Episode Details

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 oil prices have slid on hopes of a US-Iran deal. But despite US statements saying talks are "going nicely", Iran seems to be saying otherwise even if they are engaged in talks. But they seem to be talks-about-talks. Supposed insider information says the Strait of Hormuz will still be closed for another 60 days "for mine-clearing" (some say 30 days). And the US is adding new conditions each time the sides meet. Meanwhile, two LNG tankers have passed through the Strait in the past 24 hours.

Just a reminder that the US is on a long weekend holiday and we won't be getting data updates from there until tomorrow morning from there. Pre-market activity (futures) is still active however.

So first, like Japan, Singapore reported that their April CPI inflation pressure stayed very low and contained, up just +1.8% from a year ago, down -0.3% from March. Fuel costs are a small part of their index. The big mover was for clothing and that fell sharply.

Singapore also said its Q1-2026 expansion was +6.0% from the same quarter a year ago, bettering the +5.7% expansion in the previous quarter, and better than forecast (+5.1%). But they are much less bullish on how the year will turn out, revising that to "2%-4%" as Trump's Gulf War takes its toll.

But in Malaysia they reported a sharp jump in producer costs. Their producer prices rose +5.4% in April from a year ago, picking up from just a +1.1% rise in March. Prior to that, their PPI had fallen consistently since March 2025. This latest increase was also the most since August 2022, all driven by the mounting disruptions from the war in Iran.

In China, they said foreign direct investment fell -10.3% in the first four months of 2026 compared to the same period in 2025. Things got off to a negative start, but regained some initiative in April. (April 2025 was a particularly weak base.)

And global demand for yuan-denominated financing is rising, with panda and dim sum bond issuance climbing sharply in early 2026 as borrowers look to diversify away from costly US dollar funding. Panda bond issuance - yuan debt sold on the Chinese mainland by overseas institutions - topped US$13 bln in the first quarter, nearly half of last year’s total. Dim sum bonds are those issued outside China, in yuan. They hit US$45 bln in the quarter, also on track to beat the 2025 level. Yuan funding comes with much lower interest rates than US dollar funding.

We should probably also note that the Pope has