Economy Watch

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 after more bellicose threats, Trump has backed off hitting Iran as he had signaled, another TACO twist. The region isn't quiet, but the threatened escalation by the US hasn't happened, not yet anyway. The oil price hasn't really eased back yet on this lull and is holding most of last week run-up towards US$100/bbl again. Trumps policy twerking has everyone unnerved.

Away from that and looking ahead locally, this week will feature the big data dump of the June quarter RBNZ series. We will especially be watching household deposit growth, which stalled in May.

In Australia, it will be all about Wednesday's CPI release (expect a small rise to 4.1%) and Friday's PPI (expect a rise to 3.5%).

In the US, the spotlight will be on the Thursday Fed meeting. Analysts expect no-change at 3.75% even though CPI inflation was at 3.5% for June and rising, remaining well above the Fed's 2% target. Even their PCE inflation was running at 4.1% for May. We will get their June update on Friday. In the meantime, financial markets are pricing in more of a chance of a hike - if not at this meeting then two by the end of the year.

There will be a lot of other US data out this week, including a Q2 GDP update, and the Conference Board's sentiment survey. The week will also feature some Big Tech profit results.

In Japan, all eyes will be on Friday's central bank decision, especially on how they intend to respond to their currency problems. Not no change from their 1% rate is anticipated.

In China, it will be all about a big set-piece Communist Party meeting. There will be a lot of interest to see if big new stimulus is announced there. Their PMI's may signal how urgent that is.

Over the weekend in Japan, CPI inflation stayed low in June even if it did rose to a six month high. It came in at 1.7% in June from 1.5% in May, its highest since December. The pickup was largely driven by a slower decline in electricity and fuel prices as government energy subsidies were scaled back.

Japan's private sector expanded to a five-month high in July via a sharp rise in manufacturing production and an improvement in their factory PMI which was driven mainly by the sharpest increase in manufacturing orders for five years.

The July PMIs for India came in notably lower than for June as private sector growth receded and inflation pressure, especially for fuel, intensified. This is putting them in a tough spot with spreading social unrest. Their factory PMI dipped only marginally but their services PMI registered a notable easing.

In the US the first of the July PMIs shows that business activity growth rose modestly but to an eight-month high in July although that isn't an especially high benchmark. However selling prices rose sharply and at their fastest rate for nearly four years. Input cost inflation was at a 14 month high. Their factory sector expansion was little-changed however from June with new orders little-changed. It was their services sector that expanded more, albeit modestly

US new home sales were little-changed in June but maintained the modest level they have had all year. That makes then -5.6% lower than year-ago levels.

Canadian producer price growth fell back slightly in June from May but are still +12.4% higher than year-ago levels. Raw material input costs by manufacturers were up more than +20% from a year go.

Meanwhile, the Russian central bank trimmed -25 bps from its key policy rate, taking it to 14.0%. A year ago, this rate was 21%. They have CPI inflation officially at 6.0%, although this seems an unlikely level.

In the EU, eurozone business activity has risen for first time in four months in July amid renewed expansion of new orders. Their factory PMI inched up, and their services PMI inched up too. But to be fair, these higher levels are not significant and the expansion is minor compared to other global regions. But at least it isn't a contraction. The German versions of these PMIs was generally better than the overall set. German consumer sentiment didn't budge however.

In Europe, their ugly heat and worrying fire season isn't easing. In fact a new wave of extreme heat is forecast over the next few weeks. It is part of an accelerating trend that will likely extinguish European glaciers far faster than anticipated just ten years ago.

Australia also got better new factory order levels in July, the first increase in new business in five months. Improved demand conditions underpinned a stronger expansion in output, led to upgraded recruitment activity and enabled greater protection of profit margins. This data confirms the good labour market data released yesterday. But overall Australian growth is likely to remain sluggish.

Sydney, Melbourne and Canberra house prices actually fell in the June quarter, an unusual but necessary shift to make their housing more affordable. It takes serious political bravery to turn a frothy market where gains just fell from the sky.

Bitumen prices are surging again on the closed Hormuz and Red Sea shipping lanes. They are back to levels that we had in mid-March and which lasted to mid-June. Interestingly, urea prices are staying low as are potash prices (minor rises) but sulphur prices never fell after the March spike. Naphtha (used for plastics manufacturing) is rising sharply again.

The UST 10yr yield is now just on 4.68%, unchanged from this time Saturday but up +13 bps for the week.

The price of gold has firmed to US$4052/oz, virtually unchanged from Saturday up +US$49 for the week. Silver is now just on US$58/oz, down -50 USc from Saturday, up +US$2 for the week.

Oil prices have risen back +US$1.50 from Saturday at now just over US$90.50/bbl in the US, while the international Brent price is now just on US$98.50/bbl and up +US$2. A week ago these prices were US$82 and US$88/bbl respectively. Hormuz transits have almost halted entirely There have been no crude tankers and only 1 cargo ship exiting over the past 24 hours (0 dark with transponders off) and none entering for new loads (0 dark). The Red Sea is also now effectively blocked at Yemen although a small handful of ships are still getting through (less than 20 each way). Still almost 800 vessels are waiting for things to calm down.

The Kiwi dollar is unchanged from Saturday at just on 57.9 USc but down -50 bps for the week. Against the Aussie we are still at 82.9 AUc. Against the euro we are holding at just over 50.9 euro cents. That all means our TWI-5 starts today at 61.8 which is unchanged from this time Saturday but down -50 bps from a week ago.

The bitcoin price starts today at US$64,673 and up +0.7% from this time Saturday and up +1.0% from a week ago. Volatility over the past 24 hours has been low at just on +/-0.5%.

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 on Tuesday.

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 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 tankers in the Red Sea have been hit by missiles fired from Yemen. This is unnerving global markets today, and oil prices have jumped everywhere. Bond yields are surging, pushing up mortgage rates and weighing on equity valuations, especially for tech firms.

But first in the US, there were 192,000 initial jobless claims last week, a notable drop and far lower than seasonal factors would have accounted for and lower than expected. There are now 1.85 mln people on these benefits, also lower than a year ago but actually an increase from a week ago as claimants are staying on benefits longer even if it is now much harder to get initially qualified.

The Chicago Fed's National Activity Index came in slightly below trend, but enough to suggest the US economic expansion was still in place in June. But if the Atlanta Fed's GDP Now tracking is to be believed, that expansion is at a modest level. Consensus forecasts are being trimmed too.

The US Treasury 10 year TIPS yield of inflation-protected bonds jumped about +30 bps today and back to the highs we last saw in the pandemic and prior to that in the GFC.

Canadian retail sales expanded in June, extending their positive track to six consecutive months. This was for both value and volume terms, to be +5.9% higher than year ago levels. Canadian CPI is running at 2.8%.

Across the Pacific, China's foreign direct investment rose +US$11.1 bln in June, better than expected and better than the -US$7.6 bln fall in the same month in 2025.

Meanwhile, China's consumer trade-in subsidy program is losing momentum as appliance and car demand weakens.

South Korea said its economic activity expanded an impressive +3.7% in Q2-2026, almost the same as the +3.8% in Q1. This is their fastest expansion since Q4-2021, and came in above market estimates of +3.5%. Strong exports were a key factor in this result.

Singapore's June CPI came in at +1.9% in June and although that was its highest since August 2024 it was less than the 2% expected. And that was because there was no change from May.

In India, we should keep an eye on youth protests, because they are spready and gaining surprisingly wide support.

In Europe and as expected by many, the ECB left its key interest rates unchanged at its July meeting overnight, following the +25 bp hike in June. Since then, policymakers have struck a more cautious tone, adopting a "wait-and-see" approach as softer inflation, wage growth, economic activity, and inflation expectations have reduced the urgency for another move. But that may have changed today with the unexpectedly large spike in oil prices. But who knows how fast that may change again? Markets anticipate another ECB rate hike in September.

Staying in the EU, consumer sentiment improved in July. That is to say it got less negative.

And in a decision likely to intensify trans-Atlantic trade tensions, European Union regulators overnight hit Google with a €890 mln fine for illegally undercutting competition through its dominance in search. Google will not be hurt by this directly in the short term because it reported almost +US$41 bln in profits in Q2-2026 alone. If it is hurt, it will be from their heavy cash burn for its AI buildout.

The Australian labour market grew surprisingly strongly in June, adding +76,300 new jobs, far better than the +15,000 expected. Their jobless rate was stable at +4.4%. More than half the new jobs were in NSW, with good gains also in Queensland and Western Australia. But Victoria shed jobs in the month. This strength will add spine to the RBA's fight against rising inflation (4.0%) because they will be now less worried about a weak economy The RBA next meets on August 11, 2026 - 17 days away.

Global container freight rates fell -4% last week to be +74% higher than year ago levels. Outbound rates from China were the basis of the pullback from the prior week. Bulk cargo rates were down -8% for the week, and these are now a third higher than year-ago levels.

The UST 10yr yield is now just on 4.70%, up +4 bps from this time yesterday and its highest since January 2025. 

Wall Street is -1.4% lower today on the S&P500 with the Nasdaq down -2.5%. 

The price of gold has fallen to US$4042/oz, down -US$98 from yesterday. Silver is now just on US$57.50/oz, down -US$2.50 from yesterday.

Oil prices are another +US$6 higher from yesterday at just on US$93/bbl in the US, while the international Brent price is now just on US$101.50/bbl and up +US$7. Hormuz transits are still just a trickle There have been no crude tankers and 5 cargo ships exiting over the past 24 hours (5 dark with transponders off) and 8 entering for new loads (1 dark). The Red Sea is also now effectively blocked at Yemen although a small handful of ships are still getting through (less than 20 each way). More than 700 vessels are waiting for things to calm down.

The Kiwi dollar is another -40 bps lower from yesterday at just over 57.7 USc. Against the Aussie we are also down -40 bps at 82.8 AUc. Against the euro we are down -30 bps at just over 50.7 euro cents. That all means our TWI-5 starts today at 61.6 which is down -40 bps from this time yesterday.

The bitcoin price starts today at US$64,762 and down -2.1% from this time yesterday. Volatility over the past 24 hours has been extreme at just on +/-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 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 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 we may be facing a renewed oil supply shortage and this time reserves are at unusually low levels. The combined impacts of extended closures in the Persian Gulf, the Red Sea, and the Black Sea are mounting, and just as we thought the May-June stresses had faded.

US mortgage applications rose slightly last week and that was despite an unexpected fall in refinance activity. But since mid-June this US housing market indicator has essentially been flat. And US mortgage rates are now at an 11 month high.

US crude oil stocks rose unexpectedly last week when another fall was anticipated. Yes, it was minor, but still. Maybe it indicates that local production is rising faster than some assume. Or surging imports from Canada or Venezuela? Or maybe that demand is lackluster. Or all three. US Strategic Reserve levels fell again and to their lowest level since 1983.

Today's US Treasury 20yr bond auction saw its yield surge through 5%, ending with a median yield of 5.12% and a high of 5.16%. That is up sharply from the prior equivalent event a month ago of 4.88%. And demand was lower too (-4%). It is quite the rate move.

Not to be outdone, the overnight German 20 year bund auction rose to 3.60%, up from 3.38% a month ago.

Across the Pacific, Japanese exports rose faster than expected in June, up more than +19% from a year earlier. The weak yen helped as did strong demand for electronics and other data center equipment. The June export level was their second highest on record, just a whisker off the March record. At the same time their imports surged as well, up +25% and also more than expected to a new record high, just eclipsing the October 2022 level. Oil prices were high but oil import volumes retreated. The net result was a modest but stable trade deficit in June (from May), but slightly worse than the small trade surplus in June a year ago. None of this helped the yen however because it fell to a 40 year low against the USD. Against the NZD it has only been this low in 2024 and 2007.

In case anyone is still confused, or unaware, the Chinese regulator, China Securities Regulatory Commission, has been organising the SOE home team to bolster the Chinese stock markets recently, after they showed some negative indications. This has driven some good rises, but also a creeping state ownership in many listed Chinese companies. The Shanghai Composite closed up +1.8% yesterday, the Shenzhen Component was up +4.8%, while the ChiNext was up +7.1% and the STAR Market index jumped 8.8%. This is not to claim other governments don't manipulate markets; they do (Trump, Japan, etc.). But the Chinese moves don't seem sustainable unless the reasons for the dour conditions that prompted the artificial buying are resolved. In other economies, regulators would get punished by investors if issues aren't resolved. In China it is the other way around.

The Philippine-China dispute about who controls the sea off the Philippine coast is taking an ugly turn with China posting racist trope video targeting Filipino's. It is unnecessary and grubby diplomacy. But 'going low' isn't something China invented.

Surprising most observers, the Indonesian central bank did not raise its policy rate overnight following its June out-of-cycle shift higher. It judged that that earlier move was all that is needed at this time to defend the rupiah.

In Australia, the latest update of the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, suggests growth there is stalling. While the latest growth pulse is still not overly weak it is broadly consistent with stalling activity through the middle of the year.

Later today the June labour market report will be released in Australia. It is expected to show tame jobs growth.

The UST 10yr yield is now just on 4.66%, up +3 bps from this time yesterday and matching its recent mid-May highs. 

The price of gold has risen to US$4140/oz, up +US$71 from yesterday. Silver is now just on US$60/oz, up +US$1.50 from yesterday.

Oil prices are another +US$2.50 higher from yesterday at just under US$87/bbl in the US, while the international Brent price is now just on US$94/bbl and up +US$2. Hormuz transits are still just a trickle There have been just 2 crude tankers and 3 cargo ships exiting over the past 24 hours (5 dark with transponders off) and 5 entering for new loads (3 dark). Three of these outbound ships were hit by missiles. The Red Sea is also now effectively blocked at Yemen although a small handful of ships are still getting through (less than 20 each way). More than 700 vessels are waiting for things to calm down.

The Kiwi dollar is another -20 bps lower from yesterday at just over 58.1 USc. Against the Aussie we are also down -10 bps at 83.2 AUc. Against the euro we are down -10 bps at just under 51 euro cents. That all means our TWI-5 starts today at 62 which is down -20 bps from this time yesterday.

The bitcoin price starts today at US$66,141 and down -0.4% from this time yesterday. Volatility over the past 24 hours has again been low at just over +/-0.9%.

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 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 many countries are awaiting news of a new barrage of US tariffs, although the fear level is nowhere near as high this time as this weapon has proven relatively limp in the past, and mainly hurts US consumers.

First today, the overnight dairy auction surprised somewhat with an end to the recent weakness, rising +1.5% in USD terms although down almost -1.0% in NZD terms on the firmer NZD. Perhaps surprisingly, milk fats did quite well, other than cheddar (-6.5%). Powders were all up. Some say that northern hemisphere heatwaves have buyers nervous that this will soon weigh on production levels there, so stocks are being built in case.

In the US, the slower hiring trend that started in early May continued last week with the ADP weekly tracking reporting its lowest level since March, just after this weekly tracking series started.

US timber prices are rising and quite sharply recently. That is because of forest fires in the US Pacific Northwest states, and in British Columbia, the main exporting Canadian province to the US. Trump's new tariffs on Canada are making things worse for US housebuilders.

The early outcomes for the Q2-2026 earnings reporting season (with 10% of S&P 500 companies reporting actual results), 88% of these companies have reported a positive EPS surprise and 85% have reported a positive revenue surprise.

The US summer holiday season is starting to peak now and will stay like this until early August. The season overall ends on their Labor Day on September 7. We note this because commercial activity is different during this period and financial market activity is lighter than usual.

The same is true for Canada of course. But US border states are doing it tough because Canadians are choosing to avoid the US for their holidays as the insults and tariff actions from Trump's Washington swamp stay aggressive.

In China, new stimulus is being rolled out. Its gigantic "Six Networks" buildout is getting a major boost as part of more infrastructure spending. Those six are: water networks (canals), power grids, data centers, 6G development, undergrounding pipelines, and supply-chain efficiency upgrades. But they are also trying to get their service sector re-energised as well with targeted 'investments'.

Meanwhile, China is re-thinking its tax rebates that are driving its export competitiveness. It needs those funds for its domestic projects, and it doesn't need the international alarm their mercantalist export policies are creating.

In Europe, the ECB's Q2 lending survey has found banks have tightened credit standards moderately for firms on higher perceived risks and lower risk tolerance. Corporate loan demand rose while demand for housing loans and consumer debt decreased. Interestingly, companies seeking green loans were found to have much better financial profiles.

Germany's ZEW sentiment survey recovered notably in July after four months on weakness, and this is mirrored in their wider survey for the EU.

The price of copper is rising again, getting near the record highs it posted at the start of the Iran-US conflict. Driving some of this are unusually low copper stocks in China.

Meanwhile the FAO is reporting that hunger in the world fell again in 2025 and for a third consecutive year. Around 645 million people, or 7.8% of the world's population, experienced hunger last year, down from 8.1% in 2024 and 8.6% in 2022

The UST 10yr yield is now just on 4.63%, up +3 bps from this time yesterday and approaching its recent mid-May highs. 

The price of gold has risen to US$4069/oz, up +US$65 from yesterday. Silver is now just over US$58.50/oz, up +US$2 from yesterday.

Oil prices are +US$1.50 higher from yesterday at just on US$84.50/bbl in the US, while the international Brent price is now just over US$92/bbl and up +US$3. Hormuz transits are still just a trickle There have been just 1 crude tanker and 3 cargo ships exiting over the past 24 hours (4 dark with transponders off) and 11 entering for new loads (3 dark) and all this traffic is Iran-linked. The Red Sea is also now effectively blocked at Yemen.

The Kiwi dollar is -20 bps lower from yesterday at just over 58.3 USc. Against the Aussie we are also down -20 bps at 83.3 AUc. Against the euro we are down -10 bps at just on 51.1 euro cents. That all means our TWI-5 starts today at 62.2 which is down -10 bps from this time yesterday.

The bitcoin price starts today at US$66,421 and up +1.3% from this time yesterday. Volatility over the past 24 hours has again been modest at just over +/-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.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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

Hamilton Confidential is a podcast about Worldclear Ltd, based on leaked documents from the New Zealand financial services provider.

Obtained by Interest.co.nz and shared with the Organized Crime and Corruption Reporting Project, Lithuania's 15min.lt, the Belarusian Investigative Center, and Sweden's Expressen, the leak shows Worldclear processing money transfers for a colorful global clientele over a five year period.

With a staff of no more than a dozen people, one internal document claims Worldclear had "grown to process about $500 million in payment values per year."

Worldclear was found by Department of Internal Affairs supervisors to have failed to comply with several anti-money laundering requirements. And two minority Worldclear shareholders had convictions for financial crimes overseas, with one having an Interpol red notice out in his name for an unserved jail sentence in Panama for money laundering.

There is no evidence that Worldclear or its staff knowingly facilitated financial crimes. David Hillary, Worldclear's founder and managing director, denied any wrongdoing by himself or the firm, saying neither had ever; “knowingly or recklessly facilitated criminal offending, acted for the purpose of assisting any person to commit an offence, or designed or operated services for the purpose of concealing the source, destination, or beneficial connection of illicit funds.”

Here are the first four episodes in the series.

Episode 1, What was Worldclear and what did it do?

An overview of what Worldclear was, how it operated, who its customers and owners were, and why the story matters for New Zealand.

Episode 2, Richard Whitham; from Hamilton to Changi prison.

Featuring an interview with Richard Whitham, who worked for Worldclear as a banking relationships establishment project officer, and ended up spending more than two years in Changi prison. Whitham was the key source of the leak.

Episode 3; International customers; Michael Wilson, Guenther Klar & Odebrecht Overseas Ltd.

Featuring a customer wanted by the FBI who chartered a private jet and fled Canada for Vietnam, along with his wife, mother, and three dogs. A British citizen who was later convicted in Denmark of defrauding Danish tax authorities. And a Bahamas company whose Brazilian parent company had pleaded guilty in the US to involvement in a multi-billion dollar bribery scandal.

Episode 4; The Belarus & Lithuanian connection.

A discussion with Belarusian and Lithuanian journalists who worked on the investigation, looking at why the Worldclear leak is of interest in their countries, and what it's like to be a Belarusian investigative journalist working from exile.

Podcast hosts Gareth Vaughan and Emanuel Stoakes, producer Erica Wood.

Separate text stories published as part of the investigation can be found here.

Interest.co.nz is grateful for funding support from the Brian Gaynor Business Journalism Initiative and the readers who Support us, in helping bring this project to fruition.

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