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TRADE TENSIONS ESCALATE
Trump confirms 25% tariffs on Canada and Mexico effective March 4
Additional 10% tariff to be imposed on Chinese imports
Rationale: Continued concerns over drug trafficking and immigration
Impact: Over $1 trillion of US imports affected
Key vulnerability: Canada and Mexico send 80% of exports to US
Analysis: Expect upward pressure on US inflation figures
US ECONOMIC INDICATORS MIXED
Q4 GDP: Maintained at 2.3% annualized growth
Consumer strength: Personal consumption robust at 4.2% annualized
Investment weakness: Non-residential investment revised down to -3.2%
Inflation signal: PCE deflator excluding food/energy revised up to 2.7%
Manufacturing pulse: January durable goods orders exceeded expectations at +3.1%
Context: Boeing production rebound driving manufacturing figures following strike disruption
NZ BUSINESS CONFIDENCE STRENGTHENS
February ANZ Business Outlook: Confidence index rose to 58.4 from 54.4
Sectoral divergence: Services softening while manufacturing remains robust
Forward indicators: Both hiring and investment intentions increased
Inflation watch: Pricing intentions edged higher
Rate cut anticipation: Businesses optimistic about growth impact of coming monetary easing
Tariff impact assessment: No evidence of US trade announcements affecting local decision-making
AUSTRALIAN CAPEX UNEXPECTEDLY CONTRACTS
Q4 capital expenditure: Volume declined 0.2%
Sectoral breakdown: Mining sector down 0.6%
Investment type: Equipment, plant & machinery investment fell 1.0%
GDP implication: Likely drag on growth figures releasing next week
Context: Follows broader pattern of investment hesitancy
EQUITY MARKETS SHOW DIVERGENCE
US performance split: Dow advances while tech stocks retreat
Earnings spotlight: Nvidia results met revenue targets but raised margin concerns
Regional variation: Continental European markets trended lower
Fixed income: Treasury yields climbed following tariff announcements
Rate expectations: Inflation concerns pushing yields higher
CURRENCY MARKETS FAVOR USD
Dollar strength: Broad-based gains following tariff announcement
Magnitude: USD approximately 0.6% higher against euro and yen
Regional currencies: NZD and AUD experienced slightly larger declines
Current levels: Kiwi trading around 0.565 USD
Technical position: Marginally lower against most major currencies
ECONOMIC CALENDAR HIGHLIGHTS
Today: ANZ consumer confidence expected to show modest improvement
Australia: Private sector credit data releasing this afternoon
Forecast: Monthly growth rate likely edging lower to 0.5% in January
Weekend focus: Canadian Q4 GDP data early Saturday (NZ time)
Critical indicator: US PCE deflator for January (Saturday release)
Market sensitivity: Following higher-than-expected CPI figures earlier this month
Consensus forecast: Core PCE at +0.3% month-on-month
MARKET IMPLICATIONS
Trade policy: Heightened uncertainty for export-oriented economies
Inflation trajectory: Multiple indicators suggesting persistent price pressures
Rate path: Central banks balancing growth concerns with inflation vigilance
Investment strategy: Defensive positioning gaining favor amid uncertainty
Currency outlook: USD strength likely to persist near-term
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