Economy Watch

Kia ora.

Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

Today we lead with news there has been no improvement in the backdrop to the global economy.

To open the new week, oil prices have risen after Trump warned that Tehran is running out of time to reach a deal he likes, while Iranian media reports indicated the two sides remain far apart in negotiations. Shipping flows through the Strait of Hormuz remains effectively shut, keeping supplies tight.

In the US, the NY Fed's regional Business Leaders Survey shows that the service sector there is continuing to contract, but now at a lesser pace. Activity has been contracting there since late 2024. Inflationary pressures remained persistent, with firms reporting steep increases in input costs and still-elevated selling prices.

Staying tin the US, the NAHB/Wells Fargo Housing Market Index, which measures builder confidence in the market for newly built single-family homes, rose in May from April (which was its lowest level since September 2025). They too complain about sharply elevated input costs.

And we should probably note that Elon Musk has lost his case against Sam Altman and OpenAI to claim the company. The jury quickly decided Must had no case.

In China, new home prices across the 70 cities they reference shrank -3.5% in April from a year earlier, following a -3.4% decline in the previous month. This is the 34th consecutive month of contraction. It is also the sharpest contraction pace since May 2025. The weakness in their property sector goes on and on. The pace of decline in their existing home market is even faster.

Four a fourth month, China's electricity production fell from the previous month. But it was +2.6% higher than the same month a year ago. This is a good reference point to assess their industrial production, which they said rose +4.1% in April from a year ago. But that was the slowest they have reported for an April since 2022. Fixed asset investment fell -1.8% in April on that same basis.

At the same time, they said retail sales fell -0.5% in April after a -0.1% decline in March.

Chinese banks now have an average net interest margin of 1.4%, according to the latest data as at March 2026. That is news because it is a record low. (For perspective, the New Zealand industry NIM is 2.3%.)

Singapore said its non-oil exports rose a fast +24.5% in April from a year ago, up sharply from the +15.3% pace in March. This was the eighth consecutive month of growth and the fastest pace in fourteen years, with electronics the growth leader.

In Australia, Cotality reported that 1,939 capital city homes went to auction last week, an -11% drop from the previous week, but still tracking higher than a year ago (+8.7%) when 1,784 home auctions were held. The preliminary clearance rate rose 1.1 percentage points to 57.5%, still a soft result but with highly mixed outcomes across different cities. This was the fifth time in the past seven weeks that the early clearance rate had held below the 60% mark and the third lowest result for the year-to-date. The Aussie Budget signals may have contributed to the mood. 

The UST 10yr yield is now just on 4.59%, down -1 bp from this time yesterday.

The price of gold will start today up +US$8 at US$4547/oz. Silver is up +US$1 at just over US$76.50/oz.

American oil prices have risen +US$1.50 to just over US$107/bbl, while the international Brent price is now at just over US$110.50/bbl.

The Kiwi dollar is up +30 bps from yesterday at this time at 58.7 USc. Against the Aussie we are also up +30 bps at 82 AUc. Against the euro we are up +20 bps at just on 50.4 euro cents. That all means our TWI-5 starts today at just under 62.2 which is up +30 bps from yesterday.

The bitcoin price starts today at US$76,661 and down -1.8% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.6%.

It turns out Trump's investment partners are enabling Iran to access the global financial system and evade US sanctions. Iran’s Nobitex has processed at least US$2.3 billion through Tron and BNB Chain, blockchain ledgers started by backers of the Trump family’s World Liberty Financial. Of course there will be no Justice Department investigation.

You can get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again tomorrow.

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

Kia ora.

Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

Today we lead with news financial market sentiment deteriorated sharply at the end of trading last week as war-driven inflation is being priced in more aggressively, because it will persist longer than earlier assumptions. Markets are shifting to a much more sceptical position on Trump policies & actions given the extended track record of failures.

Higher long rates tend to feed on themselves when stress (like the Iran War) is elevated. And the US Fed is in no position to cut rates; in fact markets are guessing the chances of a hike are rising. These two pressures are pushing rates up.

But first in the week ahead, locally we will be following updated population data this week, producer prices, credit card data, household and business expectations survey results, and retail sales, all for March.

In Australia, the key data coming is for their April labour market, along with a key consumer sentiment survey and a key inflation expectations survey.

Globally, apart from watching what is or isn't going on in the Persian Gulf, we will be tracking how bond markets are reacting to the Trump turmoil, US regional surveys and PMIs, and the UofM sentiment survey update.

From China, there will be a raft of key data updates this coming week. There will be key industrial data out in Japan. And there will be PMI data out for India too. Indonesia’s central bank will announce its latest monetary policy decision late Wednesday night.

Over the weekend, analysts have been able to assess the results from the China-US summit. Those haven't been very positive. And it says a lot that Russian president Putin is in Beijing this week.

Essentially the takeaways from the Beijing summit meetings between Xi and Trump have been underwhelming. It is notable that the Chinese have made no mention of the trade claims by the US, although there will be some. And they will be hoping Trump throws Taiwan under the bus after they stroked his ego.

Meanwhile, the 'negotiations' between the US and Iran seem to have stalled completely. So no resolution to the Strait of Hormuz blockades. Oil prices are settling in, even rising, on fears of a much broader energy crisis. It has now been two months since Trump said the US would provide transit insurance for the Strait of Hormuz crossing. So far it has done no deals; zero.

In the US, April industrial production jumped +0.7% from March to be +1.4% higher than year ago levels, and much more than expected. But it is all "business equipment" (read: AI data centers). This will be 'good' if it generates lasting increased productivity, but the rest of their factory sector is going backwards, even with 'tariff protections'. Consumer goods manufacturing shrank in April (-0.2%) from a year ago, construction stalled in April.

In the New York region, there is a scramble to stockpile ahead for fast-rising cost increases. Business activity grew strongly there in May. US stockpiling may end up giving their Q2-2025 economic activity data an unexpected boost for the quarter.

In Canada, housing starts jumped an impressive +17% in April from March to an annualised 279,300 units in April from the previous month, well above market forecasts of 240,000 units. But it is just back to year-ago levels (281,800).

In Japan, machine tool orders surged +45% in April from a year ago, far exceeding market expectations. It maintains the much higher level it reached in March which was an all-time record, and by quite a margin. Both domestic and foreign orders leapt the at the same pace.

Japan’s producer prices rose +4.9% in April from a year ago, a surge from an upwardly revised +2.9% increase in March. That is an all-time high in a record that stretches back to 1960. Markets had expected a +3% rise. The usual suspects were the cause.

Indian exports rose sharply in April, and were near their record high levels in March 2022. They had very good increases in both goods and service exports. Imports rose fast too, probably related to the rising cost of oil. Overall, their trade deficit shrank slightly in the month.

The Russian economy is contracting, again. It is giving all the signs it is exhausted by its war on Ukraine, and this is despite its higher oil revenues. Manpower is a serious and probably unsolvable issue now that they have suffered excessive battlefield deaths.

The UST 10yr yield is now just on 4.60%, unchanged from this time Saturday. For the week this is a +24 bps jump, one of the largest one-day jumps for quite some time.

The price of gold will start today down -US$15 at US$4539/oz and down -US$184 for the week. Silver is down -US$1.50 at just over US$75.50/oz, down -US$5 for the week.

American oil prices have stayed up at just over US$105.50/bbl, while the international Brent price is down -50 USc at just over US$109/bbl. A week ago these prices were US$99.50/bbl and US$101/bbl respectively.

The Kiwi dollar is little-changed from Saturday at this time at 58.4 USc, down -120 bps for the week. Against the Aussie we are also unchanged at 81.7 AUc. Against the euro we are down -10 bps at just under 50.2 euro cents. That all means our TWI-5 starts today at just under  61.9 which is unchanged from yesterday, down -90 bps for the week to its lowest since early April..

The bitcoin price starts today at US$78,024 and down -1.5% from this time Saturday, down -4.2% from a week ago. Volatility over the past 24 hours has been low at just under +/- 0.6%.

You can get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again tomorrow.

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

Kia ora.

Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

Today we lead with news the US-China summit in Beijing is underway and so far, the results have been underwhelming. Xi warned Trump about US support for Taiwan, and a big jet order for Boeing wasn't quite what was expected, causing Boeing's share price to fall today (-3.6%). The travelling CEO's seem to be impressed with China's opportunities, rather than Trump getting China to invest in the US. But it is only day one, so more may come of this visit.

In the US data out overnight shows there were 190,600 initial jobless claims last week, less than seasonal factors would have indicated. There are now 1.7 mln people on these benefits, less than a year ago and about the same as two years ago. Given how this is tracking so different to the US household labour force survey, part of the jobless claims easing can be attributed to tougher qualification standards.

US retail sales rose marginally in April from March to be +4.5% higher than year ago levels. Higher dollar sales at petrol stations were a key factor. The timing of one-off tax refunds probably played a part too. This is a gain that is higher than the 3.8% US CPI.

Business inventories rose as well (the data is for March). Retail inventories did too. But both are up less than the sales gains, so the inventory to sales ratio is improving.

In China, banks haven't been lending at the rate expected. New yuan loans by Chinese banks fell by a net -¥10 bln in April, and much less than the expected +¥300 bln, and less than the +¥285 bln in April 2025. This is quite an unexpectedly variation and turn down in momentum, and only the third time on record this has happened. One reason is that there is a shift to corporate bond financing, away from bank financing.

In Australia, their competition regulator has prevailed in a case it brough against supermarket giant Coles claiming its discount claims were a sham. This judgement is sure to echo in New Zealand. The ACCC has a parallel case pending judgement against Woolworths.

Meanwhile the peak Australian labour union, the ACTU, has amended its claim for a minimum wage rise to +6% before the Fair Work Commission, taking the claimed rate to AU$26.45/hour (NZ$32.25). Obviously, the change is in response to rising inflation.

Global container freight rates were up +12% last week to be +14% higher than year-ago levels. Surcharging for fuel is the key reason for the rises although this is also the time the northern hemisphere "peak season surcharges (PSS) start to be applied. Bulk cargo rates shifted higher again last week as well, up +5.4% and are now at levels we had during the pandemic stresses

The UST 10yr yield is now just on 4.46%, down -1 bp from this time yesterday.

The price of gold will start today down -US$12 at US$4678/oz. Silver is down -US$3 at just under US$85/oz.

American oil prices are holding up at just over US$101.50/bbl, while the international Brent price is just under US$106/bbl.

The Kiwi dollar is down -10 bps from yesterday at this time at 59.2 USc. Against the Aussie we are up +20 bps at 81.9 AUc. Against the euro we are unchanged at just under 50.7 euro cents. That all means our TWI-5 starts today at just on 62.5 which is down -10 bps from yesterday.

The bitcoin price starts today at US$81,564 and up +2.7% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.1%.

You can get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again on Monday.

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

Kia ora.

Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

Today we lead with news commodity markets are signaling more intense stress with copper and sulphur jumping to new all-time highs and aluminium jumping to near its brief pandemic spike. Tightening supply from the Middle-East standoff is driving the cost of these fundamentals up.

Today, Trump is in Beijing where heavily choreographed set pieces are play out ahead of the formal discussions. Trump got welcomed by a non-Politburo member, the first time China has done that. So far he is being treated just like any other visiting head of state, rather than the special senior welcomes by his predecessors.

And China is organising one of its tankers to exit the Strait of Hormuz in defiance of the US blockade, right at the time these meetings take place.

US mortgage applications were little-changed last week, but with this week's push higher in benchmark interest rates, they are likely to fall when reported next week.

American producer prices were up +6.0% in April from a year ago, getting a +1.4% shove in April from March. Distorted input costs from Trumps Gulf War are embedding uncompetitive pricing in American-made goods. Only the pandemic surge has been greater (also on Trump's watch.) It isn't clear right now why American producer prices are rising faster than just about everywhere else, but history will eventually explain that.

US crude oil stocks took another outsized tumble last week according to official EIA monitoring. Petrol stocks there fell sharply too. (These sharp drops are confirmed by industry data too.) The industry is raking in record profits on these lower volumes. Why the US, a net petroleum producer, is feeling the brunt of these price hikes is a classic study in oligopoly power. (And see this investigation.)

Meanwhile, UST 30yr bond yields have risen above 5% on secondary markets. Apart from the pandemic spike, this is the first time they have done so since 2007, so a two decade high. The overnight US Treasury 30 year bond auction delivered a medium yield of 4.99% (top bid 5.05%), up from 4.82% at the prior equivalent event a month ago.

And we should note that Kevin Warsh is now the Fed Chairman. But ex-boss Powell is still there. Given the Trump-induced inflation surge, he is unlikely to be able to deliver on Trump's demand for lower US interest rates.

In Canada, their central bank says they see no evidence that AI is having a material impact on their jobs market - yet, anyway. For them, the benefits are outweighing the costs.

EU industrial production rose in March from February, but that wasn't enough to counter the outlier faster rise a year ago, so it ended down -1.0% year-on-year. An outsized fall in Germany twisted these results.

In its May monthly report, OPEC cut its forecast for global oil demand growth in 2026, joining other forecasters such as the IEA in cutting expectations due to the Iran war.

In Australia, the wealthy are reeling after their latest Budget signaled a levelling of the tax playing field and the wind-down of concessions for wealth. To be fair, these are to be unwound over many years, but the big end of town is furious they are losing their perks. Certainly, those dependent on the property market can see an end to the gravy train.

The UST 10yr yield is now just on 4.47%, unchanged from this time yesterday.

The price of gold will start today up +US$12 at US$4690/oz. Silver is up +US$3 at just over US$88/oz.

American oil prices are holding up at just over US$101.50/bbl, while the international Brent price is at just over US$106/bbl, which is down -US$1.50.

The Kiwi dollar is down -10 bps from yesterday at this time at 59.3 USc. Against the Aussie we are down -60 bps at 81.7 AUc. Against the euro we are unchanged at just under 50.7 euro cents. That all means our TWI-5 starts today at just on 62.6 which is down -10 bps from yesterday.

The bitcoin price starts today at US$79,447 and down -1.3% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.7%.

You can get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again tomorrow.

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

Kia ora.

Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

Today we lead with news oil prices are still rising as the two sides dig in in the Persian Gulf with no obvious off-ramp for this toxic situation.

And hot on the heels of what is being seen as this humiliation of the US in the Middle East, Trump is heading to Beijing where the Chinese are waiting to attempt to get the US separated from Taiwan. Their chances seem better because China seems much less reliant on the inward-looking US.

But first, the overnight dairy Pulse auction brought little-change in prices from last week's full auction event.

In the US, their April CPI inflation rose slightly more than expected, coming in 3.8% higher than year-ago levels and a three year high. Trump's war pushed fuel costs up (+17.9%). But it is pushing non-fuel costs up too with core inflation its highest in 7 months. Electricity prices are up +6.1%. (Remember, this data is from the Trump-friendly 'new management', so we should remain sceptical.)

The weekly ADP Pulse monitoring reports that the private sector added +33,000 jobs in the last week of April, keeping up the page it has reported for the prior five weeks.

An new monitoring shows it is not a good time to be young in the US.

The NFIB Small Business Optimism Index was little-changed in April and near its 11-month low of 95.8. Analysts had expected a small improvement, but it was not to be with survey respondents concerned about rising inflation, and affordability stress on their customers.

Overall US household debt was basically steady in Q1-2026 according to the latest update.

But their Federal Government debt is increasing in cost and at a faster face. The overnight auction for their ten-year bonds came in at 4.41% median yield, up from 4.23% at the prior equivalent event a month ago.

The May USDA WASDE report exposes the risks to American agriculture from creeping changes to their climate. They now concede that the US wheat crop will be sharply lower this coming season. Reductions from the EU, Argentina, and Australia are being forecast too. Corn production is likely to be lower too, although that is off this year's record harvests.

All this pressure probably means there will be no US Fed rate cuts for the foreseeable future. If there are any movements, rises are the more likely.

Across the Pacific, Japanese household spending turned worryingly lower in March as inflation started to bite and their households turned risk-averse. They are saving more. Household spending there fell -2.9% in March, much more than the -1.8% drop in February and below the expected -1.3% retreat. This is the fourth straight decrease and the largest.

India's CPI inflation rate inched up to 3.5% in April from March's 3.4%, not the big rise (to 3.8%) that was anticipated by market watchers.

In Germany, their ZEW Indicator of Economic Sentiment was expected to get more negative in May that in April, but in fact it got less negative, which was a market surprise. Economic expectations are brightening, they say.

In Australia, they released a fairly ambitious Budget overnight, doing more needed reform than anticipated. But it is still a budget in deficit, even if less so. With some unusual bravery, they are tackling stubborn policy areas and will no doubt have to use some political capital to do so. Redistribution pain will bring howls from the usual suspects at the top end of the wealth spectrum. They have been aided by stronger than expected starting point from tax flows from commodities and corporate good health. Here is one less-partisan analysis.

But accelerating cost pressures are squeezing margins and demand is cooling, with the latest NAB Monthly Business Survey signaling a tougher operating environment for Australian businesses. This April survey shows purchase cost growth lifted sharply to +4.5% in April, outpacing product price growth at +1.8%. Business conditions fell while confidence marginally but it is still deeply negative (in fact, its worst since the pandemic). Those surveyed reported that forward orders fell further in April to be down sharply since February and giving up all the gradual gains achieved over the past year. Only mining orders rose and to be fair these were outsized gains in that sector. (Later today, we expect to get the Westpac consumer sentiment survey results.)

The UST 10yr yield is now just on 4.47%, up another +6 bps from this time yesterday.

The price of gold will start today down -US$44 at US$4678/oz. Silver is down -50 USc at just under US$85/oz.

American oil prices are up another +US$3 at just over US$101.50/bbl, while the international Brent price is at just over US$107.50/bbl, also up +US$3.

The Kiwi dollar is down -30 bps from yesterday at this time at 59.4 USc. Against the Aussie we are up +10 bps at 82.3 AUc. Against the euro we are unchanged at just under 50.7 euro cents. That all means our TWI-5 starts today at just over 62.7 which is down -20 bps from yesterday.

The bitcoin price starts today at US$80,465 and down -1.9% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.5%.

You can get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again tomorrow.

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

Kia ora.

Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

Today we lead with news the Iranians seem to be sucking Trump into a place he can't extract himself from, far from his earlier claims of 'total victory'.

First up today, US existing come sales came in at a modest level again in April, and undershot what analysts were expecting. High mortgage interest rates are probably the reason for the soft demand. Still, they did sell at an annualised rate of just on 4 mln dwellings which is enough to sustain the sector. Unsold inventory is rising however, now at 16 weeks sales, and has been rising for all of 2026 and is now at 1.35 mln units.

There was another US Treasury bond auction earlier today, and it was notable that demand is flagging, down -5% from the prior event. This time this 3 year bond achieved a median yield of 3.92%, up from 3.85% at the prior equivalent event a month ago.

Inflation's impact in the US has officials scrambling. US petrol taxes are said to be on the radar for cutbacks. And the high cost of beef is pushing the US to sharply cut tariffs and quotas on imported beef. Both are effective acknowledgements that tariffs are hurting Americans more than their trading partners. However, given current demand and supply situations, it seems neither move will likely result in lower prices for US consumers.

In Canada, their central bank runs a 'market participants survey' quarterly, and in the latest of these professionals now see geopolitical tensions more of a threat to their economy that the trade tensions with the US. They also saw only a modest +1.6% economic expansion this year.

China's inflation is rising, noticeably now. Today they said their April CPI came in up +1.2% from a year ago, with fuel costs up +4.6% on that year-ago basis. But in April from March, fuel costs rose +3.5% in just one month. Things are hotter for producer costs which were up +3.5% year-on-year, and up +2.1% month-on-month. These are big sifts because it has been negative since October 2022.

China's vehicle sales came in a 2.525 mln in April, about average aver the past three years, but marginally lower than year-ago levels which was an outsized period.

On the commodities front, copper shot up to a record high today, and aluminium, nickel and zinc are also rising at the same time. Sulphur, a key ingredient for all mining and processing activity has shot up to a record high again, and approaching three times its cost of a year ago, up double from the start of Trump's Gulf War. Urea, which also spiked to mid April, has come back quite a bit since then.

Trump is on his way to Beijing for a summit with Xi, but he is going is quite a weakened state - but he probably doesn't realise it.

The UST 10yr yield is now just on 4.41%, up +5 bps from this time yesterday.

The price of gold will start today up +US$8 at US$4722/oz. Silver is up +US$5 at just under US$85.50/oz.

American oil prices are up +US$3 at just under US$98.50/bbl, while the international Brent price is holding at just over US$104.50/bbl, up +US$3.50.

The Kiwi dollar is unchanged from yesterday, at this time at 59.7 USc. Against the Aussie we are down -10 bps at 82.2 AUc. Against the euro we are up +10 bps at just on 50.7 euro cents. That all means our TWI-5 starts today at just under 62.9 which is little-changed from yesterday.

The bitcoin price starts today at US$81,983 and up +0.6% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.4%.

You can get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again tomorrow.

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

Kia ora.

Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

Today we lead with news that the Strait of Hormuz is still essentially shut with Trump's war on Iran far from resolved. The claims of 'ceasefires' merely propaganda exercises. Rolling skirmishes mean no shipping can get insurance, despite offers of safe passage. No-one respects anyone in a region where trust has evaporated.

Locally this week, the big data insights will come from the RBNZ's survey of inflation expectations on Wednesday, migration and travel activity data on Thursday, and a first look at inflation on Friday via Stats NZ's selected price tracking. We will also get the factory PMI on Friday.

In Australia, the key events will be the Federal Budget on Tuesday preceded by the Commbank profit result. There will also be consumer and business sentiment surveys out this week.

In the US, it will be all about their April CPI and PPI, along with updates for retail sales and industrial production

In India, they will also release CPI data. From Japan look out for household spending and PPI data too, and machine tool order updates.

In China, we are expecting April updates for CPI, PPI and new yuan loan data.

Over the weekend, China released its April export data and it was strong. While the US is turning inward, China is seizing the opportunities of their mistake. China’s exports rose +14% in April to a record high, picking up from March's +2.5% growth despite the disruptions from the Trump Gulf War. And China's imports surged +25% on the same year-on-year basis, a second straight monthly record and confirming resilient domestic demand. It is all very impressive.

China's exports to us were up only +3.8% from a year ago, but their imports from us were up +14.5.

China's exports to Australia were up +36% and their imports were up +20%, but that still left Australia with a very large surplus with China.

China's exports to the US were down -10.4%, and their imports down a similar -10.2%. They seem to have reduced their reliance on goods from the US to now just 9.8% of their total imports. No wonder US exports are faltering.

Over the weekend, the official data from the US showed they added +115,000 payroll jobs in April at the headline level, above expectations of a +62,000 gain and following a +185,000 increase in March. It was the first back-to-back monthly gain in nearly a year, and on an 'actual' payroll basis it was stronger again. Their jobless rate was stable at 4.3%.

But we should remember that all this data comes from an agency where Trump fired its head because he didn't like the results and this latest data is under the 'new management'. An independent professional review has confirmed there are distortions growing from this agency.

Employment rose in health care, logistics, and in the retail trade while it fell in the manufacturing and government sectors.

But if you include those not in payroll employment (self-employed etc.) there was no change on an 'actual' basis, a fall of -226,000 on a seasonally-adjusted basis. Their underclass is really struggling.

And you can see that in the latest University of Michigan consumer sentiment survey for May which fell again and to a record low. The fall from April wasn't large, coming in a scant 1.6 index points below April’s reading but it was comparable to the pandemic trough reached in June 2022. Year-ahead inflation expectations are for 4.5%, a touch less than in April.

In Canada, their employment fell -18,000 in April, but more people entered their job market, raising their jobless rate to 6.9%.

In India, banks are lending freely, with loan growth up +16% from a year ago. For all its growth narrative, India's stock exchanges are reporting serious 2026 declines, unlike most other global markets.

The UST 10yr yield is now just on 4.36%, unchanged from this time Saturday, down -2 bps for the week. 

The price of gold will start today down -US$9 at US$4714/oz, up +US$114 for the week. Silver is little-changed at just under US$80.50/oz, up +US$4.50 for the week.

American oil prices are little-changed at just under US$95.50/bbl, down -US$7 for the week, while the international Brent price is holding at just over US$101/bbl, down -US$7.50 for the week.

The Kiwi dollar is up +10 bps from Saturday, at this time at 59.7 USc, up +70 bps for the week. Against the Aussie we are unchanged at 82.3 AUc. Against the euro we are also unchanged at just on 50.6 euro cents. That all means our TWI-5 starts today at just under 62.9 which is up +10 bps from Saturday but up +40 bps for the week.

The bitcoin price starts today at US$81,392 and up +1.6% from this time Saturday. Volatility over the past 24 hours has been low however at just under +/- 0.6%.

You can get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again tomorrow.

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

Kia ora.

Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

Today we lead with news American households are struggling as inflation pressures consume their reserves.

In the US there were 181,000 new initial jobless claims last week, about what seasonal factors would have indicated. There are now 1.735 mln people on these benefits, lower than at this time last year, but still above two year-ago levels.

And there were 83,000 reported job cuts in April, a bit above the average over the past year. For a second month in a row, AI is the key reason for shedding jobs now.

Median one-year-ahead inflation expectations in the US rose in April and for a second month to 3.6% in April which is their highest since October 2023. Inflation uncertainty also increased at the one-year-ahead horizon. Income expectations are up less than 3%, so on average most people there expect inflation will set them back from where they are.

US consumer debt jumped in March by much more than expected, driven by a +9.1% surge in credit card debt. The big end of town is noticing. Executives across retail, restaurants and packaged goods are increasingly worried about American shoppers with tighter budgets amid surging fuel prices caused by Trump's Gulf War. “They’re literally running out of money at the end of the month,” one said.

Across the Pacific, China's FX reserves jumped in April to just over US$3.4 tin after the unexpected March dip, and back up in its rising trend. This is their largest gain in 28 months. But it is still off its US$4 tln level in mid 2014. Gold holdings increased again by another +8 tonnes.

The central bank of Malaysia reviewed its monetary policy late yesterday and kept its official rate unchanged at 2.75%.

And Malaysian discount airline AirAsia said it has ordered 150 Airbus aircraft worth US$19 bln, and said it has an option to order another 150 from Airbus. Orders like this are being driven by the need for fuel efficiency.

The central bank of Norway unexpectedly raised its policy rate by +25 bps to 4.25% at its overnight meeting, defying market expectations for no change. They said inflation remains too high at 3.6% and is likely to stay elevated and action is needed now to keep it closer to its 2% target.

In the EU, the volume of retail sales fell in March from February to be up just 1.9% from year ago levels. The lower volume of fuel sales was the key reason driving the recent reversal. Non-food, non-fuel activity was actually up an impressive +3.0% for the year.

In Germany they posted an impressive factory order intake for March, up +6.3% from the same month a year ago and resuming the upward trend they have had since August 2025.

Australia said its exports fell -2.7% in March from February as rural exports plunged -11.6%. Also, non-monetary gold exports dropped -6.1%. That makes its March merchandise exports -2.2% lower than year-ago levels. Meanwhile, imports rose +14%. That means they recorded a -AU$1.8 bln trade deficit for the month, far larger than the expected +$4.2 bln surplus and the first monthly deficit since 2017. The import surge of "ADP equipment" totaling $4.8 bln in March (likely for data centers), is a key reason.

Meanwhile, the Aussie government has imposed punitive tariffs of up to 82% on Chinese coil steel exports in a major effort to shield local manufacturers from low-cost competition from China that receive 'unfair' Chinese government subsidies.

Global container freight rates rose +3% last week to be +10% higher than year-ago levels. Outbound China rates are rising again. Bulk cargo rates were up +11.5% over the past week to be +112% higher than year-ago levels.

The UST 10yr yield is now just on 4.40%, up +5 bps from this time yesterday.

The price of gold will start today up +US$17 at US$4697/oz. Silver is up +US$2.50 at just over US$79.50/oz.

American oil prices are up +50 USc at just on US$96/bbl, while the international Brent price is little-changed at US$101.50/bbl.

Oil company Shell announced quarterly earnings overnight, more than doubling them to US$6.9 bln in the three months to March, from Q4-2025's US$3.2 bln. Clearly more than 'cost increases' are being passed on at the pump.

The Kiwi dollar is unchanged from yesterday at this time at 59.5 USc. Against the Aussie we are also unchanged at 82.3 AUc. Against the euro we are holding at just on 50.7 euro cents. That all means our TWI-5 starts today at just under 62.8 which is unchanged from yesterday.

The bitcoin price starts today at US$79,843 and down -1.9% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.4%.

You can get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again on Monday.

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

Kia ora.

Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

Today we lead with news oil prices have tumbled as the US seems to give up on most of its stated objectives, including the promise of safe-passage for shipping, in a u-turn to extract itself from a losing hand. Crude oil prices are down more than -10% on the news, although it needs to be noted that the Strait of Hormuz remains closed. It is just market euphoria. We now need to start worrying about a permanent Iranian transit tax after the US walks away. The Gulf States who supported the US are about to be thrown under the bus. Financial markets don't care of course and like the end of the adventure.

US mortgage applications fell again last week as interest rates rise, both for refinance activity and new home purchases. This takes this activity back to September 2024 levels.

The US ADP employment report said their private labour market added +109,000 jobs in April, marginally more than the +99,000 expected. This sets the official non-farm payrolls report up for an expected +60,000 rise, with upside. Most of the new jobs are coming from aggressive hiring in their healthcare sector.

After the prior week's outsized fall, this week the EIA reports another notable fall in US crude oil stocks. In fact, every metric fell other than US crude oil imports. There is certainly no relief at US petrol pumps yet, with prices now up more than +50% from their pre-Trump Gulf War levels.

We have earlier noted the politicalisation of US official data, especially of the Bureau of Labor Statistics who produce CPI, PPI and labour market data. We weren't the only ones. A new analytical report has been looking at how this has affected the quality of their data and concluded there is a worrying impact from this trend. So we need to be sceptical, and the next of their big set piece reports is the April non-farm payrolls. This means we will need to rely more on other non-Trump Administration high frequency market data.

In Canada, their widely-watched Ivey PMI surged into a strong expansion in April and by more than expected.

In China, new analysis shows Chinese companies are reporting lackluster earnings, with overall net profit declining in 2025 for the third consecutive year as the property slump dragged on and more retailers posted losses, hurting employment and the economy as a whole.

Meanwhile, China's Golden Week holiday has just ended, and reports are that there was less air travel this year - but very much more high-speed rail travel. Overall domestic holiday activity was up +3.5% with air travel falling -5.7% year-on-year to 10.5 million passengers between May 1 and May 5, railway journeys up +4.6% to 1.06 billion.

And staying in China, their non-official S&P Global services PMI reports that their services sector expanded faster as new business picked up in April and the year-ahead outlook improved. Cost pressures remained modest from this giant sector.

In India, their services sector saw new orders and output expand at a quicker pace supporting hiring activity. They also reported a mild reduction in inflationary pressures.

(Things aren't so good in the Russian services sector.)

In the EU, they report rising cost pressure for producers, all related to higher fuel prices. Overall they are up +2.0% in April from a year ago, but up +3.2% from March. There is quite a wide range of impacts depending on the country.

Internationally, a new report tallying global debt found it at US$353 tln, and a strong shift away from US treasuries and toward big new demand for Japanese and European government bonds. They also found the overall debt:GDP ratio remained stable.

The UST 10yr yield is now just on 4.35%, down -7 bps from this time yesterday.

The price of gold will start today up +US$121 at US$4680/oz. Silver is up +US$4 at just over US$77/oz.

American oil prices are down -US$6.50 at just on US$95.50/bbl, while the international Brent price is down -US$8.50 and now at US$101.50/bbl.

The Kiwi dollar is up +60 bps from yesterday at this time at 59.5 USc. Against the Aussie we are up +30 bps at 82.3 AUc. Against the euro we are up +30 bps at just on 50.7 euro cents. That all means our TWI-5 starts today at just under 62.8 which is up +50 bps from yesterday.

The bitcoin price starts today at US$81,399 and up +0.1% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.3%.

You can get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again tomorrow.

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

Kia ora.

Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

Today we lead with news that although the US claims the ceasefire with Iran is holding and "ships are lining up to transit", in fact, very little is moving in the area between Iran's red lines. And the most high profile transit in the past 24 hours was an Iranian tanker. Still, the US claims resonated on Wall Street, and stocks rose, benchmark rates fell.

But first today, there was another full dairy auction earlier today, a small one where volumes offered and sold were the least in fifteen years, since mid 2011. But prices were up +1.5% in USD, up +1.6% in NZD. Butter prices continued to slide, but there were good gains for SMP, WMP and mozzarella. These gains end two consecutive full events where prices fell.

US job openings fell, although to be fair, but less than expected. But even then, they are back at levels they had in April 2018, which is less than it seems because their labour force is so much larger now.

There were two services PMI reports out for the US overnight (ISM and S&P Global) and both showed that new business intakes fell for first time in two years as war in the Middle East and inflation hit demand. But both were positive even if less so that in the prior two months

The reason for the retreat cam be found in the latest April logistics managers report, where freight costs leapt, taking this index back to pandemic-stress levels.

The US RCM/TIPP economic optimism index fell yet again, down to levels last seen in early 2024. It has retreated steadily since December 2024. It's sponsor's report called it 'steady' but that is gilding it somewhat.

US exports and imports were little-changed in April, but both are in rising trends even if imports rose slightly more than exports (which rose largely on petroleum exports). Their trade deficit was widened.

Canada also reported export data and that came in at a one year high, and unexpectedly good result, largely on the back of high exports of petroleum and gold. Imports fell back in April but from an unusually high March level. The result was a good trade surplus, their first since September 2025.

Singapore reported March retail sales late yesterday and they were better than expected with a good +4.8% rise from a year ago. That represents a real gain because their CPI inflation was 1.8% in March.

As widely anticipated, the RBA raised its cash rate target by +25 bps to 4.35% late yesterday. It was a split decision with one voting member wanting to hold the rate unchanged. But they face sharply higher inflation threats that seem to be growing and prior rate hikes have done little to quell those. However they have restrained their housing market enthusiasm and this latest hike is expected to put the brakes on that further. Traders still believe there is at least one more rate increase this year despite the RBA saying their policy was still only mildly restrictive.

This comes after the March CPI rose +4.6%, and yesterday they reported that household spending remained high over the year in nominal terms, up +6.3% compared to March 2025 (and the highest since January 2023). Most of this is 'price' and much of it relates to a +32.8% increase in monthly fuel prices. But in volume terms, they say fuel purchases are lower, down -1.3% in March from February.

The UST 10yr yield is now just on 4.42%, down -2 bps from this time yesterday. 

The price of gold will start today up +US$37 at US$4559/oz. Silver is unchanged at just over US$73/oz.

American oil prices are down -US$3 at just on US$102/bbl, while the international Brent price is down -US$3.50 and now at US$110/bbl. It is hard to see these prices easing further given the sharp fall in global oil reserves recently. Even the future process of building them back will add to demand and prices.

The Kiwi dollar is up +20 bps from yesterday at this time at 58.9 USc. Against the Aussie we are up +10 bps at 82 AUc. Against the euro we are up +20 bps at just on 50.4 euro cents. That all means our TWI-5 starts today at just under 62.3 which is up +20 bps from yesterday.

The bitcoin price starts today at US$81,300 and up +0.9% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.3%.

You can get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again tomorrow.

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI