Here's our summary of key economic events overnight that affect New Zealand with news the global distortion are growing, and quite quickly now. After hitting an all-time high two weeks ago, the S&P500 has since fallen -4.4%.
Although today's news will probably be overshadowed by an unruly public spat in the Whitehouse with Trump trying to bully Ukraine's president (and interestingly not succeeding other than threatening standover tactics and repeating Moscow's talking points), there was important economic news all the same.
In the US, the widely watched PCE inflation level came in at 2.5% for January, down from 2.6% in December, and back to November's level. (The US CPI rate for January was 3.0%.) From a year ago, personal disposable incomes were up +1.8% and personal expenditures up +3.0%, so this isn't tracking in a favourable direction now. People will notice that and take household budget actions, such as increasing debt or cutting spending. When uncertainty levels are high, spending cutbacks are the more likely.
The sharp jerk in trade policy direction has brought sharp changes in American commercial behaviour. First there was a large spike in imports, up 12%, driving their merchandise trade deficit to a mammoth -$US$153 bln in January. That is an all-time record and by a country mile.
Secondly, American wholesale inventories jumped in January, especially for consumer goods which were up +2.1% from a year ago. Retail inventories rose even faster, up +5.1%.
The Chicago PMI, which was in deep contraction over the December/January period recovered in February, but it is still contracting, just less so.
North of the border, the good Canadian data continues. This time it is their Q4-2024 GDP growth rate, up +2.6% from a year ago, better than the Q3-2024 growth of +2.2%, and much better than the expected Q4 rate of +1.9%. Driving the rise was rising household spending, rising exports, and rising business investment. Of course, things for Q1-2025 are much more uncertain, although it will be interesting to see the echo of the 'Buy Canadian, Bye Americans' movement on their GDP. Perhaps it may give a Q1 fillip?
India also reported Q4-2024 GDP results and those came in at a +6.2% rate, better than the +5.6% in Q3, but just missing analyst estimates of +6.3%.
Global air travel is rising fast. International passenger travel rose +12.4% in January from the same month in 2024. That makes it an all-time high, eclipsing pre-pandemic levels. Asia/Pacific travel rose more than +20%.
Meanwhile air cargo traffic rose +3.2% on the same basis, although up +7.5% in the Asia/Pacific region.
The UST 10yr yield is at 4.23%, down -6 bps from yesterday at this time, down -19 bps for the week as risk aversion takes hold. The key 2-10 yield curve is steeper at +22 bps. But their 1-5 curve is now inverted by -8 bps. And their 3 mth-10yr curve is also now inverted -8 bps, both deeper inversions. The Australian 10 year bond yield starts today at 4.36% and down -3 bps from yesterday, down -17 bps for the week. The China 10 year bond rate is now at 1.78% and down -1 bp. The NZ Government 10 year bond rate is now at 4.50%, down -9 bps from yesterday, down -17 bps for the week.
Wall Street has opened its Friday session with the S&P500 little-changed. For the week it is down -2.9% however. Overnight, European markets were also little-changed but London rose +0.6%. Tokyo ended its Friday session down -2.9% for a weekly loss of -3.6%, Hong Kong fell -3.3% yesterday to be -2.3% lower for the week, while Shanghai fell -2.0% on Friday to be down -1.6% for the week. Singapore fell -0.7%. The ASX200 was down -1.2% in Friday trade taking its weekly fall to -1.5%. But the NZX50 bucked the global sell-off trend, up +0.5% on Friday but down -1.3% for the week.
The Fear & Greed Index ends the week having slipped into the 'extreme fear' zone, and out of the 'fear' zone where it was last week.
The price of gold will start today at just under US$2845/oz and down -US$30 from yesterday. A week ago it was at US$2938/oz so a -US$93 drop since then.
Oil prices are little-changed at just under US$70/bbl in the US but the international Brent price is down -US$1 at US$73/bbl. Both prices are -US$1 lower than a week ago.
The Kiwi dollar is now at 56 USc and down -50 bps from yesterday. That is a -150 bps drop in a week. Against the Aussie however we are little-changed at 90.2 AUc. Against the euro we are down -30 bps at 53.9 euro cents. That all means our TWI-5 starts today just over 66.2, and down a net -30 bps from yesterday, down -100 bps for the week.
The bitcoin price started today at US$83,689 and down a net -1.5% from this time yesterday. In between it fell as low as US$78,524 before recovering. Volatility over the past 24 hours has been highat +/- 3.9%.
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53 Comments
Better test if my commenting is approved.
+1
According to Trump, Poland started WW2 by being invaded by Germany, Russia & the Slovaks
Test comment
Rug pull...?
Well done for contributing, guys!
By being a next potential domino, Poland’s policy will be critical. Ironically, they could indeed provoke an attack, thus would enter the rest of NATO.Yet given how it’s gone along so far you would question if all of NATO would comply with the obligation, including the USA.
Poland was occupying Poznania, portions of Prussia, and Upper Silesia before WW2. The question of who starts wars is complicated!
Was Poland occupying or were the borders redrawn after WW1. Big difference. Sounds like a right wing attempt at justifying Germany's invasion of Poland in 1939.
Just saying the question of who starts wars can always be manipulated. The war in Gaza and Ukraine have similar problems. Even the New Zealand Wars.
True that, the Maori came to Aotearia and declared war onto the indigenous Brits to steal their land. (signed D Trump)
Land was purchased. Treaties signed and alliances were formed.
Good luck with the new model for your income stream David C. I know it wouldn't have been an easy decision and not taken lightly. The new world expectation of free content and news, where a few big techs dominant the advertising income space is harsh. I hope it all works out.
He's a corner store, in a world increasingly monopolised by supermarkets.
But like all parasitic operations/activities, he's dependent on the resource/energy flows, just at some remove. And they are increasingly fraught, while being here is increasingly discretionary. Eventually, journalism will be mostly voluntary - as will more things.
But I doubt he understands that, yet...
Better test if my commenting is approved.
Personally I think interest dot co is one of the most relevant media sources in Aotearoa. I signed up quite late and feel somewhat guilty that I haven't been a paid subscriber given that the content is valuable.
I think some opinions may be perceived as controversial (I've rec'd warnings about using terms such as 'deep state') and understand there will be some vetting before certain people are cleared to comment.
I signed up quite late and feel somewhat guilty that I haven't been a paid subscriber given that the content is valuable.
Yeah but IMHO you provide valuable content in the comments as well!
D Trump
"The art of the deal"
"I'm a great communicator"
I'll end the war in Ukraine in my first 24 hours in office"
"I'll end the war within 2 weeks"
Trump is a just a deluded, lying, ignorant, narcissistic convicted criminal.
What do you expect to achieve from such a comment? It's really boring.
You sound angry. Is your hero / god falling flat on his face? Just asking.....
I'm feeling really upbeat and a little aggressive. Just been for a fast run and running on ketones.
What were the stats on the run? Runner geek here. Just got back from a morning run myself. Feeling those endorphins pump through the bloodstream
I have only just got back into regular running after mocking it for a time. Was walking a lot. I am 65 so when I say fast I mean relative to my previous old man shuffle. I'm trying to run in the style of a young man though and sprinting at stages. I'm not pushing too much distance-wise as in the past I eventually end up with Achilles tendon problems. Any tips? I am getting that good feeling from the run. I'm trying to develop a perfect diet/exercise regime for mental and physical health. Eating eggs, ox heart, bacon cooked in butter for this morning's breakfast. Will do some weights and body weight exercise later and catch some sunlight. No COVID, not even a cold, since the pandemic.
Zachary,
With achilles tendon problems, I suggest that you look hard at your running shoes-is there more wear on one side which could indicate an issue with your running style- and consider seeing a sports physio. I am almost 80 and now use a personal trainer to help keep me in shape.
Above that vintage and also plagued by achilles flare ups. Mostly bursitis at the attachment to the heel.You have to make sure the elevation and fit at the back of the shoe does its job. Supportive, but only tight enough to prevent friction and the right height so it doesn’t bite in at the top. I use those gel like ankle supports to pad and bolster the area.
Zachary,
Course, distance, time? I used to run a lot in Scotland. My favourite course was a hilly 10 miles(16.09ks) which I could do in 80 minutes in my mid 50s.
That is impressive. These activities can become addictive. Running seems to be the only exercise that has that factor.
It’s all part of the plan, we’re going to put some resorts in Crimea after Gaza
I think the only way forward for Zelenski is to forget about the US and to side with Europe. Being European, I have to admit that I'm ashamed of Europe's lack of military expenditure for the last 30 years and their lack of military might. Unfortunately, Europeans are extremely slow at agreeing about anything. The Ukraine problem should really be resolved by European countries coming together quickly, and UNITING, a word unfortunately foreign to us. The rest of the European countries like France, Germany Poland and the Baltic and Scandinavian countries, should follow the UK's brave decision NOW, to offer troops on the ground to enforce Ukraine's safety !
Trumps rather boorish behaviour aside, this conflict needs to end. Perhaps if Europe has to fund it it may speed up a resolution as they really can’t afford it.
TK - no green tick before, so glad you’re here.
I contribute but don’t log in with press patron because it doesn’t permit me to update my username or details.
"What do you expect to achieve from such a comment?"
I'm hoping it will convince some to contribute, in order to rebuke my strongly opinionated post. 😉
I actually like the minerals deal, but agree with Zelenski that it should have some guarantees. What Zelenski should offer is for the US to have some military bases to protect the US companies that would be mining the minerals. Russia would absolutely hate having US bases so close to its soil, but might be OK with it, if it meant it got to exit the war and keep most of its captured land.
Amorica cannot afford its current bases let alone more...?
https://www.rnz.co.nz/news/national/543377/hyundai-in-running-to-build-…
We might get 2 smaller ferries for cheaper than 2 large ones. Plus break fees.
We have these plans in the drawer, you see, some country paid for.
But apparently it was the last govt' s fault Willis cancelled the contract.
Over the holiday break, after a couple of beers, a relative suggested have a look at how vehicles are shipped all over the world.
“Nowadays, the Pure Car Carrier (PCC) is being replaced by the Pure Car and Truck Carrier (PCTC). PCTCs typically have a wide stern quarter ramp and a side ramp for dual loading and discharging of a combination of cars and high-and-heavy cargo units in a short time span. The required mixture can be accommodated by having a number of liftable or hoistable car decks to allow high vehicle clearance. The internal ramp system is usually arranged in succession to allow simultaneous cargo operations on all decks. Internal ramps can be fixed, with ramp covers, or hoistable.”
This configuration allows RoRo vessels to berth at practically any quay with no special purpose terminals. These ships can been seen regularly visiting Aotea Quay Wellington to unload vehicles
Put a couple of these on a Wgtn – Lyttleton run & take the vast majority of the trucks off the ChCh-Picton SH1. Leave Wgtn – Picton to BlueBridge.
Forget the inefficient double/triple handling, featherbedded rail/rail ferry operation. We did well enough without it for a few years after the Kaikoura earthquake.
Std vessels & avoiding a billion dollars & years of construction for terminals
No rail option & reducing Picton capacity will help utilisation. Also, IIRC the Wgtn-Lyttleton ferry provides a drivers break that’s legal & schedule advantageous. Probably more freight nowadays than the 1970's, perhaps biased towards South? Would likely start with a single vessel anyway?
https://www.mol-service.com/blog/history-and-latest-technology-of-car-carrier
https://youtu.be/AcKq8B3rYxk?feature=shared
Is it time to reconsider the Wellington to Lyttelton overnight ferry? | Stuff
https://www.kiwiblog.co.nz/2025/01/will_hipkins_take_responsibility_for_the_ferries.html
Yes, looked at possible alternatives.
The key is turnaround time, and for that, you can't beat a RORO ferry.
Echoes there of Norman Kirk’s government’s strategy in forming the Shipping Corporation of New Zealand, Tom Skinner chairman. Not only to insert competition into the European trade (NZ Waitangi, NZ Pacific) but coastal trading with an eye to the somewhat vulnerability of NZ to depend on rail. Nowadays ferries and such like can be virtual computerised warehouses, highly efficient loading and discharge. Running these between Wellington & Lyttelton overnight would take a lot of pressure off the roading and not much more time.
Here
"Trump ended the meeting by saying that Zelenskyy was not “acting thankful” and “that’s not a nice thing”.
“This is going to be great television,” he concluded."
https://www.theguardian.com/us-news/2025/feb/28/trump-zelenskyy-meeting…
David is far too generous in his descriptions of the lunatic man child.
I don't like Trump at all, but he might be pretty good at deal making. Shining light in dark places is never a bad thing.
Anything that pushes for peaceful resolution might be worth it. Some might call it appeasement, but like I said in a comment above, they could make a deal where everyone is annoyed. Where they put US bases on Ukraine soil to protect the minerals the US companies would be extracting. That would certainly make Russia upset and annoy the Ukranians too, losing ceding some sovereignty in exchange for a pretty good security guarantee. And the US would be both upset and happy with the deal too.
Its been going on too long, there needs to be a deal where everyone is pissed off and bitter. They end up being the best kinds of deal long term.
Strategically that would be pivotal. Should America get involved industrially/financially then it would obviously need to protect those interests. On the other side it is clear that Russia will not withdraw from any occupied territory and there is no stomach out of the EU nations to force them out.,What will be critical will be where a new border is established. Russia will want that to be running east from the Dnieper and north of the Donetsk industrial belt in wide open territory. Ukraine will realise such a position will expose Kharkov, north and south, and next to that Kiev itself and the remainder of Ukraine.
The world has discovered that the US is unreliable so any and all promises/deals they make henceforth can no longer be relied upon.
Nato as a security arrangement no longer practically exists, nor for that matter does Australia's.
Yes, this is a good point, countering mine above. With the US political scene so polarised, much like NZ is heading. Every 4/8 years the system will lurch in some random direction, causing allies to be supported/not supported etc. Internal US politics causing instability globally through inconsistent foreign policy.
Weak data all around and no signs of inflation trending in the wrong direction. Markets predicting a June FED cut.
Although today's news will probably be overshadowed by an unruly public spat in the Whitehouse with Trump trying to bully Ukraine's president
Another https://en.wikipedia.org/wiki/Day_of_Infamy_speech
I actually think it started in the UN vote when the US sided with a whole new set of allies;
https://nz.news.yahoo.com/us-joins-russia-vote-against-175510097.html
So has the new comment policy been implemented or not? I see several posts without the green tick, which was also supposed to go away.
President Trump seems to be alone in wanting to extend the lives of tens of thousands of young men in Russia and Ukraine.
Hitler in his bunker as the Russians closed in, and when he learned of the loss over another division and twenty thousand men said " That is what young men are for"
🤡
Adolf did a lot of things from his bunker, such as flooding the subways and finishing off thousands of refugees and wounded military. A psychopathic mass murderer in the depth of lunacy. Undeniably had he been stopped in the early stages, millions of lives in general would have been saved. So too would have thousands of lives been saved if Putin hadn’t started in on his adventure. Wars take lives full stop.
Hitler ordering the flooding of the subways is likely a myth. Hitler was actually dead at the time. Subways did have water ingress after various explosions but people just walked out as it was filling slowly and in most areas was only about a metre deep. A couple of hundred bodies were recovered after the battle but as the subways were where the wounded were taken for treatment these were bodies of people that most likely died before the flooding. The flooding was hyped up a lot by the Soviets after the war.
This stupid "Churchillian" attitude of never surrender will get a lot of people killed if applied incorrectly. It was in the context of the battle of Britain and the Battle of the Atlantic where Britain had a good hand. Britain was backed by the US and the Commonwealth. Not just a plucky little island fighting on its own. Churchill's decisions were also a major contributing factor of the high death toll during the Bengal famine of 1943. Total war is grim.
Deals have been done all through history and are in fact normal and sensible. Deals are an important aspect of war. Churchill agreed to let half of Europe be annexed by the Soviets because of deals done at the Yalta and Potsdam conferences so he certainly wasn't adverse to deals.
Good points. My father was military and had sizeable library on the subject which I started reading early on. Lately though, after I read VD Hanson’s, The Second World Wars, I concluded that I had likely read too much. The little pictures can’t see the big picture anymore than vice versa.
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