Economy Watch

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-China summit in Beijing is underway and so far, the results have been underwhelming. Xi warned Trump about US support for Taiwan, and a big jet order for Boeing wasn't quite what was expected, causing Boeing's share price to fall today (-3.6%). The travelling CEO's seem to be impressed with China's opportunities, rather than Trump getting China to invest in the US. But it is only day one, so more may come of this visit. In the US data out overnight shows there were 190,600 initial jobless claims last week, less than seasonal factors would have indicated. There are now 1.7 mln people on these benefits, less than a year ago and about the same as two years ago. Given how this is tracking so different to the US household labour force survey, part of the jobless claims easing can be attributed to tougher qualification standards. US retail sales rose marginally in April from March to be +4.5% higher than year ago levels. Higher dollar sales at petrol stations were a key factor. The timing of one-off tax refunds probably played a part too. This is a gain that is higher than the 3.8% US CPI. Business inventories rose as well (the data is for March). Retail inventories did too. But both are up less than the sales gains, so the inventory to sales ratio is improving. In China, banks haven't been lending at the rate expected. New yuan loans by Chinese banks fell by a net -¥10 bln in April, and much less than the expected +¥300 bln, and less than the +¥285 bln in April 2025. This is quite an unexpectedly variation and turn down in momentum, and only the third time on record this has happened. One reason is that there is a shift to corporate bond financing, away from bank financing. In Australia, their competition regulator has prevailed in a case it brough against supermarket giant Coles claiming its discount claims were a sham. This judgement is sure to echo in New Zealand. The ACCC has a parallel case pending judgement against Woolworths. Meanwhile the peak Australian labour union, the ACTU, has amended its claim for a minimum wage rise to +6% before the Fair Work Commission, taking the claimed rate to AU$26.45/hour (NZ$32.25). Obviously, the change is in response to rising inflation. Global container freight rates were up +12% last week to be +14% higher than year-ago levels. Surcharging for fuel is the key reason for the rises although this is also the time the northern hemisphere "peak season surcharges (PSS) start to be applied. Bulk cargo rates shifted higher again last week as well, up +5.4% and are now at levels we had during the pandemic stresses The UST 10yr yield is now just on 4.46%, down -1 bp from this time yesterday. The price of gold will start today down -US$12 at US$4678/oz. Silver is down -US$3 at just under US$85/oz. American oil prices are holding up at just over US$101.50/bbl, while the international Brent price is just under US$106/bbl. The Kiwi dollar is down -10 bps from yesterday at this time at 59.2 USc. Against the Aussie we are up +20 bps at 81.9 AUc. Against the euro we are unchanged at just under 50.7 euro cents. That all means our TWI-5 starts today at just on 62.5 which is down -10 bps from yesterday. The bitcoin price starts today at US$81,564 and up +2.7% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 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 commodity markets are signaling more intense stress with copper and sulphur jumping to new all-time highs and aluminium jumping to near its brief pandemic spike. Tightening supply from the Middle-East standoff is driving the cost of these fundamentals up. Today, Trump is in Beijing where heavily choreographed set pieces are play out ahead of the formal discussions. Trump got welcomed by a non-Politburo member, the first time China has done that. So far he is being treated just like any other visiting head of state, rather than the special senior welcomes by his predecessors. And China is organising one of its tankers to exit the Strait of Hormuz in defiance of the US blockade, right at the time these meetings take place. US mortgage applications were little-changed last week, but with this week's push higher in benchmark interest rates, they are likely to fall when reported next week. American producer prices were up +6.0% in April from a year ago, getting a +1.4% shove in April from March. Distorted input costs from Trumps Gulf War are embedding uncompetitive pricing in American-made goods. Only the pandemic surge has been greater (also on Trump's watch.) It isn't clear right now why American producer prices are rising faster than just about everywhere else, but history will eventually explain that. US crude oil stocks took another outsized tumble last week according to official EIA monitoring. Petrol stocks there fell sharply too. (These sharp drops are confirmed by industry data too.) The industry is raking in record profits on these lower volumes. Why the US, a net petroleum producer, is feeling the brunt of these price hikes is a classic study in oligopoly power. (And see this investigation.) Meanwhile, UST 30yr bond yields have risen above 5% on secondary markets. Apart from the pandemic spike, this is the first time they have done so since 2007, so a two decade high. The overnight US Treasury 30 year bond auction delivered a medium yield of 4.99% (top bid 5.05%), up from 4.82% at the prior equivalent event a month ago. And we should note that Kevin Warsh is now the Fed Chairman. But ex-boss Powell is still there. Given the Trump-induced inflation surge, he is unlikely to be able to deliver on Trump's demand for lower US interest rates. In Canada, their central bank says they see no evidence that AI is having a material impact on their jobs market - yet, anyway. For them, the benefits are outweighing the costs. EU industrial production rose in March from February, but that wasn't enough to counter the outlier faster rise a year ago, so it ended down -1.0% year-on-year. An outsized fall in Germany twisted these results. In its May monthly report, OPEC cut its forecast for global oil demand growth in 2026, joining other forecasters such as the IEA in cutting expectations due to the Iran war. In Australia, the wealthy are reeling after their latest Budget signaled a levelling of the tax playing field and the wind-down of concessions for wealth. To be fair, these are to be unwound over many years, but the big end of town is furious they are losing their perks. Certainly, those dependent on the property market can see an end to the gravy train. The UST 10yr yield is now just on 4.47%, unchanged from this time yesterday. The price of gold will start today up +US$12 at US$4690/oz. Silver is up +US$3 at just over US$88/oz. American oil prices are holding up at just over US$101.50/bbl, while the international Brent price is at just over US$106/bbl, which is down -US$1.50. The Kiwi dollar is down -10 bps from yesterday at this time at 59.3 USc. Against the Aussie we are down -60 bps at 81.7 AUc. Against the euro we are unchanged at just under 50.7 euro cents. That all means our TWI-5 starts today at just on 62.6 which is down -10 bps from yesterday. The bitcoin price starts today at US$79,447 and down -1.3% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 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 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 oil prices are still rising as the two sides dig in in the Persian Gulf with no obvious off-ramp for this toxic situation. And hot on the heels of what is being seen as this humiliation of the US in the Middle East, Trump is heading to Beijing where the Chinese are waiting to attempt to get the US separated from Taiwan. Their chances seem better because China seems much less reliant on the inward-looking US. But first, the overnight dairy Pulse auction brought little-change in prices from last week's full auction event. In the US, their April CPI inflation rose slightly more than expected, coming in 3.8% higher than year-ago levels and a three year high. Trump's war pushed fuel costs up (+17.9%). But it is pushing non-fuel costs up too with core inflation its highest in 7 months. Electricity prices are up +6.1%. (Remember, this data is from the Trump-friendly 'new management', so we should remain sceptical.) The weekly ADP Pulse monitoring reports that the private sector added +33,000 jobs in the last week of April, keeping up the page it has reported for the prior five weeks. An new monitoring shows it is not a good time to be young in the US. The NFIB Small Business Optimism Index was little-changed in April and near its 11-month low of 95.8. Analysts had expected a small improvement, but it was not to be with survey respondents concerned about rising inflation, and affordability stress on their customers. Overall US household debt was basically steady in Q1-2026 according to the latest update. But their Federal Government debt is increasing in cost and at a faster face. The overnight auction for their ten-year bonds came in at 4.41% median yield, up from 4.23% at the prior equivalent event a month ago. The May USDA WASDE report exposes the risks to American agriculture from creeping changes to their climate. They now concede that the US wheat crop will be sharply lower this coming season. Reductions from the EU, Argentina, and Australia are being forecast too. Corn production is likely to be lower too, although that is off this year's record harvests. All this pressure probably means there will be no US Fed rate cuts for the foreseeable future. If there are any movements, rises are the more likely. Across the Pacific, Japanese household spending turned worryingly lower in March as inflation started to bite and their households turned risk-averse. They are saving more. Household spending there fell -2.9% in March, much more than the -1.8% drop in February and below the expected -1.3% retreat. This is the fourth straight decrease and the largest. India's CPI inflation rate inched up to 3.5% in April from March's 3.4%, not the big rise (to 3.8%) that was anticipated by market watchers. In Germany, their ZEW Indicator of Economic Sentiment was expected to get more negative in May that in April, but in fact it got less negative, which was a market surprise. Economic expectations are brightening, they say. In Australia, they released a fairly ambitious Budget overnight, doing more needed reform than anticipated. But it is still a budget in deficit, even if less so. With some unusual bravery, they are tackling stubborn policy areas and will no doubt have to use some political capital to do so. Redistribution pain will bring howls from the usual suspects at the top end of the wealth spectrum. They have been aided by stronger than expected starting point from tax flows from commodities and corporate good health. Here is one less-partisan analysis. But accelerating cost pressures are squeezing margins and demand is cooling, with the latest NAB Monthly Business Survey signaling a tougher operating environment for Australian businesses. This April survey shows purchase cost growth lifted sharply to +4.5% in April, outpacing product price growth at +1.8%. Business conditions fell while confidence marginally but it is still deeply negative (in fact, its worst since the pandemic). Those surveyed reported that forward orders fell further in April to be down sharply since February and giving up all the gradual gains achieved over the past year. Only mining orders rose and to be fair these were outsized gains in that sector. (Later today, we expect to get the Westpac consumer sentiment survey results.) The UST 10yr yield is now just on 4.47%, up another +6 bps from this time yesterday. The price of gold will start today down -US$44 at US$4678/oz. Silver is down -50 USc at just under US$85/oz. American oil prices are up another +US$3 at just over US$101.50/bbl, while the international Brent price is at just over US$107.50/bbl, also up +US$3. The Kiwi dollar is down -30 bps from yesterday at this time at 59.4 USc. Against the Aussie we are up +10 bps at 82.3 AUc. Against the euro we are unchanged at just under 50.7 euro cents. That all means our TWI-5 starts today at just over 62.7 which is down -20 bps from yesterday. The bitcoin price starts today at US$80,465 and down -1.9% from this time yesterday. 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 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 Iranians seem to be sucking Trump into a place he can't extract himself from, far from his earlier claims of 'total victory'. First up today, US existing come sales came in at a modest level again in April, and undershot what analysts were expecting. High mortgage interest rates are probably the reason for the soft demand. Still, they did sell at an annualised rate of just on 4 mln dwellings which is enough to sustain the sector. Unsold inventory is rising however, now at 16 weeks sales, and has been rising for all of 2026 and is now at 1.35 mln units. There was another US Treasury bond auction earlier today, and it was notable that demand is flagging, down -5% from the prior event. This time this 3 year bond achieved a median yield of 3.92%, up from 3.85% at the prior equivalent event a month ago. Inflation's impact in the US has officials scrambling. US petrol taxes are said to be on the radar for cutbacks. And the high cost of beef is pushing the US to sharply cut tariffs and quotas on imported beef. Both are effective acknowledgements that tariffs are hurting Americans more than their trading partners. However, given current demand and supply situations, it seems neither move will likely result in lower prices for US consumers. In Canada, their central bank runs a 'market participants survey' quarterly, and in the latest of these professionals now see geopolitical tensions more of a threat to their economy that the trade tensions with the US. They also saw only a modest +1.6% economic expansion this year. China's inflation is rising, noticeably now. Today they said their April CPI came in up +1.2% from a year ago, with fuel costs up +4.6% on that year-ago basis. But in April from March, fuel costs rose +3.5% in just one month. Things are hotter for producer costs which were up +3.5% year-on-year, and up +2.1% month-on-month. These are big sifts because it has been negative since October 2022. China's vehicle sales came in a 2.525 mln in April, about average aver the past three years, but marginally lower than year-ago levels which was an outsized period. On the commodities front, copper shot up to a record high today, and aluminium, nickel and zinc are also rising at the same time. Sulphur, a key ingredient for all mining and processing activity has shot up to a record high again, and approaching three times its cost of a year ago, up double from the start of Trump's Gulf War. Urea, which also spiked to mid April, has come back quite a bit since then. Trump is on his way to Beijing for a summit with Xi, but he is going is quite a weakened state - but he probably doesn't realise it. The UST 10yr yield is now just on 4.41%, up +5 bps from this time yesterday. The price of gold will start today up +US$8 at US$4722/oz. Silver is up +US$5 at just under US$85.50/oz. American oil prices are up +US$3 at just under US$98.50/bbl, while the international Brent price is holding at just over US$104.50/bbl, up +US$3.50. The Kiwi dollar is unchanged from yesterday, at this time at 59.7 USc. Against the Aussie we are down -10 bps at 82.2 AUc. Against the euro we are up +10 bps at just on 50.7 euro cents. That all means our TWI-5 starts today at just under 62.9 which is little-changed from yesterday. The bitcoin price starts today at US$81,983 and up +0.6% 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 that the Strait of Hormuz is still essentially shut with Trump's war on Iran far from resolved. The claims of 'ceasefires' merely propaganda exercises. Rolling skirmishes mean no shipping can get insurance, despite offers of safe passage. No-one respects anyone in a region where trust has evaporated. Locally this week, the big data insights will come from the RBNZ's survey of inflation expectations on Wednesday, migration and travel activity data on Thursday, and a first look at inflation on Friday via Stats NZ's selected price tracking. We will also get the factory PMI on Friday. In Australia, the key events will be the Federal Budget on Tuesday preceded by the Commbank profit result. There will also be consumer and business sentiment surveys out this week. In the US, it will be all about their April CPI and PPI, along with updates for retail sales and industrial production In India, they will also release CPI data. From Japan look out for household spending and PPI data too, and machine tool order updates. In China, we are expecting April updates for CPI, PPI and new yuan loan data. Over the weekend, China released its April export data and it was strong. While the US is turning inward, China is seizing the opportunities of their mistake. China’s exports rose +14% in April to a record high, picking up from March's +2.5% growth despite the disruptions from the Trump Gulf War. And China's imports surged +25% on the same year-on-year basis, a second straight monthly record and confirming resilient domestic demand. It is all very impressive. China's exports to us were up only +3.8% from a year ago, but their imports from us were up +14.5. China's exports to Australia were up +36% and their imports were up +20%, but that still left Australia with a very large surplus with China. China's exports to the US were down -10.4%, and their imports down a similar -10.2%. They seem to have reduced their reliance on goods from the US to now just 9.8% of their total imports. No wonder US exports are faltering. Over the weekend, the official data from the US showed they added +115,000 payroll jobs in April at the headline level, above expectations of a +62,000 gain and following a +185,000 increase in March. It was the first back-to-back monthly gain in nearly a year, and on an 'actual' payroll basis it was stronger again. Their jobless rate was stable at 4.3%. But we should remember that all this data comes from an agency where Trump fired its head because he didn't like the results and this latest data is under the 'new management'. An independent professional review has confirmed there are distortions growing from this agency. Employment rose in health care, logistics, and in the retail trade while it fell in the manufacturing and government sectors. But if you include those not in payroll employment (self-employed etc.) there was no change on an 'actual' basis, a fall of -226,000 on a seasonally-adjusted basis. Their underclass is really struggling. And you can see that in the latest University of Michigan consumer sentiment survey for May which fell again and to a record low. The fall from April wasn't large, coming in a scant 1.6 index points below April’s reading but it was comparable to the pandemic trough reached in June 2022. Year-ahead inflation expectations are for 4.5%, a touch less than in April. In Canada, their employment fell -18,000 in April, but more people entered their job market, raising their jobless rate to 6.9%. In India, banks are lending freely, with loan growth up +16% from a year ago. For all its growth narrative, India's stock exchanges are reporting serious 2026 declines, unlike most other global markets. The UST 10yr yield is now just on 4.36%, unchanged from this time Saturday, down -2 bps for the week.  The price of gold will start today down -US$9 at US$4714/oz, up +US$114 for the week. Silver is little-changed at just under US$80.50/oz, up +US$4.50 for the week. American oil prices are little-changed at just under US$95.50/bbl, down -US$7 for the week, while the international Brent price is holding at just over US$101/bbl, down -US$7.50 for the week. The Kiwi dollar is up +10 bps from Saturday, at this time at 59.7 USc, up +70 bps for the week. Against the Aussie we are unchanged at 82.3 AUc. Against the euro we are also unchanged at just on 50.6 euro cents. That all means our TWI-5 starts today at just under 62.9 which is up +10 bps from Saturday but up +40 bps for the week. The bitcoin price starts today at US$81,392 and up +1.6% from this time Saturday. Volatility over the past 24 hours has been low however at just under +/- 0.6%. 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 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 American households are struggling as inflation pressures consume their reserves. In the US there were 181,000 new initial jobless claims last week, about what seasonal factors would have indicated. There are now 1.735 mln people on these benefits, lower than at this time last year, but still above two year-ago levels. And there were 83,000 reported job cuts in April, a bit above the average over the past year. For a second month in a row, AI is the key reason for shedding jobs now. Median one-year-ahead inflation expectations in the US rose in April and for a second month to 3.6% in April which is their highest since October 2023. Inflation uncertainty also increased at the one-year-ahead horizon. Income expectations are up less than 3%, so on average most people there expect inflation will set them back from where they are. US consumer debt jumped in March by much more than expected, driven by a +9.1% surge in credit card debt. The big end of town is noticing. Executives across retail, restaurants and packaged goods are increasingly worried about American shoppers with tighter budgets amid surging fuel prices caused by Trump's Gulf War. “They’re literally running out of money at the end of the month,” one said. Across the Pacific, China's FX reserves jumped in April to just over US$3.4 tin after the unexpected March dip, and back up in its rising trend. This is their largest gain in 28 months. But it is still off its US$4 tln level in mid 2014. Gold holdings increased again by another +8 tonnes. The central bank of Malaysia reviewed its monetary policy late yesterday and kept its official rate unchanged at 2.75%. And Malaysian discount airline AirAsia said it has ordered 150 Airbus aircraft worth US$19 bln, and said it has an option to order another 150 from Airbus. Orders like this are being driven by the need for fuel efficiency. The central bank of Norway unexpectedly raised its policy rate by +25 bps to 4.25% at its overnight meeting, defying market expectations for no change. They said inflation remains too high at 3.6% and is likely to stay elevated and action is needed now to keep it closer to its 2% target. In the EU, the volume of retail sales fell in March from February to be up just 1.9% from year ago levels. The lower volume of fuel sales was the key reason driving the recent reversal. Non-food, non-fuel activity was actually up an impressive +3.0% for the year. In Germany they posted an impressive factory order intake for March, up +6.3% from the same month a year ago and resuming the upward trend they have had since August 2025. Australia said its exports fell -2.7% in March from February as rural exports plunged -11.6%. Also, non-monetary gold exports dropped -6.1%. That makes its March merchandise exports -2.2% lower than year-ago levels. Meanwhile, imports rose +14%. That means they recorded a -AU$1.8 bln trade deficit for the month, far larger than the expected +$4.2 bln surplus and the first monthly deficit since 2017. The import surge of "ADP equipment" totaling $4.8 bln in March (likely for data centers), is a key reason. Meanwhile, the Aussie government has imposed punitive tariffs of up to 82% on Chinese coil steel exports in a major effort to shield local manufacturers from low-cost competition from China that receive 'unfair' Chinese government subsidies. Global container freight rates rose +3% last week to be +10% higher than year-ago levels. Outbound China rates are rising again. Bulk cargo rates were up +11.5% over the past week to be +112% higher than year-ago levels. The UST 10yr yield is now just on 4.40%, up +5 bps from this time yesterday. The price of gold will start today up +US$17 at US$4697/oz. Silver is up +US$2.50 at just over US$79.50/oz. American oil prices are up +50 USc at just on US$96/bbl, while the international Brent price is little-changed at US$101.50/bbl. Oil company Shell announced quarterly earnings overnight, more than doubling them to US$6.9 bln in the three months to March, from Q4-2025's US$3.2 bln. Clearly more than 'cost increases' are being passed on at the pump. The Kiwi dollar is unchanged from yesterday at this time at 59.5 USc. Against the Aussie we are also unchanged at 82.3 AUc. Against the euro we are holding at just on 50.7 euro cents. That all means our TWI-5 starts today at just under 62.8 which is unchanged from yesterday. The bitcoin price starts today at US$79,843 and down -1.9% 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 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 oil prices have tumbled as the US seems to give up on most of its stated objectives, including the promise of safe-passage for shipping, in a u-turn to extract itself from a losing hand. Crude oil prices are down more than -10% on the news, although it needs to be noted that the Strait of Hormuz remains closed. It is just market euphoria. We now need to start worrying about a permanent Iranian transit tax after the US walks away. The Gulf States who supported the US are about to be thrown under the bus. Financial markets don't care of course and like the end of the adventure. US mortgage applications fell again last week as interest rates rise, both for refinance activity and new home purchases. This takes this activity back to September 2024 levels. The US ADP employment report said their private labour market added +109,000 jobs in April, marginally more than the +99,000 expected. This sets the official non-farm payrolls report up for an expected +60,000 rise, with upside. Most of the new jobs are coming from aggressive hiring in their healthcare sector. After the prior week's outsized fall, this week the EIA reports another notable fall in US crude oil stocks. In fact, every metric fell other than US crude oil imports. There is certainly no relief at US petrol pumps yet, with prices now up more than +50% from their pre-Trump Gulf War levels. We have earlier noted the politicalisation of US official data, especially of the Bureau of Labor Statistics who produce CPI, PPI and labour market data. We weren't the only ones. A new analytical report has been looking at how this has affected the quality of their data and concluded there is a worrying impact from this trend. So we need to be sceptical, and the next of their big set piece reports is the April non-farm payrolls. This means we will need to rely more on other non-Trump Administration high frequency market data. In Canada, their widely-watched Ivey PMI surged into a strong expansion in April and by more than expected. In China, new analysis shows Chinese companies are reporting lackluster earnings, with overall net profit declining in 2025 for the third consecutive year as the property slump dragged on and more retailers posted losses, hurting employment and the economy as a whole. Meanwhile, China's Golden Week holiday has just ended, and reports are that there was less air travel this year - but very much more high-speed rail travel. Overall domestic holiday activity was up +3.5% with air travel falling -5.7% year-on-year to 10.5 million passengers between May 1 and May 5, railway journeys up +4.6% to 1.06 billion. And staying in China, their non-official S&P Global services PMI reports that their services sector expanded faster as new business picked up in April and the year-ahead outlook improved. Cost pressures remained modest from this giant sector. In India, their services sector saw new orders and output expand at a quicker pace supporting hiring activity. They also reported a mild reduction in inflationary pressures. (Things aren't so good in the Russian services sector.) In the EU, they report rising cost pressure for producers, all related to higher fuel prices. Overall they are up +2.0% in April from a year ago, but up +3.2% from March. There is quite a wide range of impacts depending on the country. Internationally, a new report tallying global debt found it at US$353 tln, and a strong shift away from US treasuries and toward big new demand for Japanese and European government bonds. They also found the overall debt:GDP ratio remained stable. The UST 10yr yield is now just on 4.35%, down -7 bps from this time yesterday. The price of gold will start today up +US$121 at US$4680/oz. Silver is up +US$4 at just over US$77/oz. American oil prices are down -US$6.50 at just on US$95.50/bbl, while the international Brent price is down -US$8.50 and now at US$101.50/bbl. The Kiwi dollar is up +60 bps from yesterday at this time at 59.5 USc. Against the Aussie we are up +30 bps at 82.3 AUc. Against the euro we are up +30 bps at just on 50.7 euro cents. That all means our TWI-5 starts today at just under 62.8 which is up +50 bps from yesterday. The bitcoin price starts today at US$81,399 and up +0.1% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.3%. 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 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 that although the US claims the ceasefire with Iran is holding and "ships are lining up to transit", in fact, very little is moving in the area between Iran's red lines. And the most high profile transit in the past 24 hours was an Iranian tanker. Still, the US claims resonated on Wall Street, and stocks rose, benchmark rates fell. But first today, there was another full dairy auction earlier today, a small one where volumes offered and sold were the least in fifteen years, since mid 2011. But prices were up +1.5% in USD, up +1.6% in NZD. Butter prices continued to slide, but there were good gains for SMP, WMP and mozzarella. These gains end two consecutive full events where prices fell. US job openings fell, although to be fair, but less than expected. But even then, they are back at levels they had in April 2018, which is less than it seems because their labour force is so much larger now. There were two services PMI reports out for the US overnight (ISM and S&P Global) and both showed that new business intakes fell for first time in two years as war in the Middle East and inflation hit demand. But both were positive even if less so that in the prior two months The reason for the retreat cam be found in the latest April logistics managers report, where freight costs leapt, taking this index back to pandemic-stress levels. The US RCM/TIPP economic optimism index fell yet again, down to levels last seen in early 2024. It has retreated steadily since December 2024. It's sponsor's report called it 'steady' but that is gilding it somewhat. US exports and imports were little-changed in April, but both are in rising trends even if imports rose slightly more than exports (which rose largely on petroleum exports). Their trade deficit was widened. Canada also reported export data and that came in at a one year high, and unexpectedly good result, largely on the back of high exports of petroleum and gold. Imports fell back in April but from an unusually high March level. The result was a good trade surplus, their first since September 2025. Singapore reported March retail sales late yesterday and they were better than expected with a good +4.8% rise from a year ago. That represents a real gain because their CPI inflation was 1.8% in March. As widely anticipated, the RBA raised its cash rate target by +25 bps to 4.35% late yesterday. It was a split decision with one voting member wanting to hold the rate unchanged. But they face sharply higher inflation threats that seem to be growing and prior rate hikes have done little to quell those. However they have restrained their housing market enthusiasm and this latest hike is expected to put the brakes on that further. Traders still believe there is at least one more rate increase this year despite the RBA saying their policy was still only mildly restrictive. This comes after the March CPI rose +4.6%, and yesterday they reported that household spending remained high over the year in nominal terms, up +6.3% compared to March 2025 (and the highest since January 2023). Most of this is 'price' and much of it relates to a +32.8% increase in monthly fuel prices. But in volume terms, they say fuel purchases are lower, down -1.3% in March from February. The UST 10yr yield is now just on 4.42%, down -2 bps from this time yesterday.  The price of gold will start today up +US$37 at US$4559/oz. Silver is unchanged at just over US$73/oz. American oil prices are down -US$3 at just on US$102/bbl, while the international Brent price is down -US$3.50 and now at US$110/bbl. It is hard to see these prices easing further given the sharp fall in global oil reserves recently. Even the future process of building them back will add to demand and prices. The Kiwi dollar is up +20 bps from yesterday at this time at 58.9 USc. Against the Aussie we are up +10 bps at 82 AUc. Against the euro we are up +20 bps at just on 50.4 euro cents. That all means our TWI-5 starts today at just under 62.3 which is up +20 bps from yesterday. The bitcoin price starts today at US$81,300 and up +0.9% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.3%. 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 conflict in the Persian Gulf has erupted again with attacks on US naval forces trying to open the waterway for US flagged vessels. Iran also hit the UAE. Iran also warned that it will tighten its control over the Strait. So far there have been 28 attacks and 6 near-misses. The oil price has risen, equities have fallen, and benchmark interest rates rose. How China reacts will be important now. So far they are bolstering their support of Tehran via trade and payments support, and banning their companies from respecting the US sanctions threats. In the US, factory orders rose in March and by more than expected as the stockpiling trend got started. They are now almost +3.7% higher on a nominal basis than a year ago. This data matches the recent factory PMI data we have reported earlier. US April vehicle sales came it at an annualised 15.9 mln rate, slightly less than for March and less than expected. This was down -7.2% from April 2025, but holding at about the post-pandemic average which in turn is about -10% lower than pre-pandemic levels. The US Fed loan officers survey may have disappointed some observers. Earlier in the year, indications were for rising demand. But the results of the April survey found little-change. At least it didn't find softer demand. In Canada, they have announced a $C1 bln support program for manufacturers hit by the swinging Trump tariffs on their steel products, a sector hit particularly hard. Another C$500 mln in regional support was announced at the same time. In South Korea, we got another very good factory PMI for April. The S&P Global version rose to 53.6 in April from 52.6 in March, the strongest expansion since February 2022. But the scramble for more orders, and production is to get ahead of incoming inflation pressure. In fact, input costs and output price inflation surged to its highest in the 22-year history of this monitoring. In Taiwan, the same scramble is underway, with production and sales rising sharply as firms look to stockpile. That drove their factory PMI to new momentum and a five year high. In Europe, the ECB also released a survey of bank forecasters. They found there were expectations for higher inflation in the near term, but unchanged further out. These analysts have downgraded their 2026 and 2027 growth expectations, but left longer forecasts unchanged. In Australia, the Melbourne Institute's Inflation Gauge tracking reported a +0.6% rise from March to be 4.3% higher than a year ago. The April result was lower than the record high monthly increase at +1.3% in March, and compares with the official March monthly annual rise of 4.6%. Despite the easing, this rate remains very high and likely well above what the RBA will be comfortable with. The RBA is widely expected to raise its policy rate +25 bps to 4.35% later today, although in the past 24 hours, the market conviction has wavered. The UST 10yr yield is now just on 4.44%, up +6 bps from this time yesterday.  The price of gold will start today down -US$92 at US$4522/oz. Silver is down -US$2 at just under US$73/oz.. American oil prices are up +US$3 at just on US$105/bbl, while the international Brent price is up +US$5.50 and now at US$113.50/bbl. The Kiwi dollar is down -30 bps from yesterday at this time at 58.7 USc. Against the Aussie we are holding at 81.9 AUc. Against the euro we are down -10 bps at just on 50.2 euro cents. That all means our TWI-5 starts today at just under 62.1 which is down -20 bps from yesterday. The bitcoin price starts today at US$80,587 and up +2.4% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 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 it has now been 66 days since the Strait of Hormuz has been largely shut and the two combatants seem to have descended into stalemate (although the Iranian's seem to have attacked one cargo ship overnight, let others through). The result has been much higher fuel prices, fertiliser prices, and a settling in of inflationary pressure everywhere. These pressures are intense. This week will start out locally with the Barfoot results for April (today), followed by the March quarter jobs report (on Wednesday). The RBNZ will be reviewing financial stability on Wednesday as well. In Australia, it will be all about the Tuesday afternoon decisions by the Reserve Bank of Australia, where a +25 bps hike seems likely (but is not certain). But inflation risks tied to the Iran conflict are building and they risk getting embedded. Also due out this week is data for building consents, job ads, household spending, and trade data. Trade data is also due from Taiwan and PMIs will come for many countries. Sweden and Norway will be reviewing their monetary policy settings this week too. American financial markets will be eyeing their labour market data, with their non-farm, payrolls report coming at the end of the week. There will also be important updates for their services sector, plus the preliminary May sentiment survey from the University of Michigan, also at the end of the week. At the end of last week, there were two factory PMI surveys out for the US and both were positive. The ISM reported a modest expansion, unchanged from a month ago. But they also reported a rise in new orders even though export orders fell. And employment fell, and rather sharply. Prices rose sharply and at their fastest pace since the pandemic. The S&P Global US Manufacturing PMI was even more positive, but they said it was driven by stockpiling amid rising prices and supply disruptions. New orders increased at the fastest pace in four years, despite an eleventh consecutive monthly decline in exports. On the price front, input cost inflation reached a ten-month high. If stockpiling and inventory builds are behind this American rise, while they lose global market share, this is not very sustainable. Stock building seems to be behind a sharp rise in Canadian factory activity too. Their PMI showed production, employment and purchasing all increased in April. But theirs also featured new export orders which rose solidly and at the fastest rate since the start of 2022. Across the Pacific, Japanese factories are reporting their fastest expansion in twelve years. It is no doubt welcome, but they are now having capacity problems affecting supply-chain performance. This April production data supports earlier official industrial production reports for March. And the Japanese yen strengthened suddenly and sharply on Friday, ending a long period of devaluation against the USD. The shift is likely due to Bank of Japan intervention which seems to have cost the US$35 bln to pull off. In China, China Southern Airlines has ordered 137 aircraft from Airbus said to be worth US$28 bln. This comes after China Eastern Airlines ordered 101 Airbus aircraft worth US$16 bln a month ago. It appears that China won't be offering Trump aircraft orders when Xi and he meets on May 14 in Beijing. The UST 10yr yield is now just on 4.38%, unchanged from this time Friday but up +7 bps for the week.  The price of gold will start today down -US$7 at US$4613/oz and down -US$103/oz for the week. Silver is down -US$1 at just on US$75/oz. American oil prices are down -50 USc at just on US$102/bbl, while the international Brent price is also down -50 USc, and now at US$108/bbl. A week ago these prices were US$94/bbl and US$105/bbl so the really big move up was in the US. The Kiwi dollar is unchanged from Saturday at this time at 59 USc, up +20 bps for the week. Against the Aussie we are holding at 81.9 AUc. Against the euro we are down -10 bps at just on 50.3 euro cents. That all means our TWI-5 starts today at just under 62.3 which is essentially unchanged from Saturday and up +10 bps from this time last week. The bitcoin price starts today at US$78,723 and up +0.3% from this time Saturday. It is up only +1.1% from a week ago however. Volatility over the past 24 hours has been low at just on +/- 0.7%. 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 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 investors are ignoring big (geopolitical) risks by taking even bigger new tech risks. On Wall Street, tech firms are reporting a profit gusher. Google (+81% rise in profits), Amazon (+56%) and Microsoft (+24%) delivered bonanza profit results yesterday, crediting AI for these outsized results. Meta was up too (+61%), but held back by a misfiring AI strategy that will require huge new investment. The positive results will likely boost valuations ever higher. In fact, Big Tech has committed to US$750 bln in new spending in the sector. And this impulse is a big part of driving US economic activity which expanded +2% in Q1-2026 in their initial estimate, up from a modest +0.5% gain in Q4-2025 (which was revised lower at each subsequent update). However the current result was below market expectations of +2.3% growth. The outcome was driven primarily by AI investment, but also exports, and both consumer and government spending. But their PCE inflation was reported for March at its highest in more than two years at 3.5%, with +0.7% of that coming in March alone, the steepest monthly increase since the pandemic distortions. Almost certainly April will have been higher, and probably by some margin. Personal income, before adjusting for inflation, rose +4.2% while personal spending rose +5.4%. No wonder most Americans don't feel like they are making economic progress - although Big Tech won't feel the same way. US initial jobless claims came in at 180,000 last week, a decrease and by more than seasonal factors would have indicated. But although it was expected to continue to expand, in fact the Chicago PMI slipped into contraction in April. This unexpected shift was driven by a drop in new orders and a sharper than expected rise in input costs. In Japan, retail sales (+1.7% vs expectations of +0.8% year-on-year) and industrial production data (+2.3% vs +0.4% in February) out yesterday for March were much stronger than any analyst was expecting. But it was only for March, and questions linger about their April data. Still it is better to lead into that with a good prior month. There were two factory PMI surveys out for China yesterday. The official one has it expanding marginally slower and at a quite modest rate. The unofficial S&P Global version reported a slightly stronger expansion. The official services PMI showed a slightly larger contraction after the surprise tiny March expansion. In Taiwan, they also reported GDP and it will be no surprise that it was a strong +13.7% growth, well exceeding the expected +11.3% expansion. The EU said they expect April CPI inflation to come in at 3.0%, up from +2.6% in March and all driven my higher energy costs. The ECB reviewed its monetary policy settings overnight and left its policy rate unchanged, as expected. (The English central bank did the same.) In Australia, CoreLogic said its Home Value Index rose by +0.3% in April, slowing from a +0.6% increase in March and this latest level is the weakest growth in nearly a year. But values are now falling in the nation’s two largest property markets and they are easing in every other capital city. The prospect of another rate hike next Tuesday isn't helping. Global container freight rates were little-changed last week from the prior one, and are now +6% higher than year-ago levels. There were few notable regional route changes. And bulk freight rates also held unchanged over the past week although at a high level. From a year ago these rates are up +90% however. The UST 10yr yield is now just on 4.39%, down -2 bps from this time yesterday.  The price of gold will start today up +US$72 at US$4616/oz. Silver is up +US$3 at just under US$74/oz. American oil prices are down -US$3 at just on US$103.50/bbl, while the international Brent price is down -US$9.50, and now at US$109/bbl. The Kiwi dollar is back up +50 bps from yesterday at this time at 58.9 USc. Against the Aussie we are up +10 bps at 82 AUc. Against the euro we are up +30 bps at just on 50.3 euro cents. That all means our TWI-5 starts today at just under 62.2 which is up +30 bps from yesterday. The bitcoin price starts today at US$76,167 and up +0.3% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 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 lead with news financial markets are starting to see the international geopolitical risks as something that can undermine their bull run. The oil price rises caused by Trump's Gulf War are messing with the outlook in a much more visible way today. But first, in the widely expected result, the US Federal Reserve held its benchmark policy rates unchanged at 3.75%, in a 8-1 vote with only Trump's insert wanting a lower rate. Three other members abstained, not supporting language that wanted to lower the easing bias included in the Statement. This is likely the last meeting Powell will lead, although he said he will stay on as a Governor "for a period of time". His term officially ends in January 2028. Benchmark yields rose, the USD rose, and stocks fell on the news. US mortgage applications fell -1.6% last week even though benchmark interest rates hardly shifted. The fall affected both refi activity and new home purchases. US durable goods orders rose +0.8% in March on a seasonally adjusted basis, to be +2.8% ahead of year ago levels. But with US producer prices up +4.0% in the same period, this isn't a 'real' increase. But there was a big jump in US housing starts in March, up to just over a 1.5 mln annual rate and up more than +10% from February -  and to its highest level since December 2024. The US trade deficit rose +5.3% in March from February to -US$88 bln for the month, about the level expected. And US authorities reported that their crude oil stocks dived -6.3 mln bbls last week, and their petrol inventories fell by a similar very large amount. This had a dramatic impact on the WTI crude prices, which jumped In Canada, their central bank also held its policy rate at 2.25%, also as expected. Some observers saw the review as hawkish, with rate hikes coming sooner than previously expected. In Singapore, they reported a sudden and very dramatic jump in producer prices for March, up +21.6% from the same month a year ago, with oil-related prices up more that +60% in March from February. Germany said its April CPI inflation will be +2.9%, all due to higher energy costs. Global data out for March air travel revealed an overall +2.1% rise, but international travel dropped -0.6% while domestic air travel rose +6.5%. A large part of the reason was the sudden sharp drop in the Middle East (down -60%). Asia Pacific travel rose +11.5% in the month. Australian domestic travel was up +8.8%. Meanwhile air cargo activity was severely disrupted by the Middle East conflict and Trump's Gulf War in March. It fell -4.8% overall, with international cargo demand down -5.5%. Asia Pacific demand was up a modest +5.5%, but North American air cargoes fell -1.5% and Middle East cargoes fell -55%. April is likely to be much worse. Most airlines are cutting flight capacity as the fuel price and availability situation worsens sharply. April data will be bad. May likely even worse. The UST 10yr yield is now just on 4.41%, up +6 bps from this time yesterday. The price of gold will start today down -US$56 at US$4543/oz. Silver is down -US$2.50 at just over US$71/oz. American oil prices are up +US$6.50 at just on US$106.50/bbl, while the international Brent price is up +US$7.50, and now at US$118.50/bbl. The Kiwi dollar is down -50 bps from yesterday at this time at 58.4 USc. Against the Aussie we are down -10 bps at 81.9 AUc. Against the euro we are down -10 bps at just on 50 euro cents. That all means our TWI-5 starts today at just under 61.9 which is down -40 bps from yesterday. The bitcoin price starts today at US$75,931 and down -0.3% from this time yesterday. 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 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 of fractures emerging in the closure of the Strait of Hormuz, and of OPEC itself. But first up today there was a dairy Pulse auction, but this one bringing few changes from the prior week's full event. Prices for butter, SMP and WMP were little-changed. But the AMF price did fall -4.4% to its lowest of the year so far. In Australia, it is worth noting that bond markets are in full bear more. They have driven their AGB benchmark 10 year bond yield to a 15 year high (price to a 15 year low), and these movements are replicated across the whole maturity curve. Expectations are high that the RBA is about to tackle inflation head-on with purposeful monetary policy actions starting next week. And there is spillover to New Zealand benchmark rates too. In the US, their weekly ADP employment report signaled a third week of good payroll gains in the private sector. And the Conference Board's survey of consumer sentiment was marginally better than expected in April. Most aspects deteriorated in this latest survey, except the labour market conditions that the ADP signals have licked up. It was similar for the Richmond Fed's factory survey which was little-changed but with a hint of positiveness. And the Dallas Fed services survey was marginally less negative. Across the Pacific, the Bank of Japan kept its short-term policy rate unchanged at 0.75% at its April meeting overnight, leaving borrowing costs at their highest level since September 1995. The widely expected decision passed by a 6–3 vote, amid uncertainty over the Iran conflict and surging energy prices. The three dissenters wanted a hike to 1.0%. In its quarterly outlook, the central bank raised its FY2026 core inflation outlook to 2.8% from 1.9%, citing higher crude oil prices that likely push up energy and goods costs. Overall, this review was more hawksih than expected. Korean manufacturing business sentiment rose in April to its highest since June 2024, with improvements across the board. India's industrial production is settling in with a growth rate of about 4%, the March level which it has been at (or above) for eight of the past nine months. In Europe, their has been a very big jump in inflation expectations. Eurozone median inflation expectations for the next 12 months jumped to 4.0% in March in the latest ECB survey, the highest level since October 2023 and up sharply from 2.5% in February. This was the largest monthly increase since early 2022, when Russia’s invasion of Ukraine disrupted energy markets. The UST 10yr yield is now just on 4.35%, up +1 bp from this time yesterday. The price of gold will start today down -US$83 at US$4599/oz. Silver is down -US$2 at just under US$73.50/oz. American oil prices are up +US$3 at just on US$100/bbl, while the international Brent price is up +US$2, and now at US$111/bbl. And the UAE announced overnight that it is quitting OPEC, chafing at the export restrictions the cartel uses to manipulate prices. Some wee this as the beginning of the end of OPEC. We should also probably note that a Japanese supertanker has transited the Strait of Hormuz - with Iran's permission and in defiance of the US blockade. The Kiwi dollar is down -20 bps from yesterday at this time at 58.9 USc. Against the Aussie we are down -30 bps at 82 AUc. Against the euro we are down -10 bps at just on 50.3 euro cents. That all means our TWI-5 starts today at just under 62.3 which is down -20 bps from yesterday. The bitcoin price starts today at US$76,178 and down -0.8% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 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 Iran has attacked three ships in Strait of Hormuz and detaining two others so far after Trump indefinitely extended is ceasefire. It is a standoff over Tehran’s closing of the strait and Washington’s blockade that raises doubts about whether talks would actually resume. The Pakistani mediators are not happy about the disheveled US approach to it all. In the US, mortgage applications rose last week as mortgage rates dipped slightly. But that was enough to trigger a good rise in both the new purchase activity, and the refinance activity. Modest to be sure, but positive all the same. American petrol inventories dropped by -4.6 mln barrels last week (even as US crude oil stocks rose unexpectedly), and this followed a -6.3 mln barrels fall the previous week. This was the tenth consecutive weekly fall and way more than the expected -1.5 mln barrels retreat. US petrol prices eased marginally from a week ago - they have stopped rising on a daily basis - but they are still up +35% from the start of the Trump Gulf War. That rise is now embedding. Today's US Treasury 20yr bond auction brought regular modest demand, if softish, but the median yield rose to 4.84% from 4.77% at the prior equivalent event a month ago. There were similar 20 year German bund auctions overnight too, and yields on them rose similarly although they run about -150 bps lower. It will be interesting to watch the release of the Tesla financial update later this morning. Their recent production has far outstripped sales, and much lower cost Chinese alternatives are causing them real headaches. Their battery business is also under extreme pressure. In another odd corporate transaction, it seems the Trump Administration is quite comfortable using taxpayer money 'rescuing' (nationalising) failing airlines, and maybe other struggling businesses. (Apparently the government knows best and can do a better job running these businesses than the private sector. The 'deep state' at work.) The April EU consumer sentiment survey revealed a sharp fall, suddenly back to levels they were at early 2023. It is a crash reminiscent of the initial pandemic reaction, one that took years to recover from. In Australia, iron ore major BHP has responded to Chinese state pressure, agreeing to denominate its contracts in Chinese yuan rather than the USD, probably a significant break that will speed the internationalisation of the Chinese currency. It was the 'price' of a month's long standoff. Sulphur and urea have eased marginally over the past week from record highs, but to be fair the fall-backs are not especially meaningful. The UST 10yr yield is now just on 4.29%, little-changed from this time yesterday.  The price of gold will start today down +US$21 at US$4736/oz. Silver is up US$1.50 at US$8/oz. American oil prices are up +US$3 at just over US$92.50/bbl, while the international Brent price is up +US$3.50, and now at US$101.50/bbl. The Kiwi dollar is up +10 bps from yesterday at this time at 59.1 USc. Against the Aussie we are up also +10 bps at 82.5 AUc. Against the euro we are up +20 bps at just on 50.4 euro cents. That all means our TWI-5 starts today up +10 bps from yesterday at just on 62.5. The bitcoin price starts today at US$79,034 and up +4.3% from this time yesterday. Volatility over the past 24 hours has been high at just on +/- 3.1%. 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 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-wished resumption of talks with Iran don't seem to be happening. The Strait of Homuz remains closed, and even if it was re-opened it is never going back to 'normal'. It seems Trump has effectively generated to global push necessary to transition away from fossil fuels. Oil company share prices are retreating. Big investors are trying to offload their coal assets. China's green-tech is in demand everywhere, including in the US. We are now in the age of electricity where demand is surging. Meanwhile the Warsh confirmation hearings in the US are following the predictable partisan scripts. But first, today's full dairy auction featured a low amount of product offered and sold. -10% less than for the same week a year ago. Overall prices were down almost -2.75% below the last full auction in USD, down -5.85% in NZD. Northern hemisphere seasonal volumes are rising so global supply is very adequate. The main weakness in today's auction were from butter (-7.9%, AMF (-9.6%) and mozzarella (-3.1%). But WMP basically held its own (-0.6%) and SMP rose (+3.2%). Demand out of China rose, offsetting the unsettled Middle East demand. In the US there was another strong indicator from the weekly ADP employment report, the second in a row. And US retail sales came in better than expected for March, up +4.6% from a year ago, about twice the increase as for February. And that is their biggest rise in a year. But of course much of this will be inflation-related and much just came from the spike in retail petrol prices. US pending home sales were up in March from February although the gain was less than in the prior month. That still leaves these residential real estate sales -1.1% lower than year ago levels. Taiwanese export orders blew past all expectations yet again coming in at US$91.1 bln for March, up +67% from a year ago and up +18.5% above the prior stunning record high. Adjectives fail to adequately describe what is happening here The German ZEW sentiment survey fell much sharper than the expected fall in April. In Australia, the ACCC's court case against supermarket giants Coles and Woolworths regarding deceptive pricing practices over 'specials' is capturing attention. The UST 10yr yield is now just on 4.29%, up +4 bps from this time yesterday.  And we should probably note that US private credit funds are about to report their March results and especially in the direct lending sector redemptions are expected to far exceed new investment. It is notable that big-money, wealthy investors are leading the retreat and probably leaving late-arriving retail investors with very damaged positions. Interestingly, there are similar, although not as severe, pressures in China's private credit markets too. The price of gold will start today down -US$92 at US$4715/oz. Silver is down -US$3.50 at US$76.50/oz. American oil prices are up +50 USc at just over US$89.50, while the international Brent price is up +US$3, and now at US$98/bbl. The Kiwi dollar is up +10 bps from yesterday at this time at 59 USc. Against the Aussie we are up +30 bps at 82.4 AUc. Against the euro we are up +20 bps at just on 50.2 euro cents. That all means our TWI-5 starts today also up +20 bps from yesterday at just on 62.4. The bitcoin price starts today at US$75,782 and off a minor -0.2% from this time yesterday. Volatility over the past 24 hours has remained 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 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 Trump's Gulf War is back in escalation mode with the two belligerents' trading harsh rhetoric. Which of course means no oil is getting through. Kuwait has declared force majeure on its oil exports due to the US blockade. Financial markets are reacting with caution, but it seems they remain ready to push up with yet another 'relief rally' if things calm down again. Meanwhile. Canada's CPI inflation returned back to its 2.4% pa level where it has been for six of the past seven months and basically where it was in March 2025. But it is up from the unusual February 1.8% level, caused solely by the rise in energy prices. And the Bank of Canada released two Q1-2026 expectation survey results. The business version reported improved sentiment, with fewer businesses saying they are being affected by trade tensions with the United States, and many expect sales growth to improve. The consumer one said they became less negative about their spending plans than in the previous quarter as downward pressure from trade tensions eased. All the same, it is still quite negative. China has held its Loan Prime Rate (LPR) benchmarks at record lows for an 11th straight month in April 2026, matching market expectations. The one-year LPR, the benchmark for most corporate and household borrowing, was held at 3.0%, while the five-year LPR, a benchmark for mortgages, remained at 3.5%. And China’s exports of electric vehicles, solar cells and lithium-ion batteries surged significantly in March, following a sudden spike in demand for green energy products. Their investment in 'green' non-oil alternatives is really paying off for them. In Malaysia, their exports rose to a three-month high in March, but the rate of increased was lower at +8.3% from a year ago, compared to 10.7% in February. In Germany, producer prices, which had been falling on a year-on-year basis since March 2025, were virtually unchanged in March (-0.2%), but they rose +2.5% from February as the oil price spike kicked in. ECB boss Lagarde says they are uncertain how to react to the two threats of higher inflation from the oil shock, and lower growth prospects that result from that. She said the "double uncertainty about the duration of the shock and the breadth of pass-through argues for gathering more information before drawing firm conclusions for our monetary policy". But she also warned that if governments 'support' consumers with generous programs, their hand could be forced to weigh against the downstream consequences of embedded inflation. She used 2022 examples of how these problems are caused. And the BIS is warning of the threats of stablecoins. "If widely adopted in their current form, stablecoins would pose policy challenges in areas ranging from credit provision to monetary policy, with risks to financial integrity and regulatory evasion looming large." They will be particularly threatening to the sovereignty of emerging markets, they say. In Australia, they launched some direct "interest free" loans for certain sectors in their economy to assist them with the very high cost of fuel, logistics, fertilisers and plastics. And we should probably note that the zinc price has risen to its highest since 2022, and prior to the pandemic, its highest since 2018. The UST 10yr yield is now just on 4.25%, up +1 bp from this time yesterday.  The price of gold will start today down -US$22 at US$4807/oz. Silver is down -US$1 at US$80/oz. American oil prices are up +US$5 at just over US$89, while the international Brent price is up +US$4.50, and now at US$95/bbl. The IEA's latest monthly report details the quantum of the Trump Gulf War on the oil market. They say the global oil supply dropped by -10% in March to 97 million barrels per day amid attacks on energy infrastructure in the Middle East and the plunge in shipping traffic through the critical Strait of Hormuz.  The Kiwi dollar is up +10 bps from yesterday at this time at 58.9 USc. Against the Aussie we are also up +10 bps at 82.1 AUc. Against the euro we are unchanged at just on 50 euro cents. That all means our TWI-5 starts today also little-changed from yesterday at just over 62.2. The bitcoin price starts today at US$75,925 and up 1.5% from this time yesterday. A week ago it was US$72,976. Volatility over the past 24 hours has remained modest 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 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 expectations of an imminent resolution of the Persian Gulf standoff have stalled. Iranian officials have reversed reopening the Strait of Hormuz after the US refused to end its blockade of Iranian ports. Ships attempting to cross the Strait of Hormuz have been fired on. This is expected to weigh on financial markets when they open later today. This week locally will be all about the March quarter CPI which will be released on Tuesday. Because most of that quarter didn't see the oil price spike until March, markets expect a 2.9% quarterly rate, slightly less than the 3.1% rate in Q4, 2025. It is a data series that really needs to be released monthly. It will be preceded by trade balance (today), and followed by the QSBO and an update on productivity. In Australia, there are no major economic data releases, although we will get a flash report on their April PMI. In the US, apart from earnings updates, they too will get a flash April PMI, and confirmation hearings for Kevin Warsh will but this billionaire in the spotlight. In China, PMI results will also feature in a light data week. In Japan, it will be about March trade data and retail sales. Central banks will review their monetary policy settings and rates in China, Malaysia and the Philippines this week. Over the weekend, Iran confirmed what most people understood - Trump was 'claiming victory' without any deals in place, and that is making ship transit of the Straits of Hormuz hazardous again. It looks like the progress claimed was a mirage. In Canada, small business sentiment rose in April, an unexpected shift but likely due to local election results. The trade group that does this survey says it is still weak, but it is actually back to the levels that prevailed prior to the pandemic. But Canadian housing starts sagged somewhat in March, coming in below February levels and what was expected. But they are now +6.9% higher than year-ago levels. Indian loan growth reached +16.1% in the year to March according to official data released overnight. That is the fastest pace they have recorded since they started tracking this metric in April 2025. In China, their construction machinery sector rose strongly in March with excavator sales up nearly +30%, of which domestic demand was up almost +24%. Malaysian CPI inflation remained tame in March, up just +1.7%, although that was their highest rate since the beginning of 2025. They also reported that Q1-2026 economic activity rose +5.3%, and slightly less than the +5.5% expected. Meanwhile, Singaporean exports were up +15.3% from a year ago, their second fasted monthly rise since mid 2024. The UST 10yr yield is now just on 4.24%, down -1 bp from this time Saturday and the same for the week.  The price of gold will start today down -US$28 at US$4829/oz. Silver is down -50 USc at US$81/oz. American oil prices are down -50 USc at just under US$84, while the international Brent price is also down -50 USc, and now at US$90.50/bbl. These new levels are down -US$12 and -US$4/bbl respectively. The North American rig counts fell again. Tonight, all eyes will be on the IEA's April update of the global oil situation. The Kiwi dollar is down -10 bps from Saturday at this time at 58.8 USc, up +30 bps for the week. Against the Aussie we are unchanged at 82.1 AUc. Against the euro we are also unchanged at just on 50 euro cents. That all means our TWI-5 starts today also unchanged from Saturday at just over 62.2 but up +20 bps for the week. The bitcoin price starts today at US$74,842 and down -3.0% from this time Saturday. A week ago it was US$72,976. Volatility over the past 24 hours has been modest at just on +/- 1.1%. 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 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 little progress in renewed US-Iran 'peace talks'. They seem to have descended into talks about extending the ceasefire rather than resolving any issues. The Strait of Hormuz is still essentially closed. Complicating the oil supply picture is that US crude inventories fell by -9.1 mln barrels last week, far exceeding analysts’ expectations for a modest +154,000-barrel increase. This is actually a big deal and has driven the oil price higher today. In the US, initial jobless claims rose to 214,000 last week, but not as high as seasonal factors would have indicated. There are now 1.89 mln people on these benefits, less than this time last year but more than two years ago. But American industrial production fell in March from February, its first fall in four months. That makes it only +0.7% higher than year-ago levels, and hardly a surge in re-shoring. If it wasn't for the growth of AI centers and the electricity required to run them, this would have been a very disappointing result - and it probably is more most companies. That said, the latest update from the Philadelphia Fed's factory survey was quite positive in April, driven by good growth in new orders. Of course, they are measured in nominal dollars and these firms reported notable rises in inflation, for both costs and prices. In China, new home prices across 70 key cities fell -3.4% in March from a year ago, a minor worsening from a -3.2% decline in February. That was the 33rd straight month of contraction and the steepest drop since May 2025. Pre-owned home sales prices fell harder although for the first time in a while some key cities recorded month-on-month rises in prices. China said its Q1-2026 GDP expansion was up 5.0%, and better than the 4.8% expected and the official target of "about 4.5%". And its industrial output was up +5.7% in March, they said. But their retail sales only grew 1.7% which will have been a disappointment because they really need a better rise in internal demand. All the good data reported is somewhat underlined by their data that shows electricity production fell again and for a fourth month, up just +1.4% from March 2025. Australia's March labour market report was pretty tame. The employment rose by +17,900 (about the +20,000 expected) and the number of unemployed people fell by -4,000 in the month. The unemployment rate remained steady at 4.3%. Full-time employment increased by +52,500 to 10,174,400 (after the -27,700 fall in February) while part-time employment decreased by -34,600 to 4,593,300.. The expected inflation rate rose by 0.7 percentage points in April to 5.9% in Australia. It was 5.2% in March. The sharp rise in April reflects the recent spike in oil prices, and makes it its highest since November 2022. In contrast, wage change expectations have remained unchanged for the past five months. In Australia, the big fire at the Geelong Vic. refinery, one of only two in the country, has major implications for Australia's fuels. They will need to import more from a global system already strained with demands on it. (The other one is the Ampol one in Brisbane.) Talk of needing emergency fuel savings measures, especially in Victoria, are growing. Global container freight rates dipped -3% last week from the prior week to be little-changed from a year ago. But bulk cargo freight rates rose +16% last week, and are now almost double what they were this time last year. Global travel rose +4.1% in 2025 according to new research with 80 mln people on the move. But they are increasingly avoiding the US where visitor numbers fell -5.5%. The main gainer is China where visitor numbers rose +9.9% and is predicted to eclipse the US has the main global destination - at this rate in just three years. It is a fast reversal. The UST 10yr yield is now just on 4.31%, up +3 bps from this time yesterday.  The price of gold will start today little-changed, down just -US$5 at US$4488/oz. Silver is down -50 USc at US$78.50/oz. American oil prices are up +US$2.50 at just over US$95/bbl, while the international Brent price is up US$4, and now at US$99.50/bbl. The Kiwi dollar is down -20 bps from yesterday at this time at 58.9 USc. Against the Aussie we are also down -20 bps at 82.2 AUc. Against the euro we are down -10 bps at just on 50 euro cents. That all means our TWI-5 starts today also down -20 bps from yesterday at just over 62.2. The bitcoin price starts today at US$74,361 and up +0.2% from this time yesterday. Volatility over the past 24 hours has been modest 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 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 financial markets are betting Trump will endlessly extend the ceasefire with Iran and the crisis there will fade. Ships are getting through the Strait of Hormuz despite the US's 'blockade'. But there remains plenty of high-stakes risks, especially as Chinese navy warships are heading to the region. But Iran holds all the long-term cards. In the US, Trump has renewed his threats to fire Fed boss Powell for 'corruption', a clear misdirection play that has few falling for it. If he did, it still remains uncertain how this would play out, or even whether he has the authority to do so. US mortgage applications rose slightly last week with a return of better refinance activity. But activity for new home purchases slipped lower. The US Fed's Beige Book survey found the conflict in the Middle East being cited as a major source of uncertainty that complicated decision-making around hiring, pricing, and capital investment, with many firms adopting a wait-and-see posture. It also found signs of consumer financial strain, increased price sensitivity, and rising demand at food banks and other social service organizations. But spending among higher-income consumers was resilient, they reported. The April New York Empire factory survey revealed at sharp rise in costs and prices, but it expanded anyway and better than expected on a rise in new orders. But optimism waned and capital spending plans weakened. Meanwhile home builders in the US are doing it tough with widespread discounting and incentive use to spur weak sales. The NAHB/Wells Fargo Housing Market Index fell to its lowest since September in March when a rise was anticipated in this sector. There was a big surprise out of Japan yesterday. Machinery orders rose +13.6% in February from January, to be +24.7% higher than year-ago levels. This was after January orders were up +13.7%. The February year-on-year gain was three time higher than what was expected. (Japan has been drinking some Taiwan juice.) But a lot has happened since. Japanese manufacturers' confidence posted its biggest month-on-month drop in ​more than three years in April, dampened by surging oil prices and supply-chain disruptions caused ‌by the Middle East conflict, the Reuters Tankan poll showed. Meanwhile, EU industrial production rose more in February from January than expected, and the decline from a year ago was less than expected. This data is inflation adjusted, but still, it isn't particularly positive. In Australia, long term permanent immigrant arrivals bounced back strongly in February from January to +14,100 for the month but it was still -4.4% lower than for February 2025 and -14% lower than February 2024. For the year to February, permanent arrivals totalled +141,660, down more than -10% from a year ago and the least since September 2023. And Australian prime minister Albanese has been in Brunei where he secured substantial oil and fertiliser supply agreements. The UST 10yr yield is now just on 4.28%, up +3 bps from this time yesterday.  The price of gold will start today down -US$44 at US$4493/oz. Silver is up +US$1.50 at US$79/oz. American oil prices are up +US$1 at just under US$92.50/bbl, while the international Brent price is also up US$1, and now at US$95.50/bbl. The Kiwi dollar is essentially unchanged from yesterday at this time at 59.1 USc. Against the Aussie we are down -30 bps at 82.5 AUc. Against the euro we are holding at just on 50.1 euro cents. That all means our TWI-5 starts today down -10 bps from yesterday at just on 62.4. The bitcoin price starts today at US$74,1867 and down -0.7% from this time yesterday. Volatility over the past 24 hours has been low at just on +/- 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 IMF has downgraded its global forecasts and said the world's economy is drifting into unpalatable conditions. A third recession since 2000 is possible, they say. The Strait of Hormuz remains closed by the actions of both combatants. "Talks" are supposedly going on which is exciting equity markets. But bond and currency markets are bracing for stagflation. But first up today, the overnight dairy Pulse auction brought the expected lower prices, with WMP down -1.8% from the prior week's full auction event, SMP down -1.9%, and butter down -3.7%. These shifts are in USD, and with the rising NZD they will be deeper. Butter in fact is now at its lowest level since January 2024, a 27 month low. In the US, their labour market does not appear to be cracking according to the high-frequency weekly data from the ADP Pulse tracking. US private employers added +39,250 jobs per week in March. This is a sharp increase from the +26,000 weekly jobs created in the prior period and is the fourth consecutive week of improvement in hiring. The March NFIB Small Business Optimism Index fell to its lowest since April 2025 and this new level is lower than the lower level expected. They said "the dramatic spike in oil prices has spooked consumers and owners alike. Small business owners are having to absorb those higher input costs and pass them along to their customers”. Their uncertainty measure spiked. Meanwhile US producer prices rose less than the expected +4.6% jump in March, 'only' rising +4.0% according to official data. Still, that is the fastest rise since February 2023. China's March exports rose only a modest +2.5% from a year earlier, whereas their imports rose a startling +27.8%. Despite that, they has so much headroom they still managed to record a trade surplus of +¥355 bln / US$51 bln in March, although about half of what was anticipated. Yesterday, Singapore tightened their monetary policy in a new effort to ensure inflation does not ruin their economy. In Australia, consumer sentiment has dived lower. The Westpac-Melbourne Institute Consumer Sentiment Index fell heavily in April, falling by a level only exceeded in the depth of the pandemic. Australian business confidence has plunged dramatically as well. It fell -29 index points, the second largest monthly fall in the survey’s history – with falls of this magnitude previously only seen in the GFC and the onset of the pandemic. Current conditions changed little, but the sentiment outlook has crashed pretty much in the same way consumer sentiment has. Forward orders fell. Costs rose +3.0% in the quarter, more than twice as fast as prices charged (+1.1%). So it will be little surprise to know that the RBA is worried, really worried. Australia faces a difficult macro backdrop. In a fireside chat, RBA Deputy Governor Andrew Hauser warned of the “nightmare” scenario where inflation accelerates even as growth weakens, complicating policy choices. He was speaking at a New York event. We all understand that the US abandoning its strategic role in the global economy means new alliances and connections will grow to replace them. But not all of those will be welcome. We should note that the Indonesian President is in Moscow, seeking a realignment with them. It is a balance from recent 'deals' with the US. The US Administration looks just like the Putin Administration to Jakarta. The IMF now says global inflation is expected to average 4.4% in 2026, up from their projected 3.8% in their January review. They also downgraded their global growth outlook, unsurprising given the mess we are all working through.. The UST 10yr yield is now just on 4.25%, down -5 bps from this time yesterday.  The price of gold will start today up +US$98 at US$4836/oz. Silver is up +US$4 at US$77.50/oz. American oil prices are down -US$7.50 at just on US$91.50/bbl, while the international Brent price is down -US$4.50, and now at US$94.50/bbl. The Kiwi dollar is up +50 bps from yesterday at this time at 59.1 USc. Against the Aussie we are up +10 bps at 82.8 AUc. Against the euro we are up +10 bps at just on 50.1 euro cents. That all means our TWI-5 starts today up +40 bps from yesterday at just on 62.5. The bitcoin price starts today at US$74,709 and up +3.4% 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 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 US blockade on the Strait of Hormuz is starting, and a notable feature is that no other country has agreed to join it. Oil prices have risen, along with prices for many other products that rely on trade from the Persian Gulf. The last tankers to exit the Gulf are now arriving at Asian refineries, so the crunch is ahead of us, and getting closer. In the US, existing home sales dipped in March as buyers held back on the growing uncertainty. Analysts had expected a dip but this one was slightly larger than anticipated at -3.6%, taking the annual sales rate below 4 mln for the first time since June 2025. It is now also lower on a year-on-year basis. Of course, unsold inventory rose, although not alarmingly. But there was a larger retreat in building consents in Canada, falling -8.4% in February from January, down -11.5% from a year ago. Most of this was caused by a sharp -24% in non-residential building consents. In fact, housing consents rose +6.4% in the month, led by multi-unit construction. And there are by-elections in Canada, with most observers seeing Prime Minister Carney in a much stronger position after the votes are counted, no longer leading a minority government. In China, new yuan loans came in at ¥2.99 tln in March, below the ¥3.36 tln in the same month in 2025, and lower than the ¥3.4 tln forecasted to be their lowest March since 2021. And a key Chinese rare earth producer has raised its prices +45% for Q2-2026, to a level that is double what it was in Q2-2025. It was their largest quarterly hike since 2023. India's CPI inflation is rising, continuing a trend that started in November. It was at +3.4% in March, its highest since February 2025. Food prices were up +3.7%. Having noted that, we should also note that a slightly larger rise was anticipated. Aluminium prices continue to rise, and are now approaching the very unusual peak we saw in February 2022. And in Australia, we should note that a final court ruling is due any time now on the decades-long dispute over whether Gina Reinhart's claim to the Hancock mining fortune is valid. Could be some fun fireworks ahead. The UST 10yr yield is now just on 4.30%, down -2 bps from this time yesterday. The price of gold will start today down -US$9 at US$4738/oz. Silver is little-changed at US$75.50/oz. American oil prices are up +US$2.50 at just on US$99/bbl, while the international Brent price is up +US$4, also now at US$99/bbl. The Kiwi dollar is up +20 bps from yesterday at this time at 58.6 USc. Against the Aussie we are little-changed at 82.7 AUc. Against the euro we are up +20 bps at just on 50 euro cents. That all means our TWI-5 starts today up +20 bps from yesterday at just on 62.1. The bitcoin price starts today at US$72,231 and up +1.5% 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 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 US President has made ever more threats against Iran, now saying the US will blockade the Straits of Hormuz against friend and foe. The main losers will be the Gulf States that supported him. Iran probably foresees another TACO playing out. It is all very juvenile. But it does mean disruption will continue. And that inflation will stay higher for longer. But first, here in New Zealand in the week ahead, we will get updated data about migration, retail (electronic cards) and CPI data about food and other selected items. We will also get the PSI (today), and the March REINZ data later in the week In Australia, the week will be about business confidence (NAB survey) and consumer confidence Westpac survey) as well as the March labour market results, with the economy expected to have added around 20,000 jobs in March, while the jobless rate is seen holding steady at 4.3%. The development in the Middle East will remain the driver of global financial market movements, with current agreements proving fragile and energy exports from the region not yet restarted. The impacts on producer prices in the US are expected to show up in their PPI data. In China, a heavy data calendar will provide investors with fresh insight into their economy’s performance. GDP growth for Q1 is expected to accelerate to 5.0% from 4.5% in Q4 2025. The country’s trade surplus is also projected to widen slightly to US$112 bln in March, up from US$102 bln a year earlier. Meanwhile, industrial production and retail sales are likely to have slowed in March. New yuan loans are expected to rise to ¥3.4 tln. In Japan, it will be about machinery orders. In India, about a rising inflation rate. On Friday in the US, their CPI inflation rate jumped to 3.3% in March, about the expected rise. This was all due to fuel prices, especially petrol and diesel. Core inflation, which excludes this and food also moved up but more modestly, to a 2.7% rate. The Fed will be watching to see if this is transitory, or building in. Still, US oil rig counts are not rising in response to these higher prices. Actually, they fell slightly. With US crude prices higher than Middle East prices, those producers have decided the best strategy is 'do nothing' and milk the benefits. So it will be no surprise to know that the University of Michigan sentiment index plummeted in their latest survey to a historic low in early April, far below both market expectations and last year’s low level. Sentiment declined across all demographics, as well as every index component, emphasising the broad-based drop. (But it is also worth noting that this survey was taken before the 'ceasefire' claims.) Also, there was no growth in US factory orders in February from January, well before the Iran conflict. From a year ago they were up +4.0%, most of that coming earlier in the year. Take a look at this: it is the share price history for FirstCash, an American pawn shop operator. Set the chart to 'MAX'. They have more than 3,000 pawn stores in 29 US states, and business is booming. In Canada, their March labour market report showed little-change, with overall employment rising a minor +14,000 holding at just over 21 mln. There were also few changes in either full-time or part-time employment, and the jobless rate stayed unchanged at 6.7% In Korea, their central bank kept its policy interest rate unchanged at 2.25%. They have an inflation date of 2.2% but expect this to rise in the current environment. China said its CPI inflation rate was +1.0% in March from a year ago, a smaller rise than expected and lower than the February +1.3% rate (which was a three year high). Food prices only rose +0.3% year-on-year, restrained by pork and fresh vegetables. Beef prices were up +7.8% from a year ago, lamb prices up +6.8%. Dairy product prices fell -0.7% on the same basis. China also released its producer price data today which shows them suddenly out of deflation, with PPI up +0.5% from a year ago in March, the first time since September 2022, and prior to the pandemic distortion, the first time since early 2019. There was a sharp drop in vehicle sales in China in March (down -8.8%) after Beijing cut subsidies. That has turned their automakers to chasing export orders, and their appetite is desperate, and a threat to most of the world's other carmakers. In Taiwan, their export machine delivered another spectacular result in March, after the easing in February. Their exports were up to yet another record high of US$80 bln, a gain of +62% from the same month a year ago. Imports were up +59% on that same basis. German inflation was confirmed at 2.7% in March, the same as their preliminary estimate, and back up to levels last seen in January 2024. In Hungary, early results seem to favour the Tisza opposition and against Victor Orban's Fidesz. But Orban controls much of the election apparatus so it will need to be an overwhelming result to defeat him. Turnout was reported to be high. In Australia, the recent Albanese trip to Singapore to source fuel, especially diesel, caps an effective open-chequebook campaign to acquire what they need, with a virtual armada of ships to arrive in Australia over the next few weeks. The list here is interesting. We count 56 ships in that wave, some even from the US. It is also probably worth noting that China said it will ban exports of sulphuric acid, a move that will handicap copper mining, among other industries including the fertiliser industries. The copper price rose. And of course the sulphur price was already at a record high before that move. The urea price rose, back to the pandemic extremes. To be clear, there is no formal Chinese announcement of this latest curb, only producers there telling clients that they have had instructions from Beijing to block suppling them from May. And the IMF said the war on Iran will mean slower growth this year because of the destruction of energy infrastructure and supply chain disruptions. Not really 'news' but their analysis is compelling, and 2026 could be a write-off for any 'recovery'. The UST 10yr yield is now just on 4.32%, up +1 bp from this time Saturday but down -3 bps from this time last week.  The price of gold will start today down -US$21 at US$4747/oz, but up +US$71 for the week. Silver is down -US$1 at US$75.50/oz. American oil prices are holding at just on US$96.50/bbl, while the international Brent price is still at just on US$95/bbl. A week ago these prices were US$110.50 and US$109/bbl respectively. The Kiwi dollar is down -10 bps from Saturday at this time at 58.4 USc. But that is a +150 bps appreciation (+2.8%) from this time last week. Against the Aussie we are up +10 bps to 82.7 AUc. Against the euro we are little-changed at just on 49.8 euro cents. That all means our TWI-5 starts today down -10 bps from Saturday at just on 61.9, or up +110 bps (+2.0%) for the week The bitcoin price starts today at US$71,192 and down -2.4% from this time Saturday. 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 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 Middle East ceasefire deal is still an imaginary figment. Meanwhile, US real personal spending rose just +0.1% in February from January after stagnating in January. The few places of expansion were vehicle sales, healthcare, and financial services. This data shows why most Americans don't feel like they are making economic progress. Worse, real disposable personal income fell -0.5% in February. And the final update of US Q4-2025 economic activity was revised lower yet again. You may recall it was originally touted as a +4.4% growth rate (from the prior quarter). Then the second estimate pegged it at +1.7%. This final update has dropped it to +0.5%, with revisions that reveal lower investment and consumer spending. Year-on-year in real terms, the US economy was +2.0% larger than in Q4-2024, and that is the slowest expansion since Q4-2022, and before that (and except during the pandemic), Q1-2019. US initial jobless claims rose more than expected to 203,000 last week, far more than seasonal factors would have accounted for (188,000). There are now 1,928 mln people on these benefits, less than a year ago, but more than two years ago. The April USDA WASDE report shows smaller US beef production, and they raised their beef import forecast based on recent trade data and continued strong demand for lean processing beef (like from New Zealand). In Canada, there is some intriguing politics to note. Mark Carney leads a minority, coalition government. But recent defections from the Conservatives, and likely by-election results, could see his Liberal Party governing on its own very soon as a majority party. They are cashing in on Carney's surging popularity. In Japan, consumer confidence retreated sharply in March from February which was the highest figure since April 2019. The trigger for the fallback is the global uncertainty and the latest data takes their sentiment levels back to those of May 2025. Malaysia said its industrial production rose +3.1% in February from a year ago. This was sharply less than the +5.5% expected. Meanwhile, German exports rose more than expected, up +2.9% in February from a year ago, and that was despite a -7.5% fall to the US and a -2.5% fall to China. Their imports rose +1.5% from a year ago. We should also note that Anthropic's new AI model is getting eye-catching attention. It's abilities has scared even its own developers who have warned Big Tech to prepare for major disruption. Current cyber security is about to get busted big-time. Global container freight rates rose just +1% last week from the prior week to be +2% higher than year-ago levels. And that was despite sharp increases in China-EU rates that have been roiled by the Middle East conflicts. Bulk cargo rates rose +3.3% over the past week to be +60% higher than year-ago levels. The UST 10yr yield is now just on 4.29%, up +1 bp from this time yesterday.  The price of gold will start today up +US$59 at US$4799/oz. (It's record high is US$5422/oz.) Silver is up +US$1.50 at US$76.50/oz. American oil prices are up +US$3 at just on US$99/bbl, while the international Brent price is up a bit less at just under US$97/bbl. The Kiwi dollar is up +40 bps from yesterday at this time at 58.7 USc. Against the Aussie we have risen +10 bps to 82.8 AUc. Against the euro we are up +10 bps at just on 50 euro cents. That all means our TWI-5 starts today up +30 bps from yesterday at just over 62.2. The bitcoin price starts today at US$72,330 and up +0.6% from this time yesterday. Volatility over the past 24 hours has been modest 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 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 the US-announced ceasefire with Iran is struggling to hold, with Iran accusing the US and Israel of violations, and Iran launching attacks (counter-attacks?) on Gulf state assets. Israel seems very uncommitted to the US claims. There are thousands of ships waiting to transit the Strait of Hormuz, but they must first pass Iran's new gatekeeper reviews. The oil price has fallen back but only to mid-March levels and still +50% higher than the levels that prevailed at the start of March. And this is doing nothing to restore deliveries of refined product. However, first in the US, the Federal Reserve released the minutes of its March 18 meeting, which exposed how isolated Steven Miran is on that committee. In fact, some members were open to rate hikes at that time. The vast majority of participants judged that upside risks to inflation and downside risks to employment were elevated, and the majority noted that these risks had increased with developments in the Middle East. They saw the conflict in the Middle East would likely lead to more persistent increases in energy prices and these higher input costs would be more likely to pass through to core inflation. Those risks are likely still there since their meeting given that crude oil prices had risen from US$63/bbl to US$95/bbl when they met, and are at that same level today. US mortgage applications stayed low last week, restrained by lower refi activity. Meanwhile, and in an odd move against the mood shift today, investors got higher risk premiums for the US Treasury 10 year bond auctioned today. The median yield came in at 4.23%, compared to the 4.16% at the prior equivalent event a month ago. In China, a surge in heavy truck sales, especially LNG and EV versions, is bolstering a view that 2026 will turn out positively for them. Some of this was just a rebound from a weak, holiday-affected February. But those truck sales were at a five year high in March. Taiwan's CPI inflation rate showed no reaction to the events in March at all, which does seem a bit unusual and an outlier result. There was an Indian central bank review of their monetary policy overnight, and they left their rate unchanged at 5.25%. In Europe, they reported February producer prices fell -2.7% from a year ago. But this is mainly due to the February 2025 base being unusually elevated. They also reported that EU retail sales volumes were up +1.7% in February from a year ago. The UST 10yr yield is now just on 4.28%, down -7 bps from yesterday. The price of gold will start today up +US$64 at US$4740/oz. Silver is up +US$3 at US$75/oz. American oil prices are down -US$20 at just on US$95/bbl, while the international Brent price is down -US$15, also at just on US$95/bbl. The traffic through the Strait of Hormuz is moving again, but only for those that pay Iran's 'reconstruction tax'. The US has effectively shifted this waterway from being open and free, to an Iranian asset and chokepoint. The Kiwi dollar is up +120 bps from yesterday at this time at 58.3 USc. Against the Aussie we have risen +60 bps to 82.7 AUc. Against the euro we are up +70 bps at just on 49.9 euro cents. That all means our TWI-5 starts today up +100 bps from yesterday at just under 61.9. The bitcoin price starts today at US$71,919 and up +4.6% from this time yesterday. Volatility over the past 24 hours has been high at just on +/- 3.3%. 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 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 most things are in abeyance until noon (NZT) when the latest Trump genocidal threats on Iran come to a head. Financial markets are waiting to see how this plays out. And of course the Strait of Hormuz is completely shut now. Commodity prices reflect that added pressure, fertiliser prices especially. But first today, the overnight dairy auction brought a headline decline of -3.4% in USD terms, but that is only a -0.8% in USD terms. But actually things were better than this because these changes are from the prior full auction result three weeks ago. Today's results area actually gains from last week's dairy Pulse events for most items, including both SMP and WMP. The big drop however came for butter (-8.1%) and Mozzarella (-6.2%), both items that don't feature at the Pulse events. So, overall, today's dairy event is really one where prices have stabilised over the past few weeks. This is so, even though global dairy markets seem well-supplied from many sources. In the US, their Logistics Managers Index has shot up in March to its highest since May 2022 in the pandemic. This is entirely due to a very sharp rise in freight costs, but a contraction in transportation capacity happened at the same time. Warehousing capacity contracted as well. PPI inflation is getting well embedded now. Meanwhile, the weekly ADP employment Pulse report delivered an unexpected +26,000 jobs gain last week, the most since this new tracking started. However, this was not supported by the latest (February) durable goods order report that fell much more than expected, down -1.4% from January and its third consecutive decline. That makes it just +0.8% higher than year-ago levels and well below the PPI inflation rate. And it was also not supported by the April update of the RCM/TIPP sentiment survey of 'economic optimism' which fell to its lowest level since June 2024. Meanwhile, US consumer inflation expectations jumped from 3.0% in February to 3.4% in March. This may not have been as r=high as you may have expected, but the survey period covered the whole month, so is likely restrained by early-month responses. China said its FX reserves fell -US$85 bln in March from February to US$3.34 tln, mainly due to changes in the USD:CNY exchange rate rather than an actual fall in reserves. It is a pullback from the all-time record high in February, back to levels that have generally prevailed since September 2025. Within this, their gold holding rose for a 17th consecutive month. In Australian, their Melbourne Institute Monthly Inflation Gauge recorded a significant jump in monthly inflation for March, up +1.3% from February. This was primarily influenced by an increase in transport, attributable to surging fuel prices. In annual terms, headline inflation reached +4.3% and has been at above the top-end of the 2–3% RBA target band for the past seven months. The monthly cost of living also increased in March, particularly for self-funded retirees. The Australian service sector fell into contraction in March. It was a sharp fall from the February expansion. A drop in new orders and turbulent international conditions as a result of the war in the Middle East were the main reasons behind the fall in output. Making it hurt harder, inflationary pressures intensified. The New York Fed's Global Supply Chain pressure index is rising, with the March result its highest since January 2023, although to be fair, so far the rises from May 2023 have all be quite gradual. Things could change quickly on that front, of course. The UST 10yr yield is now just on 4.35%, up +1 bp from yesterday. The price of gold will start today back up +US$24 at US$4676/oz. Silver is down -US$1 at US$72/oz. American oil prices are up +US$1 at just on US$115/bbl, while the international Brent price is down -50 USc at just under US$110/bbl. The Kiwi dollar is essentially unchanged from yesterday at this time at 57.1 USc. Against the Aussie we have dropped -50 bps however to 82.1 AUc. Against the euro we are down -20 bps at just on 49.2 euro cents. That all means our TWI-5 starts today down -15 bps from yesterday at just under 60.9. The bitcoin price starts today at US$68,728 and down -1.3% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.7%. Join us at 2pm this afternoon when the RBNZ is release its latest OCR review. While not rate change is expected, commentary on how they see the current oil crisis playing out with inflation will bring intense interest. 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 most of our trading partners are coming under much heavier input cost pressure, along with supply-chain disruption. Meanwhile, US and Iran have rejected each other’s proposals to end the war. That is pushing up the price of oil. And in the US, the head of their largest bank is saying private credit losses will be much larger than most assume. In the US, the widely-followed March ISM services PMI came in a touch lower than expected, and lower than for February. The strong activity component slowed very fast but is still expanding. This survey found employment contracting. It also found prices rising their fastest since October 2022. These firms are not waiting to push through recovery price increases this time. Remember, The S&P Global services PMI released earlier found its first decline in activity since January 2023, employment was down amid their weakest rise in new orders for nearly two years. They also found steeper rises in both input costs and output prices in March. So very similar to the ISM version. One of those input costs is fuel, and now petrol is up +38% and diesel is up +51% since the start of their war on Iran. The Canadian services PMI is still contracting, extending that retreat to five straight months. However, the March shortfall was the least in that period. Inflation accelerated due to rising fuel and transportation costs Employment fell although overall confidence was up to six-month high. The Singapore economy was still expanding at a moderate pace in March, but there were signs of slowdown. Their PMI dropped to its lowest seen in 2026 so far from softer growth in output and new orders. Input price inflation accelerated to a survey-record (ten year) high. Singapore's retail sales fell in February from January on a seasonally-adjusted basis, down an unexpectedly large -4.1%. The year-on-year result isn't so relevant this month due to the skewed timing of Chinese New Year. India's services PMI was still expanding fast in March, although continuing the receding growth trend they have had for more than eight months. Input price inflation climbed to a 45-month high and they had their weakest rise in new business and activity since January 2025. But they also had another strong upturn in services exports. The UST 10yr yield is now just on 4.34%, down -1 bp from yesterday.  The price of gold will start today down -US$24 at US$4651/oz. Silver is holding at US$73/oz. American oil prices are up +US$2.50 at just on US$114/bbl, while the international Brent price is up +US$1.50 at just under US$110.50/bbl, and still lower than US prices. The Kiwi dollar is up +20 bps at 57.1 USc. Against the Aussie we have dipped -10 bps to 82.6 AUc. Against the euro we are unchanged at just on 49.5 euro cents. That all means our TWI-5 starts today up +15 bps from yesterday at just under 61. The bitcoin price starts today at US$69,614 and up +3.4% 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 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 Trump is about to make a national address (9pm NZT) where he is expected to claim Iran wants a ceasefire (which Iran immediately said was false). Many expect he will pull the US out of NATO as well (although Congress would have to agree for that to be effective). Despite the unhinged nature of it all, markets cheered the likely end of the pointless war he started. Separately, on Saturday we will get the March US non-farm payrolls data which is expected to show a +60,000 gain. The ADP version of private sector employment was out today for March and that showed a similar modest rise (+62,000). But we should also note that February official data for private sector hiring revealed a record low rate. US mortgage applications fell sharply again last week, down a further -10.5% for a third consecutive big drop, which is unprecedented. Refi fell the hardest but new purchase activity was down sharply too. Rising interest rates continue there. The widely-watched ISM factory PMI was little-changed in March from February with the same modest expansion recorded, as signaled in the alternate globally-benchmarked S&PGlobal version. The New Orders Index indicated slower growth compared to the previous month with new export orders actually in contraction. Both observed soaring inflationary pressures, back to pandemic levels. US retail sales rose in February by +3.7% above the year-ago level. This month car sales led the increase. That is a real gain given that February CPI inflation ran at 2.4%. In Canada their March factory PMI shows no growth, no decline. The China S&P Global PMI expanded again, showing growth of output and new orders were maintained in March. But suppliers' delivery times lengthen the most since December 2022. And they also recorded their strongest inflationary pressures, since March 2022. Again, their PMI was slightly more upbeat than the official version. Japan, Taiwan and Malaysia all recorded modest to good factory expansions in March in their respective factory PMIs, and all recorded higher inflation pressures. Interestingly, the Bank of Japan's Tankan survey of businesses there for Q1-2026 shows little negative impact from the current geopolitical situation. Those firms surveyed remain quite upbeat. In Europe, their eurozone factory PMI also expanded, and at a 45-month high. But the inflationary pressures were also very evident in their report. In Australia, yesterday's national address by Prime Minister Albanese warned of a rocky road ahead due to their fuel crisis, and that urgent reforms are required, mainly because previous deregulation has left them uncomfortably vulnerable in this situation. Separately, their main business trade association said their Industry Index fell 19.9 points in March to -23.6, the steepest monthly decline since the initial pandemic phase of early 2020. Industrial activity, employment, new orders and sales indicators all fell markedly in response to the emerging energy crisis. Uncertainty was the main factor, with 30% reporting volatility in fuel prices, freight and/or supply arrangements because of the energy crisis. More than a quarter (26%) of businesses said rising costs were a major pressure – in fuel, freight, raw materials, resins, plastics and packaging. There was a surge in residential consents issued in Australia in February, with 19,022 issued. That is the most for any month since mid-2021. Of note is the rise in Victoria where over 6000 consents were issued. That compares to NSW's 4332 and Queensland's 3890 in February. It is notable that states with relatively lower new-build consenting are those with higher rises in house prices. The UST 10yr yield is now just on 4.31%, unchanged from yesterday.  The price of gold will start today up +US$142 from yesterday, now at US$4783/oz. Silver is up +US$1.50 to US$76/oz. American oil prices are down -US$1.50 at just on US$100/bbl, while the international Brent price is down -US$2.50 at just under US$102/bbl. Ship transit traffic in the Strait of Hormuz seem to be slowly returning, but on Iran's terms. The Kiwi dollar is another +30 bps firmer against the USD from yesterday, now at 57.7 USc. Against the Aussie we are down another -10 bps at 83.1 AUc. We are up +40 bps against the yen. Against the euro we are up +10 bps at just on 49.7 euro cents. That all means our TWI-5 starts today up +20 bps at just over 61.4. The bitcoin price starts today at US$68,837 and up +1.8% from this time yesterday. Volatility over the past 24 hours has been moderate 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 on Tuesday after the Easter holiday break.

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 Americans are talking up apparent signals from Tehran that will allow them to declare victory and go home. Markets are taking all this at face-value. But first today, there was a dairy Pulse auction overnight where prices dipped from the prior week with WMP down -1.5%, SMP down -1.9%, and butter down -6.8%. Results in NZD limited these USD drops. In the US, the Conference Board's survey of consumer sentiment rose marginally in March from its recent lows. That was despite surging inflation expectations, now well over 5%, and a continuing decline in consumers' future expectations. Meanwhile, US job openings in February retreated and by a bit more than expected. Quits fell too as job security fears rose. Hiring decreased. The Chicago Business Barometer fell in March but from a near four-year high in February but the dip wasn't anticipated. Still, it is the third consecutive month of growth in Chicago's economic activity, rare since 2022, though the pace of expansion slowed significantly. New orders and output continued to grow, but at a slower pace, while jobs decreased. However the Dallas Fed services PMI took quite a tumble to its steepest contraction in almost a year, and a big retreat from February for both their activity and outlook measures. Costs there are rising much faster than prices. The US is getting no relief from petrol and diesel prices, as they hit another high milestone. The gap between WTI and Brent is unusually narrow at present. In Canada, and perhaps unexpectedly. they reported a small expansion in economic activity in January from December (+0.1%) and a slightly faster expansion in February from January (-0.2%). In the face of the threats and bullying from their obnoxious southern neighbour, this is resilience that few expected. In China, major property developer Vanke posted an enormous loss for 2025, and said it is facing a wall of funding maturities. Vanke has survived because of Shenzhen government ownership support, although that is being dialled back too. Meanwhile, China reported better than expected industrial expansions, in their case for their official March factory PMI. And their services PMI also recorded improvement into expansion, again unexpected. Typically these official surveys have been more pessimistic than the unofficial ones from S&P Global, which won't be released for March until later today. They too are expected to record expansion. Japanese data for industrial production and retail sales, both for February, sagged and by a bit morte than anticipated. In Korea, they reported industrial production data that was surprisingly weak in February. Global air passenger travel rose a strong +6.1% in February from the same month in 2025, bolstered by the timing of Chinese New Year. In fact, domestic travel within China in February was up +12.5%. Overall international passenger travel was up +5.9% with the Asia/Pacific region rising +8.6%. Likely much of this expansion will be upended now with the March disruptions and sentiment retreats. The UST 10yr yield is now just on 4.31%, down -3 bps from yesterday. The price of gold will start today up +US$94 from yesterday, now at US$4641/oz. Silver is up +US$4 to US$74.50/oz. American oil prices are down -US$1 at just on US$101.50/bbl, while the international Brent price is down -US$7.50 at just on US$104.50/bbl. Ship transit traffic in the Strait of Hormuz seem to be slowly returning, but on Iran's terms. The Kiwi dollar is +30 bps firmer against the USD from yesterday, now at 57.4 USc. Against the Aussie we are down another -20 bps at 83.2 AUc. We are down little-changed against the yen. Against the euro we are down -30 bps at just on 49.6 euro cents. That all means our TWI-5 starts today up +10 bps at just over 61.2. The bitcoin price starts today at US$67,646 and up +0.4% from this time yesterday. Volatility over the past 24 hours has been moderate at just over +/- 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 we are now in week five of a completely preventable global crisis. But first we should note that we are now touching up against the end of the month, and end of the first quarter. This is when fund managers and other large investors lock in their results for upcoming reporting. So there is a lot of position squaring activity at present, and that tends to skew financial market activity. But the fundamental drivers - economic activity, inflation, geopolitical events - are not stopping, so there is still substantial market reaction to those. That is driving serious risk aversion. And markets watch key policymakers too. Fed boss Powell was out speaking today to an economics class at Harvard. In answer to questions, he said distress in the private credit market looks more like a correction and not like a broader systemic event to them. He also said their would regard the inflation threats from the war on Iran as transitory, but that their patience was limited - given the fact that US inflation has been above 2% for five years now. The New York Fed boss Williams was also talking, and he seemed now more concerned with the jobs market, saying a rate cut is a real possibility if it weakens further. Meanwhile, the Dallas Fed's factory survey was a touch weaker in March than February on slowing new order growth. But their company outlook index dropped into negative territory and their outlook uncertainty index leapt. In China, they reported an enormous current account surplus of almost +US$¼ tln in Q4-2025, almost US$¾ tln for the year, one that is globally destabilising. Also we should note that countries that signed up to the Chinese Belt & Road system are finding that they are on the short end of that deal. The two items are likely related. India's factory production was up +6.0% in February from a year ago, better than expected. In Europe, their Eurozone Economic Sentiment Indicator dropped in March on rising inflation expectations tied to the Middle East conflict. So it will be no surprise to learn that German inflation jumped in March, driven by fast-rising fuel costs to its highest in over two years (January 2024) at 2.7%. We should note that the aluminium price is on a sharp move higher again, approaching its mid-March post-pandemic record high. With Middle-East production damaged or out of service because they can't ship, China's dominance of the aluminium market seems likely now. And air cargo demand surged in February, not only in response to Chinese New Year demand, but businesses seemed to rush the sector to get goods shifted fearing the Middle East situation. Sharply rising fuel costs, fuel scarcity in parts of the world, and the severe disruption to key cargo hubs in the Gulf are major shifts. February air cargo activity was up +11% from a year earlier with the Asia/Pacific region up +13.6%. But how this played out in March, and will play out in subsequent month, are likely to be a highly volatile mix of 'urgency' restrained by sharply rising costs. It is worth noting too that concerns are rising that the oil and supply-chain problems are almost certainly going to provoke a global food crisis at some stage. Not only die to sharply higher costs, but sharply lower production at the same time. But that is yet to hit us all. The UST 10yr yield is now just on 4.34%, down -10 bps from yesterday.  The price of gold will start today up +US$54 from yesterday, now at US$4547/oz. Silver is up +US$1 to US$70.50/oz. American oil prices are up another +US$3 at just over US$102.50/bbl, while the international Brent price is -50 USc lower at just on US$112/bbl. Ship transit traffic in the Strait of Hormuz seem to be slowly returning, but on Iran's terms. The Kiwi dollar is -30 bps lower against the USD from yesterday, now at 57.1 USc. Against the Aussie we are down -20 bps at 83.4 AUc. We are down -90 bps against the yen. Against the euro we are unchanged at just on 49.9 euro cents. That all means our TWI-5 starts today down -25 bps at just on 61.1. The bitcoin price starts today at US$67.359 and up +1.4% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 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.

US sentiment falls further. China and US trade anti-trade probes. China's profits rise. Countries enact various fuel affordability measures. diesel crisis grows.

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 we are starting to see economic bite from Trump's war on Iran. There is corrosion everywhere today The OECD's latest economic update says global GDP growth is expected to hold at 2.9% in 2026 before rising slightly to 3.0% in 2027, driven by strong tech investment and easing tariffs. But the ongoing Middle East conflict makes these projections wobbly due to the energy market disruptions. Inflation forecasts were revised upward, with G20 advanced economies facing 4.0% headline inflation in 2026 they say, 1.2 percentage points higher than previously anticipated.. They see American GDP expansion go from +2.0% this year to +1.7% next year. For China, they see a shift from +4.4% in 2026 to 4.3% in 2027. For Japan, it is stable at +0.9% in both years. Their forecast for Australia in +2.3% growth this year, +2.4% next years, Back in the US, jobless claims dipped last week, but not by as much as seasonal factors would have indicated. There are now 2.04 mln people on these benefits, down from 2.07 mln a year ago but up from 1.8 mln two years ago. Meanwhile the Kansas City Fed March factory survey was positive again in March, for a second consecutive month. The month-on-month indexes were all positive except for new export orders. The overnight US Treasury 7yr  bond auction brought similar results to the earlier 2 and 5 year events - lower offer volumes and much higher yields. This latest 7 year bond had a median yield of 4.19%, up from 3.74% at the prior equivalent event a month ago. Bad management brings higher risk premiums. In China, state-owned China Eastern Airlines said it will buy 101 Airbus aircraft in a deal worth about US$16 bln, extending a run of big-ticket Airbus orders by major Chinese carriers. That will juice up Airbus's 2026 order book sharply. In Singapore, manufacturing production fell by -0.1% in February from a year ago, reversing the +12.9% surge in January. This February result was the first month of decline since August last year, driven by weaker output across nearly all sectors - except electronics. Overnight, Norway's central bank kept its policy rate unchanged at 4.0%. But they do see a hiking possibility in 2026, a turn from where a cut was more likely. Global container freight rates rose +5% last week from the prior week, and are also now +5% higher than year ago levels. This latest rise makes these costs up +20% from the end of February. Outbound rates from China were the main driver in these latest rates and the overall index would have been much higher except for the decline in EU to US rates. That trade has shrivelled to a -29% year-on-year pullback. Meanwhile bulk cargo rates rose +3% in the past week but are -22% lower than year-ago levels. The UST 10yr yield is now just on 4.42%, up +9 bps from yesterday at this time and its highest since July 2025.  The price of gold will start today down -US$173 from yesterday at US$4383/oz. Silver is down -US$4.50 at US$68/oz. American oil prices are up +US$4.50 at just over US$94.50/bbl, while the international Brent price is up +US$7 at just on US$108/bbl. Ship transit traffic in the Strait of Hormuz, already low, has dried up again. The Kiwi dollar is -50 bps lower against the USD from yesterday, now at 57.7 USc. Against the Aussie we are unchanged at 83.6 AUc. We are down -50 bps against the yen. Against the euro we are -30 bps lower at just on 50 euro cents. That all means our TWI-5 starts today down -40 bps at just on 61.6. The bitcoin price starts today at US$68,909 and down -3.6% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 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 there is a general relief rally underway as the US indicates it is pulling back from its aggressive tactics with Iran. Trump seems to be 'declaring victory', but the Iranians seem to have given up nothing he sought. The Iranians are letting non-combatant ships pass through the Straits of Hormuz on their terms and schedule. They are also continuing active attacks on their foes. Even if "it is over", the echo of sharply higher inflation will linger. Yes, oil prices have pulled back but they remain more than +50% higher than at the start of Trump's crazy adventure. Benchmark interest rates are higher too. Wall Street is down a net -5% even after today's rally. 1500 civilians were killed in Iran in these attacks, 18,500 injured. The US seems to have revealed it is relatively impotent to impose its will, even with apparent overwhelming force. Certainly when applied incompetently. Meanwhile, US mortgage applications fell sharply for a second week, due to mortgage interest rates rising to a five month high. Refinance activity was hit particularly hard, but even if that wasn't the case, there was a notable retreat for new purchases too. That is two consecutive weeks of -10% reductions and that is the sharpest two-week retreat since December 2024. US crude stocks rose again last week and their fifth consecutive weekly rise, the longest stretch since early 2024. Meanwhile petrol inventories fell for a sixth consecutive week. This allowed pressure on US pump prices to rise +34% in a month. So they have an odd combination of plenty of crude oil stocks, and sharply rising energy inflation. Grifting at its best. In an item we don't usually report on, a jury in New Mexico has found both Meta and YouTube liable in a first-of-its-kind lawsuit that aimed to hold social media platforms responsible for addiction harm to children using their services, awarding US$3 mln in damages. Yesterday we noted the sharp rise in yields at the US Treasury two year Note auction. Today there was a similar one for the five year equivalent. And it too brought a dramatically higher yield - 3.92% up from 3.56% at the prior equivalent event a month ago. Demand was less for this one too, but not as dramatically as for the two year In China, we should note that after a 21 day suspension, state owned shipping line COSCO is taking bookings for China to Middle East destinations again. In Germany, their widely-watched Ifo Business Climate Index dropped in March to its weakest reading since February 2025, as the Middle East conflict dampened economic sentiment. In Australia, February CPI inflation was reported as 3.7%, a marginal dip from 3.8% in January. Most sub-categories dipped, except the housing category which rose at the rate of 7.2% pa. The UST 10yr yield is now just on 4.33%, down -8 bps from yesterday at this time.  The price of gold will start today up +US$132 from yesterday at US$4556/oz. Silver is up +US$3 at US$72.50/oz. American oil prices are down -US$2.50 at just over US$90/bbl, while the international Brent price is down -US$3 at just on US$101/bbl. The Kiwi dollar is unchanged against the USD from yesterday, still at 58.2 USc. Against the Aussie we are up +10 bps at 83.6 AUc. We are up +20 bps against the yen. Against the euro we are +10 bps firmer at just on 50.3 euro cents. That all means our TWI-5 starts today up +10 bps at just on 62. The bitcoin price starts today at US$71.453 and up +2.7% 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.

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 escalation in the Middle East is rising as the US is increasingly desperate to extract itself. Through all this it is adding more troops as Iran widens its attacks. It looks grim. But first up today we should note that the overnight dairy Pulse auction delivered slightly lower prices across the four commodities offered, all down about -3% in USD, marginally less in NZD. In the US, while everything else is in flux, there is widening concern about private credit 'cockroaches'. We first noted the issues with Blue Owl funds. But it seems many more of these opaque funds have severe valuation issues. Funds managed by some very big names have been limiting withdrawals and investors clamour to exit their exposure. A list of troublesome funds include those managed by Goldman Sachs, JPMorgan Chase, Morgan Stanley, Blackrock, Apollo, Ares, and Blackstone. There are others of course. Limiting or stopping redemptions on funds that have dodgy valuations is a terrible signal. Staying in the US, the weekly ADP pulse data delivered little-change from the prior week, a minimal +10,000 job increase. The Richmond Fed's regional factory survey reported an improvement in their region in March, built on better order levels, an easier ability to pass on price increases, and a lower cost pressure. Despite all that, things are still net-negative. However their services survey is no longer negative (although it isn't positive either). In Canada, small business sentiment took a hit in March, but it is still net-positive There were many early March PMIs out overnight and the one for the US was weaker with weakened output growth and sharply higher prices following the outbreak of war in the Middle East. This survey is now at an eleven month low. In Europe, this same survey shows Eurozone output growth slowed as input cost inflation hits its highest level for over three years. India is reporting higher inflation and lower growth. Japan is reporting a slowdown in March too. And Australia reported a sudden contraction, their first in 18 months. In all PMIs released so far, the factory sectors are seeing less negative impact than the services sectors, where the effects are more immediate. Taiwan reported a more 'modest' (for them) increase in industrial production in February, up +18% from a year ago. They also said their retail sales jumped an outsized +7.7% in February from a year ago, ending a long run of modest improvements. We should note that the sharp restriction on sulphur exports from the Middle East is really juicing up the price of this commodity essential for phosphate fertiliser production, competing with mining demand for the remaining limited supply. Sulphur prices are now +40% higher than at the start of 2026 and +27% higher than the pandemic peak which was the prior record high. The UST 10yr yield is now just on 4.41%, up +7 bps from yesterday at this time. The price of gold will start today up +US$38 from yesterday at US$4424/oz. Silver is actually up +50 USc at US$69.50/oz. American oil prices are up +US$3 at just on US$92.50/bbl, while the international Brent price is now just on US$104/bbl. And it will be no surprise to learn that jet fuel prices are leaping, globally. The Kiwi dollar is softer against the USD from yesterday, down -30 bps at 58.2 USc. Against the Aussie we are unchanged at 83.5 AUc. We are down -40 bps against the yen. Against the euro we are -30 bps lower at just under 50.2 euro cents. That all means our TWI-5 starts today down -30 bps at just on 61.9. The bitcoin price starts today at US$69,569 and down -1.4% from this time yesterday. Volatility over the past 24 hours has been modest at just over +/- 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.

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.