Economy Watch

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 investors are much less sure rate cuts will come in 2024.This week, given that American jobs growth remained strong in March, all eyes will now turn to their inflation data with CPI due out on Thursday. That is expected to show inflation rising there slightly to 3.5%, but core inflation easing slightly to 3.7%. And variations will likely colour market responses. The Americans will also release PPI data this week, along with consumer sentiment survey results for April.Of course this week our own RBNZ reviews its OCR. And they will be joined by Canada and the EU. Australia will release its NAB business sentiment survey results, along with the Westpac consumer sentiments survey results, both tomorrow (Tuesday).China will release its CPI and PPI data along with new lending data for March, also both on Thursday.Over the weekend China released its March FX reserves level and it was little-changed as it has been over the prior three months.In the US, their economy added many more jobs than expected. Analysts were thinking the expansion would be +200,000 in March from February, but in the end the headline seasonally adjusted gain was +303,000. On an actual, unadjusted basis the gain on employer payrolls was +659,000. The wider household survey saw an even larger rise of more than +1.04 mln in the month to 161.4 mln people employed both on employer payrolls and the self-employed. Adding more than +1 mln paid jobs in a month is very expansionary. Guessing here, but strong immigration (both legal and illegal) is helping fuel the expansion.Average weekly pay rose +4.1%, bolstering this strength although that was slightly lower than the +4.3% rise to February. In any case it is more than inflation and it shows that even after absorbing the migrant flow it remains 'real'.Today investors are looking past the fact that the Fed may delay rate cuts, realising the American economy is in much better shape than they have assumed, and equity prices are rising, even though bond yields are rising too.The US$5 tln US consumer debt market has been expanding marginally recently although it did show a faster than usual rise in January. The February data out today shows a slower rise and one less than expected. This market indebtedness level runs at 17.8% of US GDP, very much higher than the New Zealand equivalent which is only 3.7% of our GDP.Unfortunately, Canada's labour market isn't showing the same robust expansion in March as the US has, essentially marking time with little change after February's good gains.Australian retail sales are rising but slower than their inflation rate. They were up +1.6% in February from a year ago. But in that same time their inflation indicator rose 3.4%. Any way you look at it, that is a volume drop.The Australian goods trade surplus halved in February from the same month a year ago. It came in at a +AU$6.5 bln surplus, down from +AU$12.9 bln in February 2023. The reasons is the combination of falling exports (-2.4%), and import growth staying high (+17.1%). Of particular note is that both rural and non-rural exports fell more than -3%, but that gold exports were up +25% on that basis.An updated KPMG/University of Sydney report shows that China is sharply reducing its investments in Australia in favour of other Belt & Road states - in fact investing in B&R partners so it can wind down exposure to Australia. A prime example is in nickel mining where China has invested in cheaper (and 'dirtier') nickel mining and processing. Overall in 2023 Chinese investment in Australia fell to AU$1.4 bln, and its lowest level in seventeen years (pandemic excepted).The UST 10yr yield is now at 4.40% and up +1 bps from Saturday, up +20 bps in a week. This is its highest since late November, so a strong bond market signal. The price of gold will start today a little higher by +US$3 from this time Saturday at US$2329/oz and yet another all-time high.Oil prices have slipped a minor -50 USc to just on US$86.50/bbl in the US while the international Brent price is now down a bit more at just over US$90.50/bbl.The Kiwi dollar starts today at just on 60.1 USc and unchanged from Saturday. Against the Aussie we are firmer at 91.5 AUc. Against the euro we are unchanged at 55.5 euro cents. That all means our TWI-5 starts today just on 69.2 and unchanged.The bitcoin price starts today firmer at US$69,783 and up +2.9% from this time Saturday. Volatility over the past 24 hours has been modest at just on +/- 1.5%.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 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 markets don't seem to be worrying about coming 'bad news' ahead of tomorrow's US March labour markets report.US initial jobless claims recorded a minor +2000 rise last week from the week before taking the total to 1.94 mln. But that was a big -74,000 decrease as more benefits expired than new ones were added. A year ago there was almost the same number of initial claims as last week.Updated American job cut data remains incredibly low even if it is rising. US-based employers announced plans to cut 90,300 jobs in March, the most since January 2023, compared to 84,600 in February.Tomorrow we get the March non-farm payrolls data and markets expect employer payroll jobs growth to rise +200,000. You will recall they rose +275,000 in February.Meanwhile US exports of both goods and services were +2.1% higher in February than in January. Imports were +2.2% higher on the same basis so the overall trade balance grew fractionally in the month, although year-to-date, the goods and services deficit decreased -2.8% and remains about -2.7% of US GDP. (New Zealand's current account deficit is -6.9% of GDP.)Canada also reported trade data for February but only for goods trade and their exports rose +5.8% to a new all-time high. Imports rose +4.6%, so their merchandise trade surplus rose to +C$1.4 bln in February.It is a public holiday in China, Ching Ming Festival, although Hong Kong financial markets will reopen today.Global container freight rates continued their retreat from their late January peak. They are now down -28% since then, down -3% in the past week alone. But that leaves them still +65% higher than year-ago levels. The slowness of the recent easing points out that the twin problems in both the Panama Canal (drought) and Suez Canal (security) are not going away; the decreases are because the global logistics system is adapting. Bulk cargo rates eased -7% in the past week, and are in fact now back to long-run average levels.Steel and iron ore prices are back falling, both near their lowest in the past year, probably an early signal markets don't believe Chinese demand will recover any time soon.And speaking of commodities, a new report says the world's population is shifting in very significant ways in an historical turning point. Also, it is not simply a matter of a static or a declining world population – the nature of that population will also change. It will be much older. The report estimates there will be twice as many people over 80 as under five – nearly 900 million over-80s worldwide by 2100. A period of unprecedented demographic and economic adaption awaits our grandchildren. There seems little doubt that small countries will have many more options than large ones, but that the pressures from 'outside' will be enormous.And speaking of natural stresses, keep an eye on Sydney weather this weekend. They seem to be facing a rather extreme meeting of two wild and wet weather fronts.The UST 10yr yield is now at 4.35% and little-changed from this time yesterday. The price of gold will start today softer by -US$5 from this time yesterday at US$2288/oz. But in between it hit a new all-time high of US$2305/oz.Oil prices have fallen -US$1 to just under US$84.50/bbl in the US while the international Brent price is now up at just under US$89/bbl.The Kiwi dollar starts today at just on 60.4 USc and +¼c firmer than this time yesterday. Against the Aussie we are softer at 91.3 AUc. Against the euro we are firmer at 55.6 euro cents. That all means our TWI-5 starts today just on 69.4 and up +20 bps from this time yesterday.The bitcoin price starts today firmer at US$68,048 and up +2.7% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 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 Monday.

The departing Chief Executive of the Insurance Council of New Zealand says if Wellington is hit with an earthquake on a similar scale to the Canterbury quakes, it would “raise some questions” on whether NZ insurers would be able to continue to purchase reinsurance at an affordable cost.“I think reinsurers would still be there. But the ability to purchase reinsurance at a good rate and the degree of capacity that would be available, particularly for property in Wellington, could be really challenging,” he says in a new episode of interest.co.nz’s Of Interest podcast.“Ensuring how we manage that risk is really critical because we're very dependent on offshore capital and reinsurance to help support our insurance programs in New Zealand.”The Insurance Council says to date, private insurers have incurred over $21 billion in expenses due to the Canterbury Earthquakes.Toka Tū Ake EQC has contributed an additional $10 billion, resulting in a total insured cost surpassing $31 billion for the event. The Insurance Council estimates the overall economic losses for the entire sequence are estimated to exceed $40 billion.This week marks the conclusion of Grafton's nearly 12-year tenure as CEO of the Insurance Council and he reflected on his time in the role on the podcast.He says lessons were learnt from the 2010 and 2011 Canterbury Earthquakes, which were then applied to responses to the Kaikōura earthquake in 2016 and the Auckland floods and Cyclone Gabrielle last year as well.“When that [Kaikōura] earthquake struck, which was just a little bit after midnight, I think, on the 14th November, a lot of people were thrown out of bed almost by the earthquake in Wellington. And after the shaking stopped, I rang my counterpart at EQC Ian Simpson [EQC’s Chief Executive at the time] and said, ‘we’ve got to do better than Canterbury and can we meet in a few hours and work out where we go from here’,” he says.“So, within four weeks, we had the foundations of an agreement which enabled insurers to manage and settle claims on behalf of EQC. And that meant that for the customer, there was one point of accountability and responsibility for their claims, their insurer. And so it didn't matter whether it was an EQC claim or an insurer claim, they didn't get bounced around between the two.”“So from that, we then developed a more formal and longer lasting agreement with EQC to be their agents. And I think also the experience of those events from Canterbury through to Kaikōura, meant that when the Auckland anniversary floods and Cyclone Gabrielle came along, we were well seasoned in dealing with these kinds of situations.”Kris Faafoi will be the Insurance Council’s new Chief Executive from next week. Faafoi held a number of portfolios during the Sixth Labour Government before he quit politics in 2022, including Commerce and Consumer Affairs, Broadcasting and Media, Immigration and Civil Defence.You can find all episodes of the Of Interest podcast here.

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 progress toward lower inflation is underway but the road is bumpy.But first up today we should note that American mortgage application levels decreased again last week. Their mortgage rates moved lower last week, but that did little to ignite overall mortgage application activity which is now -13% lower that the weak year-ago levels. Their overall economy may be in a broad-based and resilient expansion but this does not include their housing market.American employments levels are rising. Private businesses in the US hired an extra +184,000 workers in March following an upwardly revised +155,000 in February, and beating forecasts of +148,000. This is the biggest increase in hiring in eight months, with employment especially strong in services. In this survey, pay was up +5.1%. The US non-farm payrolls are out on Saturday NZ time for March and they are expected to show a +200,000 increase.So it might have been a surprise to see that the ISM services PMI for March ease off a little (even if new order levels expanded strongly). Then again, that was not reflected in the S&P Global (ex-Markit) US services PMI which noted further rises in output and new orders, but rates of growth did ease. They found the pace of job creation moderated and selling price inflation rose to an eight-month high. Nothing here signals imminent recession, but clearly inflation is not beaten.Fed boss Powell spoke earlier today, but kept to his recent script saying a rate cut may come later this year, but they are watching the recent firmer inflation data even if they expect it will ease back soon. A colleague suggested the first cut there won't come until Q4.American vehicle sales were expected to rise in March but they disappointed, coming in at an annualised pace of 15.5 mln. Still, this is about the same pace we have seen since April 2023 so it is holding its rise from the depressed period two years earlier than that.In China, new order levels boosted its Caixin services PMI in March. The expansion isn't swift but it is better than a contraction. It was the 15th straight month of growth in services activity, with new business rising to the fastest pace in the year so far.The Qingming Festival 3 day holiday in China will mean data releases there will be light until next week. Equity markets will be closed. They may be glad of the break; a survey of local economists cast growing doubt that the "about 5%" growth target will be reached this year, and it will be progressively harder in years to come.In Europe, inflation levels fell more than expected, getting closer to the ECB target. It declined to 2.4% in March 2024, matching November's 28-month low and that was lower that market expectations of 2.6%.The UST 10yr yield is now at 4.36% and unchanged from this time yesterday. The price of gold will start today firmer by +US$34 from yesterday at US$2293/oz, and a new all-time high.Oil prices have risen +US$1 to just under US$85.50/bbl in the US while the international Brent price is now up at just under US$89.50/bbl. These are new five month highs.The Kiwi dollar starts today at just on 60.1 USc and +½c firmer than this time yesterday. Against the Aussie we are little-changed at 91.5 AUc. Against the euro we are holding at 55.4 euro cents. That all means our TWI-5 starts today just on 69.2 and up +20 bps from this time yesterday.The bitcoin price starts today firmer at US$66,285 and up +1.2% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.8%.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.And today we lead with news yields are climbing as markets recognise the Fed is serious about wanting to see sustained inflation at 2%, and the US economy just keeps on powering ahead. And that is hurting equity valuations.But first, the overnight dairy auction brought higher prices. In USD terms they were up +2.75% and nearly making back the drop at the prior event. However in NZD terms the gain was +4.2%, so risks to farm gate payout forecasts have faded for now. The rises were pretty much across the board and were led by cheddar cheese, WMP and butter.In the US, the February JOLTS report delivered a little-changed set of results, far better than the expected labour market retreats. Job openings actually rose slightly.Meanwhile US factory orders came in higher than expected. New orders rose by +1.4% from the previous month in February. This was above market expectations of a +1% increase to point to further resilience of the US economy. Year-on-year they rose +3.6%.Adding to the bullish theme, the US Redbook index of retail sales rose +5.2% last week compared to year-ago levels.There's more. The Logistics Manager’s Index rose to its highest reading in four months in March amid broad-based expansions in all metrics and continued progress in the transportation sector and a build-up of inventories upstream at the manufacturing and wholesale levels.But it is not all good news; Tesla missed its delivery targets in Q1-2024 by almost -15%, their least since 2022. Their stock dived -4.8% today.. But to be fair it has been on a slide since its peak in July 2023 and has since shed more than -40%.In China, all the news is about Country Garden's current sales failures. But we have heard that all before.German inflation has eased to 2.2% in March from 2.5% the previous month. This was their lowest rate since May 2021, moving closer to the ECB's target of 2.0%.In March, Australian house prices barely moved in both Sydney and Melbourne from the prior month according to CoreLogic analysis. But they zoomed higher in most other major centers. Brisbane, Adelaide and Perth all booked big gains, and year-on-year, Perth is up almost +20%.The UST 10yr yield is now at 4.36% and up another +3 bps from this time yesterday. The price of gold will start today firmer by +US$19 from yesterday at US$2259/oz, and only -US$7 below its new all-time high reached intra-day yesterday.Oil prices have risen +50 USc to just on US$84.50/bbl in the US while the international Brent price is now up at US$88.50/bbl. These are five month highs.The Kiwi dollar starts today at just on 59.6 USc and +20 bps firmer than this time yesterday. Against the Aussie we are unchanged at 91.6 AUc. Against the euro we are holding at 55.4 euro cents. That all means our TWI-5 starts today just on 69 and actually unchanged from this time yesterday.The bitcoin price starts today softer at US$65,516 and down another sharpish -4.6% from this time yesterday. Volatility over the past 24 hours has been very high at just on +/- 4.1%.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 Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news that global manufacturing indicators have turned quite positive.First in China, their official March PMIs have set a bullish tone to start the week. Their official factory PMI rose to 50.8 from 49.1 a month earlier and export orders also recovered. The official services PMI rose to its highest since June. These were followed by the private Caixin factory PMI and that broadly confirmed to improved outlook and new expansion, actually a 13 month high.This apparent recovery energised the Shanghai stock exchange yesterday.In Japan, industrial production fell and their jobless rate rose, both not expected. But that data was for February. For March, their central bank sentiment survey of mostly large businesses remained broadly positive.And in South Korea, industrial production rose and by more than expected.Back in China, the slow motion real estate sector crash rolls on with more troubles at both Vanke and Country Garden. It is more than them of course. And banks that responded earlier to Beijing's call for them to support the sector are trapped in growing bad loans. Asset quality pressure is "immense" said one major bank.In India, we should note a new ILO report that shows the jobless rate for Indian graduates at home was a massive 29%, almost nine times higher than the 3.4% for those who can’t read or write. The unemployment rate for young people with secondary or higher education was six times higher at 18.4%. This data reinforces David Hargreaves point that even if New Zealand's local labour market struggles, it will still look attractive to Indian immigrants. It isn't our attractiveness that draws them, it is the job pressure at home that pushes them out.In the US, the widely-watched ISM factory PMI has been shifted into expansion mode on the strength of new order levels. It joins the internationally-benchmarked S&P Global (ex-Markit) one which already moved to expansion the previous month. But it was the size of the ISM shift that got market attention, enough that the view formed it will keep the Fed from cutting any time soon. Both showed prices are no longer falling.It is not all good news in the US. 'Extend & Pretend' is back, especially in US commercial office markets and particularly for office buildings. The US Fed is on watch for financial stability risks although they claim it is an issue for small and mid-sized banks, not the systemically important big banks.And staying in the US, Fed Chair Powell said that PCE inflation data for February was along the lines of what the Fed wants to see and broadly expected. However, the latest readings aren’t as good as what policymakers saw last year and the Fed can wait to become more confident before cutting interest rates. In fact, he said policymakers don't need to be in a hurry to reduce borrowing costs. The Fed's base case is for inflation to come down but if the base case doesn't happen the Fed would hold rates where they are for longer, he said. Today's PMI's reinforce that position.But he was responding to PCE inflation data for February which rose +2.5% and that was following a January 2.4% rate and a December 2.6% rate. Core PCE inflation rose 2.8% after being 2.9% in the prior two months. Powell and his colleagues won't be unhappy with these levels but they aren't seeing downward progress either.Meanwhile American personal incomes were +1.7% higher than a year ago and personal consumption is +2.4% higher on the same basis. This is the first time income growth trailed spending growth in a long time. It is too soon to know whether this is a turning point, or just a data blip.So perhaps it will be a surprise to know that the University of Michigan sentiment index rose more than expected to its highest level since July 2021.In Australia, inflation expectations, which had been suck at 4.5% since December, actually slipped in March to 4.3%. While this may be its lowest since October 2021, it does emphasise just how sticky Aussie CPI inflation has become.Meanwhile, China has dropped its tariffs on Australian wine after years of sanctions that crippled the billion-dollar export industry.The UST 10yr yield is now at 4.33% and up +14 bps from the end of trading last week. The price of gold will start today firmer by +US$7 from yesterday at US$2240/oz, but -US$26 below its new all-time high reached over the past 24 hours.Oil prices have risen +US$1 to just on US$84/bbl in the US while the international Brent price is now just over US$87.50/bbl.The Kiwi dollar starts today at just on 59.4 USc and -35 bps lower than this time yesterday. Against the Aussie we are unchanged at 91.6 AUc. Against the euro we are holding at 55.4 euro cents. That all means our TWI-5 starts today just on 69 and down -20 bps from this time yesterday.The bitcoin price starts today softer at US$68,671 and down a sharpish -3.7% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.4%.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 tomorrow.

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 natural events will likely have an increasing say in how the international economy operates.But first in the US, mortgage applications were lower last week again, and the good rises in the first two weeks of the month are fading. Even essentially unchanged mortgage interest rates isn't stimulating new loan applications. The talk of an American housing market recovery might be a mirage.There was another UST 7yr bond auction earlier today and that brought rising demand. Today's event delivered a median yield of 4.14% which was lower than the 4.27% at the prior equivalent event a month ago. It is only marginal, but the interest rate load on the US Federal government borrowing is easing.China's industrial profits bounced-back in February, rising by +10.2% from the same month a year ago. They are cheering the 'strong rise'. But we must recall they were especially weak last year. Compared with 2022, the February 2024 result is down -21.2%. And it is -17.7% lower than 2021's result. So they shouldn't be too satisfied. There was almost no recovery in State-owned enterprises - all the current 'recovery' came from the private sector.The central bank of Sweden likes what it sees locally in the track of inflation. It is currently running at 4.5% and has been sticky. But they expect it will fall soon to near 2%. That view encouraged them to signal that their current policy interest rate of 4% will be trimmed soon, starting in May or June.In Australia, their Monthly Inflation Indicator was at 3.4% in February. This is the same rate they reported in December and January. Their core rate fell to 3.9% in February, down from 4.1% in January. Like everyone, they are finding it hard to wring out the last elements of excessive inflation. New Zealand's March quarter CPI rate will be released on Wednesday, April 17, 2024. In Q4-2023 it ran at 4.7%.You know about the West African crisis hitting cocoa production and prices. Now you should know that a cyclone in Madagascar will roil the market for vanilla beans. Vanilla is a main source of foreign currency for the country.And back in the US, warnings are starting to appear that their hurricane season this year could be their biggest and most damaging.Further, we should note that a giant of psychology and a huge contributor to behavioural economics, Daniel Kahneman has died earlier today. He was a Nobel Laureate, and if you haven't read his hugely influential book Thinking, Fast and Slow, which summarises much of his research, you should take the time to do so. The UST 10yr yield will today at 4.19% and down -5 bps from this time yesterday. The price of gold will start today firmer by +US$14 from yesterday at US$2191/oz.Oil prices have fallen -US$1 to just under US$81/bbl in the US while the international Brent price is now at US$85/bbl. American crude oil stocks are running much higher than anticipated.The Kiwi dollar starts today at just on 60 USc and marginally softer than this time yesterday. Against the Aussie we are unchanged at 91.9 AUc. Against the euro we have softened slightly to 55.4 euro cents. That all means our TWI-5 starts today just under 69.3 and again little-changed.The bitcoin price starts today softer at US$68,998 and a full -1.0% dip since this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.4%.Over the Easter holiday break, we will have normal weekend service, and will return with these daily briefings on Tuesday, April 2, 2024.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 Tuesday.

Kia ora,Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news that is increasingly positive in the world's largest economy.First up today, the retail signals in the US are quite positive. Their Redbook survey of bricks-and-mortar store shows sales rose +3.9% last week from the same week a year ago, handily besting inflation again.A bounce back in orders for transport equipment, including aircraft, gave a more-than-expected push to their February durable goods order levels. They came in +8.9% higher than year-ago levels. The capital goods orders came in +11.8% higher on the same basis. Certainly board rooms are giving bullish signals about the future.Meanwhile, February house sales volumes rose in February. They were up a strong +9.5% from January on a seasonally-adjusted basis, but that still left these transaction volumes -3.3% lower than year ago levels. House prices rose marginally, ending a long string of month-on-month retreats that started in July 2023. It's a shift higher that others have noted too.Given this set of positives, it maybe a surprise that consumer sentiment didn't improve in the March Conference Board survey. But it didn't slip either, holding its recent levels. The current mood improved but anxiety about the future did too.The latest US Treasury 5yr note auction was very well supported, delivering a median yield of 4.19% and slightly lower than the 4.25% at the prior equivalent event a month ago. These public debt auctions are not showing any of the expected stress the doomsters anticipated by now. The lower yields are probably driven by normal market expectations of upcoming rate cuts by the Fed. Of course that doesn't mean the outlook is any better - it isn't if no action is taken by Congress to address the deficits.In Canada a measure of their wholesale trade activity rose more than expected in February.In Singapore, they reported a better-than-expected rise in manufacturing production. It grew +3.8% in February from a year ago, easily beating market expectations of a +0.5% rise. The upturn was mainly boosted by a sharp rebound in biomedical manufacturing.The UST 10yr yield will today at 4.24% and down -2 bps from this time yesterday. The price of gold will start today marginally firmer by +US$2 from yesterday at US$2177/oz.Oil prices have risen +50 USc to just under US$82/bbl in the US while the international Brent price is unchanged at US$86/bbl.The Kiwi dollar starts today at just on 60.1 USc and marginally firmer than this time yesterday. Against the Aussie we are also marginally firmer at just over at 91.9 AUc. Against the euro we have firmed slightly to 55.5 euro cents. That all means our TWI-5 starts today over 69.3 and again little-changed.The bitcoin price starts today softer at US$69,695 and a -0.8% slip since this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 0.8%.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.And today we lead with news the American economic juggernaut rolls on, dominating global markets.American new home sales levels in February missed estimates, but ~7% mortgage interest rates basically explain that. They eased by a minor -0.3% from January to an annualised rate of 662,000, and below market expectations of a 675,000 rate.Although the Dallas Fed factory survey eased back a bit in March, it is still at levels better than for most of the past two years. A contracting oil patch doesn't really qualify as 'news' any more.Nationally, the US Chicago Fed's National Activity Index expanded in February and pushing past the January retreat. But to be fair it is in a bit of a yo-yo pattern and has been since the end of the pandemic.Recent estimates of American economic activity generally agree its economy is expanding at about a +2% (real) clip in Q1-2024. For an economy as large as their, this represents the bulk of the global economic expansion, adding more than +US$1 tln in nominal economic activity at an annualised pace. Nowhere else comes close.Interestingly, today's UST 2yr bond auction has brought slightly lower yields. It ended with a median 4.54% yield today, compared with the equivalent event a month ago at 4.64%. Investors are not demanding higher yields from these benchmark bonds despite the rise in issuance. The doomsters are still waiting for their moment – it’s been a very long time for them.In China, the IMF has noted that China needs to take a different path to recovery. It's "fork in the road" comments challenge China's standard paybook to stimulus. Presently they are using their considerable reserves to support the yuan against market challenges.In Taiwan, retail sales grew an eye-catching +9.3% in February from the same month a year ago, a sharp rise from January on the same basis. This was their sharpest growth in retail activity since June 2023. Clothing and food drove the expansion.But things aren't so bullish for Taiwanese industrial production which fell -1% from year-ago levels in February darta released overnight.We have noted the rise and rise in cocoa prices before, but they reached new extreme levels overnight, based on recent poor harvest results in West Africa. US$10,000/tonne (NZ$17/kg) beckons.The UST 10yr yield will today at 4.26% and up +6 bps from this time yesterday. The price of gold will start today firmer by +US$10 from yesterday at US$2175/oz.Oil prices have risen +US$1 to US$81.50/bbl in the US while the international Brent price is now up at US$86/bbl.The Kiwi dollar starts today at just on 60 USc and marginally firmer that this time yesterday. Against the Aussie we are -¼c lower at just over at 91.8 AUc. Against the euro we are still just on 55.4 euro cents. That all means our TWI-5 starts today under 69.3 and little-changed.The bitcoin price starts today up strongly at US$70,247 and a +7.4% rise since this time yesterday. Volatility over the past 24 hours has been very high at just on +/- 4.3%.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 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 all eyes are on China to see if they pull the trigger on their old stimulus playbook again.But first this week, the focal point in the United States will revolve around the PCE price indexes, and data on personal income and spending. Other key data include durable goods orders, their final Q4 GDP growth reading, a key consumer confidence survey, and housing market indicators such as new and pending home sales.It will be a busy week in Japan with BoJ minutes, and data on their unemployment rate, industrial production, retail sales, and housing starts. It will be a quieter week for Chinese economic releases but it will include data on industrial profits. And markets will pay close attention to potential stimulus announcements and how authorities will let the yuan’s price shift. In Australia, February’s inflation rate is expected on Wednesday and a rise is expected, inflation expectation survey data may come in before that, while markets also await the Westpac consumer confidence survey results.And staying in Australia, there is plenty of evidence their housing market is back on a roll with an active auction market this past weekend and sales volumes high.Prices seem to be rising. Behind it all is a shortage of housing as their inward migration levels rise fast.Meanwhile the Australian central bank released its half-yearly Financial Stability Report on Friday and it concluded that while conditions will remain challenging for many households and businesses there this year, "strong conditions in the labour market, the large savings buffers accumulated by many borrowers during the pandemic and rising housing prices are helping households to adapt." The Australian financial system has a high level of resilience and is well positioned to continue to support the economy, they say.In China, incoming foreign direct investment fell more than -19% in February from a year ago, the largest fall since the GFC and far more than in the early stages of the pandemic. Recent 'legal' changes and the rise of the MSS in the Middle Kingdom is making it too tough to operate there. The trade disengagement underway isn't ending. Only US$14.3 bln arrived as investment in February about half the stunted levels on one and two years ago.Meanwhile, China is making a concerted effort to qualify for the CPTPP trade group with new 'negative list for cross-border trade in services' management. "We have proactively aligned our policies and legislation with the CPTPP rules in relevant areas and are well-prepared for market access offers in goods trade, trade in services and investment," a spokesperson said over the weekend.The recent visits by Chinese foreign minister Wang Yi to both New Zealand and Australia in an unusual 'charm offensive' by the usually prickly Wolf Warrior needs to be seen in the light of this CPTPP push.In Japan, inflation is finally embedding there. It's been a long slog to get out of deflation. Their inflation rate climbed to 2.8% in February from 2.2% in the prior month, the highest figure since last November. It has been over 2% since March 2022.Across the Pacific, although they eased in January Canadian retail sales rose in February according to an early estimate. But both shifts are minor. Hesitating car sales are behind the lackluster results.Across the Atlantic, German companies are gaining confidence, and rather quicker now. Sentiment for Europe's largest economy reached its highest point since June 2023, fuelled by anticipations of potential interest rate cuts by the European Central Bank and a gradual easing of inflationary pressures. But German consumer sentiment remains stick at low levels, generally unchanged since May 2022.The UST 10yr yield will today at 4.20% and down -2 bps from this time Saturday, and -11 bps from a week ago. The price of gold will start today firmer by +US$6 from Saturday at US$2165/oz. But that is little different to week-ago levels.Oil prices have stayed at US$80.50/bbl in the US while the international Brent price is still at US$85/bbl. These levels are also unchanged in a week.The Kiwi dollar starts today at just under 59.9 USc and marginally lower that this time Saturday. A week ago it was at 60.9 USc so a -1c fall since then. And it is the first time in four months since we have been below 60 USc. Against the Aussie we are marginally firmer at just over at 92.1 AUc. Against the euro we are still just on 55.5 euro cents. That all means our TWI-5 starts today at 69.3 and down -60 bps in a week.The bitcoin price starts today at US$65,430 and up +2.9% from this time Saturday. A week ago this price was US$68,378 so a -4.3% fall since then, Volatility over the past 24 hours has been modest at just on +/- 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.