Economy Watch

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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 of more Trump flip-flops in haphazard moves that show Trump has no strategy or exit plan from the mess he created in the Middle East.

But first, there was a Pulse dairy auction overnight and prices mostly dipped from last week's full event. Both butter and SMP dipped -0.4%, but the exception was WMP which rose +0.3%. The recently higher NZD has made those changes less in local currency, reinforcing the Fonterra payout reduction.

Elsewhere, the US released its June CPI result with a somewhat surprising dip with it falling to 3.5% after May's three year high 4.2%. Markets had expected a lesser dip to 3.8%. The biggest retreat was the -9.7% fall in petrol prices (although this monitoring only recorded a +6.8% fall).

Inflation was on the mind of Fed speakers overnight, especially Kevin Warsh, who reiterated his commitment to fighting inflation saying he had "no tolerance for persistently elevated inflation". But he had no details or plans on how he is to tackle inflation. He was presenting the Fed's semi-annual Monetary Policy Report to Congress. The Fed's target is inflation at 2% and it has been above that for 63 consecutive months now, so the credibility of achieving that target is not high.

The ADP weekly private jobs monitoring fell again, now under +20,000 and the first time it has reported a gain that low since mid-March. It has been tracking lower since early May.

The lower fuel costs shifted the needle in the NFIB sentiment survey for SMEs, resulting in a less-negative June result. But these same respondents cited inflation as their biggest threat, the highest since October 2024.

Yesterday, big US banks reported strong earnings gains, helped by their role in the Big Tech IPOs and other tech fundraising.

Singapore said its economic activity was +5.7% higher in Q2-2026 than in the same quarter in 2025. While this was a bit less than the +6.3% first quarter result, it was above the expected +5.5% outcome.

China said its June exports were up a remarkable +27% from the same month a year ago, driven by US companies stockpiling ahead of the expected inflationary effects of upcoming producer price inflation from the Middle East shocks, and by China's push to export cars, and far more than the +18% expected. It also said its imports were +36% higher than a year ago, driven by crude oil imports. That all meant that it had a near record trade surplus of +US$126 bln in June, only exceeded by the January 2025 +US$136 bln in that month.

In Australia, the Westpac-MI consumer sentiment survey became less pessimistic in July, mainly because their fuel price pressures eased - and their interest rate fears moderated as well. Job loss concerns eased too. But consumers remained gloomy about the economy overall and that meant they don't think now is a good time to buy a major appliance. And, although it recovered somewhat from very low levels, Aussies are still very uncertain where their housing market is going.

The story was quite similar for business sentiment in July as reported by the NAB survey. However, this one reported a sharper-than-expected improvement even if it is still negative. Price pressures also moderated, with input price growth slowing to its weakest pace since February and retail prices falling for the first time in seven years.

The UST 10yr yield is now just on 4.57%, down -4 bps from this time yesterday.

The price of gold has risen to US$4059/oz, up +US$66/oz from yesterday. Silver is now just under US$59/oz, up +US$1.50 from yesterday.

Oil prices are up +US$1.5o from yesterday at just on US$78.50/bbl in the US, while the international Brent price is now just over US$84/bbl and up +US$2. Hormuz transits have essentially dried up as the hot conflict explodes again and Iran declaring the Strait 'closed'. There have been just 3 crude tankers and 7 cargo ships exiting over the past 24 hours and all of those tied to Iran (1 dark with transponders off) but only 9 entering for new loads, all Iran-linked (1 dark). No-one was prepared to pay Trump's tolls, so Trump backed down (in a weird rambling announcement), less than 24 hours after announcing the levies. It is unknown if any are paying Iran's tolls. Plans to build pipelines to avoid the area are getting new momentum now. So Iran is shifting its focus to blockading the Red Sea at Yemen.

The Kiwi dollar is up +50 bps from yesterday at just over 58.1 USc. Against the Aussie we are up +20 bps at 83.3 AUc. Against the euro we are up +40 bps at just on 50.9 euro cents. That all means our TWI-5 starts today at just on 62 which is up +50 bps from this time yesterday.

The bitcoin price starts today at US$64,477 and up +4.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.5%.

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.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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

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 that at the close of business today in New York, the Q2-2026 earnings season will kick off with major banks JP Morgan, Bank of America and Wells Fargo leading the pack. They will be reporting into a market that is jittery over the rebounding crisis in the Middle East.

Adding to the confusion, Trump said the US is imposing a 20% toll on all ships passing through the Strait of Hormuz. That will close all traffic except Iranian-linked vessels.

Separately, yesterday tech stocks from New York to Shanghai all took a beating.

Meanwhile, US Fed governor Waller spoke today, emphasising he is watching the inflation signals closely and warning that more rate hikes may be necessary. He warned about the impact of "tariffs, energy prices, and spillovers from demand for the AI buildout". But he is wary of recent history, acknowledging that this evolving situation has different risks and "we shouldn't fight the last war" on inflation. We are seeing a long-time dove turning hawkish on the need for action on inflation.

That comes as the US federal government posted a much wider deficit than expected, boosted by tariff refunds. Over the past nine months, that deficit has swelled to -US$1.36 tln on track for another unsustainable record, only one Trump could engineer with his dodgy fiscal strategies.

In India, CPI inflation rose to 4.4% in June, its highest since December 2024 and slightly more than expected. Food prices rose +5.3% with tomato prices up almost a third on this year-on-year basis.

In China, their climate and weather authorities are warning that there is an elevated chance of more serious storms this year. They have just had their first major one, and they say more than six national emergency level storms are expected before the end of their summer.

In Australia, we should probably note that the Xero CEO has sold all her own shares in the company, a somewhat startling signal.

Meanwhile OPEC is also turning glum. Their July Monthly Oil Market Report lowered the 2026 global oil demand growth forecast to 780,000 bpd, citing economic instability from the geopolitical conflict. They see reduced demand in major markets.

The UST 10yr yield is now just on 4.61%, up +5 bps from this time yesterday. 

The price of gold has fallen to US$3994/oz, down -US$126/oz from yesterday. Silver is now just under US$57.50/oz, down -US$2.50 from yesterday.

Oil prices are up +US$6 from yesterday at just on US$77/bbl in the US, while the international Brent price is now just over US$82/bbl. Hormuz transits have essentially dried up as the hot conflict explodes again and Iran declaring the Strait 'closed'. There have been just 6 crude tankers (1) and 5 cargo ships exiting over the past 24 hours and 5 of those tied to Iran (0 dark with transponders off) but only 5 entering for new loads, all Iran-linked (1 dark).

The Kiwi dollar is little-changed from yesterday at just under 57.6 USc. But against the Aussie we are up +20 bps at 83.1 AUc. Against the euro we are unchanged at just on 50.5 euro cents. That all means our TWI-5 starts today at just on 61.5 which is the same as this time yesterday.

The bitcoin price starts today at US$61,935 and down -3.4% from this time yesterday. Volatility over the past 24 hours has been modest however at just under +/- 1.9%.

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.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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

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 the Hormuz Strait is effectively shut again with Iran's 'strategy' winning against the US 'firepower'. It is hard to think of any other politician trashing their advantage perceptions so completely. There will be long historical echoes from all this ineffective breast-beating.

But elsewhere and locally, this week will bring updates to our migration and travel data, indicators of June retail activity, and early signals of June inflation. We will also get an look at business sentiment, and likely get the June REINZ update.

In Australia, they will chime in with their June labour market updates, after updates for consumer and business sentiment.

In the US, apart from Trump's wars, investors will turn their attention to the Q2 earnings season, and a steady stream on important economic data that includes their CPI, retail sales and consumer sentiment updates. Fed boss Warsh will be briefing Congress and that will be interesting too, especially about his views on 'reform'.

Canada will be reviewing their central bank's policy rate this week, although no change from the 2.25% is anticipated

In Japan, it will be about machinery orders and industrial production with eyes also firmly focused on their currency - which will also impact their fast-rising interest rates.

In China, it will be a busy week of June economic data releases including for trade, and debt, and highlighted by their Q2-2026 GDP growth rate.

Over the weekend, in the fiercely competitive Chinese car market, they reported 2.8 mln vehicle sales in June which was somewhat unexpected because a dip from May was anticipated. But it is a -3% dip from year-ago June sales levels. That pushes their twelve month sales to 33.8 mln units, up from 33.0 mln in the prior equivalent year. Car exports rose above 1 mln units in June, the first time that level has been achieved as it floods global markets.

It is storm season in China again, and severe flooding has hit a number of regions, enough to concentrate minds in Beijing.

Elsewhere, China has banned the export of helium. Actually, the re-export of helium because it gets most of it from Russia. The Middle East conflict has restricted supply from there, and tech users in Europe and Asia are now in a tough spot, as are medical users everywhere. China is conserving its Russian imports for its own tech industry

Japan is reporting that their producer prices rose +7.1% in June from a year ago, accelerating from an upwardly revised +6.6% increase in May and above market expectations of a +6.8% gain. It is the fastest annual increase since March 2023. Higher energy prices following supply chain disruptions linked to the war in Iran are driving this, of course.

And Japan’s finance minister said they want to steer their state pension funds to "substantially" increase investments in domestic assets. This brought a sharp immediate reaction in both their currency and bond markets, due to the expected size of the shift. The yen gained, or at least it halted its fall, and their bond yields fell sharply (see below).

Elsewhere, in the US initial jobless claims rose by +224,500 and about what seasonal factors can account for. There are now 1.767 mln people on these benefits, less than year-ago levels.

After the good May rebound, existing home sales in the US fell back to average levels, and to levels lower than a year ago. The median price is up only +1.8% from a year ago. That modest rise is less than income growth, so overall affordability is getting a chance to recover there.

On Wall Street, South Korean computer chip maker SK Hynix has raised US$26.5 bln in its New York IPO, the largest ever listing by a foreign firm in the US. SK Hynix is a key supplier to AI chip giant Nvidia.

In Canada, their payrolls rose a minor +18,200 in June, slightly better than the expected +10,000, and holding on to the +88,000 gain in May. The June gain was all about a strong rise in the private sector (+32,000) which consolidated the good May private sector rise (+56,000). But most of the net June gain was from part-time employment. These positive shifts in June may have something to do with hiring for the football World Cup events.

Global container freight rates rose another +2% last week to be +74% higher than year-ago levels, mostly about outbound freight rates from China to the US where demand is still high. Bulk cargo freight rates pushed higher too.

The UST 10yr yield is now just on 4.56%, unchanged from this time Saturday but up +7 bps for the week.

The price of gold has risen to US$4119/oz, up +US$19/oz from Saturday, but down -US$55 from a week ago. Silver is now just under US$60/oz, up +50 USc from Saturday, down -US$2.50 from a week ago.

Oil prices are little-changed from Saturday at just on US$71.50/bbl in the US, while the international Brent price is now just onUS$76/bbl. A week ago these prices were US$68.50 and US$72/bbl. Hormuz transits have dived sharply as the hot conflict explodes again and Iran declaring the Strait 'closed'. There have been just 12 crude or product tankers exiting over the past 24 hours and 5 of those tied to Iran (5 dark with transponders off) but only 9 entering for new loads, again mostly Iran-linked (3 dark).

The Kiwi dollar is unchanged from Saturday at just over 57.6 USc, up +50 bps from a week ago. Against the Aussie we are unchanged at 82.9 AUc. Against the euro we are unchanged at just on 50.5 euro cents. That all means our TWI-5 starts today at just on 61.5 which is the same as this time Saturday, up +60 bps for the week.

The bitcoin price starts today at US$64,084 and up +0.6% from this time Saturday, up +2.9% 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 on Tuesday.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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

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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 the oil price, and benchmark interest rates have both risen on the renewed tensions between the US and Iran.

But first today, the IMF has updated its global economic forecasts, and they are virtually unchanged from the main release in April. They note the world economy’s stronger-than-expected resilience to the Iran war and robust AI-related investment. They see global growth coming in at +3.0% in 2026 with the 2027 growth outlook revised up to marginally 3.4% from 3.2%. Despite the slight upgrades, the IMF warned that risks remain tilted to the downside, and the full economic impact of elevated tensions, including renewed US-Iran strikes, are still to be revealed. Global headline inflation is now expected to reach 4.7% in 2026, up from 4.1% in 2025, before easing to 3.9% in 2027.

Australia gets little mention in this update except to note that its 2026 growth is forecast to come in at +1.9% (down -0.1%) and 2027 at +1.7% (unchanged). New Zealand gets no mention at all. For the US it is +2.3% and +2.2% for the same two year, both unchanged. For China it is +4.6% and +4.1% (marginally higher). For Japan it is +0.6% and +0.7% (little-changed). Malaysia was noted as a positive mover where their economy is projected to grow at a rate of +4.7% in 2026, benefiting from data center activity and the upturn in the global technology cycle.

US mortgage applications fell again last week, especially refinance applications.

US crude oil stocksactually rose last week with a modest gain which ended a ten consecutive string of declines. But their strategic oil reserve continued to fall at the same fast pace.

The modest US consumer debt expansion recorded to April shrank to nothing in May, an unexpected weakness, and a significant variation from the continued expansion expected. However a one month hesitation occurs occasionally so we will need to wait for the June release to know if this is a significant indicator. The big mover was a sharp fall in credit cards and other revolving debt, also quite unexpected.

The minutes of the June Fed meeting were released today, revealing that most officials broadly agreed they would need to raise interest rates if inflation remained elevated this year due to the war in the Middle East, tariffs, or strong demand from the AI-driven investment boom. And that included new boss Kevin Warsh.

In Japan, their official sentiment survey of professionals recovered in June after three prior months of downbeat views

In Australia, rents are rising faster, especially house rents. The increase was both stronger than seasonal norms and relatively abrupt in some cities, pointing to a step-change in pricing behaviour rather than a gradual tightening in market conditions.

In a now somewhat dated update due to the renewed Middle East hot conflict, the New York Fed's global supply chain pressure index eased back in June after its April and May spikes. (Of course, with today's resumption by the US of its bombing of Iran, this is likely to flare up again in July.)

The UST 10yr yield is now just on 4.56%, up +8 bps from this time yesterday.

The price of gold has fallen to US$4067/oz, down -US$78/oz from yesterday. Silver is now under US$58.50/oz, down -US$2.50 from yesterday.

Oil prices are up +US$3 from yesterday at just on US$73.50/bbl in the US, while the international Brent price is now just over US$78/bbl and up +US$4. Hormuz transits have picked up sharply in a rush to get out despite the risks and renewed uncertainties with 35 crude or product tankers exiting over the past 24 hours (8 dark with transponders off) but only 16 entering for new loads (2 dark). Interestingly. All this comes as attacks on ships in transit become daily events, so the rise in oil prices isn't surprising. Red Sea activity near Yemen has fallen again to even lower levels on added risks there too.

The Kiwi dollar is up +10 bps from this time yesterday at just over 57 USc. Against the Aussie we are up +30 bps at 82.3 AUc. Against the euro we are up +10 bps at just on 49.9 euro cents. That all means our TWI-5 starts today at just on 60.9 which is up +20 bps from this time yesterday.

The bitcoin price starts today at US$62,052 and down -3.1% 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 because tomorrow is a public holiday in New Zealand, Matariki, we’ll do this again on Monday.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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

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 renewed Hormuz attacks are raising oil prices and interest rates today, not helped by a pullback in tech stocks.

But first today, there was another dairy auction overnight, a full one with new season volumes returning. But this one came in sharply lower, down -4.9% on USD terms although only a -2.5% retreat in NZD terms. Among the results, there was a notable -4.4% fall for WMP, a -7.0% fall for SMP, a -5% fall for butter and a large -12.3% fall for cheddar cheese. A few of the minor categories gained. But these falls were larger than the futures market was pricing in, so you have to say they are 'larger than expected'. While the new lower levels aren't that special in a longer perspective, the speed of the falls is concerning and analysts will be re-assessing their payout forecasts.

In the US, the RealClearMarkets/TIPP Economic Optimism Index rose in July to a better than expected level but it is still well below the average over the past year and below its long term norm.

Meanwhile, American consumer inflation expectations rose when a small dip was anticipated. It is now at 3.7%, its highest since September 2023 and is rising even though expectations for lower petrol prices are included in these results.

The weekly private jobs growth monitoring by ADP shows a smaller rise ;last week than they have recorded in the past 15 week, since mid-March in fact. And the trend has been down for seven straight weeks. This is consistent with the easing that the official non-farm payrolls report showed for June.

The US Logistics Managers Index rose again in June and to its highest since March 2022, driven by three factors; anticipation of more tariff action from Trump, stockpiling to get ahead of inflation, and an expectation that the end of year retail season will be 'normal'.

US exports weakened in May and imports rose in the same time in the broader trade result that includes both goods and services, delivering a sharp rise in their deficit and their highest in over a year. This result matched the recent report of merchandise trade but brings their services trade into the picture.

Meanwhile Canada reported rising exports and stable imports to give them a larger trade surplus in May.

China said its foreign exchange reserves dipped slightly in June from their unusually high May levels. Part of this was due to the retreat in the gold price. But their central bank continued its gold-buying streak for a 20th month, with reserves reaching 75.44 million troy ounces by June’s end, up from 74.96 million in May.

China’s excavator sales are rebounding, up by more than a third in June from a year ago, driven by major projects.

New data out yesterday paints a much improved picture for Japanese household spending in May as households started to get their mojo back. And don't overlook that this was in the middle of the Trump Gulf War uncertainties.

The UST 10yr yield is now just on 4.54%, up +6 bps from this time yesterday.

The price of gold has slipped to US$4146/oz, down -US$13/oz from yesterday. Silver is now under US$61/oz, down -US$1.50 from yesterday.

Oil prices are up +US$2 from yesterday at just under US$70.50/bbl in the US, while the international Brent price is now just on US$74/bbl. Hormuz transits have picked up sharply despite renewed uncertainties with 27 crude or product tankers exiting over the past 24 hours (4 dark with transponders off) but only 18 entering for new loads (4 dark). Interestingly. All this comes as attacks on ships in transit become daily events, so the rise in oil prices isn't surprising. Red Sea activity near Yemen has fallen again to even lower levels on added risks there too.

The Kiwi dollar is down -10 bps from this time yesterday at just on 56.9 USc. Against the Aussie we are little-changed at 82 AUc. Against the euro we are also little-changed at just on 49.8 euro cents. That all means our TWI-5 starts today at just on 60.7 which is down -10 bps from this time yesterday.

The bitcoin price starts today at US$64,063 and up +0.8% 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

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 now the Hormiz situation is settling down somewhat with oil prices easing, the global economy seems to be responding with a better outlook.

First today, the widely-watched US ISM services PMI came in at a good level for June even if slightly softer than for May. Price pressures eased slightly, new business stayed at good levels even if less than for May, but employment was stronger even if it is still the weakest component. This Overall services measure has been at or about this level for seven months now is a relatively settled state. It is much more in positive territory than the S&P Global services PMI for the US.

The S&P Global services June PMI for Canada is negative after a fall from May's small (but rare) expansion. Business activity weakened as new orders fell for a second straight month, with firms citing high prices and geopolitical uncertainty as key factors weighing on domestic and foreign demand.

Meanwhile, the Bank of Canada's June quarter Business Outlook survey found similar views. Overall business sentiment has deteriorated after improving over the past three quarters. Sales outlooks have softened slightly, but firms’ export outlooks have improved. Fewer firms said trade uncertainty and hesitancy among US customers are constraining exports, and more firms reported strong demand for commodity exports. Most firms did not report binding capacity constraints or labour shortages.

Meanwhile a companion consumer survey shows inflation expectations are now over 3% there and right at the top of its target range of 1-3%.

Singapore reported its May retail sales data overnight and it wasn't positive. Of course, this was during the height of the Middle East uncertainties.

In China, a private bank in Wuhan with US$19 bln in assets has collapsed and been taken over by regulators. While it isn't a large institution, others are saying it won't be an isolated event among regional banks. (For comparative reference, the US FDIC has dealt with two US banks in 2026 that have failed.)

And according to research by a Japanese consultancy, Chinese banks and tech companies led the world in applications for financial technology patents over the last decade, surpassing the US in a field that supports a wide range of financial services from lending and asset management to cryptocurrencies. They examined fintech-related patent filings in 118 countries and regions in the 10 years through 2025, working with Tokyo-based research firm Patent Result. The total tally reached roughly 120,000, nearly triple the number in the preceding decade.

Also for May, the EU posted its producer price data, showing a rising +5.7% level from a year ago and driven by higher energy costs. But they also released May retail sales data and perhaps surprisingly, these rose on a real basis, up a creditable +1.9% from a year ago on a price-adjusted basis.

In Australia, the Melbourne Institute survey of inflation expectations eased back slightly to 5.5% after the March spike that was rose again in April. But it has eased from there, and slipped again in June. Wage expectations, by comparison, have remained unchanged for the past seven months.

The UST 10yr yield is now just on 4.48%, down -1 bp from this time yesterday. 

The price of gold has slipped to US$4158/oz, down -US$15/oz from yesterday. Silver is now under US$62.50/oz, down -50 USc from yesterday.

Oil prices are down -50 USc from yesterday at just under US$68.50/bbl in the US, while the international Brent price is now just under US$72/bbl. Hormuz transits have stayed low on renewed uncertainties with just 16 crude or product tankers exiting over the past 24 hours (0 dark with transponders off) but 20 entering for new loads (5 dark). Interestingly, Red Sea activity near Yemen has fallen to similarly low levels on added risks there.

The Kiwi dollar is down -10 bps from this time yesterday at just on 57 USc. Against the Aussie we are down -30 bps at 82 AUc. Against the euro we are down -10 bps at just on 49.8 euro cents. That all means our TWI-5 starts today at just on 60.8 which is down -10 bps from this time yesterday.

The bitcoin price starts today at US$63,554 and up +1.6% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.0%.

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.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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

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 an OPEC decision overnight may bring lower fuel prices much sooner. But then, this will depend on the volume of Hormuz crossings.

But first, this coming week locally will be dominated by the RBNZ's OCR review on Wednesday. Economists are divided on whether an inflation-fighting hike will come, and financial markets are pricing one in at 76%. The split voting at the May 27 review, where the external members all wanted a hike, but the majority internal members didn't, is just as likely to be repeated.

ASB is saying that locally, easing oil prices have strengthened our economic outlook and reduced the risk of a prolonged inflation shock. Lower fuel costs and stronger than expected economic momentum have put the recovery back on a firmer footing.

In Australia, the data out this week will be mainly about the Melbourne Institute's monthly inflation gauge, and about job ad changes.

In the US, their data releases will focus on service sector activity and existing home sales as they, like Europe, start to battle excessively hot conditions.

In Japan, the focus will be on defending the yen. They will also release June machine tool order data.

China will release June CPI and PPI data this week.

Over the weekend, China released their unofficial services PMI and it came in quite positive for June, similar to May. Growth rates for activity and new business remain strong. They recorded the strongest rise in employment since July 2024 and the fastest input cost inflation in over two years. Service sector firms there are optimistic about the immediate future. The overall result was better than the official China services PMI.

In Japan, their services PMI returned to growth in June, but cost pressures intensified, but here business confidence remained subdued. Which is in contrast to their quite positive factory PMI.

In South Korea we should probably note a very bumpy run recently by their stock market. It is dominated by major technology and semiconductor companies like Samsung Electronics and SK Hynix, so it is like the Nasdaq on steroids. This gives it unusual volatility, and that volatility has been on display in the past two weeks. This market hit a new record high on June 22 but has fallen -11% since. On Friday, it rose +5.8% however but even that still left it down -3% for the week. Over the past year, this equity market has risen a stunning +165% with most of it in 2026 and most of it tech-related.

In Vietnam, they posted a high Q2-2026 growth rate of +8.4%, building on their +7.8% Q1-2026 rate. (How can they report so quickly?) But this latest result will disappoint them because they have set a 2026 target of +10% and that now looks unlikely to be achieved, derailed somewhat by the Middle East conflict, also by missing their infrastructure build-out targets. Inflation eased to 4.7% in June from May's 5.6%, moving closer to the government's 4.5% inflation target this year. The World Bank has now reclassified Vietnam as an upper-middle-income economy, effective July 1.

The FAO global Food Price Index retreated for a second consecutive month in June, led down by falling cereals prices as harvests stay high, despite concerns in the US and Australia. Dairy prices eased slightly too, but meat prices stayed elevated. However it is vegetable oil prices that are keeping this index from falling faster.

In the US, the latest update of the AtlantaFed's GDPNow tracking reveals a sudden turn from high optimism about economic expansion, to a dour outlook. It has been rare that this model has come in lower than 'consensus' forecasts.

The UST 10yr yield is now just on 4.49%, unchanged from this time Saturday but a +12 bps rise from this time last week. 

The price of gold has risen to US$4174/oz, unchanged from Saturday, up +US$100 from a week ago. Silver is now under US$62.50/oz, unchanged from Saturday too, up +US$3.50/oz for the week.

Oil prices are little-changed but slightly firmer from Saturday at just under US$69/bbl in the US, while the international Brent price is still at US$72/bbl. Hormuz transits picked up Friday but then on renewed uncertainties fell back again over the weekend with just 10 crude or product tankers exiting over the past 19 hours (1 dark with transponders off) but 15 entering for new loads (1 dark). Large tankers which are exiting are now choosing to do so in Oman-controlled lanes.

And we should probably note attacks on a ships in the Red Sea near Yemen over the weekend, adding another layer of uncertainty.

OPEC met over the weekend, and raised output by +188,000 barrels/day. They have Middle East members who need maximum revenues to recover from the conflict. So we may end up awash in oil and sharply lower prices.

The Kiwi dollar is unchanged from this time Saturday at just over 57.1 USc, up +70 bps from a week ago. Against the Aussie we are unchanged at 82.3 AUc. Against the euro we are still at just on 49.9 euro cents. That all means our TWI-5 starts today at just on 60.9 which is unchanged from this time Saturday, up +60 bps for the week.

The bitcoin price starts today at US$62,563 and up +0.7% from this time Saturday, but up almost +4% from this time last week. Volatility over the past 24 hours has been low at just under +/- 0.8%.

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.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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 of a surprisingly weak American jobs report for June. There is no World Cup bounce there. And economists are divided over whether Federal Reserve policymakers will be holding rates steady, lifting or lowering them over the next six months based on this latest data.

The US economy added just +57,000 jobs in June, the weakest gain in four months and far below expectations of +110,000. Their labour force participation rate dropped sharply to 61.5%, its lowest since early 2021. But seasonal adjustment has a lot to do with these headline results and the actual payroll change isn't anywhere near as weak.

However, when you broaden this view to everyone in employment, not just those on a company payroll, things don't look so good. There are now 162.7 mln people in employment in June, down -175,000 from May and down -1.2 mln from June a year ago. In fact, that employed civilian workforce level is their lowest since the end of 2024.

US jobless claims rose last week, but only marginally and by about what seasonal factors would have accounted for. There are now 1.76 mln people on these benefits, pressed lower by much tighter entitlement standards, which is consistent with the employment drop.

US factory orders fell -1.3% in May and were down -4.5% for durable goods orders. But this needs to be seen in the context of rises in the prior three months, and April was revised higher. From a year ago though, the value of these factory orders were up only +1.8% overall but down -4.3% for durable goods. Given producer price inflation has been high over this period (+6.5%), these are terrible results. And surprising given the factory PMI data, so we should be sceptical of them. But don't forget this data is from agencies with imposed partisan leadership that replaced professional leadership when the President didn't like their earlier data.

Meanwhile US vehicle sales rose in June to an annualised rate of 16.5 mln, a rise from May and from June a year ago. So that demand may improve their factory order data for June. The US vehicle market is about half the size of the Chinese equivalent (which currently runs at a 31 mln annualised sales rate).

We got all this data today because tomorrow they will be on holiday for their 250th Fourth of July celebrations. It is a milestone worth celebrating but the background economy will likely take the gloss of it for those negatively affected.

In China, those huge vehicle sales numbers mask structural problems. Prices have been low to build volume, but few of these manufacturers are profitable. A dramatic shakeout is coming because sales volumes are falling now. And that is already having implications for their steel industry, among others.

In Australia, their May exports fell -6.9% from April to be just +3.1% higher than a year ago. Their imports were +2.6% higher than April to be up +13.9% from a year ago. So their merchandise trade balance shrank to -AU$1.7 bln in May, their first deficit since January 2018. They also reported that after hitting AU$7.9 bln in February, their gold exports retreated to just AU$4.5 bln in May.

Global container freight rates rose +9% last week to be +61% higher than year-ago levels. This is all about demand for outbound cargo space out of China. Bulk cargo rates fell -2.8% last week to be +72% higher than year-ago levels, although that low base will rise quickly in future weeks.

The UST 10yr yield is now just on 4.48%, unchanged from this time yesterday. 

The price of gold has risen to US$4106/oz, up a net +US$36/oz from yesterday. Silver is now under US$60.50/oz, up +50 USc from a day ago.

Oil prices are up +50 USc from yesterday at just on US$68.50/bbl in the US, while the international Brent price is unchanged at US$71.50/bbl. Hormuz transits have stayed at their lower level after the recent volatility & uncertainties with just 19 crude or product tankers exiting over the past 24 hours (1 dark with transponders off) and 24 entering for new loads (3 dark). Over 84% of vessel movements are related to cargoes headed to China, Russia or are Iran-linked.

The Kiwi dollar is up +10 bps from this time yesterday at just over 56.9 USc. Against the Aussie we are unchanged at 82.3 AUc. Against the euro we are down -10 bps at just on 49.8 euro cents. That all means our TWI-5 starts today at just on 60.8 which is up another +10 bps from this time yesterday.

The bitcoin price starts today at US$61,635 and up +2.5% from this time yesterday. Volatility over the past 24 hours has again 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.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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 the new US Fed boss says price risks have come down in recent weeks, and repeated his determination to bring inflation back to the 2% target. Interestingly, US benchmark interest rates rose after these comments which tells you something about how they feel about the prospects for lower Fed Funds rates and inflation control.

Meanwhile, US mortgage applications were little-changed last week and the 30 year benchmark mortgage rate changed little too. Refi activity was softer.

The June job cut data for the US came in at about half the level of May and much less than expected, although layoffs due top AI remained the top reason.

Meanwhile, the ADP monthly jobs report came in softer than expected, even if it is still expanding. A rise of +113,000 was expected after the prior month's +124,000. But this marker came in at +98,000. We will get the US non-farm payrolls change data tomorrow and markets expect it to rise +110,000, and down from May's +172,000.

Meanwhile the widely-watched ISM factory PMI came in little-changed and moderately positive for June. New orders grew but slower; new export orders fell. Input prices rose again but at a slower pace. Most of this report was quite similar to yesterday's S&P Global US factory PMI.

There was another fall last week in US crude inventories although the least in six week, even as the reduction has now cumulated to ten consecutive seeks. US strategic crude reserves are now as low as they had in 1983. Petrol inventories fell as well last week. American petrol prices remain a+28 higher than before the start of the Gulf War.

In its aggressive trade relations, the US has told Canada and Mexico it will not renew the existing USMCA trade pact, one Trump himself negotiated and claimed was one of the 'best deals ever'. In fact the US ended up a net loser. Last year, the US had a -US$46 bln trade deficit ⁠in goods with Canada and a -US$197 bln deficit with Mexico. Of course the US has trade surpluses in services with both which they ignore. The existing USMCA will run another six years if it isn't eventually renewed,

Factories the world over are expanding, although more than others in some places. The global factory PMI is a positive 53. In Australia it is lagging at 51.5. In New Zealand our last BNZ-BusinessNZ factory PMI came in at 49.9. Locally we are not participating in this global expansion.

In China, their manufacturing conditions as measured by the S&P Global/RatingDog factory PMI improved further in June, completing their strongest quarter since 2020. This result was better than the official version but not quite as good as many analysts had expected. Input price inflation slowed to a five-month low while employment rose at its quickest rate since August 2023.

Japan's Tankan industrial sentiment indexes have reached their highest level since 2018 in June. They came in at a level that was better than expected for large manufacturers, but a bit more modestly improved for service sector companies.

South Korea is becoming Taiwanese, at least as regards its export prowess. Korean exports were up +71% in May from a year ago, to a record US$102 bln for the month. (For reference Taiwan exported US$78.5 bln in May, up +52% from a year ago.) However, their June factory PMI shows their softest rise in new orders in 2026 so far which limited production growth. And price and supply pressures remained pronounced.

In Australia, their May building consent data shows that the number of dwelling approved were +5.3% higher than year-ago levels. But they fell -1.1% from April. Private sector house consents rose +2.8%, to the highest level since September 2021. This is the fourth consecutive month with over 10,000 private sector houses approved. This are quite soft for multi-unit dwellings however.

And their June real estate market shows more signs of topping out. The Cotality home value index – covering all of Australia – fell -0.4% in June, following a -0.3% decline in May and a -0.1% dip in April. Annual growth slowed to +7.3%. The quarterly decline is the most significant since the 2022-23 price correction. Corrections in Sydney and Melbourne are becoming more pronounced, led by material declines in 'top tier' segments with turnover also down sharply. Momentum is slowing elsewhere but price and turnover growth are still mostly positive.

The UST 10yr yield is now just on 4.48%, up another +5 bps from this time yesterday.

The price of gold has risen to US$4070/oz, up a net +US$44/oz from yesterday. Silver is now under US$60/oz, up +50 USc from a day ago.

Oil prices are down another -US$1.50 from yesterday at just over US$68/bbl in the US, while the international Brent price is down to US$71.50/bbl. Hormuz transits have stayed at their lower level after the recent volatility & uncertainties with just 16 crude or product tankers exiting over the past 24 hours (3 dark with transponders off) and 26 entering for new loads (4 dark). Most exiting vessels are still headed to China.

The Kiwi dollar is unchanged from this time yesterday at just under 56.8 USc. Against the Aussie we are up +20 bps at 82.3 AUc. Against the euro we are up +20 bps at just on 49.9 euro cents. That all means our TWI-5 starts today at just on 60.7 which is up another +10 bps from this time yesterday.

The bitcoin price starts today at US$60,115 and up +3.1% from this time yesterday and recovering most of yesterday's fall. Volatility over the past 24 hours has again been moderate at just under +/- 2.0%.

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.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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 the Persian Gulf situation is settling into a chronic stalemate after the acute hot conflict. US allies in the region are confused, Qatar's role in negotiations is questioned as to whether it can actually do anything, and Iran and Oman are moving forward with their plans for 'fees' and 'management' of the waterway. The US is getting sidelined.

One outcome seems clear however; Chinese EV's are dominating world car sales so demand for crude oil is likely to be much less in the future, and that will limit oil price pressures.

But first today, there was another dairy Pulse auction overnight, bringing lower prices again. AMF fell -2.5% from last week's event, butter was down -0.5%, SMP was down a chunky -6.2% and WMP slipped -0.6%. These build on trends we have seen since mid-May and given the rise in global milk production by the main exporters (New Zealand included), it is a trend likely to continue for a while yet.

In the US, labour market data for May about job openings was little-changed from April even if it still is near a two year high, which was slightly better than was expected.

But the June PMI report for the important Chicago manufacturing hub was quite a bit weaker than for May and what was expected. But it is only back to February levels which isn't bad at all. It was a fall away in new orders that drove the easing.

Meanwhile the Dallas Fed's regional services survey became positive - just - for the first time in five months. They reported that selling price pressures increased slightly, while input price and wage pressures grew at a faster pace.

The Conference Board sentiment survey barely moved in June from May, which actually was a result that disappointed analysts because a more marked improvement was anticipated. And that was because respondents turned negative about job prospects, with almost a quarter of them unexpectedly saying jobs are 'hard to get', the highest level sine early 2021.

And we should perhaps note that the deadly screwworm cattle disease is still spreading in Texas and New Mexico, spreading to other animals too. Even though the number of animals reported as having contracted the disease remains small, the risks to cattle herds in these states in very large.

In Canada, the expectation that it was falling into recession has proven not to be the case. Canada’s GDP rebounded from a first-quarter contraction to record a +0.5% monthly gain in April making this their largest economic expansion in nine months. Their May estimate points to a further if minor + 0.1% growth.

Across the Pacific in Japan, the yen slipped into the 162-per-US dollar range yesterday for the first time in 39 years,and extending a slide that has accelerated in the past few months. A two month intervention effort isn't working, raising fresh questions about what is driving the yen's renewed weakness.

China's official PMIs posted some marginal improvements in June, actually very marginal but at least they are not contracting. Their factory PMI is expanding, just. New orders picked up slightly. And their services PMI is now not contracting. But it isn't expanding either. New orders in this version are still negative, but the overall index was bolstered by expectations for improvement and lower lead times. All other more direct elements are negative to some degree. We should note that the unofficial PMIs by S&P Global/RatingDog have tended to be more expansionary in 2026. These unofficial results will come later today (Wednesday) and Friday.

German inflation came in at 2.3% in June, down from 2.6% in May, 2.9% in April, and softer than anticipated, mainly because energy prices retreated there.

Back in the US, Rocket Lab has agreed to buy Iridium Communications, a pioneer in satellite telephones, in a broadening attempt to compete with Starlink. It combines their launch capabilities and satellite manufacturing with Iridium’s network in low-Earth orbit and valuable radio frequencies for satellite communication.

Yesterday we reported a +6% rise in May air cargo activity. But today the May air passenger travel data was released showing a declined -2.2% from a year ago, down -3.1% for international travel. The main diver of the pullback was international travel through the Middle East (-28.8%). But it is also worth noting that domestic air travel in China fell (-6.2%) as well as in the US (-1.9%).

The UST 10yr yield is now just on 4.43%, up +6 bps from this time yesterday.

The price of gold has risen to US$4026/oz, up a net +US$4/oz from yesterday. Silver is now under US$59.50/oz, up +US$1.50 from a day ago.

Oil prices are down -US$1.50 from yesterday at just on US$69.50/bbl in the US, while the international Brent price is unchanged at just on US$73/bbl. Hormuz transits have stayed at their lower level after the recent volatility & uncertainties with just 19 crude or product tankers exiting over the past 24 hours (5 dark with transponders off) and 23 entering for new loads (5 dark). Over the past two days, almost 70% of the exiting vessels have been headed to China.

The Kiwi dollar is up +30 bps from this time yesterday at just under 56.8 USc. Against the Aussie we are unchanged at 82.1 AUc. Against the euro we are up +20 bps at just on 49.7 euro cents. That all means our TWI-5 starts today at just on 60.6 which is up another +20 bps from this time yesterday.

The bitcoin price starts today at US$58.325 and down -3.3% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.0%.

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.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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