Here's our summary of key economic events overnight that affect New Zealand, with news reality and expectations seem to be diverging.
But first up today we can report that the weekly dairy Pulse auction for SMP and WMP brought little-change in the WMP price from the previous full GDT auction in USD, while the SMP price rose +3.0% on that same basis, but basically a recovery. However things are reversed in NZD due to the weaker greenback, with the WMP price falling -1.4% and the SMP price only up +1.7% in our currency.
Internationally, the IMF warned that rising US tariffs are marking the start of a new global era of slower growth. Since January, sweeping import duties and retaliation are raising trade barriers to levels not seen since the Great Depression. The IMF cut its global growth forecast for 2025 to +2.8% from +3.3%, and sees continued weakness through 2026. The US will be among the hardest hit, with 2025 growth cut to +1.8% from +2.7%. Others like Mexico, Canada, China, and the EU will feel some effects but are likely to be minor compared to the US.
Meanwhile, the US Treasury Secretary has told a private meeting the tariff war is unsustainable and will ease 'soon'. News of these remarks has led to a financial market rally. The problem remains however as neither Trump or China show any signs of backing down, and Bessent himself admitted that talks to de-escalate haven't even started.. Markets might be getting ahead of themselves, as is Bessent.
In the US, the Redbook retail impulse monitor was up +7.4% last week from the same week a year ago, the highest since the end of 2022. But this is becoming more of a measure of inflation than real sales activity as the tariff-taxes get passed through.
The Richmond Fed's factory survey for the mid-Atlantic states reported weak results. It plummeted to -13 in April from -4 in the previous month, and well below market expectations. It is the sharpest decline in factory activity since November. Meanwhile their service sector gauge fell too.
The latest and large US Treasury bond auction saw less support, but more than sufficient. However the median yield fell back to 3.74%, compared to the 3.94% at the prior equivalent event a month ago.
Canadian producer prices rose +4.7% in the year to March, but they are rising at a quicker pace in recent months. Canada is in its final week of election campaigning.
Across the Pacific, Taiwanese export orders rose to the elevated level of US$53 bln in March, but they have been doing this for so long now that the year-on-year gain isn't special for them, 'only' up +12.5%.
In the EU, consumer sentiment fell more than expected in April to its lowest level since November 2023.
The UST 10yr yield is now at 4.39%, a -1 bp dip from this time yesterday. The key 2-10 yield curve has eased back to +58 bps. Their 1-5 curve is still flat. And their 3 mth-10yr curve is a positive +11 bps. The Australian 10 year bond yield starts today at 4.24% and unchanged from yesterday. The China 10 year bond rate is still at 1.66% and unchanged. The NZ Government 10 year bond rate is up +4 bps at 4.57%.
Wall Street is recovering today, up +2.3% in Tuesday trade and making back much of the big Monday drop. Overnight, European markets were all up about +0.5%. Tokyo ended its Tuesday session down -0.2%. Hong Kong was up +0.8% and Shanghai was up +0.3%. Singapore rose a full +1.0%. The ASX200 ended its Tuesday up +0.7% while the NZX50 was the outlier, falling -1.9%.
The price of gold will start today at US$3398/oz, and down -US$19 from yesterday.
Oil prices have risen +US$1 from yesterday to be now just under US$64/bbl in the US and the international Brent price is now just on US$67.50/bbl.
The Kiwi dollar is now at 59.8 USc, down -20 bps from yesterday at this time. Against the Aussie we are up +10 bps at 93.7 AUc. Against the euro we up +20 bps at just on 52.3 euro cents. That all means our TWI-5 starts today now just on 68 and little-changed from yesterday.
The bitcoin price starts today at US$91,488 and up +5.4% from this time yesterday. Volatility over the past 24 hours has again been moderate at +/- 2.6%.
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6 Comments
Interesting to hear Mike Hosking on ZB today, virtually praying to both the last and future Pope for positive house price growth of 5% this year.....
He is fixated on the Ponzi coming back from its years shambling, with the Walking Dead.
He has bad loss making investment's that we wants to come off the mat and make back up to his buying price, I suspect?
Trying to keep up with the Hawkesbys is tough I guess, especially when you load up all your financial rounds, for hunting only in the housing Ponzi?
Or his family in the REA industry, to again make their well-deserved, super commissions, in his admired PONZI-Like industry.
Goooood Luuuck with those fading dreams Mike......
His faith is strong
Mike ChurchZander?
There is a lot of cheerleading based on nothing.
Pots and kettles...
There is a lot of cheerleading based on nothing.
Here, have this Coca Cola. Objectively, sugar syrup, but once our marketing team is done, it'll have you thinking it'll make a good time better, and you vibrant and exciting.
Men will want to be you, and women will want to be with you. Or the other way round, depending on your pursuasion.
I was thinking more of those who fiercely champion GROWTH
and who increasingly need to avoid, to do so.
Yes, Bernays has a lot to answer for/to. but like Trump, he was a symptom not a cause. As was Hitler, come to that. None of those persona would have risen to power or to positions of influence, it the societal stars hadn't aligned thus. Excess production-capability in the US in the 1920s, was the reason for Bernays; there was a growing need to 'sell more'. Ironically, it paralleled this:
https://en.wikipedia.org/wiki/Wealth,_Virtual_Wealth_and_Debt
The Coke ad approach won, science lost. And it happened before anyone alive, was born...
But I'm more interested in those who have doubled-down on 'Trump is the baddie, and when we get rid of him and his, it'll be pedal to the metal again. I find it intriguing how fiercely some folk (need to?) do that.
edit - your comment reminded me of the Stones' lines: 'but he can't be a man 'cos he doesn't smoke the same cigarettes as me - hey hey hey...'
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