natural to wonder what Trump would say if the EU (or India) took unilateral actions that imposed similar cost jumps on the US. It is no longer safe to be a 'friend' of the US, or any country that pursues policies that "put me first". American policymakers are scrambling to assess a wide range of materials where access is at risk. And institutions more broadly are doing the same. We need to start keeping a closer eye on supply chain pressures. The NY Fed's February monitoring shows it elevated but nothing like the pandemic period, although not yet accounting for the current stresses. Taiwanese industrial production rose +28.5% in January from a year ago, no surprise given the export order data we have been noting. But it is their sharpest rise in at least a decade, probably longer. However, things are not positive for Taiwanese retail sales; they actually decreased in January. But this was entirely due to Chinese New Year falling in a different period this year. Singapore retail sales data for January also got twisted by the holiday timing. The Malaysian central bank kept its policy rate unchanged overnight at 2.75%, saying inflation there is well contained. But they are worried about Middle East conflict effects. China said it is lowering its growth target - slightly. Premier Li Qiang is set to announce a "around 4.5 to 5%" target while delivering the government work report, a key policy document, at the opening session of the National People's Congress later today. The departure from the "around 5%" growth target for the past three years signals the start of a period of slower expansion in China. A big focus is on stabilising their moribund real estate markets. 'Stabilising' will undoubtedly mean subsidies and incentives to unlock buyer interest in the sector again. That will be a hard ask, given the widespread pain still in recent memory. EU retail sales rose +2.3% in January, although slightly less in the Euro Area. In Australia, household spending rose +4.6% in January from a year ago, the slowest pace since late May, following a +5.0% rise in December. This was a smaller increase than expected. Global container freight rates, which had been falling every week in 2026 so far, turned +3% higher last week as the early signs of the Middle East pressures started to mount. Outbound China rates are up +10% for the week. However, they are still -23% lower than year-ago levels. It might be different when this week's data is released next week, of course. More currently, bulk cargo rates are up +6% for the week. Shipping traffic in the Straits of Hormuz has ceased altogether. (Live here.) And we should note ships outside the Strait are under attack too, so the conflict stresses are spreading. New Zealand and Australia have significant food exports into the Middle East region, and they are now disrupted. We noted the sharp rise in fertiliser costs yesterday and more broadly, that is bringing warnings of food shortage consequences. And as if these crises aren't enough, overshadowed is the Blue Owl private credit car crash in the US, and the wider concerns about their risky loans. Some insiders are now talking about a consequential "bank run" being caused by this. The UST 10yr yield is now just on 4.14%, up +6 bps from yesterday.  The price of gold will start today down -US$71 from yesterday at US$5076/oz. Silver is down -US$2 at US$82/oz today. American oil prices are up more than +US$5.50, up +7% in a day, at just under US$79.50/bbl, while the international Brent price is down the same to be now just on US$84.50/bbl. The Kiwi dollar is down -40 bps against the USD from yesterday, now just on 58.9 USc. Against the Aussie we are up +20 bps at 84.1 AUc. We are down -30 bps against the yen. Against the euro we are down -10 bps at 50.9 euro cents. That all means our TWI-5 starts today down -30 bps, now just over 62.6. The bitcoin price starts today at US$71,316 and down -2.6% from this time yesterday, although holding on to a large part of yesterday's rise. Volatility over the past 24 hours has been moderate at just on +/- 2.1%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora. Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news both China and the US have parallel PMI surveys and this month each told wildly different stories about how their February economies were tracking. But first, after flat-lining in each of the past four week, US mortgage applications rose notably last week, driven by strong refi activity, covering continuing weak new home purchase applications. The US ADP employment report shows a gain of +63,000 jobs in February, the most since July, following a downwardly revised +11,000 rise in January. Analysts were anticipating a gain of +50,000. But all the gains were in the education and health sectors, and only in small (sub 20 employee) companies. As a result, the data shows data shows no widespread pay benefit from changing jobs. In fact, the pay premium for switching employers hit a record low in February. The ISM February services PMI for the US expanded more than expected to its best level since July 2022 with gains in all subcategories. Meanwhile the parallel S&P Global/Markit services told a quite different story, with the expansion in that sector falling to its lowest level since April 2025 amid a weaker rise in sales. In Taiwan, their exporting miracle has extended with export orders soaring +60% to a new record of US$77 bln in January, besting market expectations of a +51% surge and accelerating from a +44% gain in December. Yes, electronics drove the rise, but they also had strong rises in chemicals, textiles, and metals. Orders poured in from the US, the EU and from China. Export orders a year ago at US$48 bln were not weak, so this is truly an astounding trend. In China, their official February PMI's were dour affairs, even for them. Both the factory and service sector reports revealed contractions in the month, the factory sector worse than in January, their services sector a slightly less contraction than in the previous month. But in complete contrast, the private S&P Global/RatingDog surveys found something different, strong expansions in both sectors. New orders drove the factory one to its best expansion in five years, they say. and new business drove their services expansion to its fastest pace in nearly three years. In Europe, producer prices rose quite sharply in January from December, but most of that was retracing a sharp December fall. Year-on-year they are down -2.1% although most of that fall was earlier in the year. Australia reported that its economic activity rose +2.6% in Q4-2025, compared to the same period in 2024. Analysts had expected it to rise +2.2% on that basis, so it was a very positive outcome. GDP per capita increased for the fourth consecutive quarter and is now +0.9% higher than a year ago, the highest year-on-year growth since December 2022. For the full 2025, this is +2.0% (real) higher than calendar 2024. Compensation of employees rose +6.5% in the year. The household saving to income ratio increased to 6.9%, up from 6.1% in the September quarter. This ratio is now at its highest level since the September quarter 2022. All this data is 'real' after inflation. And we should note that the aluminium price surged overnight as Persian Gulf refineries declared force majeure on their orders due to the US/Israeli attacks in the area and Iran's response. The same tensions are forcing up fertiliser prices sharply. Urea prices have jumped +11% in one day. Australia imports two thirds of its urea from the Middle-East. The same ratio applies to New Zealand. And despite the "Trump guarantee" and promises of naval protection, if you can get it, insurance costs for shipping in the Persian Gulf has soared by +1300%. Insurers are completely dismissing Trump's 'promises'. The UST 10yr yield is now just on 4.08%, up +2 bps from yesterday. The price of gold will start today up +US$30 from yesterday at US$5147/oz. Silver is up +US$1 at US$84/oz today. American oil prices are down -US$2 at just over US$74/bbl, while the international Brent price is up the same to be now just over US$81/bbl. The Kiwi dollar is up +50 bps against the USD from yesterday, now just on 59.3 USc. Against the Aussie we are up +10 bps at 83.9 AUc. We are up +40 bps against the yen. Against the euro we are up +30 bps at 51 euro cents. That all means our TWI-5 starts today up +40 bps, now just on 62.9. The bitcoin price starts today at US$73,236 and up +8.4% from this time yesterday. Volatility over the past 24 hours has been very high at just on +/- 4.0%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora. Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news inflation spike fear is gripping financial markets today as equities fall, bond yields rise, some key commodities like the oil price are spiking, and there is a sharp move toward perceptions of financial 'safety' which is hurting commodity-based currencies like the AUD and the NZD. The fear is based on seeing central banks hiking policy rates to weight against a looming inflation spike, just when economic activity is likely to weaken sharply on the consequences of Trump's wars. The fear is stagflation on steroids. It is affecting investors from New York to Shanghai. And now Trump is blaming friends (Spain, the UK) for not being supportive enough and threatening new trade restrictions. But it isn't universal - yet anyway. First up today, there has been another very good dairy auction overnight, the fifth positive one in a row, delivering prices up overall by +5.7% un USD terms. With the falling NZD, prices are up +8.4% in NZD. Our charts tell the story overall and in product detail. Basically prices are now back to the high 2025 levels in both USD and NZD terms. Yes, analysts will be reaching for their pencils to reassess the season's payout forecast, although we should caution that we are well past the peak of the milk flows - and that volumes offered and sold overnight are falling away seasonally. More broadly, in the US overnight, the February US Logistics Manager survey showed pressure on their system with rising inventories and strained capacity. Meanwhile the RealClearMarkets/TIPP Economic Optimism Index retreated in March from February, and delivering a decline when an rise was expected. This is largely because personal investor sentiment fell sharply as confidence in US government economic policies slipped away. In the Middle East, only one tanker, a Singaporean one, has managed to traverse the Straits of Hormuz in the past day. It's essentially closed still. Insurers have cancelled policies. Now the US says it is considering providing that, at taxpayer expense. The costs of war are broad. The scheduled meeting between Chinese President Xi and US President Trump is still on for the end of March. Given the unhinged policy-making by the US, it is a lottery on how this will play out. Trump will undoubtedly look for short-term, face-savings wins. Xi will be playing a much longer game. Meanwhile, China is putting the finishing touches to its latest five-year plan. We are approaching the rubber-stamp set piece. In Europe, the Euro area inflation rate rose to 1.9% in February, up from 1.7% in January. Although minor it was an unexpected rise. And that pushed core inflation up to 2.4% in February. Given the global rise in uncertainty, and the US/Israel/Iran crisis pushing up their energy costs very sharply in the past few days, these inflation levels are unlikely to stay this low in March, giving the ECB a new headache. In Australia, total residential building consents fell at a -7.2% rate in January, following a -30.7% drop in December. Year on year it is down -15.7%, the largest fall since late 2023. This may have ended the rising trend of approvals that started in July 2024. But there were 9,900 detached houses approved for construction nationally, a 41-month high. The big shortfall is in intensive housing. Australia's current account balance fell by -AU$2.8 bln in December 2025 to a deficit of -AU$21.1 bln. This is its second consecutive fall, driven by a net primary income deficit widening. This will take -0.1 percentage points from the December 2025 GDP result which will be released tomorrow. In public comments yesterday, the RBA governor acknowledged the sudden increase in uncertainty in the global economy, on top of already high uncertainty from Trump's abandonment of an international rules-based order. She said "a supply shock could, for example, add to inflation pressures. And the potential implications for inflation expectations are something we are very alert to. But at the same time, a prolonged impact on energy markets could have adverse effects on global economic activity and result in downward pressure on inflation. It is not obvious how this might play out." Westpac says Brent crude at US$100 is entirely possible in the coming few weeks. The UST 10yr yield is now just on 4.06%, unchanged from yesterday, although it did get up to 4.11% in between.  The price of gold will start today down -US$179 from yesterday at US$5117/oz. Silver is down another -US$4 at US$83/oz today. American oil prices are up +US$5.50 at just under US$76/bbl, while the international Brent price is up the same to be now just over US$82.50/bbl. These at +7.5% rises. A collapse in Iranian oil production could have quite deep impacts. The Kiwi dollar is another -50 bps lower against the USD from yesterday, now just on 58.8 USc. Against the Aussie we are down -10 bps at 83.8 AUc. We are down -60 bps against the yen. Against the euro we are unchanged at 50.7 euro cents. That all means our TWI-5 starts today down -40 bps, now just on 62.5 and a new one month low. The bitcoin price starts today at US$67,5755 and down -3.2% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.6%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora. Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news the world has suddenly gotten far more dangerous after the US/Israeli strike on Iran. Shipping costs especially are in a dramatic rise on necessary re-routing. The cost of war will hit inflation soon and that is a looming problem for central bank policymakers. And investors are demanding higher yields from not only corporate paper, but benchmark government bonds as well. But first in the US, the February PMI from the widely-watched ISM survey dipped very slightly from January, but held up better than analysts were expecting. It is only the third time in 40 months that this metric shows an expansion. It was driven by prices and imports, both of which are rising faster. New order flows rose at a slower pace. This metric is basically the same as the parallel S&P Global factory PMI for February, which noted faltering exports. This contrasts with the latest EU PMI which reports its strongest rise in new factory orders since April 2022 taking their factory PMI to a 44-month high. But coming with it are building inflationary pressures. Driving this result is a notable uptick in Germany which is now back in expansion. The rise and rise of Japanese manufacturing is now getting real momentum. Their February factory PMI burst out of its trend (confirming the January rise), to now be at almost a four year high. This is on the back of output, new orders and employment that all expanded at their fastest rates since January 2022. Not to be outdone, Taiwan's factory PMI rose sharply too in February, although this also came with higher inflationary pressure than for Japan. Firms there are struggling to meet demand. In some other selected Asian nations, their factory PMI's were mostly positive. This is true for Vietnam, Indonesia, and Thailand, although the same survey in Malaysia isn't quite so positive. Indian industrial production rose 4.8% in January from a year ago, and while most countries would love that, it represents a sharp slowing from December's +8.0% and is way below the +6.5% expected. The December rate was unusual however, and the January expansion mirrors what we saw for most of 2025. China announced late yesterday that they attracted ¥92 bln (US$12.6 bln) in foreign direct investment in January 2026. This was -5.7% less than in January 2025. But we probably should also note that the December FDI was quite good, standing out from the long run of negative flows. (The December inflow was +US$20.6 bln.) In Australia, the Melbourne Institute monthly inflation gauge recorded an easing in monthly inflation in February, dipping -0.2% from January. The main influence were lower fuel prices. In annual terms, however, headline inflation remains elevated above the RBA's 2–3% target band and has exceeded the top-end of the band for the past six months. Changes in the monthly cost of living were mixed, with employee households experiencing the largest monthly increase. And staying in Australia, the Cotality Home Value Index rose +0.7% in February, easing slightly from a +0.8% gain in January. Price growth remained strong in Brisbane, Adelaide, and Perth, but values were flat in Melbourne and Sydney. Year on year, national home values rose +9.6%, moderating from +10.2% rise in January on this basis. Globally, we should probably note that the aluminium price is up during this turmoil, now at a four-year high. And tin has taken off, now at a record high. Copper is near a record high too, but it isn't changed during this crisis; its been at the current level all year. Also globally, we should note that air cargo demand rose +5.6% in January from a year ago with international airfreight up +7.2%, driven by the +9.4% rise in the Asia/Pacific region, and restrained by the +1.4% riser in North America. Meanwhile passenger air travel rose +3.8% with international travel up +5.9%. It is notable that domestic air travel fell in the US on a year-on-year basis. But it also did in Australia as well. And ocean freight costs have surged in the past day, shocking many as ships need to be re-routed away from the Middle East. The UST 10yr yield is now just on 4.06%, up +10 bps from this time yesterday.  The price of gold will start today up +US$18 from yesterday at US$5296/oz. Overnight it got up to a new record high of US$5415 but it has retraced since then. Silver is down a sharp -US$6 at US$87/oz today also after an interim burst higher. American oil prices are up +US$3.50 at just on US$70.50/bbl, while the international Brent price is up +US$4 to be now just over US$77/bbl. These at +6% rises. Given the intensified Middle East tensions, this seems pretty restrained. But European natural gas prices have leapt overnight. The Kiwi dollar is -70 bps lower against the USD from yesterday, now just on 59.3 USc. Against the Aussie we are down -40 bps at 83.9 AUc. We are down -20 bps against the yen. Against the euro we are unchanged at 50.7 euro cents. That all means our TWI-5 starts today down -50 bps, now just on 62.9 and a one month low. The bitcoin price starts today at US$69,835 and up +5.5% from this time yesterday. Volatility over the past 24 hours has been high at just under +/- 3.4%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora. Welcome to Monday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news Trump has got his distraction war, flooding the recent zone of poor news with an adventure he has created. Business eyes will be on how the financial markets react. (Others can watch the politics.) So far, the equity futures markets have the S&P500 virtually unchanged (+0.1%), the US Treasury 10 year down -8 bps from their Friday close, and the USD (DXY) lower from Friday, but little-changed from a week ago. Oil prices will be closely watched, because the Strait of Hormuz has been closed by Iran. So far they are up 3% in off-market weekend reactions. Gold is up modestly so far too, but silver and platinum have jumped sharply, both gaining about +6% and both heading back toward the late-January peaks. Spreads, or the premium companies must pay over a risk-free US Treasury, are at their highest since November for investment grade companies, and their the highest since December for those with a sub-investment grade rating. But first, looking ahead this week, there is a raft of second tier data released locally, including some trade, and more importantly mortgage markets data. And we will get the Q4-2025 RBNZ Dashboard data, exposing the winners and losers among the local banks. In Australia. it will be all about the Q4-2025 GDP, and household spending data this week In the US on the economic front, they will have their non-farm payrolls report for February at the end of the week. We will get independent ISM PMIs and retail sales updated too. In China, data will be relatively light as Beijing insists its news attention is on their next five year plan meetings. But there will be PMIs out in China, as well as Canada, South Korea, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, South Korea, Taiwan, Hong Kong, and Singapore. Trade data are also scheduled from Indonesia, while inflation figures will be released in Indonesia, the Philippines, Thailand, South Korea, Vietnam, and Taiwan. Additionally, the Malaysian central bank is set to announce its latest monetary policy decision. Over the weekend, the US PPI release shows that inflation has their producer prices firmly in its grip. Year-on-year this measure of industrial inflation wasn't too special at +2.9%, but core PPI was up +3.4% and the jump in January from December of +0.5% grabbed analysts' attention. Tariff-taxes are driving the increases as importers refuse to absorb some of these costs anymore. Meanwhile some of this also showed up in the Chicago PMI for February. The Chicago Business Barometer was expected to ease lower. Rather it leapt into a strong expansion. It was so different to the data around it on the ground had suggested, it might be wise not to jump to any early conclusions on the gain. And let's not forget the growing worries about 'cockroaches'. Concerns about the risks of private credit are not going away just because they are overshadowed by geopolitical tensions. In fact, those tensions will bring risk aversion and likely magnify the private credit risks. Investors who want out could trigger something big. Across the Pacific, Korean exports turned in another gigantic result in February, showing that the extraordinary January was no fluke. Their exports were +29.0% that a year ago at a record US$67.5 bln for the month, and this was even though there were three fewer working days and the Lunar New Year holiday break. It is another extraordinary result. Both the US and China saw imports from Korea rise more than +30% for each. In China, we should keep an eye on their car industry. They have returned from holiday with a large excess of unsold stock and are responding with promotions that feature heavy discounting. This may trigger a reckoning for many carmakers, large or small. Like their property industry, it could have wide-ranging implications. And staying in China, according to estimates by China International Capital Corp, roughly ¥75 tln (NZ$18 tln) in household term deposits will mature this year, and most of it had maturities of one year or longer. Most will be reinvested, but with such enormous flows, even small amounts diverted (to say gold, or higher risk/return options) will have very important impacts. The UST 10yr yield is now just on 3.96%, down -6 bps from this time Saturday.  The price of gold will start today up +US$93 from yesterday at US$5278/oz. Silver is up +US$5.50 at US$93/oz today. When global markets reopen, it will be unsurprising to see these prices rise sharply. American oil prices are up almost +US$2 at just on US$67/bbl, while the international Brent price is now just under US$73/bbl. But when global markets reopen today, expect a sharp rise as well. The Kiwi dollar is unchanged against the USD from Saturday, still just on 60 USc. Against the Aussie we are unchanged at 84.3 AUc. We are little-changed against the yen as well. Against the euro we are holding at 50.7 euro cents. That all means our TWI-5 starts today basically the same as Saturday, still just on 63.4. The bitcoin price starts today at US$66,168 and up +0.7% from this time Saturday. Volatility over the past 24 hours has been moderate, also at just over +/- 2.3%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Artificial intelligence (AI) should be a key election year issue especially given the technology has major potential to help improve New Zealand's productivity, says Mark Laurence. Laurence, founder and CEO of Ten Past Tomorrow which is an AI consultancy and education business, spoke to interest.co.nz in a new episode of the Of Interest podcast. "I'm kind of flabbergasted that it hasn't become a political talking point," Laurence says, noting AI "has become a really hot political topic" in the United States over the past six months. He describes AI as "a general purpose technology." "My focus is how does New Zealand, as a small, educated, economically prosperous and politically stable country, how do we become the best users of this technology where we as a nation, we're very skilled and very literate and know how to use it, know when to use it, know how to use it responsibly and ethically?" "Because you can scale from the individual productivity to national GDP on a very clear line." Laurence points out Singapore is spending NZ$1.25 billion over five years with the goal of tripling their AI practitioner workforce. The United Kingdom is investing US$500 million per year over the next five years with the goal of having 10 million AI literate workers by 2030. And Finland is spending €100 million per year for the next four years in AI readiness training. So does he think getting a more AI literate NZ population needs to be government led? "I do [think so] and I think importantly it needs to be non-partisan," Laurence says. " Whichever party wins [the election], this needs to happen. It's like to me, it's that critical to New Zealand productivity challenges. And so yes, it absolutely needs to be publicly led." However, he adds that in the countries making public investment he cites, private investment generally "floods in behind it." "We [NZ] have an AI strategy which was released last year. It's pretty flimsy and really if you kind of read between the lines, it's basically saying at the moment we're leaving this to the private sector to kickstart. I do think the stimulus needs to come, the action needs to come, the motivation needs to come, from public sectors," says Laurence. "Simply, this nation has an obsession with productivity challenges that we've developed in the last number of years. That's why I say sitting still is not a neutral option, it's a decision with consequences. The gap compounds [and] moves from being a gap to actually a chasm." In the podcast audio Laurence also talks about how NZ businesses are working with and thinking about AI, AI training, education opportunities from AI, guardrails and regulation, the previous technological breakthrough he compares AI with, how the effect and harms of AI on children could be worse than social media, why he says "AI is going to make lazy people super lazy and it will give dedicated people superpowers," and more. *You can find all previous episodes of the Of Interest podcast here.

Kia ora.Welcome to Monday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news the modest US inflation rate reported for January is fueling a disconnect and scepticism in US households.But first, this is a week where we will get the next RBNZ OCR review on Wednesday, important because it is Governor Brennan's first. And she will get her first inkling of January inflation impulses on Tuesday, and may have the January REINZ data later today. And she will likely know how the bank's consumer and business surveys are tracking, especially on inflation expectations.In Australia, the key data will come on Thursday with their January labour force updates. And the RBA will release the minutes of it February 4 meeting on Tuesday, always a potential market-moving event.The US Fed will also release its minutes this week. And we will get the advance estimate of Q4-2025 US GDP, as well as the Fed's [referred inflation gauge, the PCE. Canada will chime in with its own key releases.In China, markets will be closed for the week-long Lunar New Year holiday from February 16 to 23, although January foreign direct investment data is still expected to be released. Elsewhere, trade figures are due from Singapore, Malaysia, and New Zealand, while Malaysia will also publish inflation data.Over the weekend, China reported that that price deflation in their housing market picked up in January for a third straight month at a faster pace, overall down -3.1% from a year ago. In January, the year-on-year sales price of existing homes in first-tier cities fell by -7.6%. Specifically, prices in Beijing, Shanghai, Guangzhou, and Shenzhen falling by -8.7%, -6.8%, -8.3%, and 6.5% respectively. In second- and third-tier cities, the year-on-year sales prices of existing homes fell by -6.2% and -6.1%. Prices for new-built houses fell too, but only by -2.1%.Staying in China, and as expected, the normal January surge in new yuan lending by banks occurred again this year, but by less than expected and by a -8.2% lower level than for 2025, -4.3% lower than for January 2024. And it was -5.8% lower than what was expected. It is a soft result and is typically followed by a sharply lower level of lending in February during the Spring Festival/CNY period. 2026 is off to a languid start for them.Meanwhile, China's export economy is still functioning at full speed. Their current account surplus widened to an unprecedented US$242 bln in Q4-2025, sharply higher than the US$164 bln recorded a year earlier.India also released bank loan data overnight, and their firms are borrowing up big. In fact, it was up +14.6% in January from a year ago, the strongest surge in a year.Malaysia reported that its economic activity rose +6.3% in Q4 2025 from a year ago, revised up from an initial 5.7% and accelerating from 5.4% growth in Q3. This was their sharpest expansion since Q4-2022, with broad gains in agriculture, driven by oil palm output (+16, manufacturing, and services.On Saturday in the US CPI inflation came in at 2.4% for the year to January, slightly below the expected 2.5%. Core inflation came in at the expected 2.5%. This result was all due to lower petrol prices and falling used car prices. However, food was up +2.9%, and rents were up +3.0%. Electricity prices were up +6.3% (thank you, AI) and home gas was up +9.8%. It will be hard for households to feel inflation is under control.And key will be how the US Fed will interpret this data when setting their policy rates at their next meeting on March 19, 20206 (NZT). Markets currently expect a hold, and at least until the middle of the year.And one reason food prices seem higher there than the official data is that US beef cattle herd is now at its lowest in 75 years. This helps explain why US imports are soaring, and prices are high & rising.And don't forget, it is a long holiday weekend in the US for Washington's Birthday/President's Day. US-based activity will be low tomorrow and that will show up in our financial markets.The UST 10yr yield is still just under 4.06%, little-changed from Saturday but it is down -15 bps from this time last week.The price of gold will start today up +US$21 from Saturday at US$5041/oz. Silver is down -50 USc at US$77.50/oz today.American oil prices are little-changed at just under US$63/bbl, while the international Brent price is still under US$68/bbl.The Kiwi dollar is little-changed against the USD from Saturday, now just on 60.4 USc and down -10 bps. Against the Aussie we are unchanged at 85.4 AUc. We are down marginally again against the yen. Against the euro we are unchanged at 50.9 euro cents. That all means our TWI-5 starts today little-changed, now at 63.8 and down -10 bps from Saturday.The bitcoin price starts today at US$68,565 and down -0.8% from this time Saturday. Volatility over the past 24 hours has been modeST at just under +/- 1.5%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora.Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news global financial markets are showing nerves ahead of tomorrow's US CPI data, not only because there is upside risk that will restrain the US Fed from, rate cuts, but also gun-shy after getting non-farm payrolls reports they basically didn't believe. Sanitised US data is a risk no-one wants (other than the White House.)First in the US, there were 248,000 initial jobless claims last week, a small decrease but the one explained by seasonal factors. There are now 2.215 mln people on these benefits, more than the 2.19 mln in the same week a year ago.And American existing home sales came in sharply lower in January that the good December level. They ran at a -4.4% lower rate than in January 2025, and even lower than the unusually low January 2024 level. They fell everywhere and was the largest fall in four years, although prices rose marginally from a year ago.The New York Fed released a detailed review of "who pays" the Trump tariff taxes, and surprise, surprise, they found it is almost exclusively (90%) Americans who pay. Who knew? They also found that after these tariffs, China's share of US imports is basically unchanged. Some people are slow learners - tariff taxes are a tax on yourself. But you have to take stage one economics to learn this stuff.In India, they released CPI inflation data overnight and it came in at 2.75%, their highest since May. And we should also probably note that protests in India are growing against their recently-agreed free-trade deal with the US.In China, their Spring Festival / Chinese New Year formally starts on Tuesday, and a lot depends on the consumer spending patterns during this two week annual break. Forward bookings for travel indicate a record level of travel, a sharp jump in international travel, and a preference for independent, non-package holidays. Thailand, Russia, Turkey and the Philippines are getting outsized bookings this year.Separately, China has rolled back its steep tariff penalty on EU dairy products.In Australia. consumer inflation expectations rose in February to 5.0%. This follows a seven-month period of below five-per cent expectations. The increase in February is present across a number of inflation expectations measures.And staying in Australia, chances are rising that extended drought conditions related to the return of an El Niño weather pattern that may come later in 2026. It will be hotter there too. If that occurs, there will be spillover implications for New Zealand, particularly for the rural sector.Global container freight rates were little-changed last week (-1%), to be -38% lower than year-ago levels. Once again, the key change were weaker outbound China rates. Although shifting in between, bulk cargo rates are essentially unchanged from a week ago, but they are +150% higher than year-ago levels. (But that base was unusually low.)The UST 10yr yield is now just over 4.11%, and down -6 bps from yesterday in a hard shift to 'safety'.The price of gold will start today down -US$122 from yesterday at US$4953/oz. Silver is down a very sharp -US$8 at US$76/oz and even more volatility.American oil prices are down -US$2 at just over US$63/bbl, while the international Brent price is now just under US$68/bbl.The Kiwi dollar is down a minor -10 bps against the USD from yesterday, now just over 60.5 USc. Against the Aussie we are up +20 bps at 85.2 AUc. We are down again against the yen. But against the euro we are unchanged at 51 euro cents. That all means our TWI-5 starts today also little-changed, still at 63.9.The bitcoin price starts today at US$66,288 and up +0.5% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.7%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora.Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news of what seems to be an outlier jobs report that has financial markets sceptical.US non-farm payrolls were claimed to have risen +130,000 in January in delayed data released today, far above the downwardly revised +48,000 level for December and more than double analysts' collective estimates. All the gains seem to be in their healthcare sector. If it stands, it undermines the case for Fed rate cuts.Market reactions have not been supportive, with bond yields rising, rate curves fattening, the equity markets falling, and the USD falling.The detail of this jobs report remains 'interesting' all the same. Raw (not seasonally adjusted) data shows payrolls actually fell -2.65 mln in January from December, down -2.85 mln from November. And nested within this data are revisions for calendar 2025 now showing employment growth for 2025 revised down to +181,000 from +584,000 previously reported, implying average monthly job gains of just +15,000.These revisions bring the official data back looking like the private ADP data - except for the January headline result. Markets expect this to be revised sharply down in coming months.US mortgage applications fell again last week, the third consecutive dip, although not as sharp as the prior two.There was another US Treasury bond auction overnight, this one for their ten year Note. It was well supported. The median yield came in at 4.11%, down from the 4.13% at the prior equivalent event a month ago.Meanwhile, the US budget deficit keeps getting worse. It will grow in fiscal 2026 to -US$1.85 tln, the Congressional Budget Office said overnight. Current policy settings are worsening the country's fiscal picture amid low economic growth, particularly the enormous tax-cuts for the rich. They say the "One Big Beautiful Bill" tax cuts will will add $4.7 tln to US deficits.Across the Pacific, there is still no inflation in China, and it has turned toward deflation faster than expected. Their annual inflation rate eased to +0.2% in January from an already very low 0.8% in the previous month. This is its lowest level since October and below market estimates of 0.4%. Food prices fell for the first time in three months (-0.7% vs 1.1% in December) while non-food inflation slowed sharply too (0.4% vs 0.8%). Meanwhile, Chinese producer price deflation eased to -1.4%.China also released January car sales data, coming in at 2.35 mln for the month. However, that was -3.3% lower than for January 2025 and +-3.8% lower than the same month in 2024. Notably soft were NEV sales in January. Perhaps we are seeing signs of maturing (or exhaustion?) in this very dynamic market. It's is hugely important to China's industrial base, selling more than 34 mln units in 2025.In Australia, the number of new owner-occupier new home loan commitments rose +7.5 in the December 2025 quarter compared with a year ago. On a value basis, that rose +18.9%. For housing investor loans for the same periods, the number of new loans rose +24%, and their value rose +32%.The UST 10yr yield is now just under 4.17%, and up +2 bps from yesterday. The price of gold will start today up +US$58 from yesterday at US$5075/oz. Silver is up +US$3.50 at US$84/oz and extending its new volatility.American oil prices are up +US$1 at just on US$65/bbl, while the international Brent price is now just under US$70/bbl.The Kiwi dollar is up a minor +10 bps against the USD from yesterday, still just under 60.6 USc. Against the Aussie we are down -50 bps at 85 AUc. We are also down against the yen. But against the euro we are up +20 bps at 51 euro cents. That all means our TWI-5 starts today little-changed, still at about 63.9.The bitcoin price starts today at US$65,965 and down -5.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.8%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora.Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news financial markets are taking more notice of the lackluster US economic data today, with Wall Street equity markets hesitating, bond yields in a defensive twist, and the USD staying weaker.But first, the overnight dairy Pulse auction not only confirmed the prior week's sharp rises, it added to them. WMP was up a marginal +0.4% from a week ago to be up +14% from the start of 2026. Butter was up +6.8% from last week, up +18% year-to-date. And the SMP price was up +1.7% from last week, also up +14% so far this year. Everyone in the industry will welcome this confirmation of the recent rising trend, even if some of it is just USD weakness.Not so positive was the US retail sales report for December, which showed zero growth from November, to remain +2.3% higher than a year ago. Given CPI inflation is +2.7%, there is clear stagflation involved here.Meanwhile the weekly ADP employment report only showed private payrolls gaining +6,500 nationally, well within the margin of error. But at least it was better than the prior week's no-change.The January NFIB optimism index was also little-changed and still below the benchmark 100 level.US household debt as at the end of 2025 was recorded at US$18.8 tln, a +4.2% rise from the end of 2024. Non-housing debt rose only +2.6% in the same period, so Americans are taking on more housing debt at a faster pace. The same report shows delinquency rates on all loans rose to 4.8% of outstanding household debt, the highest level since 2017, driven by higher defaults among low-income and young borrowers.The overall soft US data probably helps make the case for another Fed rate cut at their next meeting on March 19, 2026 (NZT) but there is a lot to be revealed before then.In Australia, consumer sentiment slipped in February, and not insignificantly. Recall, the RBA has recently pushed through a rate rise. Analysts say the fall is a muted response compared to previous rate hikes. Over 80% of those surveyed expect interest rates to rise further in the next 12 months. Homebuyer sentiment has sunk as price expectations hit new 15 year high.Meanwhile, the NAB business sentiment survey results inched up in January, although revenues softened. That was offset by costs easing a bit faster.The UST 10yr yield is now just under 4.15%, and down a sharpish -5 bps from yesterday.The price of gold will start today down -US$55 from yesterday at US$5018/oz. Silver is down a sharp -US$3 at US$80.50/oz and continuing its extreme volatility.American oil prices are down -50 USc at just on US$64/bbl, while the international Brent price is now just under US$69/bbl.The Kiwi dollar is little-changed against the USD from yesterday, still just under 60.5 USc. Against the Aussie we are up +20 bps at 85.5 AUc. Against the euro we are holding at 50.8 euro cents. That all means our TWI-5 starts today unchanged at 63.9.The bitcoin price starts today at US$69,517 and down -0.7% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.3%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora.Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news Taiwan's export prowess shows no signs of flagging.But first, US inflation expectations fell to 3.1% in January, the lowest in six months, compared to 3.4% in December. Consumers expect a slowdown in prices for petrol, and a slight easing in rent rises. But they still expect food prices to rise 5.7% over the next year.The release of US labour market data, and their CPI update later in the week is where the focus is currently. And the US dollar is weak again, back near its post-pandemic low.In China, their economy is gearing up for the Year of the Horse. China's Spring Festival holiday starts a week from today on February 17 and runs to March 3, 2026.Taiwanese exports in January were spectacular yet again. They were up +70% year-on-year to an all-time high of US$66 bln in the month, following stunning +43% growth in the previous month. Analysts were expecting a +50% rise. It is a virtuous result with every category of their export trade rising. Exports to the US jumped +150%, and are now accounting for one third of their third export trade - about the same as it is toi China.Malaysia's industrial production rose +4.8% in December from a year ago, the sixth straight month it has expanded by more than +4%.In Australia, household spending fell -0.4% in December on a seasonally adjusted basis. The only category that rose notably was alcohol sales. This follows rises of +1.0% in November and +1.4% in October. Household spending over the year remains high, up +5.0% in the year to December 2025.The UST 10yr yield is now just over 4.20%, and little-net change from yesterday.The price of gold will start today up +US$107 from yesterday at US$5073/oz. Silver is up a sharp +US$5.50 at US$83.50/oz after recovering from a 2026 low.American oil prices are up +US$1 at just on US$64.50/bbl, while the international Brent price is now just under US$69/bbl.The Kiwi dollar is up +30 bps against the USD from yesterday, now just under 60.5 USc. Against the Aussie we are down -½c at 85.3 AUc. Against the euro we are down -10 bps at just on 50.8 euro cents. That all means our TWI-5 starts today just over 63.9, and up +10 bps from yesterday.The bitcoin price starts today at US$70,013 and down -1.0% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.5%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora.Welcome to Monday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news all eyes will be on the US tech industry selloff that gathered pace last week, delivering collateral damage to cryptos, and a very volatile ride for precious metals.But first, this coming week will feature the delayed release of the January US non-farm payrolls report on Thursday (markets expect +70,000), and their CPI report on Saturday (markets expect 2.5%). Deviation from those expected levels will likely have financial market implications.Australia is set for a busy data week, with releases including household spending, consumer and business confidence, building permits, home loans, and consumer inflation expectations.In New Zealand the key data this week is for Q4-2025 ready mixed concrete, and migration updates. Plus Q1-2025 inflation expectation data.China will release its CPI and PPI data on Wednesday (expect 0.4%) as well as January new loan data this week too.In China over the weekend, their FX reserves got a boost from the weak USD in January which helped boost these by +US$41 bln from December to US$3.4 tln and the highest in more than a decade. That is up from US$3.2 tln in January 2025. They also added to their gold holdings, adding +40,000oz in the month to 74.19 mln oz. That is up +US$1.8 tln in a year.Also over the weekend, US economic data looked shaky. Initial US jobless claims rose by +22,000 from the previous week to 252,000 on the last week of January, sharply above market expectations of 212,000. There are now 2.215 mln people on these benefits, up +78,000 from a week ago but that is lower than a year ago (2.252 mln), even if it is very much higher than two years agoUS job openings fell by -386,000 to 6.5 mln in December, the lowest since September 2020 and well below market expectations of 7.2 mln.Job layoffs in January came in at 108,500, the highest level for a January since 2009.The University of Michigan's consumer sentiment index rose marginally in February from its record low levels and it was a third consecutive monthly increase. Analysts had expected it to dip again. Despite the improvement, sentiment remained roughly 20% below January a year ago. The gains were driven largely by consumers with significant stock holdings, while sentiment among households without significant equity exposure stagnated at depressed levels. Year-ahead inflation expectations fell sharply to 3.5% from 4.0% in January, the lowest level since January 2025, while longer-term inflation expectations edged up for a second month to 3.4% from 3.3%.The jobless rate in Canada fell to 6.5% in January from 6.8% in the previous month, undershooting market expectations of 6.8%. But this 'improvement' was only due to fewer people looking for work. Their labour force contracted by -94,000, pushing the participation rate down to 65.0% from 65.4%. They lost -25,000 jobs in the month, interrupting the recent run of gains. But this was driven by a -70,000 fall in part-time jobs whereas full-time positions rose +45,000.Meanwhile Canadian retail sales data in both November and December came in quite positive.And their January Ivey PMI remained expansionary, a surprise because it was expected to shift back into contraction.Japan has been voting in their snap national election. It was essentially a referendum about Sanae Takaichi, a die-hard conservative in the Shinzo Abe mould. She has won convincingly with a rare single-party majority. Actually, it is better that that, a rare two-thirds super-majority.There was an election in Thailand as well, one where the ruling conservative/royalist/military party won, with 45% of seats decided, plus the proportional representation seats.At the end of last week, around the world, there were a series of central bank policy updates. The Reserve Bank of India kept its its key policy rate at 5.25% during its overnight February after cutting it by -25 bps at the prior December meeting. This is what was expected.In the EU, the ECB left its policy interest rates unchanged at its first policy meeting of 2026, on the basis that inflation is stable an within its target policy range. It is the "good place" the central bank wants to see.The Bank of England left its rate unchanged too, at 3.75%. But that was a close-run thing with a 5-4 vote.German factory orders surged +7.8% in December from November, defying market expectations for a -2.2% drop and accelerating from November's marginally revised +5.7% gain. It is up more than +13% from a year ago. It marked the fourth straight monthly increase and the strongest since December 2023.Australia recorded a merchandise trade surplus of +AU$6.7 bln in December, down -23% from the same month in 2024, taking the full 2025 surplus to +AU$45.0, which in turn was -33% lower than for all of 2024. Exports were $523.2 bln for the year, up only +1%. That gain was only possible because gold exports rose +66% to AU$60.9 bln for the full year. Rural exports rose +13.7% to AU$77.5 bln in 2025. Other mineral export receipts tanked.The UST 10yr yield is now just on 4.21%, unchanged from Saturday.The price of gold will start today very little-changed from Saturday at US$4966/oz. Silver is also little-changed at US$78/oz. In China, gold sales to investors topped those for jewelry from the first time in 25 years.American oil prices are down about -50 USc at just on US$63.50/bbl, while the international Brent price is now just on US$68/bbl. A week ago these prices similar.The Kiwi dollar is down -10 bps against the USD from Saturday, now just under 60.2 USc. Against the Aussie we are little-changed at 85.8 AUc. Against the euro we are down -10 bps at just on 50.9 euro cents. That all means our TWI-5 starts today just under 63.8, and down -10 bps from Saturday.The bitcoin price starts today at US$70,693 and up +1.1% from this time Saturday. But it is still down -10% from this time last week. Volatility over the past 24 hours has been modest however at just on +/- 1.9%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

​By Gareth VaughanThe Reserve Bank of Australia's decision to lift its cash rate 25 basis points this week means it's now 160 basis points higher than the Reserve Bank of New Zealand's official cash rate highlighting differing levels of assertiveness between the two central banks, Imre Speizer, Head of New Zealand Strategy at Westpac, says.The RBS's cash rate is now at 3.85% with the RBNZ's OCR at 2.25%. Speaking in a new episode of the Of Interest podcast, Speizer says it has been 13 or 14 years since there has been such a gap, with the two economies tending "to cycle together most of the time.""It comes down to a different central bank approach. The RBA has deliberately maintained a fairly dampened approach to tackling either low inflation or high inflation. So when it has needed to hike or cut, it has done [so] in a very cautious and drawn out manner. And by doing so it hasn't had to flip around as much as the likes of some other countries," says Speizer."The central bank of New Zealand has been pretty much an activist in terms of tackling inflation. So when inflation was high in the most recent cycle it went fairly hard and hiked rates a lot to bring it back down again, and that then amongst other things did help to engineer a brief recession.""It paid a cost to do so but it got inflation under control. Now we're basically coming out of that era and [economic] growth is starting to pick up. And so the Reserve Bank [of NZ] is now faced with the task of thinking well at what point do we need to start thinking about pushing rates up to prevent inflation from running away?""I guess it just means the assertiveness of the relative central banks is probably explained [in] why we've ended up with such big differences between New Zealand interest rates and say the Australian interest rate. In time that will rectify itself and will get back to something that looks a bit more normal, I.E. Kiwi rates a little bit higher than Aussie rates. But I think it's going to be some way down the track," Speizer says.He says lots of people are asking how the cash rate differential between New Zealand and Australia might play out with mortgage rates."There shouldn't be any direct impact if the cause of Australian rate rises is unique to Australia. But much of the time, there is a common global factor at play, so New Zealand rates do follow Australian and US term rates," Speizer says answering a follow-up question to the podcast interview."Also, if the strong Australian economy is seen as eventually benefitting New Zealand's economy, New Zealand term rates could rationally follow Australian rates higher in dampened fashion."In the podcast audio he also speaks about the direction of swap rates and what it means for mortgage rates, what the yield curve's suggesting at the moment, the outlook for NZ government bonds, the impact the volatility of US President Donald Trump's administration has on the US dollar and financial markets more broadly, incoming Federal Reserve Governor Kevin Warsh, the impact of US government shutdowns on economic data availability, geopolitics and more.​

Kia ora,Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news the real economic markers in the world's largest economy painted a very lackluster picture today.US mortgage applications retreated again last week, for a second consecutive week. But these are still running well above year-ago levels. The refinance activity retreated but the big fall was for new purchase finance.Private businesses in the US added just +22,000 jobs in January according to the comprehensive ADP survey, (sample size of 26 mln) following a downwardly revised +37,000 rise in December and below forecasts for a +48,000 rise. Among these lackluster totals hiring in the health care sectors was a standout, adding +74,000 jobs. It was retrenchment in many others, including manufacturing.Remember the January non-farm payrolls report won't be released at its usual time on Saturday (NZT) due to the shutdown delays. It will now come next Thursday, February 12 (NZT).Meanwhile the ISM services sector PMI stayed in relatively good shape in January, although December was revised lower. New order growth slowed however, and price increases, pushed by tariff-taxes, rose.This is not translating into consumers buying cars at a higher rate. In fact, in January the annualised rate was only 14.9 mln vehicles, the slowest month since December 2022, and -4.1% lower than in January 2025.In China, and unlike the official January services PMI which was more negative, the private S&P Global version is more positive. The RatingDog China General Services PMI rose in January to a better expansion, from December's six-month low and better than market expectations. It's the strongest expansion in their services sector since October, driven by stronger growth in new orders, and a fresh increase in foreign sales.Meanwhile China said its fiscal revenue fell in 2025 for the first time since the pandemic. Sharp falls in non-tax takings outweighed a modest recovery in tax revenue.In Europe, the surging value of the euro helped push down their January CPI inflation level to 1.7%. Food, however, was up 2.7%.Australia released some living cost indexes yesterday, following the overall 3.8% December CPI. They say living costs for 'employees' rose just +2.2% in the year to January, but for 'aged pensioners' it was up +4.2%.The UST 10yr yield is now just on 4.27%, down -2 bps from this time yesterday. The key 2-10 yield curve is still at +71 bps.The price of gold will start today down -US$120 from yesterday at US$4860/oz. Silver is down -US$1 to US$85.50/oz. Some non-precious metals are lower too.American oil prices are up a bit less than +US$1 at just under US$63.50/bbl, while the international Brent price is now just on US$67.50/bbl.The Kiwi dollar is down -60 bps against the USD from yesterday, now just over 59.9 USc. Against the Aussie we are down -40 bps at 85.8 AUc. Against the euro we are also down -40 bps at just on 50.8 euro cents. That all means our TWI-5 starts today just under 63.6, and down -50 bps from yesterday.The bitcoin price starts today at US$72,550 and down another -3.3% from this time yesterday, and falling. The last time it was this low was in November 2024. Volatility over the past 24 hours has been moderate at just on +/- 2.6%.Please note that it is a public holiday in New Zealand on Friday, Waitangi Day. This podcast will not be published on Friday, but will return on Monday.

Kia ora,Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news gold and silver are currently experiencing the volatility we saw with bitcoin in 2024/25. Meanwhile, bitcoin is being dumped heavily today.Today starts with a series of unfortunate delays. The overnight dairy auction has concluded after an extended delay, but there is further delays in reporting the outcome. We will update this item when those results come through.And there are delays in some key US data due to the snap federal government shutdown. We expected to report the December JOLTs report today but it is in abeyance now. And the January non-farm payrolls report will get delayed as well for the same shutdown reason.But we did get US logistics data overnight, their LMI. This rose because first started building inventories in the way they did in January a year ago, but not excessively. Of note however is that inventory costs rose a sharp +8.4% this year, which will no doubt focus management minds.There was a secondary survey out overnight on economic optimism in the US and that was moderately positive. The RealClearMarkets/TIPP Economic Optimism Index rose to its highest since August and above expectations. But to be fair it is still below the 2025 average and -6% lower than its year-ago level. But at least it is off its November low.In Canada, their large aircraft manufacturing industry is holding its breath. The Trump FAA is withholding technical certification for new-built Canadian aircraft, waiting for the president to decide on the issue.There was an unusual and notable rise in consumer sentiment in Taiwan in January, to its highest level in nine months. It is back up to mid-2023 levels after a general decline that started in September 2024.And China warned Panama there would be "heavy prices" to pay after a court ruling in Panama annulled Hong Kong-based CK Hutchison's contract to operate two ports at the Panama Canal. This reaction will have relevance for the Darwin port issue, where a new 99 year lease owned by a Chinese firm is under threat of annulment too.In Germany, and despite solid demand holding up, investors there are expecting and getting higher risk premiums for their government 30 year bond. It yielded 3.55% today, its highest in 15 years. Its 10 year bond is almost at 2.90%, and also near its 2011 levels. Germany plans to raise more than €500 billion this year to fund infrastructure upgrades and for defence spending. But most other European countries are doing the same, and that is driving up yields.In Australia, and as expected, the RBA raised its policy rate by +25 bps to 3.85% and ending its shortish easing cycle. Most big banks there have already announced a full pass-through to their home loan and business lending rates. The RBNZ reviews its policy rate on February 18, 2026 but is not expected to make any changes to its 2.25% rate at that time.The UST 10yr yield is now just on 4.29%, up +2 bps from this time yesterday.The price of gold will start today up +US$273 from yesterday at US$4980/oz. Silver is up +US$8 to US$US$86.50/oz. Some non-precious metals are bouncing back sharply too.American oil prices are up +50 USc at just over US$62.50/bbl, while the international Brent price is now just over US$66.50/bbl.The Kiwi dollar is up +40 bps against the USD from yesterday, now at 60.5 USc. Against the Aussie we are down -10 bps at 86.2 AUc. Against the euro we are up +30 bps at just on 51.2 euro cents. That all means our TWI-5 starts today just under 64.1, and up +30 bps from yesterday. And the Chinese yuan is at its strongest level against the US dollar since 2023.The bitcoin price starts today at US$74,990 and down -5.0% from this time yesterday, and falling. The last time it was this low was in mid November 2024. Volatility over the past 24 hours has been modest at just on +/- 1.7%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news commodity prices are still falling after last week's crazy surge. The retreats are widespread and substantial. Oddly, it isn't having much effect on commodity-based currencies however.But first today, the January factory PMIs for the US were positive, based on good new order growth. The closely-watched local ISM version expanded for the first time in 12 months, preceded by 26 straight months of contraction. Prices rose sharply for both inputs and outputs, and some buying appears to be to get ahead of expected price increases due to ongoing tariff issues, they said.Meanwhile the S&P Global factory PMI came in with similar trends, finding rises in production when sales growth was subdued. These two surveys are positive, but we should remember that January is "reorder month" and with the tariff threats lingering, it might mean this distortion is playing an outsized role.In China, their PMI's trends were not too different from the US, even if they were in contrast to their official version. They reported an expansion in production at a faster pace amid higher new orders. Employment rose Output charges increased for the first time in 14 months.In Taiwan, their factory sector recovery gathered pace in January, but cost pressures intensified.In Singapore and Malaysia, they recorded a January uptick, but the expansions there are still modest in their factory sectors.India and the US announced an agreement to lower tariffs and lower the temperature in their trade disputes. Given that India's exports to the US were already rising even with the higher tariff's, this is likely to be a substantial boost for India.Back in the US, and under the radar, they have entered a new federal government shutdown, with layoffs. This one is expected to be short because a deal between Congress and the White House seems to be in effect. But it will delay this weekend's non-farm payrolls report announcement.In Australia, Cotality said low supply levels, first home buyer incentives and a resilient labour market are combining to keep house prices rising. They are up +9.4% nationally from a year ago. But there is wide variation. They said mounting affordability and debt headwinds are butting up against 'fragile sentiment'. This is especially true where the prices are highest, in Sydney and Melbourne, where prices rose only +6.4% and +5.4% in January from a year ago, the least of any major city. The median house price in Sydney is now AU$1.29 mln (NZ$1,5 mln). It is now also above AU$1 mln in Brisbane at AU$1.055 mln (NZ$1.22 mln).The UST 10yr yield is now just on 4.27%, up +3 bps from this time yesterday.The price of gold will start today down -US$183 from yesterday at US$4707/oz. Silver is down -US$6 to US$US$78.50/oz. Non-precious metals are falling hard too.American oil prices are down -US$3 at just underer US$62/bbl, while the international Brent price is now just on US$66/bbl.The Kiwi dollar is down -20 bps against the USD from yesterday, now at 60.1 USc. Against the Aussie we are also down -20 bps at 86.3 AUc. Against the euro we are up +10 bps at just on 50.9 euro cents. That all means our TWI-5 starts today just under 63.8, and down -10 bps from yesterday.The bitcoin price starts today at US$78,946 and recovering +2.0% from this time yesterday. Volatility over the past 24 hours has been high at just on +/- 3.0% with all the fall coming yesterday.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Monday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news commodity and financial markets delivered some rather spectacular gyrations over the weekend, forcing investors to review how they are going to deal with the 'certainty of uncertainty' enveloping global markets.But first this week, our local coverage will be dominated by Wednesday's Q4-2025 labour market report. If it brings a notable improvement from the expected no-change 5.3% jobless rate, then the recent high inflation rate (3.1%) will get more of the RBNZ's attention at its February 18 meeting.Also this week, the RBA is meeting tomorrow to review Australia's monetary policy settings. A +25 bps change is now expected taking this rate to 3.85%, a sharp adjustment in sentiment following the strong December CPI data (3.8%).Elsewhere, important labour market data will come from the US at the end of the week via their January non-farm payrolls report. Markets expect a modest +70,000 job gain there, slightly better than the disappointing December +50,000 rise. Before that, there will be their JOLTs report, the ADP jobs report, and the layoff data for January. Then we get the first February consumer sentiment report, and it is expected to stay near its historic lows.There will be many more PMIs reported this week. And the EU will release its CPI data update, the ECB will review its policy rate. India will too. As will England.In Japan, they will release business sentiment survey results.But the week has already started in China, with dour official PMI survey results released. Their factory sector slipped back into contraction indicating their December expansion was a rogue result. Their services PMI also reverted to contraction as well, and they will be very disappointed. Neither was expected to reverse in January. The non-official PMIs will be released later today.Also over the weekend, Taiwan said its economy expanded at more than a +12% rate in Q4-2025 in a spectacular release, and their best quarter ever. That means all of 2025 was up +8.6%, even better than the outstanding 2025 gain of +5.3%. No wonder Beijing covets the neighbouring island nation.In Japan, they reported that its retail sales unexpectedly fell in December, although it did revise up its November retail sales results.In South Korea, the pandemic recovery excepted, their exports rose at a record +34% year-on-year rate in January to a massive US$66 bln. This is largely as a result of booming tech exports to China and the US. And it sets up 2026 with a great start, after 2025 exports also hit all-time records.Indian bank loan growth is still rising very fast indeed, up more than +13% year on year in its January 9, 2025 data released over the weekendIn the US, Trump said he will appoint Kevin Warsh from the conservative Hoover Institute and member of the billionaire Este Lauder family, to replace Powell when Powell's term ends in May 2026. The choice seemed to trigger the precious metals selloff. Trump once thought of appointing Warsh in 2017 but pulled back on doubts he would be compliant. Since then Warsh has become more MAGA.US producer prices rose +3.0% in December from the same month a year ago, defying expectations they would fall to +2.7%. Core data was up +3.3%, the fastest rise since July.Meanwhile in Chicago, the region's PMI made a spectacular recovery, one quite unexpected. New orders rose in this survey, employment surged. It is in complete contrast to the prior 25 consecutive months of decline. (However it will be worth waiting a month to know if this isn't just a rogue survey, one they have every two years or so. The last such unusual surge in November 2023 wasn't sustained.)In Europe, Eurozone economic activity rose +1.5% in 2025, up +1.6% in the wider EU, up from +0.9% in 2024 and better than the European Commission's projection of +1.3%. Resilient household consumption, lower borrowing costs and easing inflation, and a surge in exports to the US, all contributed to the better result. Germany and Italy were laggards, France about average, and Spain expanded at double the overall average.The UST 10yr yield is now just on 4.24%, unchanged from this time Saturday, down -2 bps for the weekThe price of gold will start today little-changed from Saturday at US$4888/oz when the big crash happened. Silver is down to US$US$84.50/oz.American oil prices are up +50 USc at just over US$65/bbl, while the international Brent price is now just under US$69/bbl. From a week ago these prices are up +US$3.50/bbl.The Kiwi dollar is down -10 bps against the USD from Saturday, now at 60.3 USc. That is a weekly appreciation of +100 bps. From the start of the month it is up +300 bps. Against the Aussie we are unchanged at 86.5 AUc. Against the euro we are also unchanged at just over 50.8 euro cents. That all means our TWI-5 starts today just on 63.9, and down -10 bps from Saturday, up +80 bps for the week, up +200 bps for the month, almost all because the USD devaluation in global markets.The bitcoin price starts today at US$77,404 and down a very sharp -6.8% from this time Saturday. That makes it down -18% for the week. Volatility over the past 24 hours has been modest however at just on +/- 0.8% with all the fall coming Saturday.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

By Gareth VaughanA new all-of-government strategy to tackle organised crime aims to make New Zealand the hardest place in the world for organised criminal groups to do business and following the money is key to the fight, says the Chairman of the Ministerial Advisory Group on Transnational, Serious and Organised Crime.One of the Ministerial Advisory Group's recommendations is to broaden the legal definition of money laundering, with barrister Steve Symon, who chaired the Advisory Group, saying money is the key driver."The reason they operate in New Zealand is money. I'm not saying that we will cure the problem of organised crime globally, but we can make New Zealand the hardest place for organised crime to operate, such that they'll see other markets as more lucrative," Symon says in a new episode of interest.co.nz's Of Interest podcast."We're effectively saying 'organised crime don't operate here, go elsewhere to do that.' We have to make it as challenging as possible for organised crime to profit from it, to use money.""The money laundering regime is a key aspect of that. Obviously there has to be a way for organised crime to take the money that they get from crime and benefit from it. Transfer it, launder it... into a way that they can use it," says Symon."The challenges that we have in relation to the current money laundering regime [are] probably best demonstrated by the small number of money laundering cases that go through our courts. We know that the drug trade is driven by organised crime. And...theoretically, for every drug case you should have a money laundering case as well."Symon says fortunately most New Zealanders won't be aware of the problem of organised crime, but they will see the symptoms of it."The methamphetamine use, particularly in our rural communities, [which] is decimating some of our rural communities. The advent of the fraud that is spreading. One in 10 New Zealanders are the victim of fraud and that number is escalating.""And there'll be touch points that the public are not aware of, where they are interacting with people who are exploited migrants who have been exploited by organised crime," says Symon."We will see new and emerging threats through organised crime, such as a black market in tobacco which has been, escalating in New Zealand. And these things are growing and becoming more complex. What we're also seeing is organised crime working in more nefarious ways. So working on corrupting individuals, corrupting New Zealanders going about doing their work to try and maximise the return they can get from their crime.""Organised crime is working more and more like large commercial enterprises. So when you think of large companies and how they spend their energy on facilitating and maximising the return that they can get for their investors, it's the same logic you should apply to organised crime," says Symon.In the podcast audiohe also talks about the challenge of cash "the primary currency of organised crime" and the recommendation to stop cash payments in certain industries, why the Advisory Group recommends a dedicated Transnational, Serious and Organised Crime Minister, funding the fight against organised crime, why more is needed from Inland Revenue, working across government agencies, the role of the private sector, cryptocurrency, the need for international cooperation and more.Just before Christmas Associate Police Minister Casey Costello unveiled a new all-of-government strategy to tackle organised crime. Costello released this strategy document, and this action plan. Details on the Ministerial Advisory Group and all its reports can be found here.*You can find all episodes of the Of Interest podcast here.

US data mixed as risk aversion rises. Singapore & Sweden hold rates. EU sentiment rises, inflation expectations dip. Air travel & cargo buoyant.

Kia ora, Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand. I'm David Chaston and this is the international edition from Interest.co.nz. Today we lead with news markets now expect an Australian rate rise next week. But first today, the US Fed held its policy rate unchanged at 3.5%. This is what markets expected from them, despite the Trump pressure to cut sharply. The vote was 10-2 with the dissenters working to curry favour with Trump to get the nod as the next Fed chairman. The FOMC indicated that rates at this level could hold for some time while household inflation stress remains elevated. Inflation with no growth (other than AI) is a hard position to extract yourself from. They also have their eye on the labour market, with some large layoff announcements in the past few days. Both UPS (-30,000) and Amazon (-16,000) have announced big cuts, less about seasonal changes, more about 'efficiency'. They aren't the only ones pulling back. American mortgage applications fell last week as mortgage interest rates rose. Refinance activity fell more than -16%, while new home purchase mortgages were little-changed. This may not be a trend change, rather just a breather, because the prior three weeks rose notably. However, this metric is in a clear yoyo pattern. Canada's central bank also held its policy rate at 2.25% in its overnight decision. New bully threats from the US are keeping their growth outlook quite uncertain but they still see inflation holding at about 2% (currently 2.4%), and they still see an economic expansion at about +1.5%. India's industrial production accelerated in December, up +7.9% from the same month a year ago to end its full year up +4.1% from 2024. Factory production was up +8.1%, with the weak sector being mining. The December expansion was its sharpest since October 2023. In Australia, inflation was reported rising 3.8%, far above the November 3.4% and also above the expected 3.6% level. After the strong December labour market data released earlier in the month, this will put heavy pressure on the RBA to act to prevent inflation impulses and inflation expectations from requiring even tougher medicine in the future. Growth hotspots Brisbane and Perth both reported even higher inflation rates. Even Sydney reported 3.7% December inflation. The RBNZ will be looking at this evolving situation with some alarm, given that we too have above-target inflation, even without the growth pressures. Separately, the Chinese ambassador to Australia has said that Beijing will step in if Australian moves to regain control of the Darwin port that was leased to Chinese interests in 2015 on a 99-year lease basis. He said China “has the obligation to take measures” to protect their rights over the port. That may include trade retaliation, and more Chinese navy circumnavigations including live-fire exercises in the Tasman. The UST 10yr yield is now just on 4.26%, up +3 bps from this time yesterday. The price of gold will start today at US$5289/oz, up a sharp +US$202 from yesterday and a new record high. Silver is up +US$7 to US$114/oz, also a record. Platinum has recovered and now at US$2645, but not back to Monday's spectacular record. We should also note that the aluminium price has risen sharply overnight - again. It is now back approaching its pandemic-frenzy levels. American oil prices are up another +US$1 at just under US$63/bbl, while the international Brent price is also higher, now just under US$68/bbl. These are four month highs. The Kiwi dollar is up +10 bps from yesterday, now at 60.3 USc. Against the Aussie we are down -10 bps at 86.2 AUc. Against the euro we are up +30 bps at just on 50.5 euro cents. That all means our TWI-5 starts today just under 63.8, and up +10 bps from yesterday, its highest since late September. The bitcoin price starts today at US$89,425 and up +0.9% from this time yesterday. Volatility over the past 24 hours has again been low at just under +/- 0.9%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news the US dollar fell for a fourth consecutive session today, sliding to its lowest level since February 2022. It's a -3.5% devaluation in just one week. Some think the US Administration is engineering the fall to bolster its export competitiveness as the US factory sector misfires, tariffs aren't working other than raising costs, and to put pressure on the Fed ahead of its meeting next week.First up today however there was another dairy Pulse auction earlier this morning and that brought some interesting signals. The WMP price came in almost identical to last week's full auction and has been holding at this higher level since the start of 2026 when it made that 7%-plus jump. The SMP price rose a strong +5.9% today from last week, and is now +9% higher than what is was at the end of 2025.. Positive signs, but somewhat undermined by the fast-falling USD.In the US, the weekly ADP employment update recorded a weekly gain of under +8000, continuing the slow easing that they have been recording since the end of November. January non-farm payrolls which will be released at the end of next week, is currently expected to show a very tame +40,000 jobs gain which will continue the weak run that started in May 2025.And that may be optimistic, The Conference Board's consumer sentiment survey for January reported that confidence collapsed to lowest point since 2014, to levels even lower than the pandemic depths. It is now back to levels as it rose from the GFC.But the latest factory survey, this one by the Richmond Fed in the mid-Atlantic states, showed little-change from its already negative levels. New order levels rose marginally however, but because that is on a dollar basis it might just be because the same survey shows high price increase activity, required by even higher cost increase levels.More positive was the January Dallas Fed services survey, which moved up into positive territory in January after four months of consecutive retreat.Today's US Treasury 5yr Note auction brought the same median yield rise from the prior equivalent event a month ago. Higher risk premiums are getting embeddedIn China, industrial profits rose +5.3% in December from the same month a year ago. They will be pleased with that because for the whole of calendar 2025 they were up merely +0.6% (and would have declined but for the December rise).In India, we can confirm the signing of their big trade deal with the EU, removing both tariff and non-tariff barriers.. The US isn't happy.In Europe, we should note that Swedish officials are looking at what it would take to ditch the krona in favour of the euro. An independent review has already pointed out that the benefits would greatly outweigh the costs. The Swedes last voted on this issue in 2003.In Australia, business sentiment as measured by the NAB survey, was stable and mildly positive in December. Business conditions however improved more strongly on better sales and margins.Later today, Australia will publish its December CPI result, and after the strong labour market for January, will be closely followed and could very well move financial markets. They had 3.4% inflation in November and this December result is expected to be 3.6%. This will be very influential on the RBA's deliberations at next Tuesday's cash rate target review.The UST 10yr yield is now just on 4.23%, up +2 bps from this time yesterday.The price of gold will start today at US$5087/oz, unchanged from yesterday and holding at its record high. Silver is down to US$107/oz. Platinum has fallen more sharply and now at US$2522, down -US$335/oz from yesterday.American oil prices are up +US$1 at just under US$62/bbl, while the international Brent price is softish, now just under US$67/bbl and up a bit more. This is all USD devaluation-driven.The Kiwi dollar is up +50 bps from yesterday, now at 60.2 USc as the greenback goes into another devaluation stage. Against the Aussie we are down -10 bps at 86.3 AUc. Against the euro we are also down -20 bps at just on 50.2 euro cents. That all means our TWI-5 starts today just under 63.7, and up +20 bps from yesterday, its highest since late September.The bitcoin price starts today at US$88,576 and up +1.0% from this time yesterday. Volatility over the past 24 hours has been low at just under +/- 0.9%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news repricing for American risk is underway, evidenced by rising UST yields, a falling US dollar, and commodity price spikes.First up today, American durable goods orders rose in November by more than expected to be +10.5% higher than year ago levels, a gain that has impressed markets, and came as a complete surprise. Non-defense capital goods orders, excluding aircraft, were up +4.3%, also a good gain.But there are a number of factors we should take into account when assessing this data. It is 'nominal' and not inflation adjusted and tariff-taxes will be a part of the increase. Second, we looked back at the ISM and S&P Global factory PMIs for November and they did not pick up this type of gain. The ISM one actually reported contraction, the S&P Global and unchanged expansion. And then there is the 'new management' at the US data agency that releases this data. All three factors mean we should wait a bit to see if this is an outlier result. Risks abound.Meanwhile, the Chicago Fed's National Activity Index came in below trend in November, although not as negative as it was in October. This is the ninth below-trend reading in the past twelve months.It was a similar story for the Dallas Fed factory survey, which also recorded a pullback, for January, although not as steeply as it did in December. Output and new orders rose, but the overall index was held back by a sharp jump in prices paid for inputs. Only about half that was recovered by prices received even though that rose sharply too.There was a US Treasury bond auction today and while it was well supported, it did bring a notable rise in the yield achieved. The 2 year bond delivered a yield of 3.55% at todays event, up from 3.45% at the prior equivalent event a month ago. This is the largest shift in yields we have observed at these events in more than a year. The US's ballooning deficit can't really afford rising interest rates, but then again it couldn't afford the tax cuts for the rich either.Singapore's industrial production dipped rather sharply in December to end up +8.3% from the same month a year ago. But the December pullback was less than observers had expected.In addition to Auckland, and Australia, Monday was also a public holiday in India, Republic day. And the two top EU officials were in New Delhi to seal a key trade deal between the two economic powers. In fact, it has been called "the mother of all deals" and is set to be signed later today. Both sides are making major concessions to get it done and it is likely to boost trade in a globally significant way. The EU will get major access to India's car market. India will get the EU's preferential tariff MFN treatment.The UST 10yr yield is now just on 4.21%, down -3 bps from this time yesterday.The price of gold will start today at US$5087/oz, up +US$104 from yesterday and a new record again. Silver is up proportionately more, up +US$12/oz at US$115/oz and also a record high. Platinum has risen to US$2857/oz, up +US$116/oz.Tin prices are up +9.5% today, and copper is up +1.5%. Both build on recent surges to record highs. A falling greenback accentuates these rises, but all commodities are still priced in USD.American oil prices are holding at yesterday's at just under US$61/bbl, while the international Brent price is firmish, now just under US$65.50/bbl and down -50 USc.The Kiwi dollar is up +30 bps from yesterday, now at 59.7 USc. Against the Aussie we are up +10 bps at 86.4 AUc. Against the euro we are also up +10 bps at just on 50.4 euro cents. That all means our TWI-5 starts today just under 63.5, and up +40 bps from yesterday, its highest since late September.The bitcoin price starts today at US$87,677 and down just -0.3% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.4%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Monday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news we need to keep an eye on the 'Sell America' trade, which until now has been more headlines that substance and mainly about China's divestment in US Treasuries. But the Greenland kerfuffle has triggered a serious rethink by many pension fund managers, and more are taking this action.But first, the week ahead will be a relatively quiet one locally on the data front, but we will get a big range of December banking sector data, allowing us to cap the 2025 year on a number of important metrics. In Australia, the key event will be Wednesday's CPI data where it is expected to rise to 3.6%, the final indicator before next week's RBA rate review.Globally, all eyes will be on the gold price and its expected push up through US$5000/oz which could come early in the week.And in the US, all eyes will be on the Fed and its January 29 meeting, amid increasingly contrasting takes by voting members on the appropriate rate path. But most things related to public policy are in turmoil in the US, and the Fed's position is just part of that. We will be watching for bond market reactions.Elsewhere, official interest rate decisions are expected in Canada, Brazil, and Sweden, and the Bank of Japan will publish meeting minutes.An don't forget it is a holiday today in the north of the North Island (Auckland Anniversary Day), and in Australia (Australia Day),In the first news up today, China released its December FDI data overnight and it was negative again. For all of 2025 foreign direct investment fell -9.5%, following a sharp -24.7% fall in 2024 and that makes it the third consecutive year of contraction. December alone recorded a good pickup from November but even with that it was -7% lower than the December 2024 month. But at least it didn't shrink as it did in November from October.China also release minimum wage rate data that showed 27 of the country's 31 provincial jurisdictions have increased monthly minimum wages over the past year, with half introducing double-digit rises.In an interview with state media Xinhua, the Chinese central bank governor indicated that cuts to their interest rates and reserve ratio requirements are on the cards in 2026.Taiwan said industrial production surged more than +21% in December from the same month a year ago, the strongest growth since May. For all of 2025 it was up +16.7%, so the latest activity is an acceleration. But their local retail sector is not showing the same exuberance, up just +0.9% in December from a year ago but down -0.2% for all of 2025. Consumers there are prioritising saving over spending, just like in the country to their west.Japanese inflation eased to 2.1% in December from 2.9% in November, the lowest since March 2022. Food inflation fell to a 13-month low of +5.1%, driven by the slowest rise in rice prices in 16 months.The Japanese January 'flash' PMIs were quite positive with private sector output expanding at their quickest rate for nearly a year-and-a-half to start 2026.The Japanese central bank reviewed its monetary policy and no change was made, held at 0.75% - because an election is imminent. But now inflation concerns seem to be easing too. But markets are on alert for official intervention to support the yen.In India, their 'flash' January PMIs rose across both sectors, maintaining the very high rates of economic expansion there.We are starting to get the early January PMI reports for many key economies. The US factory version was little-changed in a modest expansion and it was the same for their services sector. But both recorded slightly better new order flows. Both noted cost pressures from their tariff-taxes. But as you will note from below this expansion lags most of the other large global economies.The Conference Board's leading economic indicator tracking for the US isn't positive reading, with the latest update reporting further declines.In Canada, their retail sector reported good gains in November, up +3.1% from a year ago, but these may not have extended into December, according to their overnight update.In the EU, output continues to rise in January and business confidence strengthened. That raised their factory PMIs to expansion, but their services PMI's hesitated.In Australia this week, they posted stronger than expected labour market data. That has sharply changed financial market pricing. And in turn there has been a rush by banks, both a major (NAB) and some challengers, to hike their fixed home loan rates today. They get their December CPI result next week and it is widely expected to challenge the upper end of their policy tolerance. If it does, suddenly Australian floating mortgage rates are at risk of a rise on February 3, 2026. If they do hike then, the Aussie policy rate will be 3.85% (3.60% +25 bps). And that will put it 160 bps higher than the RBNZ current 2.25%. It has been 14 years since this difference was that large.In Australia, private sector output expanded at its fastest pace in five months in December according to the S&P Global 'flash' PMI report. Both the factory and services sector expansions picked up, the services sector more than the factory sector however. Faster new order growth, including for exports, was a noted feature.And we should probably note that China received its first shipment of iron ore from their giant African mine at Simandou, Guinea. This likely marks a shift in China's iron ore import focus, likely to Australia's detriment.The UST 10yr yield is now just on 4.24%, down -2 bps from this time Saturday. And here is something to keep an eye on, Europe's largest pension fund cut its holdings of US Treasury debt sharply in 2025, a trend that seems to be gathering steam, the 'sell America' trade, one started by Norway's sovereign wealth fund late last year.The price of gold will start today at US$4983/oz, up a minor +US$1 from Saturday bit still a new record again. US$5000 could come quickly now. Silver is up +US$2/oz at US$103/oz and also a record high. Platinum ihas eased marginally to US$2741/oz.American oil prices are holding at Saturday's at just on US$61/bbl, while the international Brent price is firmish, now just under US$66/bbl.The Kiwi dollar is little-changed from Saturday, still at about 59.4 USc. That makes it almost a -2c loss for the greenback for the week. Against the Aussie we are up +10 bps at 86.3 AUc. Against the euro we are down -10 bps at just on 50.3 euro cents. That all means our TWI-5 starts today just under 63.1, and up +10 bps from Saturday, its highest since late September, and up +150 bps for the week.And we should probably note that the official Chinese yuan setting by the Peoples Bank of China slipped below 7 to the US dollar in Saturday's fixing, the first time it has done that since May 2023. Although to be fair, most currencies are rising against the USD, ours included.The bitcoin price starts today at US$87,968 and down -2.0% from this time Saturday. Volatility over the past 24 hours has been modest at just under +/- 1.0%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

​By Gareth VaughanGovernor Anna Breman has implied the Reserve Bank's Monetary Policy Committee will increase the Official Cash Rate (OCR) in the run-up to November's election if members believe this is what is required."We are statutory independent. We are an independent central bank, like you point out, and we will do what is best for the New Zealand economy and to reach our inflation target," Breman told interest.co.nz in a new episode of the Of Interest podcast.She was asked if the Reserve Bank believes increasing the OCR is necessary, she would be comfortable doing so in the run up to November's election.Breman was speaking on Friday, after the release of Statistics NZ's December quarter Consumers Price Index (CPI) showed annual inflation at 3.1%, above the Reserve Bank's 1% to 3% target range."We are carefully looking through all the data. It's clear that there are some items in there that typically are very volatile. They can change a lot between different quarters. But of course 3.1% is high and it means that inflation that's been hurting households for many years is still above where we want it to be, but the outlook is still favorable in terms of inflation going forward. So it's also important to stress that we will focus on getting inflation back in the target band and towards the midpoint of the target band," Breman said.The Reserve Bank reviews the OCR for the first time this year on February 18.In a note following the CPI release BNZ Head of Research Stephen Toplis said financial markets had almost fully priced in a first OCR increase for the Reserve Bank's September 2 Monetary Policy Statement. And BNZ's economists have brought forward their expectations for a first OCR hike to September 2 from February 2027."One thing that needs to be taken into consideration is the General Election on November 7. The Reserve Bank is operationally independent so it can broadly do what it wants when it wants, but central banks are not keen to become embroiled in election campaigns if it can be avoided," said Toplis."In our opinion, this means the 28 October Monetary Policy Review would be far from optimal for a first rate hike. Moreover, it's always easier to tell the full story with a complete Monetary Policy Statement when a hiking cycle, or cutting, begins."Breman said she doesn't comment directly on market pricing. The OCR is currently at 2.25%, having been reduced from 5.50% since July 2024.In the podcast audioBreman speaks further about inflation including the challenges facing households, whether she expects help from government with the inflation fight, limits to Reserve Bank monetary policy, her recent support of US Federal Reserve Chairman Jerome Powell and the response from Foreign Minister Winston Peters and Finance Minister Nicola Willis, risks around the Fed becoming less independent when President Donald Trump appoints a new Chairman, what climate change means for the Reserve Bank, her thoughts on a potential central bank digital currency, and more.*You can find all episodes of the Of Interest podcast here.​

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news the US dollar is being marked down as demand for precious metal hedges rises.But first in the US there were 260,000 initial jobless claims last week, down -71,000 from the prior week and a marginally smaller change that the -73,000 change seasonal factors would have expected. There are now 2.21 mln people on these benefits, marginally less than the 2.24 mln a year ago. Two years ago, pre-Trump, there were 1.75 mln people on these benefits.US real personal income rose +1.0% in November from the same month a year ago. On this inflation-adjusted basis it has been flat since April 2025. But real personal consumption expenditures rose +2.6%. On an inflation-adjusted basis this is the same pace of rise that started in April 2021. It has been driven recently by services and non-durable goods. While the PCE data is still within the Fed's inflation band, the income drag will be worrying policymakers. The spending rise can't be maintained.The latest regional Fed factory survey, this one from the Kansas City Fed, shows no improvement from its dour base. It is still negative.Malaysia's central bank reviewed its monetary policy and related policy rate overnight and made no change to its 2.75% level. They have a strong economic expansion underway, and inflation is low.Japan's exports rose +5.1% in December from the same month a year ago, the fourth monthly increase and reaching a record value. As good as that was, analysts had expected a rise of +6.1%. Imports climbed +5.3% on the same basis, the fastest pace in 11 months and much faster than November's +1.3% rise.The EU's consumer sentiment survey for January was marginally better (less worse) than for December - again. This continues the slow grinding improvement from its depths in September 2022 and halving that negative level. But it is still negative at double the negative pre-pandemic. Still it is on an improved trajectory and that is in sharp contrast to the US where the similar UofM survey is now deeply negative with a recent deterioration and half the level it was pre-pandemicIn Australia, their labour market performed well in December. Employment increased by +65,000 in the month to 14.65 mln, with full time employment up +54,800 and part-time employment up +10,400. Hours worked rose. As a consequence their jobless rate fell to 4.1%, well below the prior 4.3% and the expected 4.4%. This probably ends any chance of a rate cut early February and brings forward the chance of a rate hike in 2026. Everything now depends on next week's CPI outcome where there is upside risk to November's 3.4% CPI rate now.Staying in Australia, job ad portal Seek is saying their platform shows job ads dropped -1.2% in December from November, and are down -3.5% from the same month a year ago. Applications per job ad fell -0.3% in December, "demonstrating a slightly sharper year-end decline in candidate activity than usual".And Australian unicorn Airwallex is to be investigated by the money laundering regulator AUSTRAC. They suspect "serious non-compliance" by the global payments platform, specialising in moving money internationally for dodgy clients.And we should probably note that the Trump Administration has advanced its role in granting licenses to mine the seabed in international waters. It is currently mapping resources off Samoa, and it has granted its first license to mine in international water to a US miner. The US only recognises a 12 mile country claim, so vast areas are now open to grant permits for their firms to mine. There is potential trouble ahead on jurisdictional issues.Global container freight rates fell -10% last week from the prior week to be -43% below year-ago levels. Bulk cargo freight rates rose +16% in the past week to be double year-ago levels.The UST 10yr yield is now just on 4.25%, down -3 bps from this time yesterday.The price of gold will start today at US$4909/oz, and up another +US$66 from yesterday and a new record again. Silver is up +US$2.50/oz at US$96/oz and also a record high.American oil prices are down -US$1 from yesterday at just on US$59.50/bbl, while the international Brent price is now just under US$64/bbl.The Kiwi dollar is firmer from yesterday, up +50 bps to 59 USc as the USD is devalued in financial markets. Against the Aussie we are little-changed at 86.4 AUc. Against the euro we are up +30 bps at just on 50.3 euro cents. That all means our TWI-5 starts today just on 62.9, and up +40 bps from yesterday and its highest since late September.The bitcoin price starts today at US$89,026 and up +1.2% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.7%.Join us later this morning when we will report the New Zealand Q4-2025 CPI result, which could set the scene for the RBNZ decisions in 2026, the next one on February 18, 2026. Markets expect a 3.0% CPI rate, right at the top end of the central bank's policy comfort level.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora,Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news it is all about the 'debasement trade" today - Trump debasing US public policy resulting in a rush to gold, a jump in US Treasury yields, and a fall in the greenback. Equities and cryptos are falling.In the US overnight, there was another good rise mortgage applications, largely on the back of a rush of refinance activity as 30 year mortgage rates eased.However December data for pending home sales took an unusually large dip from November to be -3.0% lower than year ago levels.In Canada, producer prices actually fell in December, unexpected because a small rise was anticipated. That puts them +4.9% higher than year ago levels, the slowest rise since August.In Indonesia, they reviewed their policy rate overnight, leaving it at 4.75% as expected.In Europe, the European Parliament has suspended the approval of a key US trade deal agreed in July in protest at Trump's demand to take over Greenland. Both Trump and some of his cabinet are at Davos, and in full arrogant insult mode.In Australia, the Westpac–Melbourne Institute Leading Economic Index inched up 0.1% in December from November to +0.42%, following the no-change in the previous month. The recent uptick is led by commodities and an improved homebuilding outlook. But the December rise was less than expected. A year ago its was +0.25%, so nearly a doubling since that tame benchmark.We should perhaps also note that cocoa prices have fallen sharply today, back to US$4400/tonne and the same level as two years ago. You may recall they reached US$12,250/tonne in April 2024 at the height of its surge.The UST 10yr yield is now just on 4.28%, unchanged from this time yesterday. Wall Street is in its Wednesday session with the S&P500 recovering +0.3% but the earlier much larger recovery gains (over +1%) seem to be fading. The S&P500 has fallen a net -1.8% in the past two days, so far. It's the same for the Nasdaq which is now back with a small loss today, down -2.2% for the same two days. The price of gold will start today at US$4843/oz, and up another +US$93 from yesterday and a new record again. Silver is lower at US$93.50/oz and off its record high.American oil prices are up a bit more than +50 USc from yesterday at just on US$60.50/bbl, while the international Brent price is unchanged at just under US$65/bbl.The Kiwi dollar is holding from yesterday, still at just under 58.5 USc. Against the Aussie we are down -30 bps at 86.4 AUc. Against the euro we are up +20 bps at just on 50 euro cents. That all means our TWI-5 starts today just on 62.5, and unchanged from yesterday and still its highest since early October.The bitcoin price starts today at US$87,927 and down -2.0% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.4%. And we perhaps should note that the $TRUMP memecoin has plunged more than -90% from its peak a year ago, burning its adherents bigtime.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news long term bond yields are on the move higher, notably in Japan and the US.First however, the overnight dairy auction delivered a modest gain, up +1.5% in USD terms, but up +0.4% in NZD terms as the US dollar is weakening. However, most of this rise is the same as recorded in last week's Pulse event. But it does cement a second consecutive rise in the full auction after nine consecutive declines. So +7.8% of rises after the -22.5% of falls. Also notable is the much less buyer interest from China, counterbalanced by stronger interest from most other regions.In the US, markets have returned after a chaotic weekend politically to a weak ADP weekly jobs report, recording just +8000 jobs gains and well within the margin of error. January is starting out tough in their labour market. But at least it wasn't a decline.The US Supreme Court issued three decisions overnight but did not decide the closely watched dispute over the legality of the Trump tariff-taxes. they gave no indication when they will. Also delayed is Trump's 'imminent decision' on his Fed boss nomination. Apparently all his candidates have issues.Also weak is the USD. It is now under 7 CNY to the USD and its lowest since 2023.In China, household borrowing is weak and household savings is strong, up +10% in 2025. That says a lot about the stress Chinese households are feeling going into 2026. Per capita bank deposits have now risen to over ¥118,000 (NZ$29,000). And we should probably note that Chinese smartphone shipments fell in 2025, the second year in a row this has occurred.In Taiwan they reported export orders in December exceeding US$76 bln, far and away a new record high and +43% higher than year ago levels. The Taiwan miracle continues. For all of 2025 these export orders rose +26%.In Malaysia, they reported good December exports too, up more than +10% from the same month a year ago to just over US$37 bln and maintaining a strong trade surplus.In Germany, producer price deflation picked up slightly to -2.5% in December from a year ago to cap a 2025 year where it averaged -1.2%.But overall German investor economic sentiment picked up notably in January, and that was also enough to propel overall EU investor sentiment into positive territory in this wide survey.It is also probably worth noting that the Microsoft boss said overnight (at the WEF) the AI bubble could falter unless adoption of the technology picks up.The UST 10yr yield is now just on 4.28%, up +1 bp from this time yesterday and now its highest since September. The UST 30 year bond is now at 4.90% and its highest in almost ten years. The Japanese 10 year bond yield is up another sharp +7 bps at 2.35% and we make that its highest in 28 years. Its 40 year bond is now over 4.25% and its highest since our records began in 2007. The price of gold will start today at US$4750/oz, and up another +US$78 from yesterday and a new record. Silver is is actually marginally lower at US$94/oz and off its record high.American oil prices are up a bit more than +50 USc from yesterday at just over US$60/bbl, while the international Brent price is just under US$65/bbl.The Kiwi dollar is up another +50 bps from yesterday, now at just under 58.5 USc. Against the Aussie we are up +40 bps at 86.7 AUc. Against the euro we are holding at just on 49.8 euro cents. That all means our TWI-5 starts today just over 62.5, and up +50 bps from yesterday and its highest since early October.The bitcoin price starts today at US$89,708 and down -3.8% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.8%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news political risks have moved higher overnight, but by less than you might have expected given the pressures.First we should note that today is Martin Luther King Day in the US, celebrating a man of peace, a Federal holiday so financial markets are closed. But no one missed the irony of the day given the US President telling the Norwegian Prime Minister he is no longer feels committed to peace.The fallout has been a rise in long term interest rates (a rise in the risk premium), and a fall in the US dollar. Equities slipped it in non-US trading.In Canada, their December inflation rate rose slightly to 2.4% from 2.2% in November, with the latest month rises relatively quickly. But there are base issues here with the ending of some GST relief measures. However, excluding petrol, their CPI rose 3.0% in December, following a 2.6% increase in November.The Bank of Canada released two important sentiment surveys overnight. Results of the Q402025 survey of consumers show that concerns over high prices and economic uncertainty related to the trade conflict with the US continue to have a negative impact. And after a weak year, businesses expect domestic sales growth ito improve slightly. Export sales are expected to be modest. Most businesses plan to maintain or decrease current staffing levels.In Japan, they have called a snap election for February 8. A key issue will be GST relief. But financial markets are concerned that will make their fiscal imbalances worse.In China, the property sector is acting like a curse on their economy. They reported that house prices fell by -2.7% in December from a year ago. That was a -1.7% fall for new-builds and a massive -7.0% fall for resales. The overall results is the 30th consecutive month of price decreases and their fastest pace since July. There are no capital gains in Chinese housing, anywhere.That is crimping consumer attitudes is a significant way. China's retail sales rose just +0.9% year-on-year in December according to official data, slowing from a +1.3% increase and missing market expectations of a +1.2% gain. This is their weakest growth since December 2022.But China also said its industrial production was +5.2% higher than a year ago, and rising. Coal output hit a new record high. However, China's electricity production was only +0.1% higher in December from the same month a year ago. It is hard to believe their industrial production data if this was the case.All this data then results in a Q4-2025 4.5% rise in GDP, according to their official report, marginally better than the expected +4.4%. Booming exports squares the circle. So they are claiming a neat +5% 2025 annual growth, exactly as the Party had said at the start of the year.Probably of more importance, China also released updated demographic data for 2025. The said 7.9 million babies were born in the year, down from 9.5 million in 2024. The number of people who died in 2025, 11.3 million, continued to climb. It is being widely accepted now that these trends cannot be reversed, and will lead to profound population changes.In the EU they also released December CPI results for December. Their annual inflation was 2.3% in December, down from 2.4% in November. A year earlier, the rate was 2.7%. Germany, Italy and France had lower rates, Spain and most of Eastern Europe had higher rates, some a lot higher.Globally, the IMF raised its global growth forecast to 3.3% from 3.1% this year, but warned that major risks are building. The upgrade reflects resilient activity, strong labour markets and heavy investment in new technologies, especially artificial intelligence. However, they cautioned that these same forces could become sources of instability. Rapid AI-driven investment, particularly in North America and Asia, is supporting growth and equity markets, but if productivity gains fail to materialise, it could trigger sharp market corrections and weaken household wealth. New Zealand gets no mention or coverage in this report. Australian growth is forecast to be +2.1% this year and +2.2% in 2027. They noted Australia's inflation-control challenge. India is the star, but strong results are also expected from Indonesia, Malaysia and the Philippines. China's 5.0% growth in 2025 is expected to dip 4.5% in 2026, 4.0% in 2027.Australia's Monthly Inflation Gauge, as surveyed by the Melbourne Institute, surged +1.0% in December from November, the fastest pace since December 2023 and a sharp pickup from the prior two months. That puts it +3.5% ahead of year-ago levels. The recent surge may well get the RBAs attention. Don't forget the RBA next reviews ints monetary policy two weeks from today on February 3. Next Thursday's labour market data, and the following Wednesday's December CPI data will be crucial decision aspects.The UST 10yr yield is now just on 4.27%, up +4 bps from this time yesterday and its highest since September.The price of gold will start today at US$4672/oz, and up +US$76 from yesterday and a new record. Silver is has pushed up to US$94.50/oz and also a new record high.American oil prices are essentially unchanged from yesterday at just under US$59.50/bbl, while the international Brent price is still at US$64/bbl.The Kiwi dollar is up +40 bps from yesterday, now at just over 57.9 USc. Against the Aussie we are up +20 bps at 86.3 AUc. Against the euro we are also up +20 bps at just on 49.8 euro cents. That all means our TWI-5 starts today just over 62, and up +30 bps from yesterday and its highest so far this year.The bitcoin price starts today at US$93,206 and down -2.0% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.6%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Monday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news the world is looking for even more workarounds to avoid having to deal with a Trump-America.First however, this week is going to be a busy one locally with important data releases on December retail sales (another less-than-inflation tiny rise is expected), and the Q4 CPI data (expected to hold at 3.0%). But a higher-than-expected result will likely bring outsized financial market reactions. There will also be another full dairy auction on Wednesday.In Australia, it will all about their December jobs data, and a good bounce-back from the unexpectedly weak November result is being looked for.Globally, the most interest will be on the big data dump from China this week. Their Q4-2025 GDP growth is expected to slow to 4.4% dipping their full year expansion to 4.9%. House price, retail sales, and industrial production data is also due, and they are all expected to be tame. Their central bank will review its Loan Prime Rates, but no change is expected from their already record low levels.In Japan, their central bank will be reviewing their policy settings, although no change is anticipated this time. However there is intense interest about possible future rate signals.Central banks in Indonesia and Malaysia are scheduled to announce monetary policy decisions as well.In the US, financial markets will be closed tomorrow for MLK Day. But then they will release key data on inflation, the PCE version, as well and the second Q4-2025 GDP update. But most interest will be on a flood of Q4-2025 corporate earnings reports, dominated by their big industrials.Over the weekend there were important data releases from the US too. Industrial production rose marginally in December from November to be +2.0% higher than year ago levels.The January NAHB/Wells Fargo Housing Market Index retreated in January from December and back to October levels and -21% lower than year ago levels. Builder sentiment deteriorated across all components of the index.The New York Fed's regional services sector tracking reports yet another sharp contraction in their region in January, although not as sharp as in December.US data is often confusing, telling different stories. Enough so all sides can claim 'victory'. But some overarching measures paint a tougher story. Inflation feels like stagflation to most consumers. And that is confirmed by the latest data on the share of economic activity flowing to workers. It is now at its lowest level ever, since this series began 80 years ago. It is a telling data series, one that has dived fast recently.Across the border, Canadian housing starts turned in another strong result in December, up by +11% from November, to the highest rate in five months. That caps a good full year, up +5.6% in 2025 from 2024.The Canadian prime minister has been in China and has negotiated a truce with Beijing in their tariff tussle. The Chinese will now import large volumes of Canadian crops in return for up to a 49,000 car concession for Chinese EVs. Those will displace US-sourced EVs. The Canadian farm lobby is happy, their car-manufacturing lobby isn't.China continues to run down its holdings of US Treasury investments with them falling -11.2% in November from a year ago. Their holdings of US paper drops them to third place behind Japan and the UK.Malaysia's economic activity continues to impress. They recorded Q4-2025 GDP growth of +5.7% with a strong factory sector supported by strong internal demand.Singapore's (non-oil) exports rose +6.1% in December from a year earlier, a moderated pace of growth from November. (Their refined oil exports grew at more than twice that pace.) This means that Singapore's non-oil full-year 2025 exports came in +4.8% above their equivalent 2024 level.The UST 10yr yield is now just on 4.23%, unchanged from this time Saturday and its highest since September. The price of gold will start today at US$4596/oz, and up +US$15 from Saturday. Silver is now just under US$90/oz.American oil prices are down -50 USc from Saturday at just under US$59.50/bbl, while the international Brent price is now at US$64/bbl.The Kiwi dollar is little-changed from Saturday, now at just over 57.5 USc. Against the Aussie we are also little-changed at 86.1 AUc. Against the euro we are up +10 bps at just on 49.6 euro cents. That all means our TWI-5 starts today just over 61.7, and up +10 bps from Saturday, up +20 bps for the week.The bitcoin price starts today at US$95,130 and up +0.6% from this time Saturday. Volatility over the past 24 hours has been very low at just on +/- 0.3%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news of plenty of gritty data, but none of it really amounting to anything significant.Actual US initial jobless claims rose +32,000 last week to 331,000. But that was a lesser rise than seasonal factors would suggest so they are taking that as a 'win'. There are now 2.31 mln people on these benefits, up from 2.27 mln this time last year and that is a post-pandemic high. (Financial markets prefer the seasonally-adjusted data, even if that doesn't actually reflect the impact on real people.)The New York Fed's Empire State factory survey rose in January on a modest rise in new orders, putting behind it the November dip. It was a very similar story for the Philly Fed factory survey which rose in January for the first time in four months.The January update to the Fed Beige Book saw overall economic activity increasing at a slight to modest pace in eight of the twelve Federal Reserve Districts, with three Districts reporting no change and one reporting a modest decline. This marks an improvement over the last three report cycles where a majority of Districts reported little change. Employment was little-changed. But cost pressures due to tariffs were a consistent theme almost everywhere.In the US rural economy, the rejection of US farm goods internationally is causing exceptionally tough times. Banks are refusing to lend because borrower prospects are so poor. It's an existential crisis for many. Far from the 'great again' promise, it is shaping up to be a rural disaster.Indian exports rose in December, but the gain was marginal. But trade with the US is little affected with exports to the US down just -1% since Trump's swingeing tariffs on India. For the full year, India had a trade deficit of -US$305 bln, a notable rise from 2024. India is no China trade behemoth - yet.Chinese banks extended ¥910 bln in new loans in December, sharply higher than the unusually low ¥390 bln in November. A year ago, the December level was ¥990 bln but at least this year it was above market expectations of ¥800 bln. New bank lending in China has been at unusually low levels for more than six months now. To encourage more, the central bank has lowered interest rates on targeted rural and SME lending. It also unveiled a ¥1 tln (NZ$250 bln) relending facility for private enterprises.The inability of some Australian state governments to repair their balance sheets after the pandemic free-spending is worrying at least one credit rating agency. S&P is warning NSW and Queensland in particular that they are now at greater risk of a downgrade from their AA+ rating. Heavy infrastructure spending and rising entitlement claims are hurting, as well as the political reluctance to raise taxes.And staying in Australia, their consumer inflation expectations came in at 4.6% in January, little changed from the 4.7% in December. Households still see elevated price pressures and has been at this general level for more than eight months. (Official November CPI was 3.4% and the December update comes on January 28, 2026.)Global container freight rates slipped -4% last week, ending a string of five consecutive rises. Most of that was driven by retreats in the China-US trade. This index is now -39% lower than year-ago levels. The bulk cargo rates fell sharply this week, down -13% to be +44% higher than year ago levels.The UST 10yr yield is now just on 4.16%, up +2 bps from this time yesterday.The price of gold will start today at US$4603/oz, and down -US$10 from yesterday. Silver is still at US$91.50/oz, up +US$4.50/oz.American oil prices are sharply lower from yesterday at just under US$59/bbl and down -US$2.50, while the international Brent price is now at US$63.50/bbl.The Kiwi dollar is down a bit less than -10 bps from yesterday, now at just over 57.4 USc. Against the Aussie we are down -40 bps at 85.7 AUc. Against the euro we are up +20 bps at just on 49.5 euro cents. That all means our TWI-5 starts today just over 61.5, and down -10 bps from yesterday.The bitcoin price starts today at US$96,711 and down -0.7% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.2%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news it is now clear that China has been the big winner in Trump's trade war. Geopolitical risks are front of mind in financial markets today.But first in the US, eyes were on a possible decision on the Trump tariff-taxes by the US Supreme Court today. But it did not come. Trump himself has been exerting maximum pressure on the justices, most of who he appointed. His problem is that he appointed strict legal constructionists and they were very unfriendly to his position during the argument stage. However, he expects 'loyalty' over "the law" and with the pressure he may get it. Today's deferral of a decision is a 'win' for him.US mortgage applications leaped +28% last week from the prior week, sharply rebounding from three consecutive periods of declines. The trigger seems to be a fall in benchmark home loan rates, although to be fair they only shifted from 6.25% to 6.18%. But that seems to have been enough to have motivated borrowers.American producer prices were up +3.0% in November from a year ago with core PPI up +3.5%. These changes are very little different to what was recorded for them one year ago.US retail sales were up +1.9% in November from a year ago (from US$723 bln in November 2024 to US$737 bln in this latest data). But for some reason the official stats agency is claiming it is up +3.3%. Hard to fathom - their 'seasonal adjustment' seems to have gone wonky.Meanwhile, American existing home sales recovered in December, and that left them +1.4% higher than year-ago levels. Their high levels of unsold inventory is starting to clear now.Across the Pacific, China's exports rose by +6.6% in December from a year ago to a record US$358 bln and much better than the expected +3% rise. These were up +5.9% in November and the December gain was the strongest growth since September, driven by a surge in exports to non-US markets. That surge capped their year with a trade surplus of much more than expected, a massive +US$1.19 tln. Clearly US tariffs haven't hurt China, although Americans are paying these taxes.China's vehicle sales grew +9.4% in 2025 from 2024 to a record high of 34.4 mln units with new energy vehicle (NEV) sales surging 28%. Although this was a faster pace of overall expansion, their December monthly sales actually fell -7.2% from 2024 levels. In fact, this industry is looking at 2026 with trepidation. The 2025 records may be the high water mark.In Japan, machine tool orders rose +10.6% in December their best level since the pandemic, and to levels they had back in the heady pre-pandemic levels. Strong foreign demand is a featureIn South Korea, some surprisingly negative jobs data was released yesterday. Their jobless rate jumped to 4.1% in December from 2.7% in November to its highest level in nearly five years - in fact back to pre-pandemic levels. The number of unemployed people rose to 1.22 mln, up +103,000 or up +9.2% year-on-year. It is such an unusual and unexpected result, it may be a rogue survey.In an updated review, the World Bank says global growth will come in at +2.7% in 2026, up marginally from +2.6% in its June forecast. It predicts US GDP growth will reach +2.2% in 2026, compared with +2.1% in 2025. For China, they see +4.9% and +4.4% for the same two years. For Japan it is +1.3% and 0.8%. For the EU, +1.4% and +0.9%. For India it is +7.2% and +6.5%. Neither Australia nor New Zealand feature in these reviews.The UST 10yr yield is now just on 4.14%, down -3 bps from this time yesterday. The price of gold will start today at US$4613/oz, and up +US$3 from yesterday, essentially holding Tuesday's big run-up on the geopolitical risks. Silver is still rising quickly, now almost US$91.50/oz, up +US$4.50/oz. Copper has hit a new record high.American oil prices are little-changed from yesterday at just over US$61.50/bbl, while the international Brent price is now at US$66/bbl.The Kiwi dollar is up a bit less than +10 bps from yesterday, now at just under 57.5 USc. Against the Aussie we are up +10 bps at 86.1 AUc. Against the euro we are unchanged at just on 49.3 euro cents. That all means our TWI-5 starts today just under 61.6, and little-changed from yesterday.The bitcoin price starts today at US$97,434 and up +4.2% from this time yesterday. Volatility over the past 24 hours has again been moderate, also at just on +/- 2.2%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news the Powell resistance to Trump has garnered unexpectedly wide support, nationally and internationally, reinvigorating "central bank independence" positions. It also has many Trump supporters worried, if the 'right-wing press' is any indication.First up today, the overnight Pulse dairy auction of milk powders extended last week's full auction gains for both SMP and WMP. And they were good gains, with SMP +2.1% higher than a week ago, and WMP +1.2% higher on the same basis.In the US, the December CPI data released overnight recorded no-change from their November levels, at 2.7% or 2.6% on a 'core' basis. Both are still above the US Fed target. Food prices are up +3.1% and rents up +3.2% within this survey.The ADP weekly jobs data shows a similar +11,000 jobs gain last week, a rate that would confirm January's net hiring as slower than the slow December.US new home sales held at the higher 737,000 annual rate in October, a good result in the circumstances, but now quite dated data.This data will get more 'interesting' in 2026 with news that more migrants left the US than entered. While the net outflow wasn't large (for the US) at possibly about -300,000, the expectation is that it will be similar in 2026. This is the first time in 50 years they have shed people. It has certainly lost its 'welcoming' reputation - for both potential migrants, and for travelers.We got more recent sentiment surveys overnight, The RCM/TIPP survey was more downbeat in January than December and more so than expected - although to be fair the shifts weren't large - they just went the 'wrong' way.But the NFIB survey was little-changed - negative yes (below 100 still), but marginally less so.In Japan, their official "economy watchers survey" was also little-changed, although the forward looking section became marginally more optimistic.Meanwhile, bank lending in Japan rose 4.4% in December from a year ago. That growth was well above what was anticipated. If you ignore than pandemic distortion, that was at least a 25 year high, and probably very much longer.And Japan is on watch, with many expecting Prime Minister Takaichi to call a snap election very soon to bolster her conservative clout in the Diet. That saw the yen tumble and equities soar yesterday. Benchmark bond yields rise sharply too.In India, they released their December vehicle sales data overnight, reporting a very strong +20.6% gain from the same month a year ago, capping a year of +5.0% growth. Apparently their GST rate reduction for other products improved the overall affordability situation for many buyers.In Australia, consumer sentiment as measured in the Westpac survey has shifted lower and is more pessimistic in January. While confidence is still well above the extreme lows recorded during the protracted ‘cost of living' crisis in 2022–2024, consumers are becoming more concerned about what 2026 may bring for family finances and the wider economy. The main catalyst continues to be a sharp turn in interest rate expectations. Nearly two thirds of consumers with a view now expect mortgage rates to move higher over the next 12 months, more than double the level back in September.The UST 10yr yield is now just on 4.17%, down -1 bp from this time yesterday. The key 2-10 yield curve is still at +64 bps.The price of gold will start today at US$4610/oz, and down -US$7 from yesterday, essentially holding yesterday's big run-up on the risks from the unsettled US Fed. Silver is still rising, now almost US$87/oz.American oil prices are up US$2.50 from yesterday at just under US$61.50/bbl, while the international Brent price is still at just under US$65.50/bbl.The Kiwi dollar is down -20 bps from yesterday, now at just over 57.4 USc. Against the Aussie we are up +20 bps at 86 AUc. Against the euro we are down -10 bps at just on 49.3 euro cents. That all means our TWI-5 starts today just under 61.6, and down -20 bps from yesterday.The bitcoin price starts today at US$93,492 and up +1.5% from this time yesterday. Volatility over the past 24 hours has again been modest, also at just on +/- 1.5%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we start with news of gold and other commodity prices have pushed up into record territories again as geopolitical risks rise. (Crypto's are notable by their impotence in the background, irrelevant in this environment.)Perhaps one reason is in the US, where the President has used his weaponised Justice Department to pressure the Federal Reserve to bow to his will. The clearly bogus criminal charges are being resisted by chairman Powell. The unseemly crisis could aggravate risk premiums worldwide. So far interest rates have remained stable (you can be sure that bond markets will be watching intensely), but the USD is noticeably weaker.It has not been in the limelight recently, but we should note that US grain farmers are facing tough trading, with them being shut out from the China trade for soybean and corn. Trump seem to have thrown them under the bus.In India, consumer price inflation rose to 1.3% in December from 0.7% in November but below the market consensus of 1.5%. Despite the rise, this rate remains well below the Reserve Bank of India's tolerance limit of 2%-6%. Prices fell less for food (down -2.7%), which represent nearly half of the consumer basket.In Australia, household spending rose strongly in November, up +1.0% from October, up +6.3% from November a year ago. This result was much better than expected.And Australia said it will y and stockpile key rare-earth minerals from domestic producers to strengthen defence and technology supply chains and reduce reliance on China. They are initially focusing on antimony and gallium under a new A$1.2 bln program.The UST 10yr yield is now just over 4.18%, up +1 bp from this time yesterday. Wall Street has opened its week with the S&P500 very little-changed, up +0.1%. We should perhaps note that serial underperformer Rakon has received another takeover bid from a previous suitor, this one less than the last, and the frustrated shareholders look like they will finally accept. They will put the mismanagement misery behind them, it seems. They will be selling for $1.55/share. These shares peaked at $5.60 back in the day, $2.08 in 2022. Today they are $1.36, so the market isn't yet pricing in a full chance of the takeover.At the other end of the scale we should also note that Alphabet (Google) briefly hit US$4 ​trln in market valuation earlier today, the second company to do that after Nvidia, as they sharpened their AI gains, both with impressive integrated solutions, and a recent deal with Apple (who was pushed into third place on the valuation table).The price of gold will start today at US$4617/oz, and up +US$108 from yesterday on the risks from the unsettled US Fed. Silver is now up at over US$80.50/oz.American oil prices are unchanged from yesterday at just on US$59/bbl, while the international Brent price is still at just under US$63.50/bbl.The Kiwi dollar is up +40 bps from yesterday, now at just under 57.7 USc. Against the Aussie we are up +10 bps at 85.8 AUc. Against the euro we are up +10 bps as well at just under 49.4 euro cents. That all means our TWI-5 starts today just on 61.7, and up +30 bps from yesterday.In offshore trading the Chinese yuan (CNH) has strengthened well past the 4:USD level, and rising.The bitcoin price starts today at US$92,071 and up +1.2% from this time yesterday. Volatility over the past 24 hours has been modest, also at just on +/- 1.2%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Monday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we start with news of plenty of trade and economic action, some good, some not so.But first, some official data will start to be released locally this week, with November building permits and employment indicators, both for November, and the monthly December "selected price increases" covering mainly food and rent. We get the latest update to the NZIER business confidence survey this week too.In Australia, they will also release November building permit data, job vacancy data and household spending data, all for November too. The Westpac consumer sentiment survey will come as well, along with inflation expectation survey results.China's trade data for December will come out this week, and we expect the 2025 surplus to exceed US$1 tln. They will also release December new yuan lending data, expected to be better than November.From Japan we will get machine tool order data. In India, it will be about inflation data.In the US, the early Q4-2025 earnings reports will come from their big banks. Retail sales data is also due. But most eyes will be on the US December CPI result which is expected to be unchanged at 2.7%, although it is from an agency where the President inserted a lackey to keep an eye on their data.That same agency released their December US non-farm payrolls report over the weekend and it was something of a damp squib, but markets seemed to like it. The US economy added just +50,000 payroll jobs in December, less than a downwardly revised +56,000 in November and below forecasts of +60,000. These are the seasonally adjusted numbers. The raw data shows payrolls falling -192,000 and quite different to the equivalent small rise in December 2024. The broader population survey has overall employment falling -335,000 in December (double the 2024 change).The US unemployment rate ended the year at 4.4%, a tick less than November's 4.5% but well above December 2024's 4.1% (and December 2023's 3.8%). Average weekly earnings rose +3.8% from a year ago, keeping pace with inflation.Most analysts now see almost no chance of a rate cut at the Fed's January 29, 2026 meeting. Trump's inserted Miran remains an almost lone voice.US consumer debt trends are showing similar signs of stress and are looking topped-out. Total debt rose by only +US$4.2 bln in November and well below market expectations of a modest +$10 bln rise. It is equivalent to a +1% annual rise. Revolving debt (credit cards, etc.) fell at an annual rate of -1.9% while non-revolving debt, which includes car and student loans, went up +2.0%.So the latest update of a key consumer sentiment survey (this one from the University of Michigan) remained very low but little-changed in January from December and -25% lower than year-ago levels, -17% lower than two years ago.And we should note that markets are now expecting the US Supreme Court to rule on its tariff case possibly on Thursday.In Canada, employment was little-changed in December, up a minor +8200. But full-time employment grew +50,100 while part-time jobs shrank -42,000. It will be a rebalancing they will welcome. Their employed workforce is 21.1 mln, up +1.1% from a year ago. Analysts see much less of a chance of interest rate hikes in 2026 after this labour market result.In Japan, household spending was expected to bounce back in November after the weak October result. It did, but by very much more than expected. That was enough to take it up +2.9% from a year ago and very much better than the market expectations for a -0.9% decline. It was the steepest rise since May, supported by higher winter-related purchases and easing inflation pressures on some essential goods.Chinese CPI inflation is staying very low even if it did rise slightly in December. It came in +0.8% higher than year ago levels, marginally higher than in November. Beef prices were up +6.9% however from a year ago, sheep meat prices up +4.4% on the same basis. Milk prices (now bundled into "dairy products") were down -1.8% on that annual basis. All these food price rises were a key reason for the overall CPI rise.Taiwanese exports were up +43% in December from a year ago, rising to the second-highest monthly level on record. The pace slowed from an unusual +56% burst in November. It says a lot about expectations in Taiwan that analysts were expecting a +46% rise.Indian bank lending rose +14.5% in December from a year ago, the most in two years.In Europe, retail sales rose at a + 2.3% year-on-year volume rate in November, up from a revised +1.9% in October and well above market expectations of just +1.6%. The return of rising consumer spending will be welcomed in the bloc. This impulse is broadly back to what they had in the 2017-2019 period.We should note as well that the EU, after overcoming deep dissension among its members (especially by France), gave the green light to a sweeping free trade deal with four South American countries (Brazil, Argentina, Paraguay and Uruguay) to create one of the largest free-trade zones in the world, connecting markets with more than 700 million people. The deal probably got over the line because of reaction to Trump's isolationist policies. It is interesting that this deal includes Argentina, which the US is propping up financially.The UST 10yr yield is now just over 4.17%, down -1 bp from this time Saturday, down -2 bps from a week ago. The price of gold will start today at US$4508/oz, and up +US$8 from Saturday, up +US$195/oz from a week ago. Silver is now up at US$80/oz. Aluminium is on the move up as well at US$3148/tonne and apart from the pandemic distortion, that is a new record high.American oil prices are down -50 USc from Saturday at just over US$59/bbl, while the international Brent price is still at just under US$63.50/bbl.The Kiwi dollar is unchanged from Saturday, now at just under 57.3 USc.  Against the Aussie we are also unchanged at 85.7 AUc. Against the euro we are little-changed as well at just under 49.3 euro cents. That all means our TWI-5 starts today just on 61.4, and unchanged from Saturday, down -30 bps from a week ago.The bitcoin price starts today at US$90,953 and down -0.5% from this time Saturday. Volatility over the past 24 hours has been very low at just on +/- 0.4%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Friday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we start with news global trade is rising and quite impressively, but the US is being shunned (or shunning itself).But first, US initial jobless claims rose more than +29,000 last week, marginally more than level seasonal factors would have accounted for. But there are now just under 2.2 mln people on these benefits and quite a bit higher than a year ago. Modest hiring and rising firings are driving these trends.Although the December month layoff data was unusually low, it does cap the full year layoff level at just over 2 mln and the most since the pandemic, and prior to that, the most since the GFC.Analysts are expecting tomorrow's release of December non-farm payrolls to rise just +60,000, similar to the low November level.In their December survey, the New York Fed reports it showed US labour market expectations worsened (almost one in seven people expect to lose their jobs in 2026) and short term; inflation expectations tick up to 3.4% but were unchanged over the longer terms.US exports rose and imports fell in the October data released overnight. The US trade deficit narrowed sharply to -US$29.4 bln in the month, the smallest gap since June 2009. Exports rose 2.6% or +US$7.2 bln to a record $302 bln. Imports declined -3.2% to a 21-month low of $331 bln. But this is really a story about gold flows more than tariff effects. Precious metal exports rose US$10.2 bln in the month and without those, exports would have fallen. Imports of gold fell -US$1.4 bls. Their largest monthly gaps were recorded with Mexico (-US$18 bln), Taiwan (-US$16 bln), Vietnam (-US$15 bln) and China (-US$14 bln). The trade gap with the EU narrowed sharply to -US$6.3 bln.Canada also reported trade data overnight. In October, Canada's merchandise imports increased +3.4%, while exports were up +2.1%. As a result, Canada's merchandise trade balance went from a small surplus of +C$243 mln in September to a deficit of -C$583 mln in October. Basically they remain in balance on this measure. But the transition away from trade with the US is sharp. Again, these flows have a large gold component too.In China, private analysts shows that their property market slump deepened in 2025, with new-home sales shrinking -9% to levels not seen before 2010 and falling by roughly half from their 2021 peak. Total sales value fell by nearly -13% according to this respected analysts.Japanese consumer sentiment, which has been improving since April, hesitated in December at just below the November level. Another improvement was expected, although the difference is small.It was a very similar story in the EU, with a December hesitation after a nine month string of improvements.Meanwhile, the survey for the ECB on consumer inflation expectations shows them unchanged in November at 2.8%.On the industrial front however, producer prices fell -1.7% in November from a year ago, more than the -0.5% in October, but less of a deterioration than the -1.9% expected. They actually rose slightly from the prior month and ny a bit more than anticipated.German factory orders rose sharply in November and ny much more than expected, up +5.6% from October, up +10.5% from the same month a year ago.In Australia, the trade surplus narrowed in November, as major commodity exports fell, and capital goods imports signalled a possibility of softer business investment in the December quarter.Globally, air passenger travel rose +5.7% in November from a year ago. international travel was up +7.7%. But its was all driven by the +7.8% rise from the Asia/Pacific region.Meanwhile air cargo traffic rose a similar +5.5% in November, also driven by the +11.1% rise in international cargoes in the Asia/Pacific region. North American flows declined.Global shipping container freight rates rose +16% last week from the prior week to be now -35% lower than year-ago levels. Outbound rates from China, to both the US and EU, rose sharply. Bulk cargo rates fell -6% last week, and are now +25% higher than a year ago.The UST 10yr yield is now just under 4.18%, up +4 bps from this time yesterday. The price of gold will start today at US$4460/oz, and up +US$2 from yesterday. Silver is down -US$2 to US$76/oz.American oil prices are up +US$1 from yesterday at just over US$57/bbl, while the international Brent price is now at just under US$61.50/bbl.The Kiwi dollar is down -30 bps from yesterday, now at just under 57.5 USc. Against the Aussie we are unchanged at 85.9 AUc. Against the euro we are down -20 bps at 49.3 euro cents. That all means our TWI-5 starts today just over 61.5, and down -30 bps from yesterday.The bitcoin price starts today at US$90,887 and down -0.4% from this time yesterday. Volatility over the past 24 hours has again been modest at just on +/- 1.2%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again on Monday.

Kia ora,Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we start with news the fall of the USD is driving some renewed realignments.To start we should note that gold has surpassed US Treasuries as the world's largest reserve asset globally for the first time in 30 years driven primarily by sharply rising prices, and some aggressive buying by some (mainly autocrat) central banks.Elsewhere in the real economy, the private US ADP employment report for December rose by +41,000 jobs following a revised -29,000 retreat in November. The December result was slightly less than forecasts of a +47,000 gain. This huge sample has been in a yo-yo pattern since mid-2025 and over that six month period they have reported a net gain of +129,000 - but almost all that gain was in August. We get the December non-farm payrolls report on Saturday, and it is expected to show a gain of +60,000.US job opening shrank in November. They fell by -303,000 to 7.146 mln in the month, the lowest since September 2024 and well below market expectations of a good gain.The ISM Services PMI rose for a third consecutive month in December, well above what was expected due to more positive holiday season trading. It was their best services sector PMI since October 2024, and broad-based. This was quite a different view to yesterday's S&P Global services PMI which told the inverse story.Meanwhile the US released catch-up factory order data, delayed by their shutdown, and a desire to make bad data seem less relevant. This report for October revealed orders fell +1.3% from September, to be just +1.6% higher than a year ago, far less than current price inflation. A driver of this pullback has been lower aircraft orders.Meanwhile, the NY Fed's global supply chain pressure index jumped rather more than expected in December, a clear signal that American importers are feeling rising stress - although nothing like its pandemic stress.In Canada, their widely-watched Ivey PMI turned back to an expansion in December, and they reported lower cost pressures, even if they remain elevated.In China, their central bank said it will cut the reserve requirement ratio and interest rates in 2026 to keep liquidity up with a loose monetary policy.Meanwhile their foreign exchange agency explicitly committed to “effectively guaranteeing” fx access for all market players, a move to reassure businesses of currency liquidity amid the global pressures.And China's FX reserves rose to US$3.358 tln in December, a +4.9% or +US$160 bln change from a year ago, boosted in part by a falling USD. But next week, China will announce a +US$1 tln trade surplus in the same period, so it does make you wonder where the difference has gone. Clearly there are large capital outflows. China's gold reserves rose more than +55% in 2025, largely due to the rise in price. But they also added volume from local mining.Another consequence of this rise in reserves and the swelling trade surplus, is that the yuan is appreciating, especially against the USD (but not significantly against the AUD or NZD). However the appreciation against the USD is crucial because most of the world's trade in conducted or priced in USD.Taiwan said its CPI rose +1.3% in December from a year ago, and its PPI fell -2.6% on the same basis.In Europe, they said their CPI was up +2.0% in the euro area in December, a slight dip from November. So it is at the ECB target now. The range was from +0.7% in France to over +3.0% in front-line eastern countries. Germany was +2.0%, Spain +3.0% and Italy +1.2%.Australia's CPI inflation slowed to 3.4% in November from a year ago, down from 3.8% in October. This was a bigger fall than expected, but it is still above the RBA's 2–3% target. Still, this will ease the pressure on the RBA and push back any thought of rate rises. Housing was up 5.2%, food by 3.3%, and transport by +2.7%. As the electricity subsidy rollback fades, that is reducing pressure overall.Australian building consents rose sharply in November, up +15.2% to 18,406, a rise dominated by apartment approvals.And while we complain about high prices for dairy products and meat because of our low dollar and high international demand, get ready for much higher fish prices too. The West Australian government has permanently closed it's snapper fishery, and fish wholesalers there are now flying in New Zealand snapper to fill the shortage.The UST 10yr yield is now just under 4.14%, down -4 bps from this time yesterday. The key 2-10 yield curve is now at +67 bps.The price of gold will start today at US$4458/oz, and down -US$29 from yesterday. Silver is down -US$4 to US$78/oz.American oil prices are down -US$1.50 USc from yesterday at just under US$56/bbl, while the international Brent price is now at just under US$60/bbl. These are both near five year lows.The Kiwi dollar is little-changed from yesterday, still at just over 57.8 USc. Against the Aussie we are up +10 bps at 85.9 AUc. Against the euro we are also up +10 bps at 49.5 euro cents. That all means our TWI-5 starts today just over 61.8, and actually little-changed yesterday.The bitcoin price starts today at US$91,276 and down -1.3% from this time yesterday. Volatility over the past 24 hours has again been modest at just on +/- 1.4%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we start with news today is all about commodity prices. Silver has jumped sharply, gold and platinum are up, copper is at a record high, and both nickel and aluminium have surged too. Tin is at a three year high. Lithium is on the move up again too after a two year slumber.It's not only hard commodities. The overnight global dairy trade auction surprised to the upside. A small gain was anticipated but in the end we got a +6.3% rise in USD terms, +6.5% in NZD terms. There were gains across the board, but the largest was for WMP (+7.2%), followed by SMP (+5.4%). There follow a worrying string of declines that set in from August, Elevated buying from China was a key driver, but that was on top of sharp increases in demand from the Middle East.The +6.3% rise in USD was the largest since March 2021. The +6.5% rise in NZD was the largest since September 2022. Despite these encouraging signs, overall prices are now only back to early December levels. The rises will be welcome, but on their own are unlikely to alter any farmgate payout prices. Today's recovery will need to be sustained. Don't forget, prices in USD have fallen -22% from May 2025 even after today's lift.In the US, the S&P Global services PMI for the US retreated back to a modest expansion in December after the good expansion the previous month which was revised lower. This metric is now at an eight month low. New business growth dropped to its lowest in 20 months as inflationary pressure bit harder.Meanwhile, the Logistics Manager's Index retreated for a second consecutive month in December. It was the slowest expansion in the logistics sector since April 2024, with the majority of the downward pressure coming from inventory and warehousing markets. Transportation costs rose more than expected.Total vehicle sales in the US rose to a 16 mln annual rate in December, up from a 15.6 mln rate in November. A year ago they ran at 16.9 mln annual rate, so a -5.3% decline.In China, total vehicle sales have not yet been announced, but it is very likely they exceeded 36 mln in 2025 with growing strength in the past six months. That will be +14.6% higher than their 2024 level.China equities hit a decade high in Tuesday trading.Meanwhile, an historic climate shift is bringing record rainfall to China's northern regions, overwhelming unprepared cities and upending agriculture, while leaving the traditionally lush south parched.In Europe, food giant Nestle is recalling infant formula after serious contamination concerns.The UST 10yr yield is now just on 4.18%, up +2 bps from this time yesterday.The price of gold will start today at US$4487/oz, and up another +US$45 from yesterday and heading back up toward its end of year record high. Silver is up sharply to US$81.50/oz and a new record high, and platinum is also back up sharply at US$2430 and also almost at its end of year record high.American oil prices are down -50 USc from yesterday at just over US$57.50/bbl, while the international Brent price is now at just under US$61.50/bbl.The Kiwi dollar is down -10 bps from yesterday, now at just on 57.8 USc. Against the Aussie we are down -40 bps at 85.8 AUc. Against the euro we are unchanged at 49.4 euro cents. That all means our TWI-5 starts today just on 61.8, and down -10 bps from yesterday.The bitcoin price starts today at US$92,515 and down -1.7% from this time yesterday. Volatility over the past 24 hours has again been modest at just on +/- 1.2%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.

Kia ora,Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we start with news elevated global uncertainty is pushing up prices for key minerals sharply today. Wall Street is of two minds about the risks and opportunities.But first in the US, the ISM Manufacturing PMI contracted for a third consecutive month in December to the lowest level since October 2024 and lower than expected. Manufacturing activity contracted at a faster rate, led by pullbacks in production and inventories. Price pressures remained elevated. On the other hand, this survey shows new orders contracting less in December and new export orders staying quite low..This ISM result was much more somber than the earlier S&P Global factory PMI for the US was still expanding in December, but fell from November to its weakest expansion in the current five-month growth phase. New orders declined for the first time in a year, while exports fell for a seventh consecutive month, weighed down by the consequences to costs from tariff-taxes, and trade frictions.Staying in the US, their vaccine-sceptic Administration has opened the door to a "moderately severe" flu outbreak this year (their description). The US CDC estimates the season's toll so far at least 11 million illnesses, 120,000 hospitalisations and 5,000 deaths. In the 2024–25 season, CDC estimated at least 5.3 million illnesses, 63,000 hospitalizations and 2,700 deaths in the equivalent period.In China, the private S&P Global (RD) services PMI expanded modestly in December. But the survey also noted that business activity and sales both rose at their slowest rates in six months. Job shedding persists. Output price inflation fell for the second time in three months. This private services PMI however is more upbeat than the official version.Indonesia exports slumped in November, following smaller retreat in October and coming much worse than market forecasts. Exports to China were a key driver of the pullback, both for oil and non-oil exports. This is their steepest drop since February 2024.Singaporean retail sales were unchanged in November from October, but given November 2024 was a weak month, that means they were up +6.3% from a year earlier to be the strongest growth since February 2024.In Europe, after a two year transition, they now have the Carbon Border Adjustment Mechanism (CBAM), fully in force. That, requires importers of steel, aluminium, cement, fertilisers, electricity and hydrogen to purchase certificates to cover the carbon emissions embedded in their products. The mechanism is designed to force importers to pay the difference between the carbon price in the country of production and that in the EU, trying to prevent “carbon leakage,” when companies based in the EU move carbon-intensive production abroad to take advantage of lax standards. But countries like China or the US are not happy.In Australia, a key industry lobby group has warned the power grid is not ready for the projected growth in capacity demands for data centers. They say the consequences could be severe for homes and businesses.And staying in Australia, the large high in the Tasman Sea bringing settled weather to New Zealand is blocking cooling relief in Australia. They now say NSW, Victoria and South Australia will get searing hot days, warm nights and elevated bushfire risk later this week. The forecast is for daytime highs being eight to 16 degrees above average, and night minimums to be 10 to 15 degrees above average.We should note that copper has surged to a new record high of US$13,093/tonne. Nickel has surged recently, now at a one-year high. And we should probably should note that Chinese iron ore prices are not falling, holding at a similar level they have been at since early 2024.The UST 10yr yield is now just on 4.16%, down -3 bps from this time yesterday.The price of gold will start today at US$4442/oz, and up +US$112 from yesterday and heading back up toward it record high. Silver is up to US$76.50/oz also back near its record high, and platinum is now at US$2269 and making the same upward shift.American oil prices are up +50 USc from yesterday at just over US$58/bbl, while the international Brent price is now at just over US$61.50/bbl.The Kiwi dollar is up another +20 bps from yesterday, now at just under 57.9 USc. Against the Aussie we are unchanged at 86.2 AUc. Against the euro we are up +20 bps at 49.4 euro cents. That all means our TWI-5 starts today just under 61.9, and up +20 bps from yesterday.The bitcoin price starts today at US$94,143 and up a strong +3.1% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.8%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we'll do this again tomorrow.