Here's our summary of key economic events overnight that affect New Zealand with news it is expected that the US will announce reciprocal tariffs today, although the phase-in time might be months. To be revealed. This will be seen as the formal start of a global trade war. New Zealand won't be any focus but it won't be immune. The tariffs will be on goods. But the retaliatory tariffs will likely come on services where the US runs large surpluses. Both will tend to drive countries away from US influence.
Every country is going to learn how to play hard-ball in a zero-sum struggle. None of this will be good for trade, or any sense of cooperation for mutual benefit.
Meanwhile, US initial jobless claims came in at 231,000 last week, almost exactly as expected. There are now just under 2.2 mln people on these benefits, quite similar to this time last year.
The expected easing in the rise in American producer prices didn't happen in January. They were up +3.5% in December and that was expected to ease to a +3.2% January rise. But in the end the pace of cost increases stayed unchanged at +3.5%. Although it is not a key metric, it is more data that will encourage the Fed to hold its settings and put off a rate cut. Tariffs are likely to make matters worse for them.
US household debt pushed on up through US$18 tln at the end of Q4-2024 in new data released today. That is 62% of US GDP, so compared with other countries, not a huge load. In fact it rose only +3.1% from a year ago, basically keeping pace with inflation.
There was a UST 30 year bond auction earlier today and that brought a median yield of 4.68%. That compared with the 4.87% at the equivalent event a month ago.
Across the Pacific, Japanese producer prices were expected to rise in January from December's 3.9% to 4.0%. In fact it came in at 4.2% for the year to January in a broad-based trend higher. And apart from the pandemic period, this is a ten year high for them.
It may seem an odd economic 'win' but EU industrial production fell -2.0% in December. This was marginally more than the November -1.8% drop, but very much less than the -3.1% fall expected. It was toughest in Austria, Italy and Hungary, all countries ruled by right-wing populists. So far they are not making their countries great again.
Container freight rates fell -5% last week to be +118% higher than pre-pandemic but -19% lower than the same time a year ago. Outbound freight rates from China brought the largest retreats. Bulk cargo rates remained near all-time low levels, but were unchanged over this past week.
The UST 10yr yield is at 4.54%, back down -9 bps from yesterday at this time. The key 2-10 yield curve is much flatter at +21 bps. Their 1-5 curve is flatter at +13 bps. And their 3 mth-10yr curve is very much flatter at +23 bps. The Australian 10 year bond yield starts today over 4.64% and up +5 bps from yesterday. The China 10 year bond rate is now at 1.63% and still unchanged The NZ Government 10 year bond rate is now at 4.66%, up +1 bp from yesterday.
Wall Street has opened its Thursday trade up +0.4% on the S&P500. Overnight, European markets were very mixed with London down -0.5% but Frankfurt up +2.1% with Paris in between, up +1.5%. Yesterday Tokyo closed up +1.3%. Hong Kong ended its Thursday trade down -0.2%. Shanghai was down -0.4%. Singapore was up +0.2%. The ASX200 ended up just +0.1%. But the NZX50 ended down just -0.1%.
The price of gold will start today at just under US$2913/oz and up +US$18 from yesterday.
Oil prices are down nearly -US$1.50 at just over US$71.50/bbl in the US and the international Brent price is now just on US$75/bbl.
The Kiwi dollar is now at 56.5 USc and up +20 bps from this time yesterday. Against the Aussie we are unchanged at 89.8 AUc. Against the euro we are down -10 bps at just on 54.2 euro cents. That all means our TWI-5 starts today just on 66.7, essentially unchanged from yesterday at this time.
The bitcoin price starts today at US$95,526 and virtually unchanged from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.5%.
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104 Comments
3rd Scroll.
This information was given to the Ministry Of The Prophet 3 years ago. It has been verified and hidden from the public until now.
New Zealand gets invaded by Foreign Soldiers with Black Hair. Foreign soldiers come ashore on small boats. This happens on the East Coast between North Auckland and Whangarei. It will be in broad daylight during swimming months while beachgoers are active.
The Prophet forewarns people for their protection, not to scare them. Those that heed the warnings and put their faith in Jesus Christ will have peace and guidance in the storm.
MOTP Ministry Of The Prophet.
14/2/2025
Storms come and go.
But they cause havoc and there can be a lot of suffering. Unless someone stands up to Trump and dials him back chaos will result and the world order is going to change and the US might not like the outcome.
But there is another perspective, and others have mentioned this possibility, that Trump or someone like him was inevitable. Stability is illusionary, as movement still tends to favour polarised groups even when it is gradual, rather than swinging around a centre. The further away from a centre (of politics?) the population of the planet gets, the more likely a major disruptor event, and the longer it takes to happen the more extreme it will be.
No wish to invite Godwin’s law critics but in Paul Johnson’s excellent Modern Times a chapter is captioned “Waiting for Hitler.” Not making either a prediction or comparison but in old parlance - cometh the hour, cometh the man. For better or worse history would tell us too.
yes recall that too I think it was Soy beans. Which if the US producers needed to be compensated means that the Chinese importers weren’t bearing the cost of the Chinese tariff on them. That could well illustrate that tariffs don’t always add a cost to the consumers. of the country of import. On the other hand the subsidy to the US producers may have been compensating for having to sell their product cheaper elsewhere. Said all that just to illustrate what a tangle of distortions tariffs can introduce.
Have seen some of the things USAID was funding?
It is pretty shocking and there is a high likelihood of money being channeled to terrorists and other enemies of the US. It badly needed sorting out and for funds to be distributed in accordance with the new Trump era of responsibility. Best just to stop it all and focus on supporting American citizens who need it.
It is not necessary for the US state to fund these things. The US already has the highest level of private funding of charity.
What and how much, you reckon? Any specifics? If they knew specifics, perhaps it would have been wise to stop those things.
Seems like conceding the soft power ground to China will be the biggest effect.
Best just to stop it all and focus on supporting American citizens who need it
Won't that be undermined by their efforts to stop funding things that support American citizens?
Mr Musk’s supporters believe that, through tech wizardry and sheer willpower, he is slashing the federal deficit in a way that has eluded politicians for years. But this narrative has a glaring flaw: our review of official data shows that Mr Musk’s efforts have scarcely made a dent in spending.
https://www.economist.com/finance-and-economics/2025/02/12/elon-musk-is…
He seems to have weirdly focused on areas that spend comparatively little, ~1%. The Federal Aviation Authority - why target that?
You do realize that US aid is only 0.24% of GNI - NZ spends more (0.31%). Norway spends 1.09%
https://theconversation.com/as-trump-tries-to-slash-us-foreign-aid-here…
It is a big deal to me, Musk and Trump. It was you guys that were saying it wasn't a big deal. "Is only 0.24% of GNI". Let's just get that straight.
NZAID wasn't being a "good world citizen". Quite the opposite. Funds were being channeled to terror groups, enemies and very questionable activities.
My argument is that America makes it sound like America is doing all the heavy lifting when in fact it is not - other country's are doing more ( a similar argument can be made about aid to Ukraine) .
The U.S. government is the single-largest aid donor in the world, according to the United Nations, accounting for more than 40% of all humanitarian aid the UN tracked in 2024.
https://www.pewresearch.org/short-reads/2025/02/06/what-the-data-says-a…
But as noted this is only 0.24% of GNI according to this article
https://theconversation.com/as-trump-tries-to-slash-us-foreign-aid-here…
You argument about terror groups and enemies is just a tad duplicitous as the US has in the past (and could be argued still is) happy to support groups and regimes that suit their interests. One man's terrorist is another man's freedom fighter. You seem to want to make the argument black and white when it is far more nuanced than that.
This is classic throwing the baby out with the bathwater stuff. This is the logic:
USAID funds 3000 projects
20 projects shouldn't be funded.
Lets stop funding for 3000 projects, because 20 projects shouldn't be funded.
Sound like the intelligent thing to do? Or maybe they should just stop funding for any future or current things they don't want to fund?
That's the problem when you see the world in black and white. There's a psychological term for it (splitting), which indicates its prevalent in people who suffer from various negative personality traits. https://en.wikipedia.org/wiki/Splitting_(psychology)
USAID was a huge part of USA's soft power abroad. Removing it allows others to step in to provide it, welcoming China etc who may become the saviours of many of their projects. USAID projects often ran as a counter point to their military adventurism. Now we will just have military adventurism, USA won't be viewed with any better light.
It seems people forget that USAID was set up to garner soft power around the world, to counter the Soviet Union during the cold war.
Congress passed the Foreign Assistance Act on September 4, 1961, which reorganized U.S. foreign assistance programs and mandated the creation of an agency to administer economic aid. The goal of this agency was to counter Soviet Union influence during the Cold War and to advance US soft power through socioeconomic development.
People celebrating because "gays somewhere!" might be missing that this cedes the above soft power to China, not to a vacuum. Seems like shooting oneself in the foot based off feelings not facts.
Yeah, I know nothing, but feel like that's the call. We do all the nice stuff but don't get want we want enough so stuff it, we will take the nice stuff away and see how you like it.
That's combined with a bit of "why were we even doing some of this in the first place" as the left stretched the definition of aid to cover things that middle America would shake its head and say "what?!".
Yeah, I would agree it seems like it's driven Trump's (or perhaps more likely Musk's) feelings rather than data and effective strategy.
Interesting now to see him backing down on hard power too, wanting to halve defense spending. Possibly because the debt increase he's looking to do to fund tax cuts for the top end again is just too great.
He did bring up that hilarious anecdote that was entertaining though when he was with his kid behind Trump, ranting about government spending and how maybe the judiciary shouldn't be independent.
It was something like how the number of people who can retire from the federal beuracracy is limited by how fast an elevator can go down into a big hold in the ground. Hilarious if true.
About that other deficit. Prescribed burns are your friend.
Given our moisture map - chest high cocksfoot under carbon trees farms are an accident waiting to happen.
"Our results indicate, despite increasing area burned in recent decades, that a widespread fire deficit persists across a range of forest types and recent years with exceptionally high area burned are not unprecedented when considering the multi-century perspective offered by fire-scarred trees. For example, ‘record’ contemporary fire years such as 2020 burned 6% of NAFSN sites—the historical average—well below the historical maximum of 29% sites that burned in 1748. Although contemporary fire extent is not unprecedented across many North American forests, there is abundant evidence that unprecedented contemporary fire severity is driving forest loss in many ecosystems and adversely impacting human lives, infrastructure, and water supplies."
profile,
I read that report yesterday. Is this not the most relevant part?
Although contemporary fire extent is not unprecedented across many North American forests, there is abundant evidence that unprecedented contemporary fire severity is driving forest loss in many ecosystems and adversely impacting human lives, infrastructure, and water supplies."
More action from our growth govt.
https://newsroom.co.nz/2025/02/12/changed-priorities-mbie-axes-small-bu…
The disestablishment of a government unit set up to help small businesses comes at a critical time for their owners and managers, and will undermine services to those very businesses that drive economic growth, industry experts say.
The savings programme for the ministry was led by David Seymour in his associate finance role. Act had wanted the public service cuts to go beyond the Government’s baseline savings targets. Seymour’s office was approached for comment.
When asked if any services are being established to replace what is no longer being funded, Chris Penk says the Government remains “firmly committed to supporting New Zealand’s small businesses”.
Whatever...
One only assumes that this is in reference to Bordeaux Bakery. Who lost enormous business because:
1. They were terrible to their staff
2. They made sub par product
3. The owners would alienate their customers by blaming everyone but themselves for their problems
One should note that the bakery La Cloche is still going very strong. And they are on the same cycleway route. And they suffer from a lack of nearby parking. And on Featherston street, the Bordeaux directly across the road from another La Cloche branch was mostly empty compared to La Cloche. Buuuuut... La Cloche make amazing baked goods that far out did Bordeaux's.
Bordeaux were out competed. The owners blamed everyone but themselves.
another genius and fair move by trump. reciprosity. i would love to see that implemented into the nz property market. so an aussie buys a holiday home in queenstown. should pay stamp duty, foreign buyers tax etc at the same rate that we would pay if buying a holiday home in queenland.
fairness
Seen in the quotes section at the bottom of the page:
The concept of global warming was invented by and for the Chinese in order to make US manufacturing non-competitive.
This is the most useful graphic I have seen to demonstrate how wrong that is
or you could try published research to show how wrong the xkcd cartoon is.
"Many studies have found a period of elevated temperatures during the Middle Holocene, known as the Holocene Thermal Maximum (HTM). ...Based on the records of the stalagmite δ18O, the HTM occurred between 10.9 and 6.7 ka, reaching its peak temperature (15.0°C) around 7.0 ka. At this time, temperatures were approximately 3°C warmer than present. ...Our Holocene temperature reconstruction is consistent with the temperature and palaeoceanographic records obtained from reef corals and marine sediments in and around the Japanese Islands in terms of the amplitude of change, warm middle Holocene, and cool late Holocene."
https://kyushu-u.elsevierpure.com/en/publications/holocene-temperature-…
That's simply not true. I am employed as a Scientist, have two Science degrees, have published papers etc and would use the phrase on topics where there is a clear consensus.
With the understanding that the consensus can always change as new evidence appears, of course.
Finally the scientists are starting to take my ideas seriously. My layman mind suggested the Amazon jungle however we may be able to detonate them under the sea:
Part way down the page they have little piece explaining the smoothing of the graph. Fair enough. But then at the end they change the scale , meaning if it was the same scale all the way you wouldn't ev n see the last dot being out of place. Makes the graph a hockey stick lie.
Edit
Totally incorrect, complete back down.
'Every country is going to learn how to play hard-ball in a zero-sum struggle'
No David, it's worse than that. As I've been pointing out here. For some time.
Post peak, there is inexorable decline (physically, it was never going to be any other way).
This is a fight jusqu'a la mort; who gets how much of what's left of the remaining half. It won't be pretty but don't blame the actors, blame the stage.
Long way to go before the end game(s) though. At least while there remains resources yet to be tapped. True as the availabilities diminish and get more difficult and expensive so too will the battle(s) for rights escalate. For example new US Secretary of Defence Hesketh that it is expected that Ukraine will repay the $billions spent there by the USA in military support, by way of precious earths. That will undoubtedly include the fracking of the vast deposits shale oil that up until now have been assessed as too difficult to extract.
Talk about failing upwards. Orr should be long gone
Hard to escape the notion, especially during the time of the isolated Auckland lockdown, and the draconian and punitive authority of it all, that the sixth Labour Government had got the bit between its teeth in terms of power and control of the people and were resistant to letting it go. Totally agreed with their management earlier on, but closing the border and locking down the people was the easy part. There was a total failure in preparedness from then on to respond as required to both developments of the pandemic itself and the compounding social and commercial issues. Rather it seemed, as described in the attachment, they were very comfortable instead with just remaining in the “black hole”
They failed to protect first home buyers who are now suffering. We could all see that the house price inflation was madness. At the time it looked like I had made a million plus on paper and it made me feel very uncomfortable. Evaporated now but I can handle it while many others are maybe not so fortunate.
We could all see that the house price inflation was madness
No we couldn't. A relatively small number of people on Interest.co.nz and some prominent economists could see it but the vast majority of the public believed the Spruiker/property/real estate narrative that house prices to the moon was the path to prosperity.
There are still a very vocal contingent on here pushing that message.
Agreed. FLP should have been phased out after a mere 6months and they chose to hang on for 2 years for no apparent reason. Not to mention the silly low OCR for too long when a high school kid having done one term of economics could have said that the level of stimulus would be inflationary so start ticking it up early to temper peoples spending.
And then there was the spending. Wilful printing, wilful spending For instance Mr Ryan Auditor General $17 mill spent. Not known where , what on and purpose. Print money, enter into nonspecific, nonproductive and unstructured spending and what do yet get. Inflation by the truckloads.
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