US PMIs mixed; copper hits record high; Japan PMIs weaker; India PMIs strong; China readies rate cuts; Australia PMIs rise; AU Budget due, then election date; UST 10yr at 4.33%, gold down and oil up; NZ$1 = 57.2 USc; TWI = 66.8

Here's our summary of key economic events overnight that affect New Zealand with news the prospect of tariffs already seem to be sapping the rising expansion of the American manufacturing sector over the past few years.

The first look at PMIs for March are starting to come through with early 'flash' results. In the US, the S&P Global composite PMI rose in March from February's 10-month low. The service sector led the upturn with a better than expected gain. But the factory sector fell into contraction as a tariff-driven boost earlier in the year ran out of puff. Employment grew only marginally. New order growth for factories evaporated in March, but rose for services.

They are facing significant cost challenges. For example, with the new Administration calling 'copper' a national security issue, prices for this key metal have now hit a record all-time high there, and rising. This type of policy mistake is going to make US factories far less competitive on the global stage.

The Chicago Fed's National Activity Index rose in February, consistent with the PMIs, and the hesitation in new orders showed up here too with this category dropping below its long term average and one of the weaker components although better than in prior months.

In Japan, their March 'flash' PMI wasn't great for them. The factory PMI contracted in March and by more than expected, the ninth consecutive month of contraction. It was a reversal in factory activity since March 2024, with sharper declines in both production and new orders, despite foreign sales growing. In the services sector there was an even larger decline, but only to just below a steady state from February's solid expansion.

In India, their PMIs continued to register a strong expansion, consistent with what they have had. Even though the services expansion was slightly less, it is still strong. Factory activity is still very strong and rising new orders suggest real capacity problems, but also that the gains will continue.

In China, there are official central bank indications that they are getting ready to cut their policy rates and banks' reserve requirements, at the “right time.”

And staying in China, they are starting to deploy robot police.

Singapore's inflation rate rose in February from January, but due to base effects, fell from a year ago and is now only up +0.9%. That is the first time it has been under 1% in four years. Since September 2022 when it hit 7.5%, it has steadily fallen from there.

In the EU, their March 'flash' PMIs record expansions in both their services and factory sectors. True, they are both minor, but because they are rising from contractions they are notable. New order growth is behind the rise.

The latest internationally-benchmarked factory PMI for Australia for March is recording a strong gain and an expansion that is its strongest since late 2022. Their 'flash' services PMI also rose but it is recording a more modest expansion.

We are standing by for a May election in Australia. Probably May 3, or May 10, both Saturdays Thursdays. We won't know what they actually decide until after their 2025/26 Federal Budget is released later today. Because it is an election Budget, its forecasts will be looked at dubiously. Current polling has the opposition parties ahead, but now falling rather sharply in support. Here is a recent outlier poll. It's basically too close to call.

The UST 10yr yield is now at 4.33%, up +7 bps from yesterday at this time. The key 2-10 yield curve is holding at +30 bps. Their 1-5 curve inversion is -2 bp. And their 3 mth-10yr curve is now +2 bps. The Australian 10 year bond yield starts today at 4.50% and up +11 bps from yesterday. The China 10 year bond rate is now at 1.91% and up +1 bp. The NZ Government 10 year bond rate is now at 4.62%, and unchanged from yesterday.

Wall Street has started its week up +1.4% on the S&P500. Overnight, European markets were all about -0.2% softer. Yesterday, Tokyo ended its Monday trade down -0.2%. Hong Kong was up +0.9%. Shanghai was up +0.2%. Singapore was up +0.3%. The ASX200 ended its Monday trade up +0.1% and that was matched on the NZX50.

The price of gold will start today at just on US$3009/oz and down a net -US$14 from yesterday.

Oil prices are up +50 USc from yesterday at just on US$69/bbl in the US and the international Brent price is still just under US$73/bbl.

The Kiwi dollar is now at 57.2 USc and down another -10 bps from this time yesterday. Against the Aussie we are down -30 bps at 91.1 AUc. Against the euro we are holding at just under 53 euro cents. That all means our TWI-5 starts today just under 66.8, and down -10 bps.

The bitcoin price starts today at US$88,026 and up +3.2% from this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.2%.

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