Economy Watch

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 all about the state of the world's factories. Globally, manufacturing stabilised in November with a rise in new orders.First up today, there were two factory PMI surveys out for the US for November. Both reported their sector contraction eased noticeably. The widely-watched local ISM version reported that new orders are now back expanding, even if the overall sector isn't. They also found that customer inventories are currently "too low", so that could well indicate an expansion is on the cards soon. And the internationally-benchmarked S&P Global/Markit version was upgraded from their 'flash' report showing similar improvements in new order flows.In Canada, their factory sector expanded with its strongest result in nearly two years.In China, the private Caixin factory PMI was noticeably more positive for November than the official version. New orders drove that improvement too, and they were led by new export orders.The same survey of Japanese factories wasn't as positive and they reported a slightly larger contraction in November.In Singapore, their PMI rose to a small expansion. But it was equal best since December 2018.In Malaysia, their PMI eased in November, only slightly, but it remained under pressure with fewer new orders.Back in China, their 10-year government bond yield has dropped to 2%, a multi-decade low. Modern records for this paper only go back to 2002, but it is easily the lowest since then. The fall comes amid expectations of expanded stimulus from Beijing to support the economy. But expected announcements haven't surfaced so far.There was quite a bit of data released in Australia yesterday. First, their building consent data for October rose but only because of a catchup in apartment consents. It was a big jump. Consents for houses continued to slip however. But they have had overall rises consistently since the start of the year.On the retail sales front, Victoria, Queensland and South Australia saw good gains, but retail sales gains in NSW and WA were weak. However, it seems their Black Friday sales were quite positive, giving retailers there hope that the run to Christmas will be a better trading period.On the factory front, their internationally-benchmarked November PMI contracted at a much slower pace in November, hardly at all, which counts as an improvement for them.The UST 10yr yield is now at just on 4.18%, unchanged from yesterday.The price of gold will start today at US$2640/oz and down -US$9 from this time yesterday.Oil prices are -50 USc lower at US$68/bbl in the US while the international Brent price is -US$1 lower at just over US$71.50/bbl.The Kiwi dollar starts today at 58.8 USc and down -50 bps from this time yesterday. Against the Aussie we up +20 bps at 91 AUc. Against the euro we unchanged at 56 euro cents. That all means our TWI-5 starts today at just on 68.4, and down -20 bps from yesterday.The bitcoin price starts today at US$96,401 and down -1.0% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.7%.You can find links to the articles mentioned today in our show notes.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 China is still stuck in its rut, the US twisted by tariff talk, Japan sees progress, and Russia's currency gets a big downgrade.But first, this coming week will end with the US non-farm payrolls report, and analysts expect a sharp recovery to +183,000 added jobs, far higher than the unusual (pre-election) October report of just +12,000. Before that they will deliver their JOLTs report, and there will be factory order data, more PMIs, and more sentiment surveys.India will review its official interest rate. South Korea and Turkey will report CPI inflation rates. Australia will report its Q3-GDP on Wednesday. And there will be many other PMI reports.In fact, over the weekend, China said its official factory PMI made a tiny improvement to maintain its small expansion. It was its second 'positive' result in a row and its best since April. At the same time the minor positive reading for its services sector disappeared. Taken together, this paints a picture of an economy without any expansion. We will get the Caixin PMI data tomorrow, and that has tended to be marginally more positive recently.In Japan, their central bank boss said they are "approaching" a decision with a view they will raise their policy rate from the current 0.25% to 0.50%. They like their current data track, but they hesitate because they don't have a firm fix on the damage the incoming US Administration will do."I am not worried much about Japan's financial system because ample capital, stable deposits and access to liquidity have been ensured," he said. In contrast, he noted that "non-bank financial institutions are posing a grave problem" in the US and added that "they deserve to be closely monitored."Japanese consumer sentiment recovered somewhat in November, still positive, but nothing like what they had from December to March earlier in the year.Japanese retail sales rose +1.6% in October, recovering from the weak September expansion, but still much lower than what they have achieved monthly since early 2022. At least it is back heading in the "right" direction.And Japanese industrial production rose +1.6% in October from a year ago, ending two months of retreatSouth Korea's industrial production rose in October at a very strong +6.3% pace from a year ago, after the unusual stumble in September, returning to the average expansion they have had since September 2023. So it will be no surprise to learn that their exports kept rising strongly in October, as did their imports.However Korean retail sales slipped in October to be -0.8/% lower than a year agoIndia's economic expansion is 'consolidating', delivering a somewhat disappointing Q3-2024 result. Their economy rose +5.4% from the previous year, slowing from the +6.7% expansion in Q2-2024 and well below market expectations of a +6.5% increase. It was their softest pace of growth since Q4-2022. Still, even at the latest lower rate, it is rising on a per capita basis.This miss adds pressure on the Reserve Bank of India to cut its policy interest rate which currently stands at 6.5%. They review it next on Friday.The Indian currency fell on the news to a record low against the USD. Although not a record low against the NZD, it is has been close to that since the whole period from end of 2020.In the US, early reports from card companies and industry monitors show that in-store retail sales growth for Back Friday sales was quite modest - even disappointing - and up only +0.7% from the same day a year ago. But online sales activity burst higher, up more than +14% on the same basis.In Canada, their Q3-2024 GDP growth came in +1.0% higher than a year ago, up +0.3 for the quarter. This was not enough to prevent a fall in per capita GDP. On that basis it fell -0.4% in the third quarter, which was the sixth consecutive quarterly decline.In Europe, inflation expectations in the euro zone for the year ahead edged up slightly in October to 2.5%, and stayed steady for three years out at 2.1%, the ECB's monthly Consumer Expectations Survey showedEU CPI inflation rose to 2.3% in October, up from 2.1% in September, but still clearly in a down-trend that started in November 2022.In Russia, their currency suddenly fell over the weekend to near record lows (a record if you exclude the full invasion spike in 2022). The falls were not only vs the USD, but the Chinese yuan as well. The economic pressure on the Russian economy is mounting as it suffers severe distortions and indigestion, the longer it presses its invasion of Ukraine.In Australia, private sector debt rose +6.1% in October from a year ago, driven primarily by business debt growth, up +8.3% on the same basis, but housing debt growth was up +5.3% too. Other personal debt only rose +2.2% in October. (From a Kiwi perspective, these are relatively fast rises. Late last week equivalent RBNZ data showed business debt rising only +1.1%, housing debt rising only +3.5%, and personal debt up only +1.7% in the year to October.)In Australia there is some scepticism that their debt tide rise will be maintained.And their housing market is showing signs of exhaustion. November data shows sales volumes -4.6% lower than a year ago. The largest drop in the volume of home sales has been in Sydney, where sales over the rolling quarter were estimated by CoreLogic to be more than -15% lower than a year ago. But that isn't easing their rental crisis where the vacancy rate is less than 1%.The UST 10yr yield is now at just on 4.18%, unchanged from Saturday but down -23 bps from this time last week. The price of gold will start today at US$2649/oz and down -US$10 from this time Saturday, and down -US$56 from this time last week.Oil prices are little-changed, still just over US$68.50/bbl in the US while the international Brent price is just under US$72.50/bbl. A week ago these levels were $2.50/bbl higher, so a retreat from then.The Kiwi dollar starts today at 59.3 USc and up +10 bps from this time Saturday. But it is up +1c from this time last week. Against the Aussie we up +60 bps at 90.8 AUc. Against the euro we unchanged at 56 euro cents. That all means our TWI-5 starts today at just over 68.6, and little-changed from Saturday, up +50 bps from a week ago.The bitcoin price starts today at US$97,372 and up a minor +0.3% from this time Saturday. Volatility over the past 24 hours has been low at +/- 0.9%.You can find links to the articles mentioned today in our show notes.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 the world's dominant financial market is closed today, so this will be a thin report. Wall Street will be back in a limited capacity tomorrow (their Friday).In the US, a record 80 mln people are expected to travel at least 100 kms this holiday weekend.But the Canadians are not on their Thanksgiving holiday break. They have it on the second Monday in October, so it has already been for them.And new data shows on average, Canadians work 33.5 hours per week. But payroll earnings are rising, up +5.2% in September from a year ago. That is a faster pace than recently. The growth in average weekly earnings can reflect a range of factors, including changes in wages, composition of employment, and hours worked.The Bank of Korea cut its base rate by -25 bps yesterday to 3.0% during its November meeting. It was a cut not expected and was the second straight month of rate reductions, bringing borrowing costs to their lowest level since October 2022.In Hong Kong, prices for private residences stopped falling in October. The smallest units, 40m2 and smaller, saw a +4.3% rise from September, ending a long decline that started in 2019. But those are still -7.8% lower than a year ago, and down -27% since mid 2019. The brader market is down -9.9% in the year. The interruption of the decline was due to the cancellation of some stamp duties and the opening up the market to mainland Chinese buyersThe EU sentiment surveys were broadly stable in November.In Australia, private capital investment rose +1.1% in Australia in Q3-2023. And that was despite a -1.9% drop in the mining sector. And you can see that in the distribution by State. New South Wales led the way with a +3.6% rise followed by Victoria's +3.2% gain. The largest falls were in South Australia (-11%) and the Northern Territory (-17%). WA was down too, but a lesser -1.3%. Large building projects involving large scale upgrades in the manufacturing sector, and large data centre projects, were the drivers. Many companies in this survey say they plan an investment surge in 2025. Westpac described the trend as a "once in a generation structural change".As part of a last-minute set of deals to get most of its agenda passed in preparation for their 2025 federal election, their government has accepted a Green Party inspired compromise to split the RBA board in two, one for rate setting, and another for governance. The Green's goal was to force the RBA to cut rates, killing the RBA's independence, but it is not clear this aspect was achieved.Container freight rates are down another -2% last week from the week before. Outbound China to the USWC saw the largest fall, down -5% in the week. Bulk cargo rates are down -7% in a week. That now puts them -34% lower than a year ago, but a year ago was when they suddenly spiked.The UST 10yr yield is now at just on 4.24% and unchanged from this time yesterday.The price of gold will start today at US$2642/oz and virtually unchanged, down just -US$1 from this time yesterday.Oil prices are little-changed, still just over US$68.50/bbl in the US while the international Brent price is just over US$72.50/bbl.The Kiwi dollar starts today at 58.9 USc and down -20 bps from this time yesterday. Against the Aussie we down -30 bps at 90.6 AUc. Against the euro we unchanged at 55.8 euro cents. That all means our TWI-5 starts today at just under 68.4, and down -20 bps from yesterday.The bitcoin price starts today at US$95,260 and down -0.8% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.4%.You can find links to the articles mentioned today in our show notes.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 rising consumer demand in the world's largest economy is still driving the world's economy, a trend that started nearly a century ago - and still, it shows no sign of ending anytime soon.First we should note that the American Thanksgiving holiday starts tomorrow, so there is a big data dump today. Most Americans will have a four day 'holiday' (although the bond market will trade on their Friday). That frees them up for the start of the end-of-year retail rush. Given the good shape their economy is in, it is likely to be a positive retail season.US jobless claims rose last week but by less than seasonal factors would have accounted for, so the headline change was regarded positively. The level of continuing claims rose too, but not as sharply as they did in the same week a year ago. So no early signs of labour market stress here.And there was a good rise in mortgage applications last week from the week before (+6.3%), and slightly better that can be accounted for by seasonal factors (+1.7%). Perhaps more impressive is that these rises came despite benchmark mortgage interest rates rising to their highest level since July.And the October pending home sales rose +2.0% to be +5.4% higher than a year ago. This is a further sign the US housing market may have touched bottom.US durable goods orders rose in October, up +5.3% from the same month in 2023, but by less than expected. And that was because the 2023 level was slightly weaker than normal. Capital goods orders rose +5.4% although non-defence capital goods orders were only up +2.9%.The Chicago area PMI came in weak in November, continuing its year-long retreat in a result that would have disappointed everyone.There were no surprises in the second estimate of the American Q3-2024 GDP growth rate, coming in unchanged from the first estimate at +2.8%, and a consistent expansion since Q3-2022. This is an expansion fuelled by consumer spending.But the same data showed core PCE rose to +2.8%, up a tick from +2.7% in Q2. Although this was as expected, this inflation measure is the one favoured by the US Fed, so it is a shift that they will take into account.Today's UST bond auction of seven year paper was very well supported, and for the first time in a long while, the median yield fell from the prior equivalent event. Today it came in at 4.14%, whereas a month ago it was at 4.17%.China industrial profits were expected to fall -3.0% in the nine months to September and in the end they came in down -4.3% on that same basis. Not a huge slip, you may think. But ytd comparisons hide a lot and for September alone, they were -23% lower than in the same month a year ago. There is a definite profit squeeze going on in China.In India, their parliament was suspended so that debate on the links between the ruling BJP political party, and the American-indicted Adani Group could not proceed.In France, their government is close to collapse.In the EU, the European Parliament is moving to get the bloc to “revoke Hong Kong’s special customs treatment” and review the status of its economic and trade office in Brussels over a long-running national security trial that last week saw 45 opposition figures jailed for between four and 10 years.Markets thought the October CPI indicator in Australia would report a rise from the September level of 2.1%. But in the end there was no change. (Food, however, was up +3.3%, and also unchanged from September.) This overall result eased financial market fears that the RBA would have to weight harder against inflation. However, the 'hold' puts rate cuts there back in the frame earlier than otherwise assumed.Australian construction work completed in Q3-2024 also came with a positive surprise, up +3.2% from, the same quarter a year ago. Dragging on this result was virtually no change in residential construction. But unlike in the June quarter, every sector made some positive contribution to the overall gain. The actual result was way better than the limp +0.3% expectation.The UST 10yr yield is now at just on 4.24% and falling -8 bps from this time yesterday.The price of gold will start today at US$2642/oz and up +US$13 from this time yesterday.Oil prices are down -US$1 at just over US$68.50/bbl in the US while the international Brent price is just on US$72.50/bbl.The Kiwi dollar starts today at 59.1 USc and up a full +80 bps from this time yesterday. Against the Aussie we are +70 bps higher at 90.9AUc. Against the euro we up +20 bps at 55.8 euro cents. That all means our TWI-5 starts today at just under 68.6, and up +50 bps from yesterday.The bitcoin price starts today at US$96,058 and up +1.7% from this time yesterday. Volatility over the past 24 hours has been high at +/- 3.1%.You can find links to the articles mentioned today in our show notes.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.Today we lead with news that financial markets are being rattled somewhat by the isolationist rhetoric from the incoming US President on tariffs, especially as they will apply to Canada, Mexico and China. However, despite the incendiary nature of the talk, the market reactions have been relatively mild with the expectation the adults in the room will calm things in January.But these reactions have hit commodity currencies.One reason restraining Trump might work is that his mind is still in the 2020 past. In fact the Biden Administration has been particularly successful in restraining drug importation, fentanyl in particular, that overdose deaths are falling rather fast now. And restraining the drugs trade from China and Mexico is a motivating reason for those tariff threats. (It was during the last Trump Administration that those deaths spiked.)Anyway, away from the ramblings of a bitter old man, first up today, we can report higher dairy prices for two key commodities at the overnight GDT Pulse auction event. SMP rose +0.5% in USD terms and was up +1.8% in NZD terms. WMP rose another +2.2% in USD terms to be up +3.5% in NZD terms. This will give upside to all the analyst farmgate payout forecasts, and it seems likely they will coalesce around the $10/kgMS mark now. That, of course, would be a record high.In the US, their retail impulse is staying 'healthy' as measured by the Redbook survey, and last week it rose +4.9% above the same week a year ago, holding the expansion we have observed for the past eight months.This was supported by a rise in consumer sentiment, as measured by the Conference Board survey. It is now at the top of the range that has prevailed over the past two years. November’s increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding their labour market.Further, there was an improvement in the Texas services sector in November, taking into an expansion. And a return to expansion was also reported for the service sector in the mid-Atlantic states.But none of this has spilled over into confidence in home buying, yet anyway. New home sales in October dropped more than 17% from the previous month to at a seasonally adjusted annualised rate of 610,000. And that takes it -9% lower than the same month a year ago.Singapore’s factory production rose by only +1.2% in October from a year ago, slowing sharply from a downwardly revised +9% rise in the previous month and disappointing analysts. Activity slowed significantly for biomedical manufacturing.Here's something we rarely report on, but is an indication of the tight ASEAN economies. Car sales in Thailand sank -36% in October from a year ago to be the seventeenth consecutive month of decline, driven primarily by high household debt and significant tightening of loans.Later today in Australia, we will be following the October CPI indicator and it is expected to reveal a small rise from the prior month.Join us at 2pm for the RBNZ's Monetary Policy Statement and the OCR review. A -50 bps rate cut is widely expected. But it will be a twelve week gap until the February 19, 2025 MPS, so this review has to carry them through a period which may have considerable international uncertainty attached to it.The UST 10yr yield is now at just on 4.32% and rising +3 bps from this time yesterday.The price of gold will start today at US$2629/oz and down -US$2 from this time yesterday.Oil prices are little-changed at just under US$69.50/bbl in the US while the international Brent price is just under US$73.50/bbl.The Kiwi dollar starts today at 58.3 USc and down a minor -10 bps from this time yesterday. Against the Aussie we are +20 bps higher at 90.2AUc. Against the euro we down -20 bps at 55.6 euro cents. That all means our TWI-5 starts today at just on 68.1, down another -10 bps from yesterday.The bitcoin price starts today at US$94,496 and down another -1.2% from this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.5%.You can find links to the articles mentioned today in our show notes.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.Today we lead with news the market pressure on US benchmark interest rates is easing now.First, an updated Dallas Fed survey showed the Texan manufacturing sector contracted less in November, the least in 2½ years. This was driven by the outlook mood which improved sharply, post election. But this may just be a partisan hope. New order levels actually fell to their worst shrinkage in a year, and continuing a two year trend of shrinkage in this oil-patch region.And the broader Chicago Fed National Activity Index decreased in October from September to its lowest in nine months in a surprise result that was much worse than market forecasts. This index suggested US economic growth decreased. Current forecasts are that the US economy is growing at just under +2%, although the Atlanta Fed's GDPNow model has it at +2.6%. Anywhere else that sort of expansion would be considered very good for a developed economy.There was another large US Treasury bond auction this morning, again very well supported. The yield was 4.24% at this event, and higher than the 4.07% median yield at the prior equivalent event a month ago - but not the sort of rise we have seen recently in other maturities.Singapore’s inflation rate eased to 1.4% year-on-year in October from 2% in the previous month, and below market expectations of 1.8% gain. This marked the lowest inflation rate since March 2021, as prices moderated for housing and utilities.Taiwanese retail stopped expanding in October after a long run of expansion that started in August 2021.But Taiwanese industrial production is still growing at a healthy rate, although that rate of growth is slowing. It was up +8.5% in October from a year ago, down from an +11% rise in the year to September. A year ago in October 2023 it was falling +2.3%, so they have come a long way since then.In China, their central bank injected ¥900 bln into financial institutions via a one-year medium-term lending facility yesterday at an unchanged rate of 2.0%. That compared with the ¥1.45 tln of MLF loans due this month, marking a net cash withdrawal of ¥550 bln.After the March to August rises, the German IFO sentiment survey returned to its lows for other than the GFC or the pandemic. Analysts see a fading of strength in an economy that was only recently an engine of Europe. And overnight, ThyssenKrupp, the largest steel maker in Germany, said it would cut its workforce by up to 11,000 from the current 98,000, by 2030.The UST 10yr yield is now at just on 4.29% and down -12 bps from this time yesterday.The price of gold will start today at US$2631/oz and down -US$85 from this time yesterday.Oil prices are down -US$2 at just over US$69/bbl in the US while the international Brent price is just over US$73/bbl.The Kiwi dollar starts today at 58.4 USc and up a minor +10 bps from this time yesterday. Against the Aussie we are +20 bps higher at 89.9 AUc. Against the euro we down -20 bps at 55.8 euro cents. That all means our TWI-5 starts today at just on 68.2, down -10 bps from yesterday.The bitcoin price starts today at US$95,648 and down -1.1% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.3%.You can find links to the articles mentioned today in our show notes.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 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 the US and India are driving global demand currently.First, in the week ahead, the major even for us will of course be the Wednesday RBNZ Monetary Policy Review, the last one for 2024. And markets have priced in a full -50 bps cut in the OCR, a setting that will have to last them though to mid-February.South Korea will also review its policy interest rate benchmark this week.In the US, they will release a packed set of data until Thursday (NZT) because for them the week ends with their major Thanksgiving holiday, and the related major retail activity that kicks off the period until the end of year. Coming this week from them are October PCE inflation data, and update of their Q3 GDP, durable goods order data, and some more sentiment surveys.There is not much economic data due from China this week, but Japan will have a set including updates for retail sales and industrial production. Canada and India will deliver GDP updates, and Australia and the EU will come up with inflation data updates.Over the weekend the US manufacturing PMI for November stayed in contraction territory, hardly moving from the prior two months. But their services PMI rose strongly to a much faster expansion, and a 32 month high. There were no inflationary signals in this survey. Business expectations were the highest level since May 2022, reflecting optimism about potential interest rate cuts, stronger economic growth, and pro-business policies.On the consumer front however, the November University of Michigan sentiment for November was down-graded from its 'flash'-reported rise, so that in fact little improvement was evident in the month. These sentiment levels remain about -30% lower than pre-pandemic levels.Canadian retail sales rose unexpectedly in October and now for a fourth straight month. Excluding car sales, which were strong in September, a small correction was expected. But in fact the non-car retail activity rose very strongly. Perhaps the recent Bank of Canada interest rate cuts are working? They have trimmed -125 bps since May this year and now have an official cash rate of 3.75%.Japanese inflation fell again in October, now running at an annual rate of +2.3%. That is sharply lower than the 3% rate they had in August but it is still within their central bank's target range.And staying in Japan, their November PMI stayed positive, also bolstered by the service sector, but manufacturing output contract less - in fact hardly at all - in November which was a good improvement for them.In India, they again reported strong expansions in both their factory and service sectors. But worryingly, there are tangible signs of serious economic over-heating with cost inflation pressures near extreme levels. Something will break soon. And climate over-heating could also leave the economic situation in a messy place.In China, a selloff in Chinese stocks deepened on Friday as disappointing tech earnings hurt sentiment already weakened by concerns over Trump’s imminent return.In Europe, their PMIs were disappointing again, with the expansion in their services sector ending, and it joining the contraction they have had for a while in their factory sector. New orders slipped for a sixth month running. Although still modest, the rate of contraction in November was the most marked since January.In Australia, their November PMIs were also again disappointing. Business activity slipped as services activity joined manufacturing output in contraction. The reduction in activity coincided with a slowdown in new order growth while external demand remained subdued. But despite this, business sentiment was resilient as confidence in future conditions reached a 15-month high. Go figure.The UST 10yr yield is now at just on 4.41% and little-changed from Saturday at this time. A week ago it was +4 bps higher.The price of gold will start today at US$2716/oz and up another +US$10 from this time Saturday. That makes the weekly gain +US$149 or up +5.8%.Oil prices are holding at just over US$71/bbl in the US while the international Brent price is still just under US$75/bbl. A week ago these prices were -US$3.50 lower respectively.The Kiwi dollar starts today at 58.3 USc and unchanged from this time Saturday but down -40 bps in a week. Against the Aussie we are still lower at 89.7 AUc. Against the euro we still at 56 euro cents. That all means our TWI-5 starts today at just on 68.3, little-changed from Saturday but down -40 bps in a week.The bitcoin price starts today at US$96,743 and down -2.3% from this time Saturday. Volatility over the past 24 hours has been moderate at +/- 2.3%.You can find links to the articles mentioned today in our show notes.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 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 about separate corruption cases involving Gautam Adani, and Matt Gaetz.But first today, the US labour market is maintaining its strength, despite strikes and tropical hurricanes. Last week only +213,000 people filed for initial jobless claims, well below the prior week, below what seasonal factors would have brought, and below the same week last year. This was a seven month low. Continuing claims inched up the prior week to 1.67 mln but that was about the same level as last year.Those job gains are helping their housing market. Existing home sales rose in October by +3.5% from the previous month to an annualised rate of just under 4 mln. While this level is pretty tame for them, it is off the September low which had the distinction of being a q14 year low. Industry insiders are hoping October's rise signals a trend turnaround. But it is hard to see with mass layoffs in the US Federal workforce imminent, it might be a vain hope.In contrast to the big jump in the New York region, the Philly Fed's factory survey dipped in November, but new order levels remained positive, and sentiment ahead did too. It was similar in the same report by the Kansas City Fed, where firms expect increases in production, new orders, and employment in the next six months.In Canada, producer prices turned up in October after easing in the prior month, to continue a trend that started in April. But the rises are not inflationary.In India, the depth and pervasiveness of corruption is on display in a case that is gripping the country. The BSE fell -0.5% on the news. And PM Modi is annoyed by the revelations as Adani has been important in his rise. In New York, Indian billionaire Gautam Adani was indicted on bribery charges in a US federal court yesterday, with prosecutors alleging the 62-year-old tycoon and other Indian executives promised more than US$250 mln to Indian government officials to win contracts. Bribery is also at the heart of a Swiss case against the same people. And Indian steel makers have faced similar allegations. But given the pervasiveness of corruption in India at the top level, there is probably little that will change there, especially as the BJP controls their government. The Americans are prosecuting because Adani did not disclose the bribes in documentation for fundraising in US markets, and it was considered to be a material factor for the investments.Ending a long series of improvement, the EU consumer sentiment survey reported a fall to a more negative result in November. Despite this, data out for EU car sales was quite positive, putting the August and September say behind it and returning to levels that have been 'normal' since mid-2022.In Turkey, they reviewed their policy rate and held it at 50%. Turkey has inflation running at 48%.In South Africa, they also reviewed theirs and cut it by -25 bps to 7.75%. South Africa has inflation running at 2.8% and falling quickly now. It is back within its target range.Container shipping freight rates were little-changed last week. Bulk cargo rates spiked during the week, but ended up basically unchanged from last week.The UST 10yr yield is now at just on 4.42% and up +1 bp from yesterday at this time. Wall Street started its Thursday little-changed, but then rose +0.7% on the S&P500 and rising when Matt Gaetz said he won't be the US Attorney General.The price of gold will start today at US$2649/oz and up another +US$26 from this time yesterday.China has found new gold reserves in central Hunan province, state outlet Xinhua News reported yesterday. China is the world's largest gold producer, accounting for around 10% of global outputOil prices are again little-changed, up just +50 USc to just over US$69.50/bbl in the US while the international Brent price is now just over US$73.50/bbl.The Kiwi dollar starts today at 58.6 USc and down -10 bps from this time yesterday. Against the Aussie we are -40 bps lower at 90 AUc. Against the euro we unchanged at 55.8 euro cents. That all means our TWI-5 starts today at just over 68.3, and down -20 bps from yesterday.The bitcoin price starts today at US$97,247 and up +3.7% from this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.7%.You can find links to the articles mentioned today in our show notes.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.Today we lead with news both China and the EU seem to be facing banking & debt pressures, different of course, but each challenging in its own way.But first in the US, mortgage applications edged slightly higher last week from the week before to be -30% lower that at the end of September and about the same weak level as a year ago. Rising mortgage interest rates are holding them back with the latest rise to 6.90% the fourth week in a row and the highest since early July. Trump and market expectations that the new Administration policies will be inflationary, is getting the blame for the higher interest rates.Yesterday we noted the bullish outlook for Walmart, as part of stronger American retail activity. But today we also need to note the downbeat assessments from another major retailer, Target.After the unexpected September dip, Japanese exports rose again in October even if the rise of +3.1% from a year ago was less than the rises they had in 2024 to August. Imports rose too, but even more modestly (+0.4%).Taiwanese export orders remain very buoyant, up +4.9% in October from a year ago and a rising pace. The ris was mainly driven by increased export orders for electronic products.The Chinese central bank left its November Loan Prime Rates unchanged at the new lower October levels of 3.10% for the one year LPR, and 3.60% for the five year LPR.And chickens are coming home to roost for Chinese banks that went along with emergency lending during the pandemic. A government-encouraged surge in lending designed to be a lifeline for small businesses during the pandemic has started to worry their banks, as misappropriation has caused the loans to go bad at an increasing rate due in part to China’s stubborn real estate slump. The official response to the problem? ease back on lending standards.The Indonesian central bank reviewed its policy rate yesterday and left it unchanged at 6%, as expected. Although they trimmed -25 bps in mid-September, they haven't really started their easing cycle yet. Inflation is running at a very low +1.7% pa, and within their policy target band so they must be close. But a big factor for them in currency stability and a high real interest rate is keeping the rupiah from depreciating at a faster rate. Global tensions, both trade and geopolitical tensions, are the main factors here.In its latest financial stability review the ECB is warning that the combination of low growth and high debt is about to play out there with some severe economic stress.In Australia, employers paid more than AU$103.7 bln in wages and salaries in the September month, up +6.3% from a year ago, and the first time it has exceeded AU$100 bln an any month. It part of a longer trend and is up +14.1% from September 2022 levels.The UST 10yr yield is now at just on 4.41% and up +2 bps from yesterday at this time.The price of gold will start today at US$2649/oz and up another +US$26 from this time yesterday.Oil prices are little-changed, still just over US$69/bbl in the US while the international Brent price is still just over US$73/bbl.The Kiwi dollar starts today at 58.7 USc and back down -30 bps from this time yesterday. Against the Aussie we are -10 bps lower at 90.4 AUc. Against the euro we unchanged at 55.8 euro cents. That all means our TWI-5 starts today at just over 68.5, and down -10 bps from yesterday.The bitcoin price starts today at US$93,816 and up +1.6% from this time yesterday. Volatility over the past 24 hours has again been modest at +/- 1.9%.You can find links to the articles mentioned today in our show notes.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.Today we lead with news dairy prices are still rising.We got an increase in dairy prices at the overnight GlobalDairyTrade auction from the prior event, but it was a small pullback from prices at last week's Pulse event. Overall prices were up +1.9% in USD terms, up +3.6% in NZD terms, so a good result. WMP let the rises with a +3.2% gain, but the main pullbacks were in the cheeses with cheddar down -3.1% and mozzarella down -6.6%. SMP rose +0.9% from the prior full event but was down -1.1% from last week's Pulse event.This is still a good result and will probably encourage some analysts to update their new season payout forecasts, just as BNZ analysts did last week. The possibility of a $10/kgMS payout is still in play after these results.Holding the WMP prices up is the unexpectedly sticky fall in Chinese milk production (due to low profitability) and a rather steep and unexpected fall in their WMP inventories. This will underpin WMP demand for a while and rising New Zealand production will bring a virtuous tone to the party as well.In the US, although the average American voter may have voted 'negative', they are acting 'positive' in their spending with the Redbook retail sales growth up +5.1% last week from the same week a year ago. And those sort of gains are what giant Walmart is racking up. (Presently, these gains are essentially volume gains. But of course, if the US gets aggressive tariffs, price rises will drive these numbers higher with inflation.)US housing starts hit a bump in the road in October, down -3.1% to just over a +1.3 mln starts (annualised rate), but the fall was because construction activity fell sharply in the South due to their hurricanes. Obviously that will recover soon for the same reason. But in the background it is generally challenging for house builders because mortgage interest rates are remaining high. Still, sales at a 1.3 mln is about average for 2024.A big question hangs over the US housing markets, both for new and used houses. The incoming Administration seems committed to quitting the two big institutions that make the market for 30 year fixed mortgages, Fannie Mae and Freddie Mac. They tried in the last Trump Administration and were thwarted by Congress, but they seem more determined this time. If that happens it will be an earthquake for housing finance in the US, and probably be the demise of their unique long-term fixed rates.September data released yesterday by the US Treasury shows a huge inflow of foreign funds into the US. There was +US$341 bln of private net flows in the month, plus another +US$57 bln by "official" (government) transactions. This is easily the largest single monthly inflow ever. (For reference, the US Federal Government deficit averaged -US$153 bln monthly in the year to September.)Canadian CPI inflation was up +2.0% in October, a blip up from September's +1.9%. Their food prices were up +2.7% within that, rents up +7.3%. But these were offset by much lower energy costs.After growing rather well in the April to August months, Malaysian export growth as pulled back in September and October with only modest changes. Malaysian import growth is pulling back too, but it this is still expanding at twice the export growth rate.In Hong Kong, the clampdowns on freedoms of expression are getting fiercer. And it is no longer 'legal' to mention Jimmy Lai, let along the umbrella freedom protests.And China is moving to make it an offense to operating in financial markets unless pricing is "rational".In India, they are again battling seasonal air pollution, and it is particularly bad this year, especially in the north.The UST 10yr yield is now at just on 4.39% and down -6 bps from yesterday at this time.The price of gold will start today at US$2623/oz and up another +US$13 from this time yesterday.Oil prices are little-changed, still at US$69/bbl in the US while the international Brent price is still just on US$73/bbl.The Kiwi dollar starts today at 59 USc and up +30 bps from this time yesterday. Against the Aussie we are unchanged at 90.5 AUc. Against the euro we up +20 bps at 55.8 euro cents. That all means our TWI-5 starts today at just over 68.6, and up another +10 bps from yesterday.The bitcoin price starts today at US$92,318 and up +0.3% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.7%.You can find links to the articles mentioned today in our show notes.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.