Here's our summary of key economic events overnight that affect New Zealand, with news weaker US data has halted the bond selloff.
But first, the actual number of US initial jobless claims rose marginally last week, and the number of people on these benefits was actually unchanged from the prior week at 1.7 mln although that was a small increase from year-ago levels.
However, Q1-2024 GDP was revised lower to +1.3% in their second estimate, from +1.6% in the first and this was more of an adjustment than was expected. The main change was due to less consumer spending than originally estimated.
Both retail and wholesale inventories rose in April, but the changes were in fact very small. And the US continues to be a magnet for imports with a larger trade deficit. However some of this will be markets reacting to impending tariff rises and may be temporary. But their trade deficit as a proportion of total economic activity is little-changed.
US pending home sales fell sharply in April, down a whopping -7.7% from March in a dive that surprised analysts. It was the largest retreat since February 2021. Only a small -0.6% correction from a good March was anticipated. Getting the blame was the impact of "escalating interest rates" throughout April dampened home buying, and that left more inventory in the market.
Canada said weekly earnings in March were +4.2% higher than a year ago, a slight slowing of the pace in February when they rose +4.3%.
Taiwan also reported Q1-2024 GDP growth overnight and that came in much better at +6.6% higher than year-ago levels. And you will notice that is better than China's equivalent +5.3% in the same period.
In Australia, there was a small rise in residential building consent levels in April from March (+1.3%) but lower when seasonally adjusted for Easter. Markets weren't expecting that dip. Year-on-year however, these consent levels are more than +13% higher.
And staying in Australia, major bank NAB is forecasting Perth residential prices to zoom almost +14% higher in 2024. That is the high outlier; Sydney is expecting a +4.5% rise, Brisbane almost +9%, but Melbourne will be the laggard at +2.5% in 2024.
Already high container freight rates rose another +4% last week to push them more than +150% higher than year-ago levels. The same drivers are at play; security risks, canal disruptions, and now plus the rush to beat new US tariffs on some Chinese goods. It is outbound from China rates that are being most affected. However, bulk cargo rates are immune to these rises, unchanged again this week and still at their long-run average levels.
The UST 10yr yield is now at 4.56% and down -7 bps from yesterday. The key 2-10 yield curve inversion is little-changed at -38 bps. Their 1-5 curve is deeper at -64 bps. And their 3 mth-10yr curve inversion is also deeper at -83 bps. The Australian 10 year bond yield is now at 4.47% and down -3 bps. The China 10 year bond rate is little-changed at 2.32%. The NZ Government 10 year bond rate is up +2 bps at 4.96%.
Wall Street has slipped again today as rates rise further with the S&P500 down another -0.3% in late Thursday trade. Overnight European markets were all up +0.6%, except Frankfurt which was only up +0.1%. Yesterday Tokyo ended down -1.3%. Hong Kong was also down -1.3%, but Shanghai fell only -0.6%. Singapore ended essentially unchanged. The ASX200 ended its Thursday session down -0.5% while the NZX50 went the whole hog, down -1.0% at the end.
The price of gold will start today unchanged from yesterday at US$2343/oz.
Oil prices are down -US$2 at just on US$77.50/bbl in the US while the international Brent price is now under US$82/bbl.
The Kiwi dollar starts today marginally firmer from yesterday at just under 61.3 USc. Against the Aussie we are -¼c lower at 92.2 AUc. Against the euro we are also marginally softer at 56.5 euro cents. That all means our TWI-5 starts today at just under 70.6 and little-changed.
The bitcoin price starts today at US$69,480 and up +3.0% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.8%.
By the way, there are now only 200 days until the Christmas holiday break. :) Also, Monday is a public holiday in New Zealand. The next edition will be Tuesday, June 4, 2024.
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80 Comments
The Tiwai Point aluminium smelter is set to stay open until 2044 - power supply deal reached with suppliers Meridian and Contact
In an ideal world, we wouldn't be paying millions of dollars in taxpayer subsidies to a mining corporation, but the current economic situation in NZ is far from ideal.
This operation alone supports a disproportionate number of high paying jobs in the sub-region and wider economy, making it too big to fail.
Bigly....China announces export controls on certain aviation equipment Taking effect July 1, relevant equipment, software, technology will be barred for export w/o permission, per statement jointly released by MOFCOM, GAC, and CMC’s equipment development department. https://sc.mp/tr084 Link
In other news, Unions donate to Labour
https://elections.nz/democracy-in-nz/political-parties-in-new-zealand/p…
We must ensure no quarrying in NZ or impose such onerous conditions that it becomes prohibitively expensive and also have to pay off a few tribes to consent to the quarrying.. We can soon regress to dirt roads, mud/adobe huts and anything else that requires gravel. Best initiate MBIE to produce a standard for mud/adobe huts. With bit of Kiwi ingenuity might even be able to get two storey ones. No steel of course. That requires metallurgical coal and mining. One or two on this website need to differentiate between thermal and metallurgical coal. Blast both require mining
It is a unsavoury double play insult. Firstly it is unquestionably racist. Secondly the condition of a spastic is one of great sadness and suffering and mocking that in itself, is descending to the level of ignorant, cruel and puerile teenagers, as common in the 60/70s. Those families that have to accommodate the condition should rightly be as offended as the suggester here should be ashamed.
This was one of the TPM suggestions.
“If we are 50% of the male prison population, we should get 50% of that budget. If we are 64% of the female prison population, we should get 64% of their budget."
I'll go out on a limb and suggest that if they can get these numbers down to 17%, there'll be more budget to go around?
It’s now policy for media and govt organisations not to engage in discussion about Maoris following complaints from viewers/voters eg how to improve their services. All with a negative opinion are assumed to be racist. It’s the equivalent of the transgender woke BS the States is suffering. There is pushback against woke so hopefully NZ will come around soon enough and move on.
Did I hear you can get up to 4 years on each count somewhere ? What's the bet he serves little to no jail time ? I really don't like the guy, never have but you kind of get the feeling this whole thing is politically motivated, the Dem's know they have already lost if he gets to run for president again.
This is the best solution but that's not politics is it ? They all stand behind the person who gets them back into power no matter what an a**hole he is. Both Biden and Trump are absolutely hopeless and its a disgrace that out of 330 million people its the best they can come up with.
Maybe, but he's a scumbag, always has been, always will be. The law suits he's facing are way overdue, politically motivated or not. He'll appeal and appeal and do anything he can to make this all about it being planned by 'Merica's enemies. I thought it would be hilarious if he got in last time, and elements of it were, however this time around it would be tragic.
Yeah he's clearly a "bad hombre" (his words, not mine) but Trump Derangement Syndrome has been such a prominent force for such a long time that it's hard to know what to think about some of it. I still remember one of those talk show hosts back in his term, for example, going on about the fact the guy has two scoops of ice cream with his apple pie like it was the biggest deal ever.
I've wondered for a while now if the way to make Trump go away - although the door has probably long shut on this - is to simply ignore him. Stop talking about him, stop bringing cases against him, stop covering his every utterance. I guess it sets a bad precedent of 'do dodgy things and get away with it' but at the same time he's able to get almost endless coverage thanks to the cases against him. Unless convictions are somehow able to stop him from actually being on the ballot, for as long as he can spin a message of 'this is a witch hunt' he might well be able to play the game of 'any publicity is good publicity'. After all, the polling seems pretty clear right now that he will be President again by EOY.
The problem is that he has seduced the Republican Party into believing he is the only one that can win the presidency for them.Therefore before anything else they are voting for the power that will fill the troughs down the line for their awaiting snouts. They are hardly alone but all of them are the antithesis of JFK’s “ask not” speech. They are voting for what’s in it for them. Downright sordid and ugly arena for supposedly the world’s great democracy.
I don't disagree (although is it the Republican party being seduced by Trump, or the Republican party being seduced by the hardcore Trump supporters without whom the party stands no chance of winning ... I guess what does it matter if the outcome is the same).
My comment is really more of a "what if" ... what if, following the last election, Trump had just been ignored even if it involved others swallowing a few rats e.g. "that rioting about the stolen election was a bit naughty, don't do it again, good job Trump never encouraged it wink wink".
I can't help but feel he would have faded into obscurity, at least enough to make him a non-starter as a candidate. Whatever his myriad flaws he is skilled at weaponising negative publicity to his own benefit.
I have to say, sometimes Biden can speak quite powerfully and coherently although he has plenty of embarrassing moments (hardly a new thing for him - even when he was VP he was known for gaffs).
Meanwhile Trump - I can't remember him giving a coherent speech since he took up Politics. He can barely put together a coherent sentence (although maybe the Judge can change that soon...)
NAB is forecasting Perth residential prices to zoom almost +14% higher in 2024. That is the high outlier; Sydney is expecting a +4.5% rise, Brisbane almost +9%, but Melbourne will be the laggard at +2.5% in 2024.
Cheap money baby, RBA have to be the most most reluctant reserve banks globally.
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