Here's our summary of key economic events overnight that affect New Zealand, with news gold has taken off, hitting yet another new all-time record high as fear stalks markets today and risk is definitely 'off'. But the NZD is rising. As we publish, markets are moving quickly so this snapshot will date just as quickly.
But first in the US, mortgage applications fell -8.0% last week from the same week a year ago, with the refinance component down a rather sharp -12% on the same basis. These retreats came as benchmark mortgage rates rose +20 bps from a week ago
A rush to buy cars ahead of the April tariff taxes delivered a boost to March retail sales that was even more than expected. Without those car sales, March retail was barely improved, and that does not adjust for price inflation so in volume terms, core retail sales are declining now. That trend will have global implications.
American industrial production rose +1.3% from a year ago and this does adjust for price changes, so a small improvement. But it did shrink in March compared to February.
Sentiment by American house builders was little-changed in March from February, but it is -21% lower than a year ago, and -13% lower than two years ago. In fact, excluding the pandemic, you have to go back to the GFC to find it this poor in a March month. That is not good because it is the start of their Spring selling season. Survey results show that tariff taxes are not being paid by importing countries, rather by the builders at this stage. As profits dive, that will be passed on to buyers next.
There was a US Treasury 20 year bond auction earlier today and demand was slightly lower so the median yield rose to 4.75%. That is a rise from the 4.59% at the prior equivalent event a month ago.
Fed boss Powell was talking earlier today, saying that tariffs pose a real challenge to meet their dual inflation+jobs mandates. Inflation pressures are here now which argues for rate settings to rise, while economic growth is expected to leak away soon hurting jobs, arguing for a rate cut. He said they will "wait for greater clarity" to see where the dominant pressure comes from.
These comments were not the magical thinking equity markets wanted to hear, and the realities of what faces the US economy has seen Wall Street pull back today. The Nasdaq is down -3.1%, the S&P500 down -2.2%. The Dow is down -1.7%. Gold is the safe-haven parking lot.
In Canada, they are also waiting. Rather than continue with their rate cut track, the Bank of Canada has paused that track, keeping its policy rate at 2.75% as they too watch inflation rise and economic activity leak away. Interestingly, the TSX is only down -0.3%, hit far less than Wall Street.
Across the Pacific, Japan's February machinery orders rebounded sharply, rising well above market expectations for a modest +0.8% increase to its highest level in a year. Manufacturing orders rose +3%, while non-manufacturing orders jumped +11.4%. This rise matches the separate machine tool order data for March which was also up sharply. And these first see prosperity ahead; The Reuters Tankan sentiment index rose sharply in April. But the same firms surveyed were gloomy for the months further out in 2025.
China claimed its economy grew at a +5.4% rate in Q1-2025 (real), the same rate as for Q4-2024. They said retail sales were up +5.9% (nominal) in March from a year ago, better than the +4.0% in February and the best rise since December 2023 which benefited from a low base. They also said industrial production was up +7.7% (nominal) in March, far better than the +5.6% expected and far better than the +5.9% February gain. Electricity production was only up +1.8% (real) year on year in March, so either they are making spectacular energy efficiency gains, or something other than electricity powers their industry, or something doesn't add up. Anecdotal reports from many regions don't paint quite the picture these official stats paint.
Meanwhile, Chinese new home prices in March edged lower from February, but there are range of changes in the 70 top Chinese cities. Still only Shanghai shows a year-on-year gain. Among the same cities, none show any gain for resales of existing houses and some declines are now as much as -11% (Jinhua, 7 mln population, and Tangshan, 7.7 mln).
The UST 10yr yield is now at 4.27%, down another -6 bps from this time yesterday. The key 2-10 yield curve is little-changed at +50 bps. Their 1-5 curve is now inverted -4 bps. And their 3 mth-10yr curve is flat. The Australian 10 year bond yield starts today at 4.31% and down -1 bp from yesterday. The China 10 year bond rate is now at 1.64% and down -2 bps. The NZ Government 10 year bond rate is down -1 bp at 4.59%.
Wall Street has started its Wednesday session in a sharp retreat and down -2.8% on the S&P500. The recent rally was built on sand. European markets all little-changed overnight. Tokyo ended yesterday down -1.0%. Hong Kong was down -1.9%. Shanghai was up +0.3% with home-team support. And Singapore gained a full +1.0%. But the ASX200 ended its Wednesday session unchanged, although the NZX50 rose +0.5%.
The price of gold will start today sharply higher at a new record of US$3337/oz, and up +US$108 from yesterday or +3.3%.
Oil prices have firmed marginally, up +50 USc from yesterday to be now just over US$62/bbl in the US and the international Brent price is now just over US$65.50/bbl.
The Kiwi dollar is now at 59.3 USc, up +20 bps from yesterday at this time and still the highest since mid-December. The fall of the USD embeds. Against the Aussie we are unchanged at 92.9 AUc. Against the euro we down -40 bps from yesterday at just on 52.4 euro cents. That all means our TWI-5 starts today now just on 67.6 and unchanged from yesterday.
The bitcoin price starts today at US$83,854 and holding again, down less than -0.9% from this time yesterday. Volatility over the past 24 hours has again been modest at +/- 1.3%.
[Due to staffing holidays, the video version of this review will not return until April 28, 2025.]
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65 Comments
Feels like a global recession in 3,2, 1.
On the internet, every day is the beginning of the end of the world.
No its real world.... but some young things would not know what this means....
“We’re going back to the world that existed prior to the fall of the USSR, which is a multipolar world, less globalisation, less efficiency, less productivity, more capital scarcity. And so that reprices every risk asset.”
We're trying to use dollar values to appraise reality. So something made up, trying to relate to the world.
...sort of like another religion
Any way a human tries to fit all this in a box can be seen that way. Especially if they think the box is airtight.
Like it or hate it, we value things in $, this is a site to help you with financial decisions, not a self help Kum ba yah site.
The base rules are changing, USA is no longer going to fund the world.
“A big part of what we think is happening is the US has been on an unsustainable growth trajectory. We were running 7 per cent-plus deficits, and the rest of the world’s running 2.5 per cent deficits. That means everybody’s going to crowd into the US dollar and our stock market’s going to look good for a while.”
Like it or hate it, we value things in $, this is a site to help you with financial decisions, not a self help Kum ba yah site
Where every day, at least one person tries to prophesize its hitting the fan. And they're wrong. Is that a help?
Life's been most profitable for me when the money and accounting isn't at the top of the priorities.
Where every day, at least one person tries to prophesize its hitting the fan. And they're wrong.
All good you reckon P? That's the spirit. Looking out the window or picking through the wisdom at Granny Herald, no indication the economy needs a different purpose or trajectory.
It's good enough. Actually, if people had much of a sense of perspective, it's pretty amazing.
We had COVID, and it was the worstest thing, ever. Except it wasn't really that bad.
Now what's going on today, which also likely won't be as apocalyptic as people's fears fool them to believe.
What do we do with your sensible, money inspired advice? Retreat, stand still, or double down?
It's good enough. Actually, if people had much of a sense of perspective, it's pretty amazing.
I hear you. One of the narratives bouncing around the water cooler is that if things were so bad, then the Aotearoa Peso wouldn't be appreciating relative to USD.
Or like, we'd have to live lives that most of our forebears endured.
No, IT GUY, and that's the whole point.
The US NEVER funded the world - it hoovered from the world. Which is why it, and many associated with the hoovering, needed to hide behind the false account that is keystroke-issued debt-proxy.
I don't quite understand this comment IT, where'd you get it from?
But the world is pivoting away from the US, so they're choosing not to be led by the US any more. Personally I'm hoping China will be able to serve them a serious dose of humility while keeping the escalation down to non-violent actions. Who know though? Trump is like a petulant child. Will his military obey if he tries to use them offensively to drive his program? I hope not.
AFR its paywalled. The comment regards to the US economy since Covid under Biden they where running massive deficiets, Trump has tried to stop the spending. Things looked good while borrowing ran fast, much like NZ under hippy.
"Trump has tried to stop the spending"
Did Trump not raise the spending limit by something like $4 Trillion ?
yes as opposed to the recent 7 trillion, I guess reduce the bleeding as cutting to 0 will probably kill the patient
The thing is though is that it is not borrowing per se is it? They're creating money hand over fist, and it is a bet against future economic activity, but it is not a debt that has to be paid back.
The problem is that without the external demand for the US$ there is little to hold the value up other than internal economic activity. Their tax system doesn't appear to be that good at removing money from circulation, and that will be where their problem lies. Most of their wealth sits with perhaps 10% of their population and control of the amount of money in circulation would necessarily be impacting them. Too much money in the system and the value of the currency crashes.
It's not that different to NZ, except that our Governments do borrow rather than deficit fund for most of their spending, and that is/will be a problem.
its a very real problem, if US has to pay higher interest on freshly minted 10,20,30year treasuries the face value on current will fall, someone will wear that loss, probably in conservative super funds
Ah the silver dollar just dropped! That's how they borrow isn't it?
the Fed issuing securities is essentially putting new money into the system, but the treasuries is borrowing to fund what ever?
Have i got that right? (apologies but you are adding to my education on this here)
How is external demand met, is that by external buyer of treasuries?
Funding new deficiets, BUT most is roll over of existing treasuries. If the auction process goes badly and rates rise it devalues the face of the bonds issued with lower rates that have a long time to run.... (why would anyone buy them off you with say 5 years to run and a low rate?). If a 30 year bond has only 30 days to run you are only going to lose the delta on 30 days of interest....
If the safest assets in the world fall, then conservative funds fall...
The total "cash funds" are the only safe havens currently I believe......unless you see safety elswhere?
Gold is winning big currently......but could drop fast, if all stabilizes. Stable does not look like the near future.....
Not the end of the world....the end of the world as we have known it.
You may say that is insignificant but I suspect that for anyone attempting to plan it is anything but.
Not the end of the world....the end of the world as we have known it.
We could say that every day.
You may say that is insignificant but I suspect that for anyone attempting to plan it is anything but.
Well, anyone who's taken the previous reliability and prosperity for granted, may feel some remorse.
"We could say that every day."
No we could not....we have lived with the 'understanding' that there will always be more available if only we choose to use it.....that is the fundamental change.
It's never really been just a matter of choice.
Things are always changing, we're just unaware of most of it. And usually wrong when trying to guess the nature of the change.
Things are always changing, at the margins...only occasionally do they change fundamentally.
History would indicate systems don't do fundamental change very well.
We're openly watching America shit the bed. But they ate that dodgy Vindaloo a while ago. So the change was already happening, it just didn't have the same light upon it.
As for systems and fundamental change, this can be good or bad, it's too hard to say.
Do you have a horse?
When the chips are down (off?) Painter always retreats.
Turns it into a story and backs away.
An interesting thing to observe - says heaps.
Just sayin'
"This is very exciting," Prof McCarthy added. "Normally it takes billions of dollars and decades to develop a new antibiotic. But here we have a compound that's already widely used, and it not only kills drug-resistant bacteria but also makes existing antibiotics more effective.
https://phys.org/news/2025-04-artificial-sweetener-power-antibiotic-res…
Drink 10 diet cokes and call me in the morning
That's very interesting. Thanks.
Fascinating stuff. I searched for this on my phone so I could forward it to others via a messaging app and amongst the results that came up was this one... from 2023...
Is this a reflection of the underfunding of medical research around the world or researchers not communicating with each othe as to what they are doing or have done?
de Rios involved in both studies by looks of things.
https://www.zerohedge.com/markets/bessents-grand-strategy-use-tariff-ne…
Yesterday, president Trump laid out the stakes in the ever-escalating trading war between the US and China, in typical laconic fashion: "We may want countries to choose between us and China" (a topic discussed further here), with the White House adding that "The ball is in China’s court. China needs to make a deal with us."
This strategy, of forcing the world into "us (or US) vs them" camps first emerged last week when Trump reduced reciprocal tariffs for all countries except China, something we highlighted at the time.
USA cannot let Taiwan fall to China due to the chip plants.... things may get hot.
I heard their media princess (oh sorry is that a little too derogatory?) say that China needed to make a deal with them, but they don't need to make a deal with China. They may want to pay attention; Xi doesn't agree with them, and more than a few others in the world too. they seem to be totally ignorant of the effect they're having on the world.
I can't recall - did Trump cancel the Chips Act? We hear nothing about it (i.e., the progress of local manufacture).
https://www.cnet.com/tech/services-and-software/nvidia-ai-chip-producti…
Nvidia bringing some fabrication back to USA
TSMC is already expanding a chip factory in the US. They started building it in 2020 and it went into production in 2024.
Hedge against Chinese invasion of Taiwan.
the US continues to be interesting. The Dems rank and file is increasingly revolting against the incumbents. It seems they are questioning the status quo and asking why the feeble fight back against Trump. It looks very much like some long term incumbents security of privilege and position may be under threat. This is coming from younger voters and members who do seem to be asking the right questions.
It looks like the old farts have got a little too complacent about being in touch with their electorates and it's going to bite them. Now it needs to happen to the Republicans, but personally from what I've read that side needs some blood on the floor. They've effectively thrown the constitution in the dustbin.
The old structures are failing - not just politically.
We can trace that back to a reduction in EROEI, globally, and relentlessly-advancing entropy.
What replaces t is likely to be bottom-up, local, less complex, and non-exponential.
That obsoletes almost everything we have lived with. Interesting time to be alive.
We can trace that back to a reduction in EROEI, globally, and relentlessly-advancing entropy.
So what happened every other time old structures declined?
The old structure, to put it figuratively, right now is Trump himself. He is the king pin and the lynch pin of the driving force of his administration, its policy and direction. Fair to say amongst all the extremes, he is as indispensable as irreplaceable. For his age and the accompanying pressures, he evidences remarkable stamina and energy. That though, can change. Biden took office at the same age and didn’t seem all that bad. The decline was camouflaged but was obviously rapid once it began. Those of us that started out with Model As and Austin A40s know all about declining structures and the importance of the above pins. Bit scary then to consider what impact the decline and/or departure of one Trump would make. Who and/or what fills the void. Very difficult to fix a mess with another mess.
Reagan wilted visibly in office too. Some claimed Nancy was the real power and brains in his second term.
Painter - I've answered that here, many times.
The same trend happened to them, but locally.
Rome, the Maya - all a reduction in EROEI; a reduction in energy surplus, and overshoot, maybe a trigger, and a rapid decline. Seneca nailed it.
This time, for the first and only possible time, we are running the process ar global scale - 8x the population in 1800, orders-of-magnitude less planet left.
Avoidance.... is strong in that one it is.
The price of gold will start today sharply higher at a new record of US$3337/oz, and up +US$108 from yesterday or +3.3%.
Nobody asking or challenging the collective conventional wisdom of our ruling elite as to why we don't have even a little gold as a strategic reserve asset. What is our strategic reserve asset anyway? The housing stock? Even the mighty Aussie doesn't seem to want gold, even though they have no issue with pulling it out of the ground. Gold has no place in the Ponzi paradigm.
Because they're surrounded by wingmen
by wingman | 16th Mar 24, 3:20pm
Over the long term, gold's been terrible bet with no income.
I'm sure there are many of his posts that will age like a rotting carcass.
Spare a thought for the poor ,old, bedraggled swamp dwelling Winger.....every thought he uttered here, aged badly, just a week later.
Riverswamp property values have plummeted and Gold/Silver has gone from strength to strength. He was the total inverse fortune teller.......
Gold gaining USD$100 in a day, must be ripping his soggy nightie.
If you consider what the U.S. is attempting to do then it is a tacit acknowledgement that resources are becoming less available (the end of growth) and they are using what remains of their power to ensure they have preferential access to those declining resources.
Unfortunately, as always, the problems arise in the transition.
And time is not on anyones side.
America is fairly well resourced for its own needs, as far as resources go.
What they really wanted, was wealth beyond that, power, influence and security.
Which they got, in a world where both Europe and Asia were decimated, and they had technological superiority.
That extreme level of leverage, has largely dissipated.
I agree that America was (past tense) probably the economy with the greatest capacity for autarky ....now however due in no small part to the complexity of the current system (required to support the overshot population) they are as incapable of autarky as anyone else.
That is where the leverage has been lost.
We are now in the 'oh shit' and scrambling mode.
Didn't help that their greed led to them virtually giving a lot of their intellectual property to competitors because it was cheaper to manufacture there than in the US. For people who consider themselves smart, they couldn't see the flaws in that one? Just the logistics issues highlighted those, well before COVID came along to demonstrate them.
A part of that issue is that attitude towards risk management. The endemic attitude seems to be 'low risk' equates to 'no risk'.
It is only with the benefit of hindsight that was a poor idea. In the 90s with the collapse of the USSR and no (widespread) understanding of resource depletion rates those US companies (and shareholders) would have seen the 'growth' they did indeed gain....pity it only lasted 30 years.
Nevermind, it was great ( for some) while it lasted.....and remember that (nominal) wealth still largely exists (until it is repriced)
Maybe they will find a way to maintain their ratio position....some suggest gold, others crypto...whatever it may be the fact remains that real resources will be available in lesser and lesser volume.
"It is only with the benefit of hindsight that was a poor idea." Hardly - there was a healthy attitude of denial too.
Early 2000s i was R&D manager for a small local company with some input into their supply strategies. their Accountant owner loved the JIT principles, and didn't take kindly to me point out the vulnerabilities to supply chain fragilities. They had a quality rating, (which they were cheating on) but wouldn't hold their suppliers to the standard required (they were too small and not enough clout), and didn't believe anything could go wrong - until it did. But by that time I had left the company.
You are viewing it from the perspective of the some that it didnt work for for 30 odd years.....remember that it did work for others, the fact it wasnt sustainable is unlikely to change their position on its 'benefits'.
And none of that changes the trajectory ahead.
I agree that it doesn't change what was ahead. The frustrating thing at the time of the above example, I gave them a simple solution that was not a big cost, but their paradigms didn't let them see the benefits until it was too late. They held onto some flawed assumptions that I challenged and tried to show them were wrong.
Yes the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders.
Didn't help that their greed led to them virtually giving a lot of their intellectual property to competitors because it was cheaper to manufacture there than in the US. For people who consider themselves smart, they couldn't see the flaws in that one?
From a greed perspective, it's proven to have worked out fairly well. America has the world's largest (by value) companies, with a much larger customer base than 30 years ago.
Socially, not so much. But that wasn't the motivation for the change to globalisation.
Not 'is'.
Was.
Aussie media looking at electoral fraud. Perhaps this is why they’re mass importing people even though it’s creating the mother of all housing / cost of living crises and even though job growth is anemic outside Govt and Ponzi-related sectors, which is eroding Aussie society, culture and wealth.
Will ASIO do anything about the many thousands of migrants who have been placed on the electoral roll over the past six months in Sydney and Melbourne to benefit Labor candidates? The is no disputing that the Australian Electoral Commission roll contains a substantial number of bogus entries. Voting investigator and analyst Lex Stewart discovered at least 248,000 false names enrolled at correct addresses as attested by the dodgy Same Sex Postal Plebiscite held in 2017 administered by the Australian Bureau of Statistics using the AEC roll for its massive mailout of ballots.
https://cairnsnews.org/2025/04/14/electoral-roll-has-increased-by-87000…
Anyone know why we can't comment on some of the other articles?
I couldn't possibly comment
:)
but the Editor IS away on holiday...
The Herald is saying Labour have finally come out and stated they don't super TPMs policy of the pension for all Maori at 55. Considering that health outcomes are most commonly the product of lifestyle choices I would agree, aside from the fact that it is a divisive, racist policy.
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