International trade tensions look set to shape the second half of 2018, following ''steady'' global economic activity so far this year.
Craigs Investment Partners head of research Mark Lister said several themes had emerged in global financial markets in the first half of the year.
He is picking the US economy to maintain strong growth, but with trouble brewing for Europe and China and expectations of a continued slowing in New Zealand's economy.
''Global economic activity has been steady over the first half of 2018, although the backdrop has certainly changed from synchronised growth to something a little patchier,'' Mr Lister said in a statement.
New Zealand's economy remained ''solid'' but with increasing signs of a slowdown.
Auckland's house prices had again declined during the first six months of this year, while the rest of the country had small gains.
''The big gains of the last decade are certainly behind us,'' Mr Lister said.
While unemployment was at its lowest in a decade, economic growth for the quarter to March was at its equal slowest since 2013.
Migration remained high, but last month had the lowest annual gain since January 2016, Mr Lister said.
Business confidence had been in negative territory for nine consecutive months, the longest stretch in more than 10 years.
This week's release of the New Zealand Institute of Economic Research quarterly survey of more than 4000 businesses was rife with pessimism, mirroring other separate monthly surveys.
However, the country's export sector was picking up some of the slack.
Fonterra was forecasting a milk payout this season of $7, the highest in five years, he said.
Currency weakness was helping push things along, the New Zealand dollar being down against most trading partners, in particular the resurgent US dollar.
''Our currency is down almost 5% against the greenback and is at the lowest levels in over two years,'' Mr Lister said.
He described the New Zealand sharemarket performance as ''again very reliable'', the NZX50 being up 6.5% so far in 2018.
Australian shares also had a solid half, rising 4.3% to a 10-year high and posting their best quarterly performance since 2015 for the three months to June, he said.
While the US economy remained Mr Lister's ''pick of the bunch'', and economic growth in the quarter to June was expected to be strong, economies in the rest of the world looked ''mixed''.
''Trade tensions loom as a big one, globally, while the steady decrease of central bank support will keep markets nervous.''
He said Europe was muddling through its ongoing political drama and China was at present in the firing line over tariffs.
The number of trades on the NZX continued to rise in June, but the values fell as investors were jittery about the prospect of a global trade war, BusinessDesk reported yesterday.
Total NZX trades rose 63% to 299,098 trades in June from the corresponding month last year, the exchange's monthly metrics showed.
However, the total value traded fell 9.9% to $3.4 billion and the daily average value traded fell 5.4% to $168.1 million.
