Episode Details

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

traders who claimed to foresee a Trump 'victory' over Iran are getting a lesson in their susceptibility to propaganda.

In the Middle East, US and Israeli struck a number of Iranian vessels in the Strait of Hormuz, hours after President Donald Trump had suggested negotiations with Tehran over an interim deal were progressing. Renewed aggression there and in Lebanon hardly seems to indicate talks are "going nicely". Both sides are in a chronic violent embrace, despite what they say.

Oil prices are rising again; prospects for normalisation have faded significantly.

First we should note there was another dairy Pulse auction overnight. This on saw the butter price recover notably, up +2% from the prior week's full auction, and the SMP price fall back notably, down -5% on that same basis. The WMP price dipped -1%.

In the US, the Conference Board said its survey of consumer confidence edged down in May. But this dip wasn't quite as much as analysts had expected.

Meanwhile the May Dallas Fed factory survey edged up slightly from its languid ("stable") state, a bit less than other similar surveys and less than expected.

And the National Activity Index tracked by the Chicago Fed rose in April to its best reading since March 2025.

The US Treasury's popular 2 year bond auction today brought sharply higher yields. The median yield today was 4.02% (high was 4.07%), a big shift up from the median 3.75% at the equivalent event a month ago.

Across the Pacific, Singapore said its industrial production was up a very healthy +17.6% in April from a year ago, a rising trend and an expansion that is starting to rival Taiwan.

And in Taiwan industrial production rose at a +15% rate in April from the same month a year ago, less than in March but still the third-best month ever. The base has been rising spectacularly for more than a year now so the outsized yeay-on-year growth will ease back from here. Their retail sales were up +5.2% in April, extending the outsized improvements to three consecutive months now.

In Malaysia, it appears that they have instituted

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