Here's our summary of key economic events over the weekend that affect New Zealand with news the world seems to be bracing for the uncertainties of the incoming US Administration, but it is starting from a generally resilient position (although that doesn't seem to include New Zealand).
But first, the week ahead will be dominated locally by our Q4 CPI release. Markets expect a 2.1% year-on-year rate, only marginally less than the Q3 rate of 2.2%. We will also get another full dairy auction on Wednesday too. The REINZ will release its December data sometime, maybe Tuesday. And we can expect other banks to react to ASB's home loan rate reductions.
Elsewhere, there will be more PMI releases, GDP releases for South Korea and Taiwan, and rate decisions from Norway, Turkey, Malaysia, and the big one from Japan at the end of the week. Data out of Australia will be minor this coming week. But all the while, important earnings reports will flow on Wall Street.
Over the weekend, China said new home prices in 70 cities dropped by an average -5.3% in December from a year ago, slowing from a -5.7% decline in the previous month. This was the softest fall since August but is the 18th consecutive month of decreases. "Second hand home" prices fell faster, and there were no cities where prices rose. The string of decreases come despite efforts from Beijing to reduce the impacts of a prolonged property weakness, efforts such as lowering mortgage rates and cutting home buying costs.
China released data that showed electricity production was only up +0.6% from a year ago in December. For the whole of 2024 the rise was +4.6%. The year ended weakly with neither November nor December rising more than +1%. This is a telling indicator of real activity. (This is the metric then-to-be Premier Li Keqiang famously referred to after dismissing their GDP results.)
But they said industrial production was up +6.2% in December. Retail sales were up +3.7%. And through all this they claimed Q4-2024 GDP rose +5.4% and its fastest pace of the year. Frankly, that is hard to see based on the components that make it up. Apparently it is based on export growth, but as good as that is, it is hard to see that behind the claimed growth. But the links here, plus this one, and they should be enough to inspect their data and for you to make your own judgement.
Singapore’s exports surged +9% in December from the same month a year ago, after a +3.4% gain in November. This exceeded the +7.4% rise in November and is the fastest pace in export growth since August. A key driver is a sharp rebound in non-electronic product sales.
Globally, the January update of the IMF's World Economic Outlook estimated global growth to be +3.3% in 2025, a slight increase from the 3.2% forecast in October. The rise was driven by the US which offset downgrades in other major economies. Growth for 2026 is also expected at 3.3%, unchanged from the previous projection.
They say the US faces upside risks that could bolster growth in the near term, but other nations remain exposed to downside risks amid heightened policy uncertainty. The US economy is now forecast to grow by 2.7% in 2025 (vs 2.2% in October), and China's GDP growth was revised slightly higher to 4.6% (vs 4.5%).
Conversely, the Euro Area's growth projection was downgraded to 1% (vs 1.2%), while Japan's growth forecast remains steady at 1.1%. Projections for India’s GDP growth were maintained at 6.5%. Australia is expected to grow +2.1% in 2025 and +2.2% in 2026. New Zealand doesn't get a mention in these forecasts.
Underscoring the US growth upgrade, American housing starts surged by almost +16% from the previous month to an annualised rate of 1.5 mln units in December, the most since March 2021 and well above the expected 1.32 mln level.
And industrial production in the US was up an outsized +0.9% in December and well above the +0.3% expected rise to the strongest increase since February. It was helped by the end of strikes, and a jump in the production of aircraft.
But there is a bump in the road about to start: the latest US debt limit deal is about to expire very soon. The new US Administration will have to grapple with that in its early days. Trump wants no debt limits to constrain his tax cuts and spending plans, but his hardline conservative supporters won't agree to more deficits. This will be interesting.
Trump has already had an effect on the US Federal Reserve, getting them to withdraw from the 144 member NGFS, which includes the RBNZ.
And separately, we should probably note that the aluminium price is at a two month high, and heading toward a two year high.
The UST 10yr yield is now at just on 4.62%, and up +2 bps from this time Saturday. The key 2-10 yield curve is also unchanged at +34 bps. Their 1-5 curve is holding at +22 bps. And their 3 mth-10yr curve has steepende slightly, now to +32 bps. The Australian 10 year bond yield starts today under 4.50% and down -5 bps. The China 10 year bond rate is now at 1.64% and down -1 bps. The NZ Government 10 year bond rate is now at 4.75% and unchanged.
The price of gold will start today at US$2702/oz and down -US$14 from Saturday.
Oil prices are down -50 USc at just under US$78/bbl in the US while the international Brent price is now just under US$81.
The Kiwi dollar starts today just under 55.9 USc and down -10 bps from this time Saturday. Against the Aussie we unchanged at 90.1 AUc. Against the euro we are down -10 bps at 54.4 euro cents. That all means our TWI-5 starts today just on 66.8 and down -10 bps from yesterday, but up +20 bps from a week ago.
The bitcoin price starts today at US$104,704 and down -0.3% from this time Saturday. Volatility over the past 24 hours has been modest at +/- 1.1%.
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56 Comments
Trump is a symptom, not a cause.
Our species has run into the Limits to Growth, and the hitherto-leading hegemony, is disintegrating.
The blame is on exponentially-increased population, consumption, and the resultant overshoot. Neither left not right have answers, although the left will be kinder to citizens on the way down.
PDK/Murray, I agree with you in part that it is a contributing factor, however I don’t think that yours is the only explanation.
Perhaps we ought to be acknowledging a multi-faceted explanation?
Take for example this former trader’s explanation of institutional decline: https://youtu.be/wPoXOwiEfrQ?si=8FmxDSxc7D636Cqe
He offers a very eloquent answer to a complex problem different to your own (arguing the point of the rich taking more and more from ordinary people, thus causing this decline), and I would recommend it to anyone with critical faculties… but it isn’t the only answer in my view.
What about Sam Harris’s views - different to yours and the above - on the failings of the left to explain institutional decline and Trump being a symptom? https://podcasts.apple.com/fr/podcast/391-the-reckoning/id733163012?i=1000676525003&l=en-GB
Outstanding monologue, highly recommended and yet once again, one explanation among the many, in my view.
I acknowledge and highly respect your points on energy and civilisation to explain certain phenomena, but I don’t always agree that it is the main causality.
I believe it takes a bit more backbone to make the hard decisions that may not be popular with the whiners and "wokesters" - no doubt you've seen the clip of the PM saying he is going to and I quote "spike it" referring to the treaty principals bill - that is no way for the PM to act. Just my opinion of course.
Now obvious why the main stream media were so desperate to have Luxinda as PM. Talking him up before he was even an MP.
"The CEO of Air New Zealand Christopher Luxon has resigned, leading to feverish speculation that not only will he get into politics, but that he’ll be the next National PM. Why?
Watching the takes unfold around the apparently imminent and glorious political career of Christopher Luxon, it’s hard not to feel a little powerless about it all."
https://thespinoff.co.nz/politics/20-06-2019/revealed-christopher-luxon…
The war for immigrants when your Ehrlich exponential growth fantasies don't pan out?
"In CBO’s projections, the rate of population growth generally slows over the next 30 years, from an average of 0.4 percent a year between 2025 and 2035 to an average of 0.1 percent a year between 2036 and 2055. Net immigration becomes an increasingly important source of population growth. Without immigration, the population would shrink beginning in 2033, in part because fertility rates are projected to remain too low for a generation to replace itself."
No mention of $trump? Trumps team have dropped a $trump coin over the weekend. It’s currently bouncing along the mid $60 range. Its increased almost 1000% in a few days. All bets are off what happens after the inauguration. I don’t believe Trumps ego will let this coin crash. “This coin is the greatest coin to ever exist, you’ve never seen anything like it”
It's crazy. I swear there was more coverage of 'Hawk Tuah' girl coin in the mainstream media than Trump coin (at least so far).
I have been fairly "charitable" about Trump in the past (in part because being in my early 20s when he first ran I was drawn in by the whole meme aspect of his candidacy). It's painfully obvious why a lot of people - particularly the traditional working class - like him and his type of politics.
However, this is a grift too far.
Even the most cursory research into the wallet distributions etc make it clear how much of an insider job this is. Fair play to you if you can make a few bucks on the way up, but there is no way this doesn't end with a monstrous rug pull. Or it is an out-in-the-open scheme to allow third parties e.g. foreign actors to buy Trump's favour by bidding up the value of the tokens he/his associates clearly control.
Crazy to think that Jimmy Carter had to give up his peanut farm as it was considered unseemly for him to have business interests, and a few decades later it's ok for the president to launch a meme cryptocurrency that at best exists as a vehicle for nothing more than rampant speculation (of which the president and his inner circle benefit the most) and at worst could well be a tool for all sorts of nefarious activity ... and nobody seems to be batting an eyelid.
As somebody who first got in to crypto because it represented interesting technology, the opportunity to transact in a more private manner, and 'decentralising' finance, it's a shame how far it has all fallen and this is the most egregious example yet.
I hope the entire crypto space implodes at this point. Not that I think it will ... but it would be better for society if it did.
I hope the entire crypto space implodes at this point. Not that I think it will ... but it would be better for society if it did.
To own Trump’s new meme coin, you actually have to buy it yourself. No one’s forcing you to hit that buy button. So, if you feel like you’re being rug-pulled, just remember—it’s a decision you made.
Of course nobody is forcing you to participate, and I am a firm believer in the principles of caveat emptor and a fool and his money soon being parted, but do you really think it is "becoming" of a president to be flogging a literal $hitcoin to increasingly cult-like followers? It's one thing having random individuals dream up amusing tokens like Fartcoin, but this Kafkaesque.
I say this as somebody who has investments in crypto - so in theory some Trump-inspired influx of cash into the wider crypto markets would benefit me personally - and as somebody who has long been more complimentary of Trump than most so my criticism isn't fueled by any form of "TDS".
At least in earlier crypto bull runs there was some veneer of trying to hide behind promising technology ... this time round in the memecoin era it's nothing more than a bleak, ruthless PvP casino.
All respect to you if you've been able to get in on this and make a buck, I just think it's peak insanity.
All respect to you if you've been able to get in on this and make a buck, I just think it's peak insanity.
I hear you. I've never owned a meme coin and often kicked myself for not understanding how one can make out like a bandit on them and then taking a punt.
Nevertheless, buying anything without understanding risk and different scenarios - with memes and even BTC you should set the lower parameter at near zero. If you do so, you don't get rekt.
As for influencers and rug pulling in investments, Aotearoa's own My Food Bag is possibly an example for understanding psychology.
"I hope the entire crypto space implodes at this point. Not that I think it will..."
The biggest risk to the crypto space is all the new coins. Check them out ... https://coinmarketcap.com/ ...
My guess is that the implosion will begin with one of the new coins, possibly Trump's. This will spread to other new ones. And then to the more established ones. A few will be left standing ... But at what value? Even stable coins will take a hit.
How fast could this happen? Over a few hours are a possibility. Over days is more likely - with constant periods of heightened activity as a 'floor' is found only to be blown away some hours later. This will be interspersed with collapses of various businesses associated with each crypto currency. The reports of outright corruption, which are not being paid any credence at the moment, will be grabbing headlines, and confidence will disappear (hence stable coins taking a hit too.). In a few weeks, it'll largely be over. But like the 1929 Wall Street crash there will be periods where confidence seems to have returned before crashing again. And if the 1929 Wall Street crash is anything to go by, this process will take years.
I wasn't alive in 1929 to enjoy that one. But I was for '88 and the few since then. But not since the .Com bubble have I seen such a level of remarkable silliness. At least the .Com bubble had some tangible promises behind the hype. Likewise the CDO collapses of 2008. But this one has absolutely none.
It is going to be a tonne of fun to watch from the sidelines. Take care, y'all.
Edit: dumbthoughts: "I just think it's peak insanity." I'd agree. I've seen nothing this absurd, and on such a scale, since tulip-mania.
Is buying a meme coin any different to buying one of these?
https://www.whitehousegiftshop.com/46th-President-Elect-Joe-Joseph-R-Bi…
Both "coins" rely on their value being determined by some future idiot prepared to pay more for them.
Most dangerous thing for country about Trump coin is what comes next. Now anyone in world can essentially deposit money into bank account of President of USA with a couple clicks. Every favor - geopolitical, corporate or personal - is now on sale, right out in the open.
Though you must admit it is a lot more efficient than buying the presidents son's paintings or doing dubious book deals for washed up politicians. Or of course donating to the Clinton Foundation.
"...The Clinton Foundation has a rocky past. It was described as “a slush fund”, is still at the centre of an FBI investigation and was revealed to have spent more than $50 million on travel.
...IBT wrote that the State Department approved massive commercial arms sales for countries which had donated to the Clinton charity.
...The Daily Telegraph wrote in October that “Lo and behold, (Julia Gillard) became chairman (of the Clinton-affiliated Global Partnership for Education) in 2014”, one year after being defeated in a leadership ballot by Kevin Rudd."
https://www.news.com.au/finance/economy/australian-economy/australia-ce…
Let's remember. The Mooch backed Sam Bankman-Fried and FTX. Different I know. But FTX would have listed TRUMP.
TRUMP released on the same day Chair Gary Gensler left the SEC. He will be remembered for his attack on crypto assets as being securities under the Howey Test, except for BTC, which is a commodity. Perhaps Trump himself is trying send a message here:
1. The US is a free market. People will be able to create any token. Caveat Emptor.
2. The US is open for business and regulators cannot prevent innovation.
3. The banks and the Fed no longer call all the shots.
Yup. All true.
https://www.investors.com/news/donald-trump-launches-trump-meme-coin-in…
Reminds me of all the newly floated companies launched on the NZX in '87/'88. Their share prices skyrocketed on nothing but promises of further share prices rises. That turned out well, right? LOL.
Isn't it simply another way to donate to the Inauguration? Does it really matter if you buy a meme coin or just transfer US dollars into his account? Its standard practice for incoming Presidents to raise money for the Inauguration via donations. Biden took in $61.8M in donations for his. Obama got $53M for his one.
https://www.reuters.com/world/us/pfizer-unions-others-donated-618-mln-b…
People really need to get over the whole Trump Derangement thing, and stop making mountains out of molehills.
A very scathing review of the previous transport minister: https://www.greaterauckland.org.nz/2025/01/20/can-we-have-a-normal-mini…
Make sure you don't get sick peeps...
Quit while he was ahead?
https://www.aa.co.nz/about/newsroom/media-releases/safety/2024-sees-low…
Tangental, but related. Is anyone else sick to death of our judiciary handing out pathetic sentences for vehicular murder while imhpaired? From the All Blacks daughter to the recent sentencing of a group of mongrels in a stolen car, high on meth, who killed two of my relatives, it's a joke.
The former gets a year home detention and posts on social media laughing, the latter will be out in 15 months.
I'm sorry for your loss, very sad to hear the circumstances.
It's been apparent for a long time that NZ has a legal system not a justice system. Serious offenders repeatedly get slapped with wet bus tickets while victims get life sentences.
It must be really frustrating & continually demotivating for Police to see the end results of their extensive efforts & personal risks incurred.
Thanks, it was my wifes side, 2 beautiful souls wiped out with almost no consequences. There was another case in the paper last week of a truck driver who crossed the road and killed a 15y old girl in Whakatane, he tested positive to meth, he'll be out in 9 months. https://www.nzherald.co.nz/bay-of-plenty-times/news/parents-of-bay-of-p…
The AB daughter 3 times the limit, fled the scene and not even a custodial sentence.
I would genuinely consider vigilante justice, it's not as if there are any consequences it seems.
Agreed.
My solution is a simple one - take sentence-setting away from judges. From where I'm sat, they've lost the social licence to continue to be in charge of handing out sentences.
A judge can sit in the court room to ensure due process is followed, that everything is procedurally fair etc, but once the verdict is read out just have some kind of algorithm hand out the sentence with a maximum discount.
Any discounts would be preset amounts, e.g. you get 10% off for an early guilty plea, up to a maximum discount amount, say 33%. Formula of maximum sentence for the crime x discount = sentence, judge has no say in this and cannot deviate. Some kind of allowance for first time offenders to get a focus on preventing recidivism, but once a pattern of behaviour is established recognise that the leopard won't change its spots.
A fair playing ground, with no opportunity for activist judges to shaft victims and the general public in their quest to show off to each other how "enlightened" they are.
Another bonus is we can then pay them less, as they are massively overpaid right now (especially once you factor in all the perks like gold-plated pensions etc). A taxpayer $ saving we can all get behind.
Sure there will be a cost to more prison places, but then again the construction industry is on its arse right now so we could do with a bit of stimulus, and don't try to tell me there isn't a cost to crime either.
Sorry to hear of your loss Te Kooti. This type of occurrence is becoming far too frequent.
I would bring back capital punishment for meth dealers. Unfortunately, all district court judges (the majority of whom seem to be women today) have become incredibly woke. One of the reasons is because they live in the relatively safe leafy suburbs and have no real personal experience of the mayhem and violence caused by meth; their compassion is liberally meted out to the offenders while all the victims and their families can do is to read out victims' statements in court with the smug, smirking and contemptuous accused looking on.
In fact, I believe that judges' promotions are now dependent on who can give the most sentencing "discounts" to convicted offenders over the course of a year.
Thanks. I have no idea on the gender balance in judges, I would accept females are generally more liberal and that may or may not be reflected in sentencing. I just think we have lost our way, these innocent lifes being taken by the dregs of society for almost no punishment.
Its not just driving offences, its all offences. Like the five time serial rapist that got 9 months home detention. Or the guy that deliberately hunted down and killed a man in Christchurch who got 11 months home detention (not even the full 12 months). And lets not even bother talking about the sentences (or rather lack of them) for domestic violence offenders.
The car theft rate in New Zealand is twice that of Queensland, and three times that of NSW. Criminals operate in this country with complete impunity.
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