Contrasting national addresses

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 Trump is about to make a national address (9pm NZT) where he is expected to claim (https://truthsocial.com/@realDonaldTrump/posts/116329512466946656) Iran wants a ceasefire (which Iran immediately said (https://www.bbc.com/news/live/c36r5p1l7w3t) was false). Many expect (https://www.reuters.com/world/middle-east/us-leave-iran-pretty-quickly-return-if-needed-trump-tells-reuters-2026-04-01/) he will pull the US out of NATO as well (although Congress would have to agree for that to be effective). Despite the unhinged nature of it all, markets cheered the likely end of the pointless war he started. Separately, on Saturday we will get the March US non-farm payrolls data which is expected to show a +60,000 gain. The ADP version (https://adp-ri-nrip-static.adp.com/artifacts/us_ner/20260401/ADP_NATIONAL_EMPLOYMENT_REPORT_Press_Release_2026_03%20FINAL.pdf?_ga=2.210168208.440815673.1775064866-1729320912.1772644589) of private sector employment was out today for March and that showed a similar modest rise (+62,000). But we should also note that February official data for private sector hiring (https://www.bls.gov/charts/job-openings-and-labor-turnover/opening-hire-seps-rates.htm) revealed a record low rate. US mortgage applications (http://www.mortgagebankers.org/) fell sharply again last week, down a further -10.5% for a third consecutive big drop, which is unprecedented. Refi fell the hardest but new purchase activity was down sharply too. Rising interest rates continue there. The widely-watched ISM factory PMI (https://www.ismworld.org/supply-management-news-and-reports/reports/ism-pmi-reports/pmi/march/) was little-changed in March from February with the same modest expansion recorded, as signaled in the alternate globally-benchmarked S&PGlobal version (https://www.pmi.spglobal.com/Public/Home/PressRelease/c75dd7dd17c94989afb36aad2fbf7f0b) . The New Orders Index indicated slower growth compared to the previous month with new export orders actually in contraction. Both observed soaring inflationary pressures, back to pandemic levels. US retail sales (https://www.census.gov/retail/marts/www/marts_current.pdf) rose in February by +3.7% above the year-ago level. This month car sales led the increase. That is a real gain given that February CPI inflation ran at 2.4%. In Canada (https://www.pmi.spglobal.com/Public/Home/PressRelease/dc04ec72331a41ce9470b633e19c3fba) their March factory PMI shows no growth, no decline. The China S&P Global PMI (https://www.pmi.spglobal.com/Public/Home/PressRelease/1992d4fdcca54d56be7bf90637ff6540) expanded again, showing growth of output and new orders were maintained in March. But suppliers' delivery times lengthen the most since December 2022. And they also recorded their strongest inflationary pressures, since March 2022. Again, their PMI was slightly more upbeat than the official version. Japan (https://www.pmi.spglobal.com/Public/Home/PressRelease/d09c780efe364af8845c0befd9e1139a) , Taiwan (https://www.pmi.spglobal.com/Public/Home/PressRelease/e9fd8922f2c044118c4aac4837f383fc) and Malaysia (https://www.pmi.spglobal.com/Public/Home/PressRelease/d4789a7328554697a56b1e5c8eec9587) all recorded modest to good factory expansions in March in their respective factory PMIs, and all recorded higher inflation pressures. Interestingly, the Bank of Japan's Tankan survey (https://www.boj.or.jp/en/statistics/tk/gaiyo/2026/tka2603.pdf) of businesses there for Q1-2026 shows little negative impact from the current geopolitical situation. Those firms surveyed remain quite upbeat. In Europe, their eurozone factory PMI (https://www.pmi.spglobal.com/Public/Home/PressRelease/fb07b69c22f443aa9b7ec52841c6ffc7) also expanded, and at a 45-month high. But the inflationary pressures were also very evident in their report. In Australia, yesterday's national address by Prime Minister Albanese (https://www.youtube.com/watch?v=cgFCX-T760s) warned of a rocky road ahead due to their fuel crisis, and that urgent reforms are required, mainly because previous deregulation has left them uncomfortably vulnerable in this situation. Separately, their main business trade association said (https://www.australianindustrygroup.com.au/news/media-centre/2026/industry-index-reveals-deteriorating-business-conditions-as-energy-crisis-hits/) their Industry Index fell 19.9 points in March to -23.6, the steepest monthly decline since the initial pandemic phase of early 2020. Industrial activity, employment, new orders and sales indicators all fell markedly in response to the emerging energy crisis. Uncertainty was the main factor, with 30% reporting volatility in fuel prices, freight and/or supply arrangements because of the energy crisis. More than a...