US data broadly positive; Chinese return to international travel; Argentina sniffs inflation progress; OECD sees global economic expansion rising; UST 10yr 4.58%; gold firms and oil slips; NZ$1 = 59.5 USc; TWI-5 = 68.9

Here's our summary of key economic events overnight that affect New Zealand, with news the OECD sees a world economy in recovery and about to expand at an increased rate, despite the many challenges. It is a perspective of resilience.

But first in the US, jobless claims held at a two month low ahead of tomorrow's April non-farm labour market report. There were +189,000 new claimants last week taking the total to 1.76 mln and that is its lowest since October.

The very low levels of job cuts reported in April fell from the prior month.

Markets expect non-farm payrolls to have expanded +243,000 in April when they are released tomorrow.

Although they fell in March from February's record high, American exports are essentially holding at a high level and were unchanged from a year ago on goods and services basis.

The American March factory order data was released overnight and that showed another increase, a second consecutive one and up +1.6% from the prior month which was itself up +1.2% on that basis. However these levels are still running -0.9% lower than a year ago.

China remains on holiday. One feature of this year's extended Labour Day break is the return of Chinese making international trips. Japan is the focus this week, but that will spread as Chinese travellers regain their appetite for seeing the world.

Meanwhile, their real estate sector is making no progress toward recovery. It remained very weak in April with major developers’ sales tumbling -45% year on year and holding new very low month-on-month levels.

In Argentina they can sniff real progress in their battle against endemic inflation. So their central bank slashed its benchmark interest rate overnight by -10% to 50%, the fifth change since December and the third in the past three weeks. They see a notable slowdown in monthly inflation and a "rapid adjustment" of inflation expectations. In March, Argentina's monthly inflation slowed more than expected for the third consecutive time, with consumer prices rising by 11% from February to March, below economists' forecast of 12.1%. The new administration has prioritised stringent spending cuts since December to combat inflation, and they now expect monthly inflation to decrease to 3.8% by September. That would take the current inflation rate of 288% down to under 50%.

Australia's merchandise trade surplus fell to +AU$5 bln in March from a downwardly revised +AU$6.6 bln in the previous month. March came in well below market forecasts of +AU$7.3 bln. It was the smallest trade surplus since November 2020, as exports grew much slower than imports.

On Monday, the OECD will release an updated assessment of the New Zealand economy and prospects. Today, its global Economic Outlook update sees an "unfolding recovery" and it has raised its global growth forecast to +3.2% for 2025 from 3.1% this year. They see New Zealand rising from a modest +0.8% in 2024 to +1.9% in 2025. For Australia it is a rise from +1.5% to +2.2%. For Japan, from +0.5% to +1.1%. For the US it is a retreat from +2.6% this year to +1.8% next. For China, they see a slip there too from +4.9% to +4.5%. They expect global inflation to ease but unemployment to rise modestly. For a world with wars and severe security stresses, it is a remarkably sanguine outlook. But that inflation outlook, even if it does ease, points to higher-than-wanted sticky levels.

Global container freight rates dipped a minor -1% last week to take them to +55% higher than year ago levels. The same drivers of high rates (war diversions, Suez security, Panama drought) are all still there so immediate relief seems unlikely. Bulk cargo rates however slipped -5% for the week and are down -12% for the year.

The UST 10yr yield is now at 4.58% and down -3 bps from yesterday. The key 2-10 yield curve inversion is now at -31 bps and sharply less. And their 1-5 curve inversion is more at -61 bps. Their 3 mth-10yr curve inversion is now at -81 bps and 6 bps more. The Australian 10 year bond yield is now at 4.47% and down -8 bps. The China 10 year bond rate is unchanged at 2.31%. The NZ Government 10 year bond rate is now at 4.93% and down -6 bps.

Wall Street has risen +1.0% the S&P500 in late afternoon trade. Overnight European markets mixed with London up +0.6% and Paris down -0.9% to bookend their markets. Yesterday Tokyo fell -0.1%. Hong Kong however rose +2.5%. Shanghai remained closed. Singapore was up +0.1%. The ASX200 ended its Thursday session up +0.1% and the NZX50 ended up +0.1%.

The price of gold will start today up a minor +US$2 from this time yesterday at US$2305/oz.

Oil prices are down another -50 USc from yesterday at just over US$78.50/bbl in the US while the international Brent price is unchanged at just on US$83.50/bbl.

The Kiwi dollar starts today up +½c from yesterday at just over 59.5 USc. Against the Aussie we are holding at 90.8 AUc. Against the euro we are firmish at 55.5 euro cents. That all means our TWI-5 starts today just on 68.9 and up a mere +10 bps from yesterday.

The bitcoin price starts today at US$59,164 and up +2.5% from this time yesterday. Volatility over the past 24 hours has moderate at just on +/- 2.4%.

The easiest place to stay up with event risk is by following our Economic Calendar here ».