Weekly market wrap up

While fuel prices have dominated the headlines, the bigger story may be what they are doing to transport choices. Brent crude rose to almost US$120 a barrel as Middle East tensions disrupted shipping through the Strait of Hormuz, a reminder that petrol prices can move quickly when global supply comes under pressure. New Zealand is not short on immediate supply - MBIE said that as at 1 March the country had 49 days of petrol cover, although that total includes fuel held both in-country and on the water. That still does not shield motorists from higher pump prices, and when fuel rises drivers tend to pay closer attention to running costs. Against that backdrop, EV uptake already has a solid base to build from, with New Zealand now passing 100,000 NZ-new BEV and PHEV registrations.

China’s February inflation figures showed a bit more fizz than markets were expecting. Consumer prices rose 1.3% year on year, up from 0.2% in January, beating expectations of a 0.8% increase and marking the strongest annual CPI print in three years. Producer prices remained in deflation at -0.9%, though that was an improvement on January’s -1.4%, hinting that conditions on the factory floor may be becoming slightly less heavy. The timing of Lunar New Year clearly gave demand a seasonal nudge, so this looked more like a welcome pulse than a full rewrite of the story.

In another story centred on oil, but with a different transport twist, Air New Zealand noted this week that airfares are likely to rise as escalating tensions in the Middle East add pressure to airline operating costs. As oil prices move higher, fuel remains one of the largest and most variable expenses on an airline’s balance sheet. When jet fuel costs climb, ticket prices rarely stay grounded for long. For Air New Zealand, operating at the far edge of the global aviation network means fuel costs can play a particularly important role given the long-haul nature of many routes.

US trade data offered a rare bit of better news this week, with the goods and services deficit narrowing to US$54.5 billion in January from US$72.9 billion in December. Exports climbed while imports edged lower, a clear improvement on the December blowout, although the detail suggests this was not all down to some grand economic makeover. A hefty lift in industrial supplies exports, including nonmonetary gold and other precious metals, did some of the heavy lifting, while imports of consumer goods and autos also eased. Coming straight after February CPI, the figures added to a week that felt a touch less messy for the US economy.