Weekly market wrap up

New Zealand inflation accelerated in the June quarter, with the CPI rising 1.5% over the quarter and annual inflation lifting to 4.1%, up from 3.1% in March and slightly above the RBNZ's 3.9% forecast. At first glance, it looked like inflation had taken another decisive step higher. A closer look told a more nuanced story. Petrol prices jumped 20.1% over the quarter and diesel surged 47.7%, together accounting for almost two-thirds of the quarterly increase in the CPI. Strip those two components out and annual inflation was a much more subdued 2.9%, while other underlying measures also remained closer to the middle of the Reserve Bank's target range. The result is still likely to keep further OCR increases firmly in the conversation. For now, the inflation story remains heavily influenced by higher fuel costs, but energy shocks rarely stay confined to the pump. 

The European Central Bank left interest rates unchanged at 2.40% this week, but there was little sense of complacency in the accompanying message. Policymakers acknowledged that inflation remains vulnerable to higher energy prices, with the ongoing conflict in the Middle East adding another layer of uncertainty to the outlook. Rather than signalling where rates might head next, the ECB stuck to its now familiar meeting-by-meeting, data-dependent approach, keeping its options open as it watches whether higher energy costs spread more broadly through the economy. For markets, the decision was less about today's interest rate and more about tomorrow's possibilities. 

Google received an €890 million (NZD1.75 billion) fine from the European Commission this week for breaches of the Digital Markets Act. Regulators found the company favoured its own services in search results and restricted app developers from directing customers to alternative purchasing channels. The case highlights a growing challenge in the digital economy. Many businesses rely on search engines, app stores and online marketplaces to reach customers, yet those same platforms often set the rules of engagement. The relationship can sometimes resemble renting a shop where the landlord also sells competing products next door. For markets, it is another sign that competition policy is increasingly following commerce into the digital world. 

The United States unveiled a fresh round of tariffs this week, introducing duties of between 10% and 12.5% on imports from its trading partners. The measures follow a US investigation into how countries prevent goods linked to forced labour from entering their supply chains. New Zealand has been placed at the 12.5% rate, though a number of products remain subject to separate exemptions or trade arrangements. For local exporters, the immediate challenge is less about the size of the increase and more about another change to the rules of engagement in a major market. Tariffs can affect pricing, margins and competitiveness, while repeated changes make planning that much harder. The latest move is also a reminder that modern trade policy now reaches well beyond traditional arguments about imports and exports, touching labour standards, supply-chain oversight and market access.