Energy shock to be protracted

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. Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI