Here's our summary of key economic events overnight that affect New Zealand with news the gold price is approaching US$3000/oz again after hitting a new record high earlier today. The equity markets are falling again. Benchmark bond yields are in risk-aversion mode but corporate debt yields are rising.
But first, US initial jobless claims were little-changed last week from the prior week, slipping slightly on seasonal factors. There are now 2.163 mln people on these benefits, +4.0% more than at this time last year.
American producer prices were up +3.2% in February from a year ago, slightly less than expected (+3.3%) and a notable fall from January (+3.7%). But January was an outlier. The average in 2024 was +2.5%.
This updated chart of the price of eggs in the US is interesting. They are now up +100% in one year, up +42% in 2025 alone. US egg prices are rising faster than gold.
There was a US Treasury 30 year bond tendered overnight and to slightly less demand. It resulted in a median yield of 4.56%, which was less that the 4.68% at the prior equivalent event a month ago.
Meanwhile, US yields for sub-investment grade corporate bonds ("Junk bonds") have jumped in the past week or so on recession fears and tariff uncertainty. Today there were more tariff threats from Trump who can't seem to understand why others would retaliate.
North of the border, riled up Canadians are now proposing to toll US trucks that go through B.C. to service Alaska. But this won't hurt Alaska much as most of their freight arrives by sea. However they seem to want to make a point by withdrawing a long-standing concession. Elsewhere, supply-chain and retailers are noticing significant anti-US consumer demand shifts.
And staying in Canada, their residential building consent levels slipped in January, pretty much as expected after the surge in December. But they remain an impressive +29% higher than a year ago, largely due to multi-unit construction.
Across the Pacific, Beijing has quietly moved to inject public funds worth ¥500 bln (NZ$120 bln) into ailing state-owned banks. It is a similar rescue to the 1998 Asian Financial Crisis when they injected the ¥270 bln for the same reason - wavering SOE bank health.
Chinese warships may have been circling Australia for geopolitical warning reasons. Or they may have had other objectives as well. Yesterday the official work report from the Chinese National Congress was released, and it includes a mention (page 17) of it now being a "key task for 2025" to develop "deep-sea science and technology", which is a new item added this year. It's a reach of course, but we may be seeing more Chinese vessels on our presumably valuable continental shelf. If we don't want them there we will have to develop the ability to keep them away.
Global container freight rates fell another -7% last week to be their lowest since January 2024 but still +67% higher than pre-pandemic levels. Bulk cargo rates rose sharply last week, up +27% for the week to be a third lower than this time last year.
The UST 10yr yield is now at 4.27%, down -3 bps from yesterday at this time. The key 2-10 yield curve is little-changed at +32 bps. Their 1-5 curve inversion is now -1 bp. And their 3 mth-10yr curve inversion is gone. The Australian 10 year bond yield starts today at 4.47% and down -4 bps from yesterday. The China 10 year bond rate is now at 1.89% and down -3 bps. The NZ Government 10 year bond rate is now at 4.67%, down -2 bps from yesterday.
Wall Street is falling again, down -1.4% on the S&P500. Overnight, European markets were mostly down -0.6%, less in London. Yesterday, Tokyo ended its Thursday session down a minor -0.1%. Hong Kong was down -0.6%, and Shanghai was down -0.4%. Singapore was up +0.1%. The ASX ended its Thursday trade down -0.5% and the NZX50 was down -0.3%.
The price of gold will start today at just on US$2980/oz and up another +US$48 from yesterday. And that is a new all-time high. In intra-day trading it hasn't yet quite touched US$3000, but close, and probably soon.
Oil prices are down -US$1 at just over US$66.50/bbl in the US and the international Brent price is at just under US$70/bbl.
The Kiwi dollar is now at 57.1 USc and down -20 bps from yesterday. Against the Aussie however we are unchanged at 90.8 AUc. Against the euro we are still at 52.5 euro cents. That all means our TWI-5 starts today just under 66.4, and down -10 bps from yesterday.
The bitcoin price started today at US$80,780 and down -1.7% from this time yesterday. Volatility over the past 24 hours has again been moderate at +/- 2.1%.
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48 Comments
'spose those troughers who can' get there by private jet have to get there somehow. Though probably some jungle getting cleared right now for the new airport. Weapons grade ecotard rivalling wet lefties lighting up a tesla showroom.
"A new four-lane highway cutting through tens of thousands of acres of protected Amazon rainforest is being built for the COP30 climate summit in the Brazilian city of Belém.
It aims to ease traffic to the city, which will host more than 50,000 people - including world leaders - at the conference in November."
Something of a “The Far Side” cartoon there. Bit like the one where the psychics need a sign to tell their conference room is on the third floor.
You can't stop progress. The Amazon jungle is as large as the United States so some roads will need to be cut through it. The new highway follows a line of existing power pylons. Seems perfectly reasonable to follow this route with a new highway. I doubt it is being put in just for the conference but as part of a pre-existing wider infrastructure improvement plan.
Bollocks, from a disher-out of bollocks.
Need to? Progress?
Anthropological arrogance, right there. We are merely a species, not a culmination, not going to be 'gods'.
And the Amazon is one of the last lungs of the planet, whereas by your reckoning, we shouldn't need to trash anything. Yet one by one, we trash our (global) habitat. Self-justifying via flawed logic, all the way (as you demonstrate).
Profile is right to put up the link - if for the wrong reason. We are a less-than-sapient species, and are digging ourselves a bigger hole by the minute.
Yes look at the history of what happens when they build rods into the amazon rainforest. the answer of course, is to set up towns to be used as hubs for deforesting the surrounding areas until it is baron farmland for raising cattle, then build another road further in. Only a matter of time until the ecosystem implodes there and that will have global ramifications on weather patterns. Sounds very doomsday-ish but all you have to do is see the sattellite imagery of the rate of deforestation in past decades, then compare with the tipping point for when the moisture ... Read more
Yes look at the history of what happens when they build rods into the amazon rainforest. the answer of course, is to set up towns to be used as hubs for deforesting the surrounding areas until it is baron farmland for raising cattle, then build another road further in. Only a matter of time until the ecosystem implodes there and that will have global ramifications on weather patterns. Sounds very doomsday-ish but all you have to do is see the sattellite imagery of the rate of deforestation in past decades, then compare with the tipping point for when the moisture evaporated from the trees is no longer sufficient to generate enough rainfall to sustain the forest.
Read lessWow, Gold touching USD 3,000 an ounce ! I remember posting, I think in June 2023, that I was buying Gold when under $1,950, after listening to Schiff, Dalio, Roubini, Burry, Rickards and others. Back then, I was reasonably confident it would break through $2,000 by some margin, and I remember thinking: "imagine if it was to go all the way to $3,000". Then I checked myself and thought, "you're just being unreasonably greedy, it's very unlikely to happen."..
I think in June 2023, that I was buying Gold when under $1,950, after listening to Schiff, Dalio, Roubini, Burry, Rickards
If you say you bought gold Dr Y, it must be true. Mind you, being a Ponzi cheerleader and a goldbug at the same time is an incongruous combination.
Anyway, big night for gold, silver, JPY, and gold miners (GDX). Ratty not at the party.
"being a Ponzi cheerleader and a goldbug at the same time is an incongruous combination"
Have you considered that I had sold all my NZ residential properties by 2023 (except the house I live in) and that I therefore had spare cash to invest ?
If thats the case, well done. I got in Feb 2020 ~$1600.
Really though, if you only have one house, it doesn’t really make sense to cheer on the housing market, recently as of yesterday sounds like you’re now happy with prices falling?
Imagine if you could buy US govt gold at its USD40/oz valuation. Happy days.
.
Well done for buying Gold at $1,600.
Me pushing back against some bears making apocalyptic claims about the housing is not the same as "cheering on" house prices. FYI I predicted (wrongly) that house prices will fould 10% over 2024.
I don't care about "cheering on" any asset values in any direction or being happy or upset about values changing, because I think that emotion gets in the way of making good financial decisions.
Some might say that the value of gold has not increased but the value of the currency has decreased..
Lots of things to be concerned about locally as well as internationally.
Our government seems hell bent on ignoring the little fact that if they get foreign investors to fund our public infrastructure, they're giving them access to controlling to some extent, future economic activity and taking a rake off the top. It could in some respects be argued as undermining our sovereignty a little more.
And DCs comment above; "It's a reach of course, but we may be seeing more Chinese vessels on our presumably valuable continental shelf. If we don't want them there we will have to develop the ... Read more
Lots of things to be concerned about locally as well as internationally.
Our government seems hell bent on ignoring the little fact that if they get foreign investors to fund our public infrastructure, they're giving them access to controlling to some extent, future economic activity and taking a rake off the top. It could in some respects be argued as undermining our sovereignty a little more.
And DCs comment above; "It's a reach of course, but we may be seeing more Chinese vessels on our presumably valuable continental shelf. If we don't want them there we will have to develop the ability to keep them away." is a well stated dig at generations of politicians who have underfunded defence and don't understand our, the world's and human history.
Read lessIs it even possible for New Zealand to develop the ability to keep them away? What would we need to acquire?
What would we need to acquire?
Covid?
Funny (and true)
2 weeks to flatten the curve
https://www.zerohedge.com/covid-19/they-knew-covered-it-german-intel-to…
As Alex Berenson notes, while every legacy media outlet is reminding you it’s been exactly five years since the Little Epidemic That Could started its long chug into your lungs, or at least your upper respiratory tract, two big German newspapers - Zeit and Süddeutsche Zeitung -broke some actual news.
Turns out, Germany’s Federal Intelligence Service (BND) has long had evidence that the Covid-19 virus originally came from a lab in Wuhan, China.
It was kept classified, however.
Unlikely NZ has ever had the capability to defend itself in the traditional seaboard sense. Instead it has had to rely on alliances in which it has invested with very meaningful military capability globally. Unfortunately the world today looks less likely to recognise those contributions. Some time ago Paul Keating caustically hammered that point home to political dignitaries in France - the flower of our youth speech. NZ’s vulnerability is now exposed to a modern aggression in the form of missile strikes, a vessel undetected 200kms off shore would suffice with just a few to devastate countywide. The defence to ... Read more
Unlikely NZ has ever had the capability to defend itself in the traditional seaboard sense. Instead it has had to rely on alliances in which it has invested with very meaningful military capability globally. Unfortunately the world today looks less likely to recognise those contributions. Some time ago Paul Keating caustically hammered that point home to political dignitaries in France - the flower of our youth speech. NZ’s vulnerability is now exposed to a modern aggression in the form of missile strikes, a vessel undetected 200kms off shore would suffice with just a few to devastate countywide. The defence to that can only be deterrence. That is being able to retaliate in like form. That is why Australia is investing in a nuclear powered submarine fleet and likely Japan soon too. NZ may think to invest into one of the Australian vessels. That would parallel the purchase of the battlecruiser HMS New Zealand prior to WW1 when there was a perceived Russian threat to the South Pacific.
Read lessMurray, It doesn't matter how much NZ spends on defence, there is exactly 0% chance of keeping China away without our allies.
Well we could just buy 20 F35's or a couple of nuclear subs - rather than get our unborn children to gift $30 billion Paris slush fund to some third world shithole. At least pull "our" weight with our children's money.
Trump has raised the awareness that relying on US political stability to ensure military logistics support is a fraught position. SAAB Gripens or Dassault Rafales are looking better all the time. My pick is the Gripen. Similar cost to the F35 but designed to operate and survive against 5th gen opponents. Logistics would be a stumbling block, but they made a significant offer to Canada on that issue (and still lost to the F35). I note a report that in view of the current politics Canada is apparently reviewing it's F35 contract?
Reports have come out in the last few days that while F35s don't have a remote kill switch that the USA could use to disable them, cutting off support would accomplish the same result soon enough.
That would certainly make a potential buyer think twice before moving their cart to the check-out screen.
Here's a link: You Don't Need A Kill Switch To Hobble Exported F-35s
And another: The F-35 'Kill Switch': Separating Myth from Reality - The Aviationist
Heck, just google the following: USA can disable F35
yep read all those. The 'Kill switch' idea I thought was too big a vulnerability, but withholding support would essentially be almost as effective. the Canadians have identified that 8 million lines of code from the F35s systems are withheld from buyers. They don't know what is in that code.
The message; do not trust the US political leadership. Extend that how you will.
Hmm, my limited knowledge solution for that is to write your own code - maybe Linux for F-35?
Actually, it appears I'm 19 years too late: F-35 cockpit display system to run Linux apps?
how long for a buyer to identify what the 8 million lines does, write their own, test it, then deploy it? Years! It took LM years to do it and they had a head start with the F16 code and testing. Not really a realistic option you think?
probably True Yvil, but what is the likelihood of any allies stepping up for us considering the political attitudes our governments have shown towards defence and NZ's military history, since Helen Clark was PM and earlier?
The only reason Aussie would come to our defence today is because a Chinese invasion and occupation of NZ would put their very capable air force within striking distance of all the major population centers along their eastern seaboard, including the ACT.
In the last 30 - 50 years the attitude NZ has had towards it's military is both shameful and shortsighted.
Liz Warren out last night rampaging against the stablecoin bill (GENIUS Act). The party line voted for 13-11 Reps-Dems. She couldn't help herself and invoked Dems donor Bankman Fried (and criminal) in her argument. Absolutely shameless.
Trump still doesn't realise his tariffs are isolating the USA and pushing all his allies away and closer to each other and even China.
If NZ somehow manages to stay clear of the majority of tariffs (not that we have much say), we will actually benefit from other countries entering into trade wars, as our products will comparatively become cheaper and we will be perceived as a "friendly" country to trade with.
We could be hit on beef tariffs
lets see what they do to Aussie on this, US Beef farmers are pushing for this against Aussie and we may get caught in crossfire.
"Trump still doesn't realise his tariffs are isolating the USA and pushing all his allies away and closer to each other and even China. "
Trumps personal ignorance and insanity dosnt explain the lack of temperance by those in a position to restrain him however....Congress (or at least the Rep.) are bending over backwards to facilitate his actions....go figure.
The US is a dying hegemony. It suited us well to hang on its coattails for the last century - but that era was always going to come to an end.
It has too many infrastructural balls in the air - including military ones - which are demanding an ever-bigger share of their ever-smaller resource-pie, to maintain. In other words, they are being beaten by entropy.
But - and it's a big but - The global Limits to Growth are currently being traversed, meaning that while a challenger can become the dominant hegemony, it cannot become as big as the US was. ... Read more
The US is a dying hegemony. It suited us well to hang on its coattails for the last century - but that era was always going to come to an end.
It has too many infrastructural balls in the air - including military ones - which are demanding an ever-bigger share of their ever-smaller resource-pie, to maintain. In other words, they are being beaten by entropy.
But - and it's a big but - The global Limits to Growth are currently being traversed, meaning that while a challenger can become the dominant hegemony, it cannot become as big as the US was. Not enough remaining planet for that to happen (despite some folk seeming able to carry cognitive dissonance to extreme levels).
And that begs the question: Can the global debt-based trading system survive a reducing energy/resource input?
I suggest, no.
Read lessThat may all be so, however it dosnt explain the apparent mass headlong rush to self destruction by hundreds of (supposedly) intelligent elected representatives.....maybe Wuhan have unnoticed developed a virus that dissolves the brains of U.S. representatives.
Edit...upon reflection , I should point out the time factor....yes all countries representatives are ignoring the headlong rush to self destruction, but they can console themselves with a belief it is in the distance, this madness is almost immediate.
Barfoot auction this morning 1 of 7 sold. The one that sold 36 Kelkirk Street, Kelston, Waitakere City for $727,500
2021 RV $1,050,000
2017 RV $760,000
At its peak, this could’ve gone for 1.2M. Thankfully, no one was hurt during the madness (last sold 24 August 2002).
Honest question: would you have posted it, if say 4 out of 7 had sold ?
No, I probably wouldn't have (this is the comment section, so we've got our biases), but 4 of 7 is only happening in East Auckland. East Auckland is the only area in Auckland still getting clearance rates above 40%. Suburbs like Greenlane, Remuera, and St Heliers are managing to get 2021 prices. Everywhere else, clearance rates this week were around 28-32%, and most sold under RV. South and West Auckland have dropped a lot since 2021.
Good answer and Yvil showing his bias with the question.
Norm, it's an honest reply, but no, I'm not showing any biais.
Kraken's example of 1 in 7 = 14% clearance, so I equally and purposefully exaggerated at the other end with 4 in 7 = 57%. The actual figures are in between at roughly 32-40%.
If you want to honestly know where this sits biais lies, look at the likes for each comment: 15 likes for the 14% and 2 likes for the 57%.
Figures don't lie.
looking at it now, hard to see how this ever could have justified a 1.2mil value.... Oct 21 the kiwi was in the 70s
ie at peak it valued at $840,000 USD madness but stuff happened.
https://www.oneroof.co.nz/property/auckland/kelston/36-kelkirk-street/8…
And sold today for $414,898 USD.... ouch
All good. Set the Tardis back to 2002 and you will find they bought it for $130,013 USD.
The high value of 1.2M NZD back in 2022 was the height of COVID madness and low interest rates. The house was also under pressure to sell as the owner had already bought another home so today's price is likely a bargain for the new owner.
How Adrian Orr’s departure from the Reserve Bank could benefit both banks and lift OCR
I missed this one, and don't have a premium account, is it worth a read?
https://www.nzherald.co.nz/business/economy/official-cash-rate/how-adri…
It seems Orr left on principle. Wasn't prepared to be associated with upping bank risk to attempt re-starting the Ponzi.
Which other ignoramuses (our current Govt) seem keen to do.
Ideology is surfacing rapidly - blind faith is a phrase we would do well to consider.
16 March 2020 the RBNZ under Orr crash dived the OCR to 0.25%. That over reaction to covid, created a stampede into said property ponzi.
Not really; the property Ponzi has been going since the early 2000s.
Don’t disagree and in which case it hardly needed an accelerant like that did it.
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