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 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...

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...

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...

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...

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,...

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...

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...

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...

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...

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...

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...

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...

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...