Here's our summary of key economic events over the weekend that affect New Zealand, with news this week we may start to see some hard data from the US and how the Trump insurgency is affecting the world's largest economy. Already sentiment surveys seem pretty negative.
For us, the week ahead will be dominated by the March quarter financial system data releases from the RBNZ on Wednesday.
Internationally, we will remain trapped watching the chaotic policy changes from Washington and trying to assess how they may impact us. Wall Street's earning season releases will also be a big influence, especially results from Big Tech. And the Americans will release their Q1-2025 GDP results, PCE inflation data, and their ISM PMI survey results. And at the end of the week we will get the April non-farm payroll results for the US labour market.
The Bank of Japan is scheduled to review its monetary policy, but they are unlikely to make any changes in the fog of uncertainty around trade policies. Australia will release its Q1-2025 CPI data (expect a dip to 2.2%). China will release its official PMI survey results.
Over the weekend, China said its March industrial profits were better than expected, but private sector profits slipped again. However, overall profits rose +0.8% from a year ago. Also better were foreign company profits which were up +2.8% on the same basis.
China said they are adding another ¥500 bln in medium-term lending facility funding. This is the second month they have pushed out substantial additional liquidity in this way.
And China says more than 120 million people have benefited from their old-for-new consumer goods trade-in subsidy program, driving sales of more than ¥720 bln.
And the BS meter is on high after Trump said that “we’re meeting with China” on tariffs, comments aimed at soothing jittery financial markets. But Chinese officials say no talks have taken place.
In fact, China cancelled some large pork and soybean orders to US suppliers. American farmers not only have to bear the brunt of trade policy gone rogue, they are also battling rouge weather.
Singapore said its industrial production rose in March, a bounce-back from a weak February result. But the recovery wasn't as strong as analysts had expected.
Across the Pacific, US initial jobless claims fell last week to +209,700 and to the level expected. But seasonal effects suggested this reduction should have been larger. There are now 1.89 mln people on these benefits, still higher than year ago levels. This is despite Federal pressure on States to deny long term undocumented workers access to benefits.
New durable goods orders jumped in March by +10.9%, the largest rise in seven months. Capital goods orders rose +24.1%. But non-defense, non-aircraft capital goods orders were only up +1.8%. This is probably why the March or April PMIs didn't note a general rise in factory orders.
US existing-home sales fell -5.9% in March from February to be -2.4% lower than one year ago.
Meanwhile the Kansas City Fed factory survey reported lower activity, higher costs, and unchanged order levels.
Nationally, the Chicago Fed's National Activity Index reported a small slip in March. This is consistent with the overall Fed Beige Book monitoring.
And finally for the US, the UofM sentiment survey for April was -8.4% lower than for March, -32% weaker than a year ago. These are big drops. Year-ahead inflation expectations surged from 5.0% in March, an unusually high level, to 6.5% this month, the highest reading since 1981.
North of the border, Canada reported February retail sales and they slipped from January to be +2.1% ahead of year ago levels. This data is volume data, so a real increase.
And its election day in Canada (tonight NZ time). There has been a notable surge in early voting. Official data for this was released a week ago, and that showed 7.3 million electors had voted in advance at that stage. This is a +25% increase from the 5.8 million electors who voted in advance in the last federal general election in 2021. They have 27.6 mln eligible voters this time.
The UST 10yr yield is now at 4.25%, up +1 bp from this time Saturday. A week ago it was at 4.33% so a -8 bps fall since then. The key 2-10 yield curve has stayed at +50 bps. Their 1-5 curve is now inverted by -8 bps. And their 3 mth-10yr curve is inverted -4 bps. The Australian 10 year bond yield starts today at 4.19% and down -1 bp from Saturday. The China 10 year bond rate is now at 1.66% and unchanged. The NZ Government 10 year bond rate is also unchanged at 4.51%, down -2 bps from a week ago.
The price of gold will start today at US$3318/oz, and up +US$28 from Saturday.
Oil prices have held from Saturday be still just over US$63/bbl in the US and the international Brent price is now just under US$67/bbl.
The Kiwi dollar is now at 59.6 USc, down -10 bps from Saturday at this time. Against the Aussie we are down -10 bps at 93.2 AUc. Against the euro we unchanged at 52.5 euro cents. That all means our TWI-5 starts today still just on 68 and unchanged from Thursday, but up +40 bps from a week ago.
The bitcoin price starts today at US$94,238 and down -0.8% from this time Saturday. Volatility over the past 24 hours has again been low at +/- 0.7%.
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27 Comments
"And the BS meter is on high after Trump said ......" Oh I love your turn of phrase DC, but i would suggest you understate it somewhat. With Trump in office I suggest the BS meter needle hit the upper stop so hard that the needle wrapped around the stop and cannot go back down. It is possible though that it bounced over the needle and went beyond it....
Interesting though that more media articles in America are apparently investigating his relationship with Putin and how Putin operates. The longer he stays in office though the more of an idiot he appears to outsiders (if that is at all possible) and for Americans themselves, the more dangerous he is becoming. There seems to be more media attention on federal authorities 'disappearing' immigrants without charge or cause as well (some are properly documented, Mahmoud Khalil a case in point). I watched a video on the weekend of a group of individuals who did not identify themselves, nor carried ID and one at least was masked, 'arrest' a person at a district court house. The commentary indicated they had suggested (or it was assumed) to the people there they were ICE agents, but none were in uniform or wore any form of marked clothing. The commentary suggested the action was an abduction. How long before citizens resort to force to stop such actions? And how long before those agencies start to see their own actions as outsiders view them, as fascist?
At some point Trump will try using the military to quell discontent, which will create the ultimate test; does the military obey Trump or the constitution?
I think the military will refuse. There is law where the National Guard can be mobilised but they are state resources, and I'm not sure if it can be mobilised by the federal authorities. I suggest there is a bigger risk that he will try to use the military to occupy Greenland. Jeffery Sachs has talked about the reasoning behind their focus there on Canada and Greenland being because the northern trade routes are opening up because of global climate change melting the ice. But an occupation of Greenland is to all intents an invasion of Europe, and the US military will understand that and challenge the executive on any direction.
Since being pointed at him two weeks ago, I have watched two or three videos of Sachs talking about what's happening at various conferences and panels. He at least seems to get it and tell is how it is. I wonder though how many are really listening?
I have watched two or three videos of Sachs talking about what's happening at various conferences and panels. He at least seems to get it and tell is how it is. I wonder though how many are really listening?
When Sachs talks about the Ukraine War being a proxy war, many people switch off (if they are aware of Sachs). Most Westerners struggle with the idea that somehow the US and NATO have any responsibility in the conflict. People are selective about what they want to believe.
Not seen any of his comments on Ukraine. I know PDK has a thing about the Nuland's meddling there. But the argument that it is a proxy war is weak at best I feel. Putin's self admitted aspirations to be compared to Peter The Great are the sole reason. His education in the KGB set him up to seize and hold onto power. NATO, Europe and the US all knew the invasion was going to happen long before it did, and they warned Ukraine, but did nothing else to stop it when they could have, simply and easily.
Evil succeeds when good people do nothing.
Not seen any of his comments on Ukraine
Good to do some research on Sachs' experience with Russia and Eastern European geopolitics. Here's a primer:
Poland (1989): Sachs served as an economic adviser to the Polish government during its transition from communism to a market economy, helping design and implement the “shock therapy” reforms that stabilized the economy and set the stage for growth.
Soviet Union/Russia (1990–1993): He advised President Gorbachev’s economic team in 1990–91, focusing on strategies for economic stabilization and transformation. In 1991, he was invited by Yegor Gaidar, then economic adviser and soon-to-be acting Prime Minister under Boris Yeltsin, to help address Russia’s economic crisis-marked by hyperinflation, food shortages, and financial instability.
Ukraine (1993–1994): Sachs advised President Leonid Kuchma’s economic team, contributing to Ukraine’s early post-Soviet reforms
Other Eastern European States: He played a role in introducing the Estonian currency and provided advice to several countries in the former Yugoslavia, notably Slovenia
You can argue that he was setting the scene for a US rape of resources.
Remember a few Kiwis went hunting for bargains, too...
Most Westerners struggle with the idea that somehow the US and NATO have any responsibility in the conflict
It's not hard to identify the US and NATO have an interest there. Given the US isn't equipped to engage in a two front World War, it benefits them if Russia wants to commit harakiri trying to annex Ukraine.
It's the massive jump to "Russia is blameless and the US did it" that's irreconcilable nonsense by people who can't view a situation as being nuanced.
Agreed. It's pretty clear that the guy who lined up a few thousand tanks and pointed them at his neighbor's capital city must share quite a lot of the blame for the war that ensued.
Putin Is answerable only to the Russian people and history evidences as far back as Peter the Great and beyond, that the Russians follow the leader, be it a Tsar or a Bolshevik, in the true spirit of subjugation. Russia will not be dislodged from the Crimean peninsula nor the other occupied territory. This is now considered as Russian land and any attack on it would qualify as being an existential threat about which Putin has made it very clear, a nuclear strike would be justified. There it is.
It's the massive jump to "Russia is blameless and the US did it" that's irreconcilable nonsense by people who can't view a situation as being nuanced.
Well P, it makes sense you and your mates reckoning at the bowling club bar are going to have a different perspective than the Vietnamese discussing history at the cafes.
Like your reckoning that USAID was nothing but corruption, and not funding things like orphanages for kids with HIV?
Feel free to provide actual counterpoints, rather than character assassination via your imagination.
It's not my perspective P. It's the perspective of Jeffrey Sachs. You have do your own reading on this. Nevertheless, it follows along the lines of:
Proxy War Framing: Sachs has explicitly described the Ukraine conflict as a proxy war, stating, “Let’s face it, we’re waging a proxy war, but we’re not giving our proxies the ability to do the job”. He argues that the U.S. and its allies are using Ukraine as a means to confront Russia without direct military engagement by Western forces.
NATO Expansion as a Provocation: Sachs contends that U.S. efforts to expand NATO to include Ukraine and Georgia were central provocations leading to the conflict. He asserts that these moves were perceived as existential threats by Russia and played a decisive role in escalating tensions.
2014 Ukrainian Revolution and U.S. Involvement: Sachs maintains that the 2014 ousting of Ukraine’s pro-Russian president Viktor Yanukovych was not simply a popular revolution but was actively supported by the U.S., which he describes as “installing a Russophobic regime in Ukraine by the violent overthrow” of Yanukovych.. He dates the beginning of the proxy war to this event, not just the 2022 Russian invasion.
Missed Opportunities for Peace: Sachs has argued that there were several missed opportunities for a negotiated settlement, particularly in early 2022, which he claims were undermined by the U.S. and U.K. He alleges that the U.S. discouraged Ukraine from pursuing neutrality and blocked potential peace agreements, prolonging the conflict and increasing casualties.
It's not my perspective P. It's the perspective of Jeffrey Sachs.
You brought it into the discussion, Jeffrey Sachs isn't here for a bidirectional conversation. If you can't talk to a counterpoint to someone else's view you're wanting to promote, perhaps more understanding is required on your behalf.
He's also problematic as a commentor, particularly if you want to use his perspective as your sole point of reference, for reasons we've already discussed.
He's also problematic as a commentor, particularly if you want to use his perspective as your sole point of reference, for reasons we've already discussed.
Let me suggest Jeffrey Sachs is better positioned than you and the bowling club crew to have perspective on these matters. You don't have to agree with him. But then you would have little understanding of the Maidan Uprising, so you're at a disadvantage compared to Sachs.
Again, and rather ironically, you're trying to have an argument via a proxy.
So many of the administration's actions get reversed by them within a week or so; example: the revocation of student visas:
Revocation letters sent a week ago;
https://www.msn.com/en-us/news/us/why-are-so-many-visas-being-revoked-h…
then reversed five days later;
https://www.msn.com/en-us/news/us/trump-administration-reverses-abrupt-…
They really haven't a clue about anything.
In the meantime though Mahmoud Khalil remains in detention, no charges, or even a suggestion of any.
How long before citizens resort to force to stop such actions?
One might say that due to the right to bear arms, the US citizen does have the ability to fight back.
One might also say that heavy handed firearms rules such as in Aus and desired by some in NZ only make us unsafer - the bad guys continue to arm themselves regardless and breed at a rate that ensures their influence accelerates.
Oh thank you Rastus! I agree totally.
And indeed in history when bad players have taken control, there is often evidence that the citizenry had opportunities to stop them if only they had the temerity to face down bullies. Sitting by idle, waiting to see how it plays out can simply be leaving it too late to do anything. That happens on a bigger scale too, Ukraine - Russia- NATO - Europe?
Needs no words.....
COLFO Condemns Firearms Safety Authority’s Decision to License and Appoint Former Violent Criminal
Pukepuke’s accreditation as a police vetting agent and his role on a Māori Firearms Authority forum, where he claims his criminal history provides a valuable perspective, are deeply disturbing.
Armed robbery is a severe crime involving violence and intimidation, and entrusting someone with such a record to determine whether law-abiding citizens are “fit and proper” to hold firearms licenses is unacceptable.
How long did it take in previous fascist states?
How often did it happen at all in those states?
I'd suggest humans aren't great at standing up to such things.
Trump is discovering that Putin is no Gorbachev and also that Russia under Putin when bargaining, recognises, understands and respects only force.
Another "canary in the coalmine": The shrinking but critical trade needed to keep Australian manufacturing alive
"According to the latest Census, there are only 2,220 toolmakers and engineering pattern-makers left in Australia — that's a 70 per cent decrease between 2006 and 2021. Only 411 of these jobs are held by people under 40."
The shrinking but critical trade needed to keep Australian manufacturing alive - ABC News
I wonder what the relevant numbers are in NZ (or if it's even measured?) 30 years ago the manufacturing company I worked for had ~30 Trades staff including 10 apprentices, most were fitter/turner & a couple of toolmakers. Most of our toolmaking was outsourced to a couple of specialist firms (Wgtn region) who apparently don't exist now.
It's all very hard to gauge, because manufacturing is now a lot more automated. The amount of human labour involved to make something like a car for instance, is far less than what it was 30 years ago.
Friend of mine was a tool maker in Auckland. Very good at it too. Moved to Aussie to get paid significantly better, has his own business there now.
Another "canary in the coalmine": The shrinking but critical trade needed to keep Australian manufacturing alive
Also AUS purchasing large amounts of Russian Crude oil and distillates from the likes of Turkey and India to sustain said economic activity. end of the day, everyone needs the energy supply to be productive.
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