Economy Watch

Kia ora,Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news the US Fed thinks inflation risks outweigh concerns about their labour market.But first. in its familiar yoyo pattern, US mortgage applications fell last week by -1.4% from the prior week, but that makes then +10% higher than the same week a year ago. The softness over the past week is all related to softer refinance activity, even though benchmark 30 year mortgage rates changed little.The US Fed released the minutes of its July meeting and that revealed the stances of the two Trump supporters on th nine-member voting panel. "Almost all" officials supported keeping rates unchanged at 4.25%, with those two dissenting in favour of a quarter-point cut to protect a weakening job market. It seems ironic that they should use that reason, because Trump fired the BLS chief for producing results that showed the American labour market weakening. One of the two, Christopher Waller, is considered the front-runner to replace Powell when his term ends. The two dissenters seem isolated in the group at this time.But that has not stopped Trump supporters making up 'fraud' claims against sitting Fed members in an effort to twist the voting panel.These minutes had no impact on financial markets.There was a well-supported US Treasury 20 year bond tender earlier today that delivered a median yield of 4.82%. That was lower than the 4.89% at the prior equivalent event a month ago.In Canada, a survey of small business owners turned more positive in July - even though their trade association claimed that 38% of them won't last a year without tariff changes.Across the Pacific, Taiwan turned in another very strong rise in export orders, up +15% in July from a year ago. After the +25% rise in June, this remains impressive but is what analysts have now come to expect.In Indonesia, they had a central bank review of their 5.25% policy interest rate yesterday and no change was anticipated. But in fact they cut by -25 bps to 5.00%, the fifth cut over the past year. They are confident inflation will remain contained and are moving to support "the need to stimulate economic growth in line with the economy's capacity".In the UK, their CPI inflation rate rose to 3.8% in July, its highest since January 2024. Driving the rise were cost increases from transport, holidays, food and fuel. These were offset by slower increases in rents (even if they are still rising fast). They have their own twist on the CPI called the CPIH which they emphasise, which adds in owner-occupier housing costs, and that rose 4.2%. That draws in imputed rents, stamp duties, and the cost of maintenance improvements. Either way, they have a sharpish inflation problem.In Australia, AUSTRAC said real estate agents are one of the key to tackling scams, drug trafficking and organised crime. Along with banks and lawyers, real estate agents are going to get more focus on fighting money laundering.The UST 10yr yield is now at 4.29%, down -1 bp from yesterday at this time.The price of gold will start today at US$3,347/oz, up +US$31 from yesterday.American oil prices have stabilised at just over US$62.50/bbl with the international Brent price up +US$1 to just over US$66.50/bbl.The Kiwi dollar is at just on 58.3 USc and down -70 bps from yesterday following the dovish RBNZ MPS. Against the Aussie we have fallen -80 bps to 90.6 AUc. Against the euro we are down -60 bps at 50 euro cents. That all means our TWI-5 starts today at just under 66.1, and down -80 bps.The bitcoin price starts today at US$114,270 and up +0.7% from this time yesterday. Volatility over the past 24 hours has been low at just under +/-0.8%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news commodity prices are taking a hit in global markets today as overall economic prospects are under scrutiny in both the US and China. And Wall Street is following them down, in their case led by tech firms.Prices for both hard and soft commodities are in retreat today, including oil, natural gas, steel, copper, aluminium, wheat, and soybeans. Even bitcoin is falling, down -8.5% over the past week when it hit a recent high note. But not everything.Today's full dairy auction revealed better demand from a wider range of markets than was expected so the declines anticipated were much less, in fact just -0.3% overall. Good buying of WMP and not only from China saw this rise slightly and that limited any overall downside. But there were lower prices for cheese, butter and SMP - lower, but about what was expected for these categories.In the US, housing starts rose a bit more than expected. But the gain was accentuated because July 2024 was unusually weak and that was because for some reason the 2024 bump came in August. Still it was encouraging because analysts had expected a small retreat in July. Still, the general level remains well below the general levels over the prior years. And new building permits were unusually low in July and are now running at their lowest level since June 2020. So the future isn't that bright in this sector.In the rural sector, American farmers are particularly worried about how the Trump Administration is upending their industry, and questions about survivability are arising. Many apparently face bankruptcy.Canadian CPI inflation fell, and by a bit more than expected. It came in at 1.9% in June in a small blip up. It was expected to slip back to a 1.8% rate but in fact came in at 1.7%, the same level it was in April and May. Fuel prices led the decline, but rents rose +3.0% and grocery prices were up +3.4% This will make it tricky for their central bank when they next meet on September 17.Across the Pacific, the top leaders in China have been on vacation and are now starting to return to active front-line duty.Meanwhile, Malaysian exports turned out to be much stronger in July than anticipated. They rose +6.8% in July from the same month a year ago, defying market expectations of a -5% drop. They also revised their June result to be a smaller dip than first reported. Malaysia imports were expected to fall sharply, but in fact held their own.In Australia, the Westpac-Melbourne Institute Consumer Sentiment Index surged 5.7% in August to its highest since February 2022, after a small rise in July. All components rose: family finances compared to a year ago rose +6.2%, while expectations for the next 12 months climbed +5.4%. Views on the economy improved, with the 12-month outlook up +7.6% and the 5-year outlook rose +5.4%, both above historical norms. The time to buy a major household item index gained +4.2%, while unemployment expectations fell -2.4%, still below the long-run level of 129. Their long spell of consumer pessimism may be ending, though sustaining momentum could require more easing. This survey underscores why the second-term Albanese government is riding ever higher in their polls, and the right-wing opposition parties are in disarray.The UST 10yr yield is now at 4.30%, down -4 bps from yesterday at this time.The price of gold will start today at US$3,316/oz, down -US$17 from yesterday.American oil prices have fallen -US$1 to be just under US$62.50/bbl with the international Brent price over US$65.50/bbl.The Kiwi dollar is at just on 59 USc and down -20 bps from yesterday. Against the Aussie we have firmed +20 bps to 91.4 AUc. Against the euro we are down -20 bps at 50.6 euro cents. That all means our TWI-5 starts today at just under 66.9, and down -10 bps.The bitcoin price starts today at US$113,512 and down -2.6% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/-1.5%.Join us from 2pm NZT this afternoon for full overage of the RBNZ OCR decision and the following press conference.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news that attention will now turn to the annual Fed meeting in Jackson Hole, WO. This year Fed boss Powell is not only trying to balance US monetary policy settings between rising inflation pressures and a basically stable (and good) labour market, he also has to contend with a unstable fiscal policies and political pressure, with two and soon to be three voting members who want to appease the "low rate" President. He is earning his keep at present, and this summer forum will be a way for him to make his case.Special attention will be on his comments about rate cut prospects, something markets have mostly priced in for the September 18 meetings. Currently, analysts expect Powell to be coy about his signals for a rate cut.But on the current data front in the US, their housebuilding industry remains quite glum. The NAHB index of sentiment in the sector is near a record low, only worse during one month in the pandemic. And the July retreat was not expected. Builder sentiment has now been in negative territory for 16 consecutive months and their key problem is costs, induced recently by tariff taxes, and keeping new housing basically unaffordable for new buyers.But north of the border, its quite a different situation. Canadian housing starts hit a three year high in July, up +3.7% from June which was also a very strong month. The Canadians are tackling their housing affordability issue with a strong push for more supply. The key gains are with multi-unit housing in Montreal and the Prairie Provinces.It is not something we have reported on before, but India is now releasing monthly unemployment data. Previously it was quarterly and the latest release shows this key metric at 4.2% in July, which is a record low since records started in 1995. Nothing like an expanding economy to pull down the jobless rates.Singapore’s non-oil domestic exports (NODX) fell -4.6% year-on-year in July, reversing a downwardly revised +12.9% surge in June and establishing a yoyo pattern. This marked the third decline so far this year and the steepest contraction since October 2024, due to a fall in non-electronic exports, especially to the US (-48%) but also China -12%). Perhaps more worrying, near neighbours Thailand, Malaysia and Indonesia all bought significantly less in July.In China, the $2 bln trade in dairy products from the EU to China is under investigation by political authorities as part of pressures China is exerting as countermeasures for EU restrictions on China. Now the Chinese are drawing out the pressure with another extension to the probe, due to "complexity" in the case.The UST 10yr yield is now at 4.34%, up +2 bps from yesterday at this time.The price of gold will start today at US$3,333/oz, essentially unchanged from yesterday.American oil prices have firmed slightly to be just under US$63.50/bbl with the international Brent price under US$66.50/bbl.The Kiwi dollar is at just on 59.2 USc and unchanged from yesterday. Against the Aussie we have firmed +20 bps to 91.2 AUc. Against the euro we are also up +20 bps at 50.8 euro cents. That all means our TWI-5 starts today at just on 67, and up +20 bps.The bitcoin price starts today at US$116,576 and down -1.2% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/-1.4%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news consumer hesitations are showing up the world's largest economies.But first, our week ahead will be dominated by Wednesday's RBNZ OCR rate review, one that is widely expected, by both analysts and financial markets, to deliver a -25 bps cut. That will flow though to floating mortgage and savings rates, but it is far less clear it will affect fixed home loan rates given we have had a full range of cuts last week.In Australia this week it will be all about consumer inflation expectations and consumer sentiment.Elsewhere, in the shadow of northern hemisphere vacations, Canada and Japan will release updated CPI data, and there will be a focus on the US Fed, who with guests, will be huddling in Jackson Hole, WY, again. This time the comments from the two Trump-aligned board members will no doubt hog the limelight.All the while, PMI releases will ground us in the real economy.And in the real economy, Chinese retail sales rose +3.7% in July from a year ago, slowing from a +4.8% expansion in June. Markets were expecting a +4.6% gain in July, so this is a disappointment. This latest result is their weakest growth since December 2024.Meanwhile, China's industrial production expanded by +5.7% in July from a year ago, slowing from June’s three-month high of +6.8%. Expectations were for a 5.9% gain so this miss is small. But it is the softest increase in industrial production since last November. That comes after capacity curbs caused by unusually high temperatures and heavy rainfall in some regions.The more important metric of Chinese electricity production saw it rise +3.1% in July from a year ago, a faster expansion than in June. Hydro power was down -9.8% on the same basis, coal power up +4.3%, and nuclear power up +8.3%. The smaller renewals sector's rise was much faster than all of these.And China’s new home prices in the 70 major reference cities dropped by -2.8% in July from a year ago, easing from a -3.2% decline in the previous month. It was the 25th consecutive month of contraction, the softest pace since March 2024. Only five of those 70 cities had any increase, and those were all marginal at best. But then again, so were the dips. For resales, there were no cities showing any year-on-year gains and only one (Taiyuan, in Shanxi province) with a monthly gain.Overall, it’s a picture of a slightly slowing Chinese economy across all sectors and that will tell Beijing that its stimulus efforts so far are insufficient to keep up with the forces that are dragging it slower. But Beijing is calling the economy 'steady'.And staying in Asia, Malaysia’s economy expanded by +4.4% year-on-year in the June quarter, matching the pace in Q1 and slightly below the initial estimate of +4.5%.In the US economy, retail sales rose +0.5% in July from June, as expected and following an upwardly revised 0.9% rise in June. This was largely due to car buying. They are up +3.9% from a year ago but that gain has been falling from the recent +5.1% peak in March. Although tariff-taxes account for most of the gain, overall there is a small real gain here. However without cars, this would look quite negative.In the New York region, they saw a modest rise in business activity in their factories in July based on rising new orders.And that is supported by national industrial output data. While American industrial production edged down -0.1% in July, missing forecasts of a flat reading and following an upwardly revised +0.4% rise in June, the decline was only because the mining sector was weak. Factory output, which makes up about 78% of total industrial production, edged up +0.1% in July, after increasing +0.3% in June. From year-ago levels it is up +1.4%, similar to most of 2025.Not so positive is American consumer sentiment and they don't like what they see ahead. The University of Michigan consumer sentiment August survey fell sharply from July and well below what was expected. It was the first fall in four months, mainly due to growing inflation concerns and sharply worse buying conditions for durable goods. Those surveyed anticipate worsening inflation and unemployment ahead. Overall this survey is more than -13% worse than year ago levels.And in Europe, data released over the weekend shows that Ireland's exports to the US dropped by almost a quarter in June compared to a year ago. Tariffs got the blame. (But they were able to reorient about half of that drop to the UK.)More globally, we should note that international shipping costs are starting to be roiled by the new Trump rule of tariff-extras/extra port fees for Chinese-made ships that dock there that comes into effect in five weeks. That will raise freight costs for Americans, and with extra capacity in other trades, probably bringing lower costs elsewhere.The UST 10yr yield is now at 4.33%, up +1 bp from Saturday at this time, up +4 bps for the week.The price of gold will start today at US$3,334/oz, unchanged from Saturday, but down -US$61 for the week.American oil prices have firmed slightly to be just over US$63/bbl with the international Brent price over US$66/bbl.The Kiwi dollar is at just over 59.2 USc and unchanged from Saturday. But it is down -40 bps from a week ago. Against the Aussie we have dipped -10 bps to 91 AUc. Against the euro we are holding at 50.6 euro cents. That all means our TWI-5 starts today at just on 66.8, down -10 bps from Saturday and down -½c for the week.The bitcoin price starts today at US$117,422 and down -0.3% from this time yesterday. But up +0.5% from a week ago. Volatility over the past 24 hours has been low at just under +/-1.0%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news tariff-costs seem to be having much more impact on US prices than on global trade.But first, US initial jobless claims rose slightly last week to 199,000 but that was slightly lower than seasonal factors would have accounted for. There are now just over 2 mln people on these benefits, +100,000 more than at the same time last year.However, rising much more were producer prices. They are up +3.3% in July from a year ago, a jump from June's +2.4% and much higher than the expected +2.5%. This ends a period where these costs eased since February with a notable reversal. The month-on-month rise was outsized and we make that the largest non-pandemic jump since 2012. This data is having traders re-think their bets on the September 18 US Fed rate review. Currently they expect a -25 bps cut, despite White House pressures. They have two more -25 bps cuts priced in through to january 2026, so maybe some of those could get reassessed. Today's PPI data may signal the tariff-induced inflation is only just starting.In China, they are wrestling - endlessly it seems - with how to staunch the property development sector's bleeding. The latest idea is that Beijing's SOEs but up the unsold housing overhang.India's exports rose in July, but their imports jumped much more so their trade deficit worsened and is much more negative than it was a year ago for the same month.Meanwhile, S&P have upgraded the Indian sovereign credit rating to 'BBB' from 'BBB-' and changed the outlook to stable from positive. It said the upgrade was based on economic resilience and sustained fiscal consolidation. They noted the strong growth momentum, said monetary policy was credible, and added that the impact of Trump’s tariffs should be manageableIn Australia, one of their largest superannuation funds failed to tell regulator ASIC about investigations into serious member services issues, including incorrect insurance premium refunds for dead members. This is part of what ASIC is alleging in an Australian Federal Court suit launched yesterday.And staying in Australia, their jobless rate eased to 4.2% in July, down from the four year high of 4.3% in June. The decline was driven by a drop of 10,200 in the number of unemployed, bringing the total to 649,600. Meanwhile, employment rose by +24,500 to a record high of 14.6 mln following a downwardly revised gain of +1,000 in June. Full-time employment rose by +60,500 while part-time positions fell by -35,900. Female participation hit a record high of 63.5%.Global container freight rates fell in a broad shift lower to be down -3% last week from the prior week and down -59% from year ago levels. Those year ago levels were an unusually high benchmark due to Red Sea security factors back then. Bulk freight rates were little-changed over the past week, but are +20% above year ago levels.The UST 10yr yield is now at 4.28%, up +5 bps from yesterday at this time. The price of gold will start today at US$3,335/oz, down -US$17 from yesterday.American oil prices have risen +US$1.50 to be just under US$64/bbl with the international Brent price up a bit less at US$66.50/bbl.The Kiwi dollar is at just under 59.1 USc and down -60 bps from yesterday. Against the Aussie we are down -20 bps at 91.1 AUc. Against the euro we are down -20 bps at 50.8 euro cents. That all means our TWI-5 starts today at just on 66.9, down -40 bps from yesterday.The bitcoin price starts today at US$117,741 and down -3.1% from this time yesterday. Volatility over the past 24 hours has been moderate at +/-2.6%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Kia ora,Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news of a rare drop in bank lending in China from weak demand.But first up today, we need to report that "due to a technical issue", yesterday's GDT Pulse Auction was cancelled prior to its completion.Meanwhile in the US, and boosted by a very sharp surge in refinance activity, mortgage applications were up more than +10% last week from the week earlier. Refi clients too advantage of a small -10 bps dip in the benchmark interest rate. But applications to finance a new home purchase actually fell last week from the prior week. Still, that is +16% higher than year-ago levels.The Trump Administration is increasingly worried about the outlook for their economy. Tariff costs are choking off expansion. We will get a GDPNow update of economic activity later this week, but it is likely to be quite soft. Now Treasury Secretary Bessent is calling for a -150 bps rate cut by the Fed to counter the expected decline, and telling them to ignore the building inflation.In Japan, machine tool orders rose +3.6% in July driven by stronger export orders.In China, there has been an unexpected surprise in the release of their bank lending data for July released overnight. It actually fell for the first time in more than twenty years. It fell -¥50 bln in July from the prior month. A +¥300 bln increase was expected. July is often a shadow month after the quarter end, but actual declines are almost unheard of in the modern era. Overall social funding rose, but that is bolstered ny economic support measures. That commercial firms are borrowing less is undoubtedly not a trend Beijing wants to see.The slowdown domestically, and severe overcapacity has seen Chinese steel products dumped in international markets. More countries like Japan and South Korea are considering anti-dumping actions against Chinese steel, while India has several probes underway. Chile has imposed temporary anti-dumping tariffs to protect its steel industry. These moves come after the US and Canada imposed their restrictions. These actions against Chinese steel will no doubt get more strident unless China removes a meaningful proportion of its overcapacity.That makes Australia vulnerable.Australia imports a significant amount of steel from China (more than AU$4 bln/year), with structural steel being a major category. And this is rising and a threat to local steel mills. Australia is in a tough spot dealing with China on the issue because their iron ore exports are the main Australian advantage (about AU$100 bls/year). And quality is another advantage of local steel products. There are rising concerns about the quality and compliance with Australian standards of some imported Chinese steel products.New owner-occupier loan values in Australia were up +7.2% in June from the same quarter in 2024. But the number of new loans was up only +0.2% on the same basis. This reflects the frothy housing markets in many state capital cities. The biggest value increases were for owner-occupiers who weren't first home buyers with these loan values up +9.8%. Volumes for that group were up+1.0%. First home buyers in Australia are the weakest borrowers, largely shut out of their housing markets.The UST 10yr yield is now at 4.24%, down -5 bps from yesterday at this time.The price of gold will start today at US$3,353/oz, up +US$6 from yesterday.American oil prices have fallen another -US$1 to be just under US$62.50/bbl with the international Brent price now at US$65.50/bbl.The Kiwi dollar is at just under 59.7 USc and up +10 bps from yesterday. Against the Aussie we are also up +10 bps at 91.3 AUc. Against the euro we are holding at 51 euro cents. That all means our TWI-5 starts today at just on 67.3, up +10 bps from yesterday.The bitcoin price started today at US$121,559 and up +1.9% from this time yesterday. Volatility over the past 24 hours has been modest at +/-1.3%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news inflation is staying high in the US but retreating in India and Australia.The US CPI inflation rate remained at 2.7% in July, the same as in June and below forecasts of 2.8%. Still it is worth noting that June's level caused Trump to fire the bearer of that news. But the level has been held anyway. Food prices also were steady at +2.9%. Meanwhile, core inflation, which excludes food and energy, accelerated to a five-month high of 3.1%, compared to 2.9% in June and above forecasts of 3%. The monthly core CPI went up +0.3% as expected, its sharpest rise in six months.Apparently, importers were still absorbing most of the border tariff taxes.The new head of the agency responsible for this data (a Heritage Foundation official) has suggested they stop publishing monthly jobs data, especially for jobs, until "errors can be corrected". (Code for, what the White House wants.)What today's inflation data means for a Fed rate cut is still uncertain - for some. Equity markets are betting this "as expected" result will allow one and their bets are now 90% certain a cut will come on September 18 (NZT). Bond markets are a bit more sceptical. Currency markets remain bearish on the USD.Record expected corn production in the US, and closing international appetites for politicised trade uncertainties brought a swift fall in corn prices. The same USDA WASDE report says beef prices are rising in lower tariff-induced imports from Brazil and lower domestic production. US milk prices are little-changed but they expect to import more SMP.The US NFIB Small Business Optimism Index rose in July from June but it still not back to levels of earlier in the year. This latest rise is all about current outcomes rather than future conditions. The uncertainty subcategory was still high and rising.The US government posted a -US$291 bln budget deficit in July, despite a +US$21 bln boost in border tariff collections from importers, as spending outpaced revenues. The shortfall was US$47 bln larger than a year earlier, with receipts rising +2% to US$338 bln but outlays jumping +10% to a record US$630 bln for the month. The unexpected worsening seems to have been ignored by equity markets who 'liked' the inflation result.But the bond market is bracing for the impact of an additional US$500 bln in Treasury Bond issuance over the next six months. Benchmark yields rose.In Canada, a sharper than expected fall in Vancouver multi-unit house building permits, along with a sharper than expected fall in Toronto commercial building, has seen the Canadian building permit levels in June retreat much more sharply than expected. This retreat comes after an unusually strong gain in May however.In India, CPI inflation is retreating rapidly now, coming in in July at only 1.6% fron a year ago. In June it rose 2.1%. The July level is almost as low as the all-time low of 1.5% in June eight years ago. In the latest data, food prices deflated -1.8% and this was by far the major reason for the overall easing. The result is now well below the RBI inflation tolerance band of 2-6% so official rate cutting may come into play. But arguing against that is the record weakness on the Indian rupee.In Germany, ZEW Indicator of Economic Sentiment fell back for the first time in four months, mainly on the disappointing outcomes in the EU-US tariff 'negotiations'. But overall sentiment remain relatively high there in a long term perspective.In Australia, and in a unanimous decision, the nine member Reserve Bank of Australia Monetary Policy Board has cut its cash rate target by -25 bps to 3.60%, saying a further easing of monetary policy is appropriate after a pause at its last review in July. Most banks announced they would pass it on in full to home loan borrowers. Lower inflation tracks are behind the official rate cut.The UST 10yr yield is now at 4.29%, up +2 bps from yesterday at this time. The price of gold will start today at US$3,347/oz, down -US$7 from yesterday.American oil prices have softened -50 USc to be just under US$63.50/bbl with the international Brent price now at US$66/bbl.The Kiwi dollar is at just under 59.6 USc and up +20 bps from yesterday. Against the Aussie we are up +10 bps at 91.2 AUc. Against the euro we are down -10 bps at 51 euro cents. That all means our TWI-5 starts today at just on 67.2, unchanged from yesterday.The bitcoin price started today at US$119*,329 and down -0.2% from this time yesterday. Volatility over the past 24 hours has been low at +/-0.7%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news the US is deploying new shakedown tactics on its exporters to give some favoured tech companies tariff and national security export relief - if they pay.However first, China's vehicle sales were up almost 15% in July from a year ago, following a nearly +14% rise in June. That means they sold 2.6 mln units in July. The sales pace is running far higher in 2025 than the record pace in 2024, but the really large sales months don't come until late in the second half of the year. Sales of new energy vehicles surged 27% year-on-year to more than 1.25 mln units in July, accounting for nearly half of all new car sales and marking the fifth consecutive monthly increase.Hong Kong listed Chinese property developer, China South City Holdings, has been suspended after a Hong Kong court ordered its winding up. That ends a years-long process of attempting to survive through reorganisation and emphasises how tough the Chinese property development market is still.In India, there are reports their central bank is in the markets supporting the falling rupee. So far they have spent US$5 bln on the operation to no obvious impact, although it may have helped slow the devaluation.In the US, the Federal Government is finding new ways to tax. First it was tariffs (import taxes), now it is export taxes. It is extracting 15% from chip sales, starting with exports to China. These shakedown of corporate America come with waiving tariffs or national security export restrictions, giving the company advantages over its rivals. Very Soprano. It is a habit sure to spread, ushering in a period of hyper crony-capitalism - one that may be indistinguishable from capitalism-with-Chinese-characteristics. The Chinese at least are trying to wean themselves off the habit, because it led them nowhere.Tomorrow, the US will release its CPI data. And after the firing of its agency head last month because Trump didn't like the result, this will draw special scrutiny, especially as tariff costs are increasingly being passed on. The key reaction to watch will be how TIPS bonds are prices (Treasury Inflation Protected Securities). The CPI rate is the basis for these yields and it they are going to be artificially interfered with, investors may sell down this US$2.1 tln bond market corner. If that happens, we will all notice. Markets expect the 2.7% CPI rate in June (the one Trump didn't like) to rise to 2.8%, and the core rate to hit 3% - for the first time in five months and calling an end to the disinflation cycle and the start of re-inflation.Later today we get the RBA's latest rate decision. It almost certainly will announce a cut of -25 bps to 3.60%. And before that the wide-watched NAB business sentiment survey will be released. It isn't expected to show much change from the modestly positive readings.And as important as today's announcements will be, don't forget tomorrow CBA will release its annual 2025 results to June. And they are widely expected to be a record exceeding AU$10 bln. It is ranked in the mid 40s on an assets basis, but it is one of the worlds most profitable.The UST 10yr yield is now at 4.26%, down -2 bps from yesterday at this time. The price of gold will start today at US$3,354/oz, down -US$44 from yesterday.American oil prices have firmed +50 USc to be just under US$64/bbl with the international Brent price now at US$66.50/bbl.The Kiwi dollar is at 59.3 USc and down -20 bps from yesterday. Against the Aussie we are also down -20 bps at 91.1 AUc. Against the euro we are unchanged at 51.1 euro cents. That all means our TWI-5 starts today at just on 67.2, down -10 bps from yesterday.The bitcoin price started today at US$119,552 and up +0.8% from this time Saturday. Volatility over the past 24 hours has been modest at +/-1.7%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news geopolitics will suck up all the headlines this week, but we will focus on how the world's economies are faring.This coming week will have a focus on Australia, and the RBA's Tuesday cash rate target review. "Everyone" expects them to cut by -25 bps to 3.60% - the more so because they skipped the expected cut at their July 9 review. There will be interest in the NAB business sentiment report this week tooIn the US, the economic focus will be on CPI, PPI, retail sales and industrial production data. Market analysts aren't expecting to see much expansion and are expecting to see higher inflation. There will also be another consumer sentiment survey released this week too.In Europe it will be all about GDP and sentiment updates. In Japan, we get to learn their Q2 GDP result. In India the focus will be on inflation updates.In China there will be some big data released including for industrial production, retail sales, and new bank lending.Over the weekend China released its July CPI data. It rose +0.4% from June, to be unchanged from a year ago. They are being suppressed by Beijing's subsidy programs. Food prices fell marginally in the month to be -1.0% lower than a year ago. Beef prices however rose +3.6% on that annual basis, sheepmeat prices fell -1.4%, and milk was down -1.3%.Meanwhile overall producer prices deflated quicker, down -3.6% from a year ago. Producer purchase prices were down -4.5%, taking it to almost three years of continuous monthly declines. That's serious deflation.More globally, the July world food price index inched higher, but that masks record higher prices for meat proteins. And those were driven by beef and sheep prices. Dairy prices eased back from June but only slightly and they remain very near record levels.Canada released its July labour market report over the weekend showing 1.6 mln people unemployed for a jobless rate of 6.9%. That's high even if it is stable, and the number of people employed fell by -40,800, with a drop of -51,000 in full-time jobs and a rise of +10,000 in part-time jobs. The decline was mostly among 15-24 year olds. Markets had expected overall employment to rise by +13,000.In Japan, June data for household spending rose +1.3% from the same month a year ago, down sharply from a +4.7% increase in May. Forecasts were for a +2.6% rise. Households were worried about the impact of US tariffs and persistent inflation on consumer activity. On a monthly basis, spending plunged -5.2% in June from May, reversing May’s +4.6% rise and undershooting expectations of a -3% correction.And staying with Japan, they agreed with the US on a 15% "reciprocal" tariff. But Trump issued an executive order to charge 25% in a pique of retribution for slights no-one can quite understand. The Japanese have called them out on it, insisting they honour the negotiated deal. Now Bessent and Lutnick have agreed to not only correct the "administrative mistake" but refund the capricious tariff charges. The Japanese are back with the same deal as the EU has.Taiwan's export performance continues to astound. Exports from the island nation surged +42% in July from a year ago to a record US$56.7 bln, following the +34% increase in June. They were expecting 'only' a +29% rise on this basis. by any measure this strength is quite remarkable. It is all built on electronics. Taiwanese imports were up +21% on the same basis.In the US the appointment of Stephen Miran to fill a temporary vacancy as a board member of the US Federal Reserve adds in a protectionist sceptic to the voting mix. He is no fan of central bank independence. But oddly he has railed against the 'revolving door' of its members moving between Whitehouse/Treasury positions and the Fed governorships. He has now become exhibit A.An global reinsurer SwissRe says 2025 is shaping up to incur weather and climate losses exceeding US$150 bln, after a record $80 bln in the first half. That would make it its costliest year since 2011 (when the NZ and Japanese earthquakes occurred), but by far the costliest for just climate impacts.We should also note an AFR report that French dairy giant Lactalis, is the leading bidder for Fonterra’s Mainland business after being granted exclusivity to negotiate for a buyout. They got the nod with a price rumoured to be something less than $4 bln.The UST 10yr yield is now at 4.28%, down -1 bp from Saturday and up +6 bps for the week.The price of gold will start today at US$3,398/oz, up US$3 from Saturday. But that has built to a +US$51 gain for the week, or up +1.5%. The uncertainties swirling around the new US tariff ruling are flowing through the New York gold price. Meanwhile the White House called the news 'misinformation' even though their agency had published to tariff ruling.American oil prices have slipped back again, down -50 USc to be just under US$63.50/bbl with the international Brent price down at just over US$66/bbl. These are more than -US$3.50 lower than week-ago levels.The Kiwi dollar is at 59.5 USc and down -10 bps from Saturday, up +½c from a week ago. Against the Aussie we are up +10 bps at 91.3 AUc. Against the euro we are unchanged at 51.1 euro cents. That all means our TWI-5 starts today at just on 67.3, unchanged from Saturday and up +20 bps from this time last week.The bitcoin price started today at US$118,561 and up +1.5% from this time Saturday. Volatility over the past 24 hours has been modest at just on +/-1.1%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with we are ending the week with Wall Street not finding much to like about future trade prospects, especially as policy shifts seem to be highly chaotic and involve personal retributions.US initial jobless claims rose last week to +195,000 when seasonal factors indicated it would fall. There are now just over 2 mln people claiming these benefits. This time last year there was just over 1.9 mln, a rise of +99,000.American consumer inflation expectations for the year ahead rose to 3.1% in July from 3% in June. This was held back only because of the widespread perception that petrol prices would fall. The median year-ahead expected change in food prices remained unchanged at 5.5%. Looking further ahead inflation expectations in fives rose to 2.9% from 2.6%.Meanwhile Q2 American labour productivity improved in data released today. It rose by 2.4% in the quarter following a revised -1.8% drop in the prior period. Analysts expected a +2% increase. Output increased by 3.7% (vs -0.6% in Q1) and hours worked increased by 1.3% (vs 1.2%).The US agricultural sector used to be a powerhouse export driver. But no more. Data released yesterday shows it has turned into a net importer, a trend that started in 2018 in the first Trump presidency. The first half of 2025 has now recorded its largest deficit on record, mainly on stuttering exports.Meanwhile, American consumer credit rose in June but only modestly. Total consumer credit rose by just +US$7.4 bln in the month, up from a +US$5.1 bln in May. These are minor changes and don't indicate any impending credit stress.Across the Atlantic in a tighter than expected vote, the Bank of England cut its policy rate by -25 bps to 4.0%. They have inflation running at 3.6% with a target of 2%. Five of the nine voting members voted for the cut, four wanted no-change. This was much closer than the 7:2 vote expected.In China, they are not only subsidising trade-in programs to help juice their domestic economy, now they are subsidising interest rates on personal loans. Consumer credit has not been traditionally popular in China, but young people are signing up much more freely. It is a sector that may grow to hold financial stability risks.Standard & Poor’s have affirmed China's sovereign credit rating at A+ Stable. China's government gets a AAA rating from its own domestic ratings agencies, but Beijing was pleased anyway with the S&P result.Container freight rates fell -3% last week from the week before to be -58% lower than year-ago levels, although to be fair those were an unusual peak. Outbound from China was again the main weakness although outbound from the US is now showing up as a weakening trade too - and that starts with very low rates anyway. Bulk cargo rates were essentially unchanged over the past week and are now +18% higher than a year ago.The UST 10yr yield is now at 4.25%, up +3 bps from yesterday. The price of gold will start today at US$3,391/oz, up US$17 from yesterday.American oil prices have slipped back again, down another -US$1 to just on US$64/bbl with the international Brent price down at just over US$66.50/bbl.The Kiwi dollar is at 59.5 USc and up +10 bps from yesterday. Against the Aussie we are up +20 bps at 91.5 AUc. Against the euro we are up +10 bps at 51.1 euro cents. That all means our TWI-5 starts today at just on 67.3, up +20 bps.The bitcoin price started today at US$116,442 and up +0.8% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/-1.1%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.