Economy Watch

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. Today we lead with news bankrupt US/Israeli decisions to choose war over peaceful pressure are having global consequences. But first, the Federal Reserve Beige Book for February reported that overall US economic activity increased at a slight to moderate pace in seven of the twelve Federal Reserve Districts, while the number of Districts reporting flat or declining activity increased from four in the prior period to five in the current period. This is not a review that found strong growth. US jobless claims rose last week by +18,000 from the prior week to 213,000 but most of that can be accounted for by seasonal factors. There are now 2.21 mln people on these benefits, similar to this time last year, but significantly higher than the 2024 levels. February announced job cuts were lower than in January, but together the first two months have been almost as high as the equivalent 2025 levels. This survey also tracks hiring plans and that is down more than -50% from last year. Tomorrow the February US non-farm payrolls will be released and analysts expect a low +59,000 gain. That would be half the +130,000 January level, itself historically low. According to AAA monitoring, average petrol prices (91) in the US are now US$3.25/gal (NZ$1.46L / AU$1.23/L) This is up +9% from US$2.98/gal a week ago, up from US$2.89/gal a month ago, or a +12.5% rise. US natural gas prices are up +7.2% over the same time-frame but to be fair are still very low. But in Europe, these prices are up +70% (in the UK) and up 53% (in Germany) for example. In India, natural gas prices have tripled for many users over the past few days. It is natural to wonder what Trump would say if the EU (or India) took unilateral actions that imposed similar cost jumps on the US. It is no longer safe to be a 'friend' of the US, or any country that pursues policies that "put me first". American policymakers are scrambling to assess a wide range of materials where access is at risk. And institutions more broadly are doing the same. We need to start keeping a closer eye on supply chain pressures. The NY Fed's February monitoring shows it elevated but nothing like the pandemic period, although not yet accounting for the current stresses. Taiwanese industrial production rose +28.5% in January from a year ago, no surprise given the export order data we have been noting. But it is their sharpest rise in at least a decade, probably longer. However, things are not positive for Taiwanese retail sales; they actually decreased in January. But this was entirely due to Chinese New Year falling in a different period this year. Singapore retail sales data for January also got twisted by the holiday timing. The Malaysian central bank kept its policy rate unchanged overnight at 2.75%, saying inflation there is well contained. But they are worried about Middle East conflict effects. China said it is lowering its growth target - slightly. Premier Li Qiang is set to announce a "around 4.5 to 5%" target while delivering the government work report, a key policy document, at the opening session of the National People's Congress later today. The departure from the "around 5%" growth target for the past three years signals the start of a period of slower expansion in China. A big focus is on stabilising their moribund real estate markets. 'Stabilising' will undoubtedly mean subsidies and incentives to unlock buyer interest in the sector again. That will be a hard ask, given the widespread pain still in recent memory. EU retail sales rose +2.3% in January, although slightly less in the Euro Area. In Australia, household spending rose +4.6% in January from a year ago, the slowest pace since late May, following a +5.0% rise in December. This was a smaller increase than expected. Global container freight rates, which had been falling every week in 2026 so far, turned +3% higher last week as the early signs of the Middle East pressures started to mount. Outbound China rates are up +10% for the week. However, they are still -23% lower than year-ago levels. It might be different when this week’s data is released next week, of course. More currently, bulk cargo rates are up +6% for the week. Shipping traffic in the Straits of Hormuz has ceased altogether. (Live here.) And we should note ships outside the Strait are under attack too, so the conflict stresses are spreading. New Zealand and Australia have significant food exports into the Middle East region, and they are now disrupted. We noted the sharp rise in fertiliser costs yesterday and more broadly, that is bringing warnings of food shortage consequences. And as if these crises aren't enough, overshadowed is the Blue Owl private credit car crash in the US, and the wider concerns about their risky loans. Some insiders are now talking about a consequential "bank run" being caused by this. The UST 10yr yield is now just on 4.14%, up +6 bps from yesterday.  The price of gold will start today down -US$71 from yesterday at US$5076/oz. Silver is down -US$2 at US$82/oz today. American oil prices are up more than +US$5.50, up +7% in a day, at just under US$79.50/bbl, while the international Brent price is down the same to be now just on US$84.50/bbl. The Kiwi dollar is down -40 bps against the USD from yesterday, now just on 58.9 USc. Against the Aussie we are up +20 bps at 84.1 AUc. We are down -30 bps against the yen. Against the euro we are down -10 bps at 50.9 euro cents. That all means our TWI-5 starts today down -30 bps, now just over 62.6. The bitcoin price starts today at US$71,316 and down -2.6% from this time yesterday, although holding on to a large part of yesterday's rise. Volatility over the past 24 hours has been moderate at just on +/- 2.1%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we’ll 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. Today we lead with news both China and the US have parallel PMI surveys and this month each told wildly different stories about how their February economies were tracking. But first, after flat-lining in each of the past four week, US mortgage applications rose notably last week, driven by strong refi activity, covering continuing weak new home purchase applications. The US ADP employment report shows a gain of +63,000 jobs in February, the most since July, following a downwardly revised +11,000 rise in January. Analysts were anticipating a gain of +50,000. But all the gains were in the education and health sectors, and only in small (sub 20 employee) companies. As a result, the data shows data shows no widespread pay benefit from changing jobs. In fact, the pay premium for switching employers hit a record low in February. The ISM February services PMI for the US expanded more than expected to its best level since July 2022 with gains in all subcategories. Meanwhile the parallel S&P Global/Markit services told a quite different story, with the expansion in that sector falling to its lowest level since April 2025 amid a weaker rise in sales. In Taiwan, their exporting miracle has extended with export orders soaring +60% to a new record of US$77 bln in January, besting market expectations of a +51% surge and accelerating from a +44% gain in December. Yes, electronics drove the rise, but they also had strong rises in chemicals, textiles, and metals. Orders poured in from the US, the EU and from China. Export orders a year ago at US$48 bln were not weak, so this is truly an astounding trend. In China, their official February PMI's were dour affairs, even for them. Both the factory and service sector reports revealed contractions in the month, the factory sector worse than in January, their services sector a slightly less contraction than in the previous month. But in complete contrast, the private S&P Global/RatingDog surveys found something different, strong expansions in both sectors. New orders drove the factory one to its best expansion in five years, they say. and new business drove their services expansion to its fastest pace in nearly three years. In Europe, producer prices rose quite sharply in January from December, but most of that was retracing a sharp December fall. Year-on-year they are down -2.1% although most of that fall was earlier in the year. Australia reported that its economic activity rose +2.6% in Q4-2025, compared to the same period in 2024. Analysts had expected it to rise +2.2% on that basis, so it was a very positive outcome. GDP per capita increased for the fourth consecutive quarter and is now +0.9% higher than a year ago, the highest year-on-year growth since December 2022. For the full 2025, this is +2.0% (real) higher than calendar 2024. Compensation of employees rose +6.5% in the year. The household saving to income ratio increased to 6.9%, up from 6.1% in the September quarter. This ratio is now at its highest level since the September quarter 2022. All this data is 'real' after inflation. And we should note that the aluminium price surged overnight as Persian Gulf refineries declared force majeure on their orders due to the US/Israeli attacks in the area and Iran's response. The same tensions are forcing up fertiliser prices sharply. Urea prices have jumped +11% in one day. Australia imports two thirds of its urea from the Middle-East. The same ratio applies to New Zealand. And despite the "Trump guarantee" and promises of naval protection, if you can get it, insurance costs for shipping in the Persian Gulf has soared by +1300%. Insurers are completely dismissing Trump's 'promises'. The UST 10yr yield is now just on 4.08%, up +2 bps from yesterday. The price of gold will start today up +US$30 from yesterday at US$5147/oz. Silver is up +US$1 at US$84/oz today. American oil prices are down -US$2 at just over US$74/bbl, while the international Brent price is up the same to be now just over US$81/bbl. The Kiwi dollar is up +50 bps against the USD from yesterday, now just on 59.3 USc. Against the Aussie we are up +10 bps at 83.9 AUc. We are up +40 bps against the yen. Against the euro we are up +30 bps at 51 euro cents. That all means our TWI-5 starts today up +40 bps, now just on 62.9. The bitcoin price starts today at US$73,236 and up +8.4% from this time yesterday. Volatility over the past 24 hours has been very high at just on +/- 4.0%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we’ll 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. Today we lead with news inflation spike fear is gripping financial markets today as equities fall, bond yields rise, some key commodities like the oil price are spiking, and there is a sharp move toward perceptions of financial 'safety' which is hurting commodity-based currencies like the AUD and the NZD. The fear is based on seeing central banks hiking policy rates to weight against a looming inflation spike, just when economic activity is likely to weaken sharply on the consequences of Trump's wars. The fear is stagflation on steroids. It is affecting investors from New York to Shanghai. And now Trump is blaming friends (Spain, the UK) for not being supportive enough and threatening new trade restrictions. But it isn't universal - yet anyway. First up today, there has been another very good dairy auction overnight, the fifth positive one in a row, delivering prices up overall by +5.7% un USD terms. With the falling NZD, prices are up +8.4% in NZD. Our charts tell the story overall and in product detail. Basically prices are now back to the high 2025 levels in both USD and NZD terms. Yes, analysts will be reaching for their pencils to reassess the season's payout forecast, although we should caution that we are well past the peak of the milk flows - and that volumes offered and sold overnight are falling away seasonally. More broadly, in the US overnight, the February US Logistics Manager survey showed pressure on their system with rising inventories and strained capacity. Meanwhile the RealClearMarkets/TIPP Economic Optimism Index retreated in March from February, and delivering a decline when an rise was expected. This is largely because personal investor sentiment fell sharply as confidence in US government economic policies slipped away. In the Middle East, only one tanker, a Singaporean one, has managed to traverse the Straits of Hormuz in the past day. It's essentially closed still. Insurers have cancelled policies. Now the US says it is considering providing that, at taxpayer expense. The costs of war are broad. The scheduled meeting between Chinese President Xi and US President Trump is still on for the end of March. Given the unhinged policy-making by the US, it is a lottery on how this will play out. Trump will undoubtedly look for short-term, face-savings wins. Xi will be playing a much longer game. Meanwhile, China is putting the finishing touches to its latest five-year plan. We are approaching the rubber-stamp set piece. In Europe, the Euro area inflation rate rose to 1.9% in February, up from 1.7% in January. Although minor it was an unexpected rise. And that pushed core inflation up to 2.4% in February. Given the global rise in uncertainty, and the US/Israel/Iran crisis pushing up their energy costs very sharply in the past few days, these inflation levels are unlikely to stay this low in March, giving the ECB a new headache. In Australia, total residential building consents fell at a -7.2% rate in January, following a -30.7% drop in December. Year on year it is down -15.7%, the largest fall since late 2023. This may have ended the rising trend of approvals that started in July 2024. But there were 9,900 detached houses approved for construction nationally, a 41-month high. The big shortfall is in intensive housing. Australia’s current account balance fell by -AU$2.8 bln in December 2025 to a deficit of -AU$21.1 bln. This is its second consecutive fall, driven by a net primary income deficit widening. This will take -0.1 percentage points from the December 2025 GDP result which will be released tomorrow. In public comments yesterday, the RBA governor acknowledged the sudden increase in uncertainty in the global economy, on top of already high uncertainty from Trump's abandonment of an international rules-based order. She said "a supply shock could, for example, add to inflation pressures. And the potential implications for inflation expectations are something we are very alert to. But at the same time, a prolonged impact on energy markets could have adverse effects on global economic activity and result in downward pressure on inflation. It is not obvious how this might play out." Westpac says Brent crude at US$100 is entirely possible in the coming few weeks. The UST 10yr yield is now just on 4.06%, unchanged from yesterday, although it did get up to 4.11% in between.  The price of gold will start today down -US$179 from yesterday at US$5117/oz. Silver is down another -US$4 at US$83/oz today. American oil prices are up +US$5.50 at just under US$76/bbl, while the international Brent price is up the same to be now just over US$82.50/bbl. These at +7.5% rises. A collapse in Iranian oil production could have quite deep impacts. The Kiwi dollar is another -50 bps lower against the USD from yesterday, now just on 58.8 USc. Against the Aussie we are down -10 bps at 83.8 AUc. We are down -60 bps against the yen. Against the euro we are unchanged at 50.7 euro cents. That all means our TWI-5 starts today down -40 bps, now just on 62.5 and a new one month low. The bitcoin price starts today at US$67,5755 and down -3.2% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 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’ll 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. Today we lead with news the world has suddenly gotten far more dangerous after the US/Israeli strike on Iran. Shipping costs especially are in a dramatic rise on necessary re-routing. The cost of war will hit inflation soon and that is a looming problem for central bank policymakers. And investors are demanding higher yields from not only corporate paper, but benchmark government bonds as well. But first in the US, the February PMI from the widely-watched ISM survey dipped very slightly from January, but held up better than analysts were expecting. It is only the third time in 40 months that this metric shows an expansion. It was driven by prices and imports, both of which are rising faster. New order flows rose at a slower pace. This metric is basically the same as the parallel S&P Global factory PMI for February, which noted faltering exports. This contrasts with the latest EU PMI which reports its strongest rise in new factory orders since April 2022 taking their factory PMI to a 44-month high. But coming with it are building inflationary pressures. Driving this result is a notable uptick in Germany which is now back in expansion. The rise and rise of Japanese manufacturing is now getting real momentum. Their February factory PMI burst out of its trend (confirming the January rise), to now be at almost a four year high. This is on the back of output, new orders and employment that all expanded at their fastest rates since January 2022. Not to be outdone, Taiwan's factory PMI rose sharply too in February, although this also came with higher inflationary pressure than for Japan. Firms there are struggling to meet demand. In some other selected Asian nations, their factory PMI's were mostly positive. This is true for Vietnam, Indonesia, and Thailand, although the same survey in Malaysia isn't quite so positive. Indian industrial production rose 4.8% in January from a year ago, and while most countries would love that, it represents a sharp slowing from December's +8.0% and is way below the +6.5% expected. The December rate was unusual however, and the January expansion mirrors what we saw for most of 2025. China announced late yesterday that they attracted ¥92 bln (US$12.6 bln) in foreign direct investment in January 2026. This was -5.7% less than in January 2025. But we probably should also note that the December FDI was quite good, standing out from the long run of negative flows. (The December inflow was +US$20.6 bln.) In Australia, the Melbourne Institute monthly inflation gauge recorded an easing in monthly inflation in February, dipping -0.2% from January. The main influence were lower fuel prices. In annual terms, however, headline inflation remains elevated above the RBA's 2–3% target band and has exceeded the top-end of the band for the past six months. Changes in the monthly cost of living were mixed, with employee households experiencing the largest monthly increase. And staying in Australia, the Cotality Home Value Index rose +0.7% in February, easing slightly from a +0.8% gain in January. Price growth remained strong in Brisbane, Adelaide, and Perth, but values were flat in Melbourne and Sydney. Year on year, national home values rose +9.6%, moderating from +10.2% rise in January on this basis. Globally, we should probably note that the aluminium price is up during this turmoil, now at a four-year high. And tin has taken off, now at a record high. Copper is near a record high too, but it isn't changed during this crisis; its been at the current level all year. Also globally, we should note that air cargo demand rose +5.6% in January from a year ago with international airfreight up +7.2%, driven by the +9.4% rise in the Asia/Pacific region, and restrained by the +1.4% riser in North America. Meanwhile passenger air travel rose +3.8% with international travel up +5.9%. It is notable that domestic air travel fell in the US on a year-on-year basis. But it also did in Australia as well. And ocean freight costs have surged in the past day, shocking many as ships need to be re-routed away from the Middle East. The UST 10yr yield is now just on 4.06%, up +10 bps from this time yesterday.  The price of gold will start today up +US$18 from yesterday at US$5296/oz. Overnight it got up to a new record high of US$5415 but it has retraced since then. Silver is down a sharp -US$6 at US$87/oz today also after an interim burst higher. American oil prices are up +US$3.50 at just on US$70.50/bbl, while the international Brent price is up +US$4 to be now just over US$77/bbl. These at +6% rises. Given the intensified Middle East tensions, this seems pretty restrained. But European natural gas prices have leapt overnight. The Kiwi dollar is -70 bps lower against the USD from yesterday, now just on 59.3 USc. Against the Aussie we are down -40 bps at 83.9 AUc. We are down -20 bps against the yen. Against the euro we are unchanged at 50.7 euro cents. That all means our TWI-5 starts today down -50 bps, now just on 62.9 and a one month low. The bitcoin price starts today at US$69,835 and up +5.5% from this time yesterday. Volatility over the past 24 hours has been high at just under +/- 3.4%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we’ll 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. Today we lead with news Trump has got his distraction war, flooding the recent zone of poor news with an adventure he has created. Business eyes will be on how the financial markets react. (Others can watch the politics.) So far, the equity futures markets have the S&P500 virtually unchanged (+0.1%), the US Treasury 10 year down -8 bps from their Friday close, and the USD (DXY) lower from Friday, but little-changed from a week ago. Oil prices will be closely watched, because the Strait of Hormuz has been closed by Iran. So far they are up 3% in off-market weekend reactions. Gold is up modestly so far too, but silver and platinum have jumped sharply, both gaining about +6% and both heading back toward the late-January peaks. Spreads, or the premium companies must pay over a risk-free US Treasury, are at their highest since November for investment grade companies, and their the highest since December for those with a sub-investment grade rating. But first, looking ahead this week, there is a raft of second tier data released locally, including some trade, and more importantly mortgage markets data. And we will get the Q4-2025 RBNZ Dashboard data, exposing the winners and losers among the local banks. In Australia. it will be all about the Q4-2025 GDP, and household spending data this week In the US on the economic front, they will have their non-farm payrolls report for February at the end of the week. We will get independent ISM PMIs and retail sales updated too. In China, data will be relatively light as Beijing insists its news attention is on their next five year plan meetings. But there will be PMIs out in China, as well as Canada, South Korea, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, South Korea, Taiwan, Hong Kong, and Singapore. Trade data are also scheduled from Indonesia, while inflation figures will be released in Indonesia, the Philippines, Thailand, South Korea, Vietnam, and Taiwan. Additionally, the Malaysian central bank is set to announce its latest monetary policy decision. Over the weekend, the US PPI release shows that inflation has their producer prices firmly in its grip. Year-on-year this measure of industrial inflation wasn't too special at +2.9%, but core PPI was up +3.4% and the jump in January from December of +0.5% grabbed analysts' attention. Tariff-taxes are driving the increases as importers refuse to absorb some of these costs anymore. Meanwhile some of this also showed up in the Chicago PMI for February. The Chicago Business Barometer was expected to ease lower. Rather it leapt into a strong expansion. It was so different to the data around it on the ground had suggested, it might be wise not to jump to any early conclusions on the gain. And let's not forget the growing worries about 'cockroaches'. Concerns about the risks of private credit are not going away just because they are overshadowed by geopolitical tensions. In fact, those tensions will bring risk aversion and likely magnify the private credit risks. Investors who want out could trigger something big. Across the Pacific, Korean exports turned in another gigantic result in February, showing that the extraordinary January was no fluke. Their exports were +29.0% that a year ago at a record US$67.5 bln for the month, and this was even though there were three fewer working days and the Lunar New Year holiday break. It is another extraordinary result. Both the US and China saw imports from Korea rise more than +30% for each. In China, we should keep an eye on their car industry. They have returned from holiday with a large excess of unsold stock and are responding with promotions that feature heavy discounting. This may trigger a reckoning for many carmakers, large or small. Like their property industry, it could have wide-ranging implications. And staying in China, according to estimates by China International Capital Corp, roughly ¥75 tln (NZ$18 tln) in household term deposits will mature this year, and most of it had maturities of one year or longer. Most will be reinvested, but with such enormous flows, even small amounts diverted (to say gold, or higher risk/return options) will have very important impacts. The UST 10yr yield is now just on 3.96%, down -6 bps from this time Saturday.  The price of gold will start today up +US$93 from yesterday at US$5278/oz. Silver is up +US$5.50 at US$93/oz today. When global markets reopen, it will be unsurprising to see these prices rise sharply. American oil prices are up almost +US$2 at just on US$67/bbl, while the international Brent price is now just under US$73/bbl. But when global markets reopen today, expect a sharp rise as well. The Kiwi dollar is unchanged against the USD from Saturday, still just on 60 USc. Against the Aussie we are unchanged at 84.3 AUc. We are little-changed against the yen as well. Against the euro we are holding at 50.7 euro cents. That all means our TWI-5 starts today basically the same as Saturday, still just on 63.4. The bitcoin price starts today at US$66,168 and up +0.7% from this time Saturday. Volatility over the past 24 hours has been moderate, also at just over +/- 2.3%. You can get more news affecting the economy in New Zealand from interest.co.nz. Kia ora. I'm David Chaston and we’ll do this again tomorrow.

Artificial intelligence (AI) should be a key election year issue especially given the technology has major potential to help improve New Zealand's productivity, says Mark Laurence. Laurence, founder and CEO of Ten Past Tomorrow which is an AI consultancy and education business, spoke to interest.co.nz in a new episode of the Of Interest podcast. "I'm kind of flabbergasted that it hasn't become a political talking point," Laurence says, noting AI "has become a really hot political topic" in the United States over the past six months. He describes AI as "a general purpose technology." "My focus is how does New Zealand, as a small, educated, economically prosperous and politically stable country, how do we become the best users of this technology where we as a nation, we're very skilled and very literate and know how to use it, know when to use it, know how to use it responsibly and ethically?" "Because you can scale from the individual productivity to national GDP on a very clear line." Laurence points out Singapore is spending NZ$1.25 billion over five years with the goal of tripling their AI practitioner workforce. The United Kingdom is investing US$500 million per year over the next five years with the goal of having 10 million AI literate workers by 2030. And Finland is spending €100 million per year for the next four years in AI readiness training. So does he think getting a more AI literate NZ population needs to be government led? "I do [think so] and I think importantly it needs to be non-partisan," Laurence says. " Whichever party wins [the election], this needs to happen. It's like to me, it's that critical to New Zealand productivity challenges. And so yes, it absolutely needs to be publicly led." However, he adds that in the countries making public investment he cites, private investment generally "floods in behind it." "We [NZ] have an AI strategy which was released last year. It's pretty flimsy and really if you kind of read between the lines, it's basically saying at the moment we're leaving this to the private sector to kickstart. I do think the stimulus needs to come, the action needs to come, the motivation needs to come, from public sectors," says Laurence. "Simply, this nation has an obsession with productivity challenges that we've developed in the last number of years. That's why I say sitting still is not a neutral option, it's a decision with consequences. The gap compounds [and] moves from being a gap to actually a chasm." In the podcast audio Laurence also talks about how NZ businesses are working with and thinking about AI, AI training, education opportunities from AI, guardrails and regulation, the previous technological breakthrough he compares AI with, how the effect and harms of AI on children could be worse than social media, why he says "AI is going to make lazy people super lazy and it will give dedicated people superpowers," and more. *You can find all previous episodes of the Of Interest podcast here.

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.Today we lead with news the modest US inflation rate reported for January is fueling a disconnect and scepticism in US households.But first, this is a week where we will get the next RBNZ OCR review on Wednesday, important because it is Governor Brennan's first. And she will get her first inkling of January inflation impulses on Tuesday, and may have the January REINZ data later today. And she will likely know how the bank's consumer and business surveys are tracking, especially on inflation expectations.In Australia, the key data will come on Thursday with their January labour force updates. And the RBA will release the minutes of it February 4 meeting on Tuesday, always a potential market-moving event.The US Fed will also release its minutes this week. And we will get the advance estimate of Q4-2025 US GDP, as well as the Fed's [referred inflation gauge, the PCE. Canada will chime in with its own key releases.In China, markets will be closed for the week-long Lunar New Year holiday from February 16 to 23, although January foreign direct investment data is still expected to be released. Elsewhere, trade figures are due from Singapore, Malaysia, and New Zealand, while Malaysia will also publish inflation data.Over the weekend, China reported that that price deflation in their housing market picked up in January for a third straight month at a faster pace, overall down -3.1% from a year ago. In January, the year-on-year sales price of existing homes in first-tier cities fell by -7.6%. Specifically, prices in Beijing, Shanghai, Guangzhou, and Shenzhen falling by -8.7%, -6.8%, -8.3%, and 6.5% respectively. In second- and third-tier cities, the year-on-year sales prices of existing homes fell by -6.2% and -6.1%. Prices for new-built houses fell too, but only by -2.1%.Staying in China, and as expected, the normal January surge in new yuan lending by banks occurred again this year, but by less than expected and by a -8.2% lower level than for 2025, -4.3% lower than for January 2024. And it was -5.8% lower than what was expected. It is a soft result and is typically followed by a sharply lower level of lending in February during the Spring Festival/CNY period. 2026 is off to a languid start for them.Meanwhile, China's export economy is still functioning at full speed. Their current account surplus widened to an unprecedented US$242 bln in Q4-2025, sharply higher than the US$164 bln recorded a year earlier.India also released bank loan data overnight, and their firms are borrowing up big. In fact, it was up +14.6% in January from a year ago, the strongest surge in a year.Malaysia reported that its economic activity rose +6.3% in Q4 2025 from a year ago, revised up from an initial 5.7% and accelerating from 5.4% growth in Q3. This was their sharpest expansion since Q4-2022, with broad gains in agriculture, driven by oil palm output (+16, manufacturing, and services.On Saturday in the US CPI inflation came in at 2.4% for the year to January, slightly below the expected 2.5%. Core inflation came in at the expected 2.5%. This result was all due to lower petrol prices and falling used car prices. However, food was up +2.9%, and rents were up +3.0%. Electricity prices were up +6.3% (thank you, AI) and home gas was up +9.8%. It will be hard for households to feel inflation is under control.And key will be how the US Fed will interpret this data when setting their policy rates at their next meeting on March 19, 20206 (NZT). Markets currently expect a hold, and at least until the middle of the year.And one reason food prices seem higher there than the official data is that US beef cattle herd is now at its lowest in 75 years. This helps explain why US imports are soaring, and prices are high & rising.And don't forget, it is a long holiday weekend in the US for Washington's Birthday/President's Day. US-based activity will be low tomorrow and that will show up in our financial markets.The UST 10yr yield is still just under 4.06%, little-changed from Saturday but it is down -15 bps from this time last week.The price of gold will start today up +US$21 from Saturday at US$5041/oz. Silver is down -50 USc at US$77.50/oz today.American oil prices are little-changed at just under US$63/bbl, while the international Brent price is still under US$68/bbl.The Kiwi dollar is little-changed against the USD from Saturday, now just on 60.4 USc and down -10 bps. Against the Aussie we are unchanged at 85.4 AUc. We are down marginally again against the yen. Against the euro we are unchanged at 50.9 euro cents. That all means our TWI-5 starts today little-changed, now at 63.8 and down -10 bps from Saturday.The bitcoin price starts today at US$68,565 and down -0.8% from this time Saturday. Volatility over the past 24 hours has been modeST at just under +/- 1.5%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we’ll 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.Today we lead with news global financial markets are showing nerves ahead of tomorrow's US CPI data, not only because there is upside risk that will restrain the US Fed from, rate cuts, but also gun-shy after getting non-farm payrolls reports they basically didn't believe. Sanitised US data is a risk no-one wants (other than the White House.)First in the US, there were 248,000 initial jobless claims last week, a small decrease but the one explained by seasonal factors. There are now 2.215 mln people on these benefits, more than the 2.19 mln in the same week a year ago.And American existing home sales came in sharply lower in January that the good December level. They ran at a -4.4% lower rate than in January 2025, and even lower than the unusually low January 2024 level. They fell everywhere and was the largest fall in four years, although prices rose marginally from a year ago.The New York Fed released a detailed review of "who pays" the Trump tariff taxes, and surprise, surprise, they found it is almost exclusively (90%) Americans who pay. Who knew? They also found that after these tariffs, China's share of US imports is basically unchanged. Some people are slow learners - tariff taxes are a tax on yourself. But you have to take stage one economics to learn this stuff.In India, they released CPI inflation data overnight and it came in at 2.75%, their highest since May. And we should also probably note that protests in India are growing against their recently-agreed free-trade deal with the US.In China, their Spring Festival / Chinese New Year formally starts on Tuesday, and a lot depends on the consumer spending patterns during this two week annual break. Forward bookings for travel indicate a record level of travel, a sharp jump in international travel, and a preference for independent, non-package holidays. Thailand, Russia, Turkey and the Philippines are getting outsized bookings this year.Separately, China has rolled back its steep tariff penalty on EU dairy products.In Australia. consumer inflation expectations rose in February to 5.0%. This follows a seven-month period of below five-per cent expectations. The increase in February is present across a number of inflation expectations measures.And staying in Australia, chances are rising that extended drought conditions related to the return of an El Niño weather pattern that may come later in 2026. It will be hotter there too. If that occurs, there will be spillover implications for New Zealand, particularly for the rural sector.Global container freight rates were little-changed last week (-1%), to be -38% lower than year-ago levels. Once again, the key change were weaker outbound China rates. Although shifting in between, bulk cargo rates are essentially unchanged from a week ago, but they are +150% higher than year-ago levels. (But that base was unusually low.)The UST 10yr yield is now just over 4.11%, and down -6 bps from yesterday in a hard shift to 'safety'.The price of gold will start today down -US$122 from yesterday at US$4953/oz. Silver is down a very sharp -US$8 at US$76/oz and even more volatility.American oil prices are down -US$2 at just over US$63/bbl, while the international Brent price is now just under US$68/bbl.The Kiwi dollar is down a minor -10 bps against the USD from yesterday, now just over 60.5 USc. Against the Aussie we are up +20 bps at 85.2 AUc. We are down again against the yen. But against the euro we are unchanged at 51 euro cents. That all means our TWI-5 starts today also little-changed, still at 63.9.The bitcoin price starts today at US$66,288 and up +0.5% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 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’ll 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.Today we lead with news of what seems to be an outlier jobs report that has financial markets sceptical.US non-farm payrolls were claimed to have risen +130,000 in January in delayed data released today, far above the downwardly revised +48,000 level for December and more than double analysts' collective estimates. All the gains seem to be in their healthcare sector. If it stands, it undermines the case for Fed rate cuts.Market reactions have not been supportive, with bond yields rising, rate curves fattening, the equity markets falling, and the USD falling.The detail of this jobs report remains 'interesting' all the same. Raw (not seasonally adjusted) data shows payrolls actually fell -2.65 mln in January from December, down -2.85 mln from November. And nested within this data are revisions for calendar 2025 now showing employment growth for 2025 revised down to +181,000 from +584,000 previously reported, implying average monthly job gains of just +15,000.These revisions bring the official data back looking like the private ADP data - except for the January headline result. Markets expect this to be revised sharply down in coming months.US mortgage applications fell again last week, the third consecutive dip, although not as sharp as the prior two.There was another US Treasury bond auction overnight, this one for their ten year Note. It was well supported. The median yield came in at 4.11%, down from the 4.13% at the prior equivalent event a month ago.Meanwhile, the US budget deficit keeps getting worse. It will grow in fiscal 2026 to -US$1.85 tln, the Congressional Budget Office said overnight. Current policy settings are worsening the country's fiscal picture amid low economic growth, particularly the enormous tax-cuts for the rich. They say the "One Big Beautiful Bill" tax cuts will will add $4.7 tln to US deficits.Across the Pacific, there is still no inflation in China, and it has turned toward deflation faster than expected. Their annual inflation rate eased to +0.2% in January from an already very low 0.8% in the previous month. This is its lowest level since October and below market estimates of 0.4%. Food prices fell for the first time in three months (-0.7% vs 1.1% in December) while non-food inflation slowed sharply too (0.4% vs 0.8%). Meanwhile, Chinese producer price deflation eased to -1.4%.China also released January car sales data, coming in at 2.35 mln for the month. However, that was -3.3% lower than for January 2025 and +-3.8% lower than the same month in 2024. Notably soft were NEV sales in January. Perhaps we are seeing signs of maturing (or exhaustion?) in this very dynamic market. It's is hugely important to China's industrial base, selling more than 34 mln units in 2025.In Australia, the number of new owner-occupier new home loan commitments rose +7.5 in the December 2025 quarter compared with a year ago. On a value basis, that rose +18.9%. For housing investor loans for the same periods, the number of new loans rose +24%, and their value rose +32%.The UST 10yr yield is now just under 4.17%, and up +2 bps from yesterday. The price of gold will start today up +US$58 from yesterday at US$5075/oz. Silver is up +US$3.50 at US$84/oz and extending its new volatility.American oil prices are up +US$1 at just on US$65/bbl, while the international Brent price is now just under US$70/bbl.The Kiwi dollar is up a minor +10 bps against the USD from yesterday, still just under 60.6 USc. Against the Aussie we are down -50 bps at 85 AUc. We are also down against the yen. But against the euro we are up +20 bps at 51 euro cents. That all means our TWI-5 starts today little-changed, still at about 63.9.The bitcoin price starts today at US$65,965 and down -5.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.8%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we’ll 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.Today we lead with news financial markets are taking more notice of the lackluster US economic data today, with Wall Street equity markets hesitating, bond yields in a defensive twist, and the USD staying weaker.But first, the overnight dairy Pulse auction not only confirmed the prior week's sharp rises, it added to them. WMP was up a marginal +0.4% from a week ago to be up +14% from the start of 2026. Butter was up +6.8% from last week, up +18% year-to-date. And the SMP price was up +1.7% from last week, also up +14% so far this year. Everyone in the industry will welcome this confirmation of the recent rising trend, even if some of it is just USD weakness.Not so positive was the US retail sales report for December, which showed zero growth from November, to remain +2.3% higher than a year ago. Given CPI inflation is +2.7%, there is clear stagflation involved here.Meanwhile the weekly ADP employment report only showed private payrolls gaining +6,500 nationally, well within the margin of error. But at least it was better than the prior week's no-change.The January NFIB optimism index was also little-changed and still below the benchmark 100 level.US household debt as at the end of 2025 was recorded at US$18.8 tln, a +4.2% rise from the end of 2024. Non-housing debt rose only +2.6% in the same period, so Americans are taking on more housing debt at a faster pace. The same report shows delinquency rates on all loans rose to 4.8% of outstanding household debt, the highest level since 2017, driven by higher defaults among low-income and young borrowers.The overall soft US data probably helps make the case for another Fed rate cut at their next meeting on March 19, 2026 (NZT) but there is a lot to be revealed before then.In Australia, consumer sentiment slipped in February, and not insignificantly. Recall, the RBA has recently pushed through a rate rise. Analysts say the fall is a muted response compared to previous rate hikes. Over 80% of those surveyed expect interest rates to rise further in the next 12 months. Homebuyer sentiment has sunk as price expectations hit new 15 year high.Meanwhile, the NAB business sentiment survey results inched up in January, although revenues softened. That was offset by costs easing a bit faster.The UST 10yr yield is now just under 4.15%, and down a sharpish -5 bps from yesterday.The price of gold will start today down -US$55 from yesterday at US$5018/oz. Silver is down a sharp -US$3 at US$80.50/oz and continuing its extreme volatility.American oil prices are down -50 USc at just on US$64/bbl, while the international Brent price is now just under US$69/bbl.The Kiwi dollar is little-changed against the USD from yesterday, still just under 60.5 USc. Against the Aussie we are up +20 bps at 85.5 AUc. Against the euro we are holding at 50.8 euro cents. That all means our TWI-5 starts today unchanged at 63.9.The bitcoin price starts today at US$69,517 and down -0.7% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.3%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston and we’ll do this again tomorrow.