ofInterestNZ

Oil prices settle to be +12% above conflict-start levels, +25% above early 2026 levels

Audio is licensed by Shutterstock. Track 1219389 Monetization ID TFGEPGEI0LHEIJAI ---- Kia ora. Welcome to Friday’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 financial markets may be moving on from the US-Iran deal, but commodity markets are noting that Iran will now have the opportunity to charge for transit ('fees' but no 'tolls') after a key US concession. The MOU (https://edition.cnn.com/2026/06/17/politics/us-iran-memo-annotated-intl-vis) is signed (https://www.aljazeera.com/news/2026/6/17/iran-confirms-that-mou-has-been-signed-electronically-by-both-sides) . In the US, jobless claims dipped slightly (https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20261013.pdf) last week to 219,500 but at about the rate expected as what seasonal factors would have indicated. There are now just under 1.7 people on these benefits, marginally less than a year ago. The Philly Fed factory survey recovered (https://www.philadelphiafed.org/-/media/FRBP/Assets/Surveys-And-Data/MBOS/2026/bos0626.pdf?sc_lang=en&hash=93C903D2F9C6BCF98FD1AA79FBA9FAAB) in June after the poor report for May, but only to a level below its 2026 average. These firms said prices paid moved up while the prices they got for their goods dipped. Meanwhile the US Conference Board's leading index (https://www.conference-board.org/topics/us-leading-indicators/) rose marginally in May, and this metric suggests its may be coming to the end of its long term down trend that started in 2022. In Canada, producer prices (https://www150.statcan.gc.ca/n1/daily-quotidien/260618/dq260618a-eng.htm) were up +13.6% in May from a year earlier with +1.2% of that coming in the latest month. Of course, most of this was energy related. In fact raw materials costs were up +33% from a year ago within the overall result. There was a lot of central bank action overnight, all timed to follow the US Fed. Taiwan (https://www.cbc.gov.tw/tw/cp-302-192416-38c80-1.html) held its policy rate unchanged at 2.0% as expected. Indonesia (https://www.bi.go.id/id/publikasi/ruang-media/news-release/Pages/sp_2812626.aspx) hike again, up +25 bps to 5.75% quickly following last week's out-of-cycle emergency hike to support their currency. The central Bank of England (https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2026/june-2026) held unchanged at 2.75% (with two of their nine members wanting a hike). The Swiss (https://www.snb.ch/en/publications/communication/press-releases-restricted/pre_20260618) central bank held at 0%. The Norwegian (https://www.norges-bank.no/tema/pengepolitikk/Rentemoter/2026/juni-2026/?tabs=162257) central bank held at 4.25%. And the Swedish (https://www.riksbank.se/sv/press-och-publicerat/nyheter-och-pressmeddelanden/pressmeddelanden/2026/styrrantan-oforandrad-pa-175-procent4/) central bank held at 1.75% a day ago. All these came after last week's +25 bps rise by the ECB (https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.mp260611~4d41bd5e83.en.html) . Global container freight rates (https://www.drewry.co.uk/supply-chain-advisors/supply-chain-expertise/world-container-index-assessed-by-drewry) surged another +12% last week to be +21% higher than this time last year. There were increases in all major trades but the China-EU trade got the biggest hit. Meanwhile, bulk cargo rates fell -8% over the past week to be +36% higher than year ago levels. The UST 10yr yield (https://www.interest.co.nz/charts/interest-rates/us-treasures) is now just on 4.44%, down -2 bps from this time yesterday. The price of gold (http://www.interest.co.nz/charts/commodities/precious-metals) has retreated another -US$44 from yesterday to US$4229/oz. Silver is down another -US$2 at US$66/oz. Oil prices are down -US$1 from yesterday at just under US$75.50/bbl in the US, while the international Brent price is now just over US$78.50/bbl and down -50 USc. Hormuz transits (https://insights.windward.ai/) are picking up with 13 crude or product tankers exiting over the past 24 hours and 13 entering for new loads. (Normal is 60 in each direction.) The Kiwi dollar is down -60 bps from this time yesterday at just on 57.6 USc. Against the Aussie we are down -30 bps at 82.0 AUc. Against the euro we are unchanged at just under 50.2 euro cents. That all means our TWI-5 starts today at just over 61.3 which is down -50 bps from yesterday. The bitcoin price starts today at US$62,623 and down -5.1% from this time yesterday. Volatility over the past 24 hours has been high at just under +/- 3.0%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we’ll do this again on Monday.   Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI