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New Zealand CPI Expectations Rise in June Quarter, RBNZ Survey Says

Expectations for New Zealand's one-year-ahead annual consumer price index (CPI) inflation increased by 82 basis points to 3.41% from 2.59% in June quarter, according to the Reserve Bank of New Zealand's (RBNZ) survey published on Wednesday.Two-year-ahead inflation expectations increased to 2.53% from 2.37%, while five-year-ahead inflation expectations decreased to 2.22% from 2.31%, and 10-year-ahead inflation expectations decreased to 2.19% from 2.30%.On average, survey respondents expect the official cash rate to remain at 2.34% by the end of the June quarter.One-year-ahead unemployment rate expectations increased to 5.37% from 4.95%, and two-year-ahead unemployment rate expectations increased to 4.97% from 4.58%.Expectations for annual wage inflation over the next one and two years have increased to 2.63% and 2.84%, respectively, compared to the previous quarter.Expectations for annual real gross domestic product growth were 1.58% and 2.16% for the one and two-year-ahead time horizons, respectively.Annual house price inflation expectations tightened across all horizons, with one-year-ahead expectations falling to 0.33% from 2.37% and two-year-ahead expectations declining to 2.80% from 3.44%.

Data Points to Slowing Momentum Across New Zealand Services Industries, Households, ANZ Says

High-frequency data pointed to slowing momentum across services industries and households in New Zealand as the conflict in the Middle East leaves global oil markets tight, and shipping costs and refining margins elevated, ANZ said in its Quarterly Economic Outlook report on Wednesday.New Zealand's first quarter gross domestic product (GDP), largely pre-dating the shock, is expected to print strongly at 0.9% quarter-over-quarter. Growth over 2026 is anticipated to come in at 1.5% year-over-year, before advancing to 2.6% and 2.8% in 2027 and 2028, respectively. Annual inflation is forecast to accelerate to 4.4% year-over-year in the second quarter before slowing to 4.3% in the third quarter and reaching 4.1% by the end of the year.ANZ's Business Outlook suggests firms are absorbing some of the cost surge. Recent resilience in the Purchasing Managers' Index and ANZ's Heavy Traffic Index suggests some firms may be building up inventories to mitigate the risk of potential transport disruptions. The Reserve Bank of New Zealand is anticipated to begin normalizing the official cash rate in July, with three consecutive hikes. Higher fuel costs have driven a reduction in spending on more discretionary goods and services.While the broad direction of travel for inflation and activity in the near term is known, the magnitude of the fallout for New Zealand businesses and households, and the persistence of this shock, remain unknown. The longer the shock continues, the greater the pressure on firms to pass higher costs on to consumers, and the more "demand destruction" may occur.Consumer inflation expectations have jumped higher than during COVID-19, and firms' employment intentions are "clearly deteriorating." For low-income households, the cost-of-living squeeze is most acute, while upward pressure on mortgage rates may hit middle-income households the hardest.Brent crude oil is assumed to fall to just under $90 per barrel by the end of the year, before falling to $80 per barrel by the end of 2027.

Australia's Wage Price Index Rises in March Quarter

Australia's seasonally adjusted wage price index rose 0.8% in the March quarter, unchanged from the December 2025 quarter, data from the Australian Bureau of Statistics showed on Wednesday.Quarterly wage growth was led by health care and social assistance, up 0.7%.Hourly pay rates, excluding bonuses, increased by 0.8% in the private and 0.5% in the public sectors.On an annual basis, wage growth was 3.3% in the March quarter, down from 3.4% in the previous quarter.Public sector wages rose 3.3% in the year to the March quarter, down from 3.6% a year earlier, while private sector wages grew 3.2%, down from 3.3%.

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Australia's Total Loan Commitments for Dwellings Falls in March Quarter

The number of total loan commitments for dwellings in Australia fell 6.2% to 139,794 between the March and December 2025 quarters, data from the Australian Bureau of Statistics showed on Wednesday.New home loans declined 6.9% to 82,453, with their total value falling 4.3% to AU$61.42 billion, while first home buyer loans decreased 4.3% to 30,241, and fell 6.7% in value to AU$17.91 billion."Falls were recorded across all borrower types this quarter, following strong growth throughout 2025 and cash rate rises in February and March," said Mish Tan, the bureau's head of finance statistics.Meanwhile, lending to investors fell 5.3% to 57,342. The total value of investment loans approved decreased 3% to AU$41.54 billion.Compared with the year-earlier period, the number of total loans approved rose 8.6% in the March quarter. New home loans increased 2.5%, and investor loans jumped nearly 19%.

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New Zealand's Economy Now Expected to Experience Year of 'Positive But Still Sub-Par Growth,' Westpac Says

The outlook for New Zealand's economy has shifted now to another year of "positive but still sub-par growth" at 1.5% in the wake of the conflict in the Middle East, due to which oil and refined fuel prices have have rising, with real petrol and diesel prices now at 50-year high, Westpac said in a Wednesday report.The extent of the disruption to New Zealand's growth will depend on the duration of the conflict. Annual headline consumer price index inflation will move into the 4% to 5% range for some time and lift inflation expectations to some extent.Core inflation looks set to rise above the top of the Reserve Bank of New Zealand's target range and require the official cash rate to rise toward 3% this year, and higher through 2027, Westpac said. The resulting pressure on households' finances will be a significant drag on spending. High uncertainty will weigh on businesses' plans for hiring and investment.Unemployment is expected to rise to 5.6% from 5.3% currently.The expected economic hiatus will impact the services sector, retail spending, and hospitality the hardest, reflecting the implied hit to household incomes. Tourism will also be interrupted.The report assumed that transit through the Strait of Hormuz remains limited for a couple of months but gradually improves toward pre-conflict levels in late 2026 to mid-2027, with Brent crude declining to $83 per barrel by the end of 2026 and $64 per barrel by the end of 2027.

Japan's Current Account Surplus Expands 29% in March

Japan reported a current account surplus of 4.682 trillion yen in March, up 29.1% from 3.625 trillion yen a year earlier, preliminary data released by the Ministry of Finance on Wednesday showed.That figure was higher than the consensus estimate for a surplus of 3.879 trillion yen and the 3.933 trillion yen surplus in February.Exports grew 11.7% year over year to 10.822 trillion yen from 9.691 trillion yen, and imports climbed 10% to 9.992 trillion yen from 9.079 trillion yen a year before, the report said.The goods account surplus widened 36% to 830.5 billion yen from 611.3 billion yen in the prior year, and the primary income surplus jumped 20.8% to 4.631 trillion yen from 3.833 trillion yen, the report said.

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South Korea's Jobless Rate Edges Up in April

The seasonally adjusted unemployment rate in South Korea in April edged up to 2.8% from 2.7% in March, data from Statistics Korea indicated Wednesday.On an annual basis, the unemployment rate remained unchanged.The number of unemployed people fell to 853,000 in April from 854,000 a year earlier.The number of employed people increased by 74,000 to hit 28.96 million last month from 28.9 million in the year-ago period.

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Japan Bank Lending Growth Accelerates to 5.4% In April

Japan's bank lending growth accelerated in April, with total loans and discounts at major, regional and shinkin banks rising 5.4% year-over-year to 670.647 trillion yen, according to preliminary data released by the Bank of Japan on Wednesday.The pace of growth accelerated from the 4.8% expansion in March. Loans at major and regional banks alone rose 6% to 591.079 trillion yen.Major banks led the increase, with lending climbing 8% to 275.081 trillion yen, while regional banks posted 4.3% growth to 315.998 trillion yen. Foreign banks' yen-denominated lending rose 29% to 7.489 trillion yen.On the deposits side, deposits and certificates of deposit at city, regional and shinkin banks rose 1.9% year over year to 1,080.719 trillion yen in April.

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South Korea's Unemployment Rate Slightly Eases to 2.9% in April

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Australian Budget Seen to Improve Long-Term Fiscal Position, Says ANZ Research

The Australian budget for fiscal 2026 to 2027 comprises of significant policy changes, including capital gains taxation, negative gearing and the taxation of trusts, all of which are expected to improve the fiscal position in the long term, ANZ Research said Tuesday.The firm said the underlying cash deficit is projected to be 1% of the gross domestic product (GDP) in the near term, reflecting a modest improvement on estimates from the mid-year economic and fiscal outlook in December 2025.ANZ does not expect any direct impact on near-term growth or inflation forecasts from lower-than-expected net new spending in the 2026 to 2027 period.The headline cash deficit is expected to be 2.1% of GDP in 2026 to 2027 amid a neutral fiscal impulse, and fiscal position is set to return to balance in 2034 to 2035 as per the budget papers."Overall, we see nothing in the budget to dissuade us from our view that the RBA is likely to keep the cash rate at 4.35% through 2026 and 2027," analysts at ANZ said.However, higher prices and costs as reflected in the business survey data, coupled with weaker forward orders present a risk that policymakers may have to make difficult trade-offs in the coming months, it added.

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Quantity Sold at GDT Pulse Auction Exceeds 3,000 Metric Tonnes

A total of 3,019 metric tonnes (MT) of products were sold during the Global Dairy Trade (GDT) pulse auction held Tuesday, with supply ranging from 2,700 MT to 3,050 MT, according to data from the trading platform.The average selling price for anhydrous milk fat was $6,243 per MT, butter averaged $5,595 per MT, and skim milk powder and whole milk powder averaged $3,549 per MT and $3,768 per MT, respectively.

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US Equity Markets Mixed After Hot Inflation Data, Higher Crude Oil Prices

US equity indexes were mixed on Tuesday after hotter-than-anticipated inflation data and higher crude oil prices amid US-Iran peace negotiation deadlock.* The US seasonally adjusted consumer price index jumped by 3.8% in April from 3.3% in the prior month, according to data released Tuesday by the Bureau of Labor Statistics, compared with the 3.7% consensus.* The CPI increased 0.6% in April, as expected, following a 0.9% increase in the previous month. Core CPI gained 0.4%, higher than the consensus estimate for a 0.3% increase.* June West Texas Intermediate crude oil rose $4.22 to settle at $102.28 per barrel, while July Brent crude, the global benchmark, was last seen up $3.53 at $107.75.* Zebra Technologies (ZBRA) shares were up roughly 11%, the highest on the S&P 500, after the company reported higher fiscal Q1 non-GAAP earnings and net sales, and issued fiscal Q2 and 2026 non-GAAP EPS outlook above analysts' estimates.* Shares of Qualcomm (QCOM) and Intel (INTC) dropped nearly 12% and 6.5%, respectively, the steepest slides on the S&P 500 and the Nasdaq, amid a sell-off in the tech sector following the extended closure of the Strait of Hormuz.

Daily Roundup of Key US Economic Data for May 12

The consumer price index rose by 0.6% in April after a 0.9% gain in the previous month and was up 0.4% excluding food and energy prices after a 0.2% gain.The gain lifted the year-over-year increase to 3.8% from 3.3% in March, while the core measure was up 2.8% year-over-year after a 2.6% rate in the previous month.Food prices rose by 0.5%, while energy prices increased by 3.8%. Gasoline prices alone were up 5.4%.Owners' equivalent rents rose by 0.5% and regular rents were also up 0.5%, both faster than in the previous month and accounting for about one-third of the overall gain.In addition, prices of new vehicles fell by 0.2% after a 0.1% gain in the previous month and used vehicle prices held steady after a 0.4% decline.The National Federation of Independent Business' monthly sentiment index rose to 95.9 in April from 95.8 in March, with gains in seven of the 10 components, particularly the earnings trend."Inflationary pressures continue to be a challenge for Main Street," said NFIB Chief Economist Bill Dunkelberg. "While small business optimism is currently fragile, the benefits of the Working Families Tax Cut Act should start to feed into the private sector over the next few months."The US Treasury reported a $215.02 billion budget surplus in April, smaller than the $258.40 billion deficit reported in April 2025. The fiscal year-to-date gap narrowed to $953.56 billion from $1.049 trillion.Redbook reported that US same-store retail sales were up 9.6% year-over-year in the week ended May 9, stronger than a 7.8% gain in the prior week due to seasonal sales and Mother's Day spending.

US Treasury April Budget Surplus Smaller Than Expected, Narrower Than Year Ago

The US Treasury posted a $215.02 billion budget surplus in April compared with the $220 billion surplus expected in a survey compiled by Bloomberg and smaller than the $258.40 billion budget surplus a year earlier.The monthly deficit was $164.1 billion in March.Through the first seven months of the fiscal year, the deficit is $953.56 billion, smaller than a $1.048 trillion gap in the same period a year earlier.

US April Treasury Budget Surplus $215.02 Billion Vs $220 Billion Surplus Expected, April 2025 $258.40 Billion Surplus

Redbook US Same-Store Sales Accelerate in Week Ended May 9

Redbook US same-store sales rose by 9.6% from a year earlier in the week ended May 9 after a 7.8% year-over-year increase in the previous week.Redbook noted higher sales of seasonal products including clothing, footwear and outdoor goods due to rising temperature and graduation sales.Mother's Day also boosted sales of gifts items including cosmetics, jewelry, cards, flowers and small appliances. However, annual growth was unaffected because Mother's Day occurred during the same period as last year.Through the first selling week for May, sales were up 9.6% compared with May 2025, well above the target for an 8.6% gain, Redbook said.

Redbook US Same-Store Sales Rise 9.6% Year-Over-Year in Week Ended May 9 After Prior 7.8% Gain

April US Consumer Prices Rise as Expected, Slower Than in Previous Month

The US seasonally adjusted consumer price index, a measure of inflation, rose by 0.6% in April, as expected and following a 0.9% increase in March, according to data released Tuesday by the Bureau of Labor Statistics.Core CPI, which excludes food and energy prices, rose by 0.4%, higher than the consensus estimate for a 0.3% increase. Core CPI rose by 0.2% in March.Food prices increased by 0.5%, while energy prices were up 3.8%. Gasoline prices were up 5.4%.Owners' equivalent rents and regular rent both increased by 0.5%. There were also notable gains in apparel and airline fares, while medical services prices were flat.CPI excluding food, energy and shelter rose by 0.2% after a 0.1% increase in the previous month.The year-over-year rates for overall and core CPI increased to 3.8% and 2.8%, respectively, from 3.3% and 2.6% in the previous month.The monthly consumer price index, or CPI, reported by the Bureau of Labor Statistics, measures the index level of prices paid by consumers for a basket of goods and services such as food, energy, vehicle, medical care, apparel, and housing.The core measure, which excludes food and energy due to their volatility, is closely watched by markets and the Federal Reserve as a sign of underlying inflation pressures.Rising inflation is a sign of strong US consumer demand, but both stocks and bond normally react negatively to level of price growth that would necessitate higher interest rates.