Here’s our summary of key economic events overnight that affect New Zealand with news commodity markets are betting all-in that a deal between the US and Iran will unlock the Strait of Hormuz soon. An Iranian State TV report has triggered the optimism. (And even though the US has denied it.)

More ships are transiting, but it is still only a fraction of ‘normal’. However it is enough to drive the price of crude oil lower.

But despite all that, financial markets seem to remain unconvinced, or at least they have turned defensive due to what lies ahead of a resolution. How well any deal will stick between the two parties who have become quite transactional remains to be seen. Certainly the US is unlikely to be trusted to maintain the deal by both Iran, and even its own traditional allies. Iran will be Iran, agreeing but preparing for another attack/fight. The one thing the US/Israeli thing has done is solidify the Iranian regime’s position at home. It no longer has internal dissent or street challenges, and it will thank Trump for that.

In the US, mortgage applications fell sharply last week, as US 30 year mortgage rates rose. Most of the fall is from the outsized retreat in refinance activity (-18%), although new purchase activity did dip as well. Those mortgage rates rose to their highest level since August 2025.

Meanwhile, the ADP tracking of private payrolls showed the good levels continued last week, even if there was a small dip posted.

And that is supported by factory survey data out from the Richmond Fed for the mid-Atlantic states area. New order levels rose notably. And firms expected growth in prices paid to moderate slightly over the next 12 months. But there was no improvement in the forward expectations, despite these improvements.

Meanwhile the Dallas Fed services sector survey remained quite negative, even if less so in May than in April. But their uncertainty metric is notably less.

There was a US Treasury 5yr Note auction overnight and that delivered a yield of 4.13% (4.18% high), up sharply from the 3.90% yield at the prior equivalent event a month ago.

In Australia, consumer price inflation came in lower than most analysts were expecting for April. It rose 4.2% from a year ago, lower than the March 4.6%, and lower than the expected 4.4%. From March, CPI prices rose +0.4%, also lower in the same way. A key reason is that fuel prices fell -7.0% from March to April, after rising 33% in the previous month. The fall this month includes the halving of the fuel excise on 1 April. Fuel prices are still +23.5% higher than in February and before the impact of the Middle East conflict. Apart from fuel, outsized rises were recorded for ‘housing’ (+6.3%) and ‘clothing’ (+5.9%). The main contributors to the annual housing rise were Electricity (+22.5%), New dwellings (+4.7%) and Rents (+3.5%).

And staying in Australia, Westpac has been hit with a AU$26 mln civil penalty for not dealing with clients who were struggling financially in a proper way. Remediation of all costs to those clients was AU$1.7 mln.

The UST 10yr yield is now just on 4.48%, down -1 bp from this time yesterday. The key 2-10 yield curve is now at +45 bps (+1 bp). Their 1-5 curve is now at +39 bps (+2 bps) and the 3 mth-10yr curve is at +81 bps (-3 bps). The China 10 year bond rate is down -1 bp at 1.74%. The Japanese 10 year bond yield is down -3 bps at 2.69%. The Australian 10 year bond yield starts today at 4.90%, down -3 bps. And the NZ Government 10 year bond rate is down -2 bps at 4.62%.

Wall Street is marking time today with the S&P500 up a minor 00.1%. The Nasdaq is up the same, both now off recent record highs. Overnight, European markets ended between Paris’s +0.4% fall and Frankfurt’s little-change. Yesterday, Tokyo also closed little-changed. Hong Kong fell a sharp -1.1% however and Shanghai was down even more, down -1.2%. Singapore ended down -0.8%. The ASX200 ended its Wednesday session up +0.7%. The NZX50 ended up +1.2% and the best of the markets we follow.

The price of gold will start today down another -US$49 at US$4450/oz. Silver is down -US$1.50 at just under US$74.50/oz.

Oil prices have fallen -US$4.50 to just on US$89.50/bbl in the US, while the international Brent price is now at US$95/bbl.

The Kiwi dollar is up +60 bps from yesterday at this time at 58.9 USc. Against the Aussie we are up +110 bps at 82.6 AUc. Against the euro we are up +50 bps at just under 50.7 euro cents. That all means our TWI-5 starts today at just under 62.4 which is up +60 bps from yesterday.

The bitcoin price starts today at US$74,765 and down -1.5% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.0%.

There will be no video version of this article today. Join us later today for full coverage of the 2026 Budget release, an election budget of course.

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