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 most of our trading partners are coming under much heavier input cost pressure, along with supply-chain disruption.

Meanwhile, US and Iran have rejected each other’s proposals to end the war. That is pushing up the price of oil. And in the US, the head of their largest bank is saying private credit losses will be much larger than most assume.

In the US, the widely-followed March ISM services PMI came in a touch lower than expected, and lower than for February. The strong activity component slowed very fast but is still expanding. This survey found employment contracting. It also found prices rising their fastest since October 2022. These firms are not waiting to push through recovery price increases this time.

Remember, The S&P Global services PMI released earlier found its first decline in activity since January 2023, employment was down amid their weakest rise in new orders for nearly two years. They also found steeper rises in both input costs and output prices in March. So very similar to the ISM version.

One of those input costs is fuel, and now petrol is up +38% and diesel is up +51% since the start of their war on Iran.

The Canadian services PMI is still contracting, extending that retreat to five straight months. However, the March shortfall was the least in that period. Inflation accelerated due to rising fuel and transportation costs Employment fell although overall confidence was up to six-month high.

The Singapore economy was still expanding at a moderate pace in March, but there were signs of slowdown. Their PMI dropped to its lowest seen in 2026 so far from softer growth in output and new orders. Input price inflation accelerated to a survey-record (ten year) high.

Singapore's retail sales fell in February from January on a seasonally-adjusted basis, down an unexpectedly large -4.1%. The year-on-year result isn't so relevant this month due to the skewed timing of Chinese New Year.

India's services PMI was still expanding fast in March, although continuing the receding growth trend they have had for more than eight months. Input price inflation climbed to a 45-month high and they had their weakest rise in new business and activity since January 2025. But they also had another strong upturn in services exports.

The UST 10yr yield is now just on 4.34%, down -1 bp from yesterday.

The price of gold will start today down -US$24 at US$4651/oz. Silver is holding at US$73/oz.

American oil prices are up +US$2.50 at just on US$114/bbl, while the international Brent price is up +US$1.50 at just under US$110.50/bbl, and still lower than US prices.

The Kiwi dollar is up +20 bps at 57.1 USc. Against the Aussie we have dipped -10 bps to 82.6 AUc. Against the euro we are unchanged at just on 49.5 euro cents. That all means our TWI-5 starts today up +15 bps from yesterday at just under 61.

The bitcoin price starts today at US$69,614 and up +3.4% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.3%.

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 tomorrow.

US service sector cools, inflation heats up