The RBNZ showed no rush around rate cuts whatsoever overnight and included the most telling central bank sentence this year in the press release. “However, services inflation is receding slowly, and expected policy interest rate cuts continue to be delayed. “

This is exactly the vibe we are sharing. No reasons to postpone rate cuts keep showing up. First, it was wages, then it was rents and now it is potentially freight rates and a return of goods-flation (at least the BoE has referred a lot to that).

The Shanghai Containerized Freight Rates Index (covering 16 export routes) is already past peaks seen earlier this year, and judging from futures and anecdotal reports, it is not out of the question that spot prices could reach 2021/2022 this summer. No news (from Gaza) is bad news for shipping-flation as the supply side remains constrained due to a lack of safe shipping lanes, while the demand side seems to be doing OK.

Chart 1: Rising freight rates (again)