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.And today we lead with news the world's economy is handling the US tariff-tax buffeting quite well.Financial market reactions to the US Fed rate cut yesterday, and the nature of its split decision, has seen the USD fall, bonds shift to a risk averse tone, and Wall Street retreat, although it has recovered to break-even in the past hour. The oil price has fallen as demand estimates in the US fade.Today, in a very big shift, there were 313,100 actual initial jobless claims last week in the US which is the largest weekly rise since early in 2020. There are now 1.965 mln people on these benefits, +2% more than at this time last year.We should also note that the US home ownership rate in Q3-2025 was 65.3%. A year ago it was 65.6%. (In New Zealand it is 66.0%.) Their rental vacancy rate is now 7.1%, up from 6.9% a year ago.US wholesale inventories are rising according to late-released September data, now up +4.8% from a year ago. But their inventory-to-sales ratio isn't anywhere near concerning levels yet.US exports rose marginally in September, largely driven by the export of gold which accounted for 70% of the monthly rise. Computer exports fell, and travel receipts by visitors also retreated notably. Meanwhile imports into the US were little-changed. The shift of gold out enabled them to record their lowest trade deficit since 2020.In Canada however, their export growth was much stronger, and also featuring gold. Their exports jumped +6.3%, while imports were down -4.1%. That turned a trade deficit of -C$6.4 bln in August to a small trade surplus of +C$153 mln surplus in September and ending the 2025 negative monthly outcomes. Canada's exports of aircraft, and energy products (oil and electricity) rose significantly in September.Across the Pacific, Japan’s Business Survey Index for large manufacturers rose to +4.7% in Q4-2025, up from 3.8% in the prior quarter and the strongest reading this year. This was better than expected, underscoring continued resilience despite trade frictions, growth concerns and their mounting fiscal risks.China has signaled that 2026 economic support from Beijing will be more modest than many had thought it would be.Switzerland reviewed its interest rate overnight and left it at 0%. They have inflation at +0.2%.We can also note the Central Bank of Turkey cut its policy rate by -150 bps to 38% overnight, a fourth consecutive reduction, and by more than markets expected. They claim inflation is starting to ease, especially food inflation. Overall inflation is still running over 30% pa, although that is half the rate of a year ago.In Australia, their November labour market report showed employment fell -21,300 (s.a.) from October, an unexpected result, but remained +182,400 higher than a year ago. Full-time employment fell -56,500 but part-time employment rose +35,200. Their jobless rate was stable at 4.3%. Underemployment rose to 6.2%.Container freight rates rose +2% last week from the prior week, largely on the back of rising rates from China to the EU. Rates from China to the US are falling as trade volumes ease. These container rates are now -45% lower than year-ago levels. Meanwhile bild cargo rates are +111% higher than year-ago levels, after last week's -14.8% fall off the recent peak.The UST 10yr yield is now at 4.12%, down -4 bps from this time yesterday.The price of gold will start today at US$4273/oz, and up +US$70 from yesterday and back near its peak. And we should note again that silver has set a new record high, just under US$64/oz with another big move.American oil prices are down almost -US$1 at just over US$57/bbl, while the international Brent price is just under US$61/bbl.The Kiwi dollar is +30 bps firmer from yesterday, now at just on 58.2 USc. Against the Aussie we are up +10 bps at 87.2 AUc. Against the euro we are down -20 bps at 49.5 euro cents. That all means our TWI-5 starts today at just under 62.3, and up +30 bps from yesterday.The bitcoin price starts today at US$89,977 and down another -2.5% from this time yesterday. Volatility over the past 24 hours has been moderate, at just over +/- 2.5%.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 markets have essentially been on hold overnight awaiting the US Fed's decision.In the end, the Fed's FOMC trimmed its key rate by -25 bps to 3.75% as markets had guessed it would do. But it was not unanimous. The Trump stooge on the committee wanted a far larger cut. But the professional members fear inflation still and the small trim was the uneasy compromise. The voting was 9 members to cut by -25 bps, two to hold unchanged, and Miran wanting a big cut.Immediately after, the UST 10yr benchmark was active with a softish tone but really little-changed. the S&P500 rose, and the USD fell slightly. More reaction will come after Chairman Powell's press conference which is about to start soon.Earlier, the report on US mortgage applications was quite positive, up 4.8% last week from the week before which you may recall brought a small but unexpected retreat. The latest week however was all about refinance applications which were up +15% on that same prior week basis.An Q3-2025 data for US payroll compensation costs (pay plus payroll taxes plus benefits) were up +3.5% from a year ago, rising at about that rate in the latest quarter too. So American inflation isn't getting any respite from this direction.Quite how odd the US public policy has become is revealed in a current court case. US Federal prosecutors spent over a year extraditing a Belarusian woman to the US to face charges she illegally smuggled US tech to Russia for its war on Ukraine. Then ICE stepped in accusing her of being in the country illegally, and deported her, collapsing the case. Moscow smirked in satisfaction.In Canada, their central bank stood pat, holding their policy rate unchanged at 2.25% as widely expected. The say this is about the right level in the current uncertain environment. But they were surprised by the upside growth of GDP at +2.6% in the third quarter, found the labour market improvement better than anticipated as their unemployment rate fell. CPI inflation slowed to 2.2% in October and they see core inflation remaining in the 2.5% to 3% range.Across the Pacific in China, there was a slight rise in CPI inflation, enhance because the previous inflation was so low. Their inflation rose 0.7% in November from a year ago, as expected and accelerating from a +0.2% increase in October. This time, food price inflation was very low. It was the second consecutive month of consumer inflation and the fastest pace since February 2024.Meanwhile China's producer prices fell into a steeper deflation, down -2.2% in November from a year ago.And the IMF has raised its forecast for growth of the Chinese economy for 2025 and 2026, now expecting to see an expansion of +5.0% this year.And some influential analysts are saying the Chinese yuan is 25% undervalued and will appreciate more than forwards contracts are pricing for 2026.And in the EU, the ECB boss Christine Lagarde says they will likely raise their forecast for EU growth as well.In Australia, if you are retired and have assets, you need to pay a tax on a deemed rate of interest on your assets (irrespective of what they actually earn, if anything). That rate depends on how many assets you have. They raised it in September 2025 and have now signaled they will raise it again in March.The UST 10yr yield is now at 4.16%, dipping -0.1 bp from this time yesterday and holding that after the Fed decision.The price of gold will start today at US$4204/oz, and down -US$17 from yesterday. And we should note again that silver has set a new record high, just under US$61/oz.American oil prices are little-changed at just om US$58/bbl, while the international Brent price is just under US$62/bbl.The Kiwi dollar is +10 bps firmer from yesterday, now at just under 57.9 USc. Against the Aussie though we are again essentially unchanged at 87.1 AUc. Against the euro we are down -10 bps at 49.7 euro cents. That all means our TWI-5 starts today at just over 62, and down -10 bps from yesterday.The bitcoin price starts today at US$92,274 and down -2.3% from this time yesterday. Volatility over the past 24 hours has been modest, at just over +/- 1.4%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to 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 the world is awash in better economic news today in many of the world's largest economies.First, the overnight dairy Pulse auction of the two key milk powders brought more weakness. The SMP price fell another -0.5% from last week's full auction, but as the NZD is rising, it was actually down -1.6% in NZD terms. The WMP fared worse, down -3.6% on the same basis in USD, down -4.2% in NZD. It is not a good trajectory.In the US there were some key labour market reports out today. First the weekly ADP private payrolls update for last week recorded a small +5000 gain which follows five consecutive weeks where they recorded more than a -27,000 loss of jobs (which was consistent with what they reported for the November month).And the catch-up JOLTS report for October showed little-change from September, but job openings were a little higher than anticipated for both months.And the widely watched SME sentiment survey from the NFIB was marginally better than expected, up slightly from October, but just back to the levels it has been at since May although that still leaves it at a slight net negative. Interestingly, the retail Redbook survey eased back a bit last week to the average rise it has recorded since later 2023, which mirrors retail inflation that is juiced by tariff-taxes. It is perhaps an indicator that the Thanksgiving seasonal retail was not as strong as hoped.There is more evidence that Trump is just plain dumb. After his failure to get the Chinese to buy US soybeans at scale, he is rolling out US$16 mln in taxpayer support for some farmers which will actually be very little for most. Now he is threatening swingeing tariffs on Canadian fertilizer imports of potash, oblivious that even if that blocks cheap Canadian imports, it will leave high-priced local product, with a net loss for farmers, probably exceeding US$15 bln. Even a high school economics student can see the flaws in his approach, which embeds higher costs on Americans.Trump has also handed China a huge AI chip win, agreeing to let Nvidia sell its best stuff to China. This will allow China to close the gap on the US AI advantages much faster now. The US security community is gobsmacked. China may not buy a lot, but it doers give them access to the technology.In Japan, machine tool orders were strong in November, up +14.2% from a year ago continuing expanded growth over the past seven months. But domestic demand actually fell. It was foreign orders that were the star here, up by +23%.Next week, there will be an important central bank meeting in Tokyo. Overnight remarks by the Bank of Japan governor seemed to set the groundworks for another rate rise on the basis that inflation is embedding, especially wage inflation, and that the risks of deflation there are receding on a permanent basis. Japanese long term interest rates are now approaching 2% and a twenty year high..Taiwanese exports were exceptionally strong again, as we have come to expect. They surged +56% in November from a year ago to a record US$64 bln, up from a 49% gain in October and again better that market expectations for a 41% rise. It is strong global demand for their chips and AI technology that is powering these amazing results.German exports also rose in October, a surprise because that had risen strongly in September and a small correction was expected.We get US export data on Friday, and in contrast to Japan, Germany, Taiwan and China, they are currently expected to show a retreat.In Australia, the RBA kept the cash rate on hold at Tuesday's review as expected. Their review was slightly more hawkish, firmly focused on the upside risks to inflation. And that is what financial markets reacted to with bond yields rising as a result.And staying in Australia, the NAB Business Confidence Index slipped in November from October, but stayed just positive, although the weakest reading since April. The survey showed business conditions softened after declines in sales and profitability.The UST 10yr yield is now at 4.17%, unchanged from this time yesterday.The price of gold will start today at US$4217/oz, and up +US$26 from yesterday. And we should note that silver has set a new record high, over US$60/oz.American oil prices are down -US$1 again at just over US$58/bbl, while the international Brent price is just under US$62/bbl. Analysts are sow saying a 'super glut' of oil is on the way, and downward price pressures will rise from here.The Kiwi dollar is +10 bps firmer from yesterday, now at just on 57.8 USc. Against the Aussie though we are essentially unchanged at 87.1 AUc. Against the euro we are up +20 bps at 49.8 euro cents. That all means our TWI-5 starts today at 62.1, and also up +20 bps from yesterday.The bitcoin price starts today at US$94,444 and up +5.1% from this time yesterday. Volatility over the past 24 hours has been moderate, at just over +/- 2.4%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to 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 long term bond yields are on the move higher again with the UST 10yr at a 4 month high, but the Japanese yen is now at a 27 year high. The Australian equivalent is at a 2 year high and threatening a 14 year benchmark, while the NZGB 10 year is at a 5 month high.In the US, the top-line survey of inflation expectations seems stable at a highish 3.2% for the year ahead, 3.0% for 5 years ahead. But within that are some signals that have garnered attention. Expectations for food rose to 5.9%, petrol climbed to 4.1%, medical care surged to 10.1% (the highest since January 2014), college education increased to 8.4%, and rent jumped to 8.3%. The main reason the overall lid remained is that house price expectations fell. The survey indicated that consumers expect a worsening financial situation.The failure of the Trump Administration to get a deal out of China for agricultural exports is seeing them scrambling to support their farmers with direct subsidies.There was another US Treasury auction today, the ever-popular 3 year Note. But offer volumes fell more than -7% for this event. It delivered a median yield of 3.57%, little-changed from the 3.54% at the prior equivalent event a month ago.In Japan, a powerful earthquake with a preliminary magnitude of 7.5 struck northeastern Japan late Monday night, with aaa a tsunami warning for coastal areas of Hokkaido issued.Japan’s GDP contracted -0.6% in Q3 2025 from Q2, a larger fall than the flash estimate of a -0.4% decline and market forecasts for a -0.5% drop. The latest figure followed a downwardly revised -0.5% growth in Q2 and marked the first quarterly contraction since Q1 2024, with business spending slipping for the first time in three quarters.In China, they released November trade data overnight and their exports rose by +5.9% from a year ago to an eleven-month high, much better than the expected +3.8% rise and recovering from the -1.1% fall in October. There was a notable surge in exports to non-US markets. A lower than expected rise in imports delivered at trade balance exceeding +US$110 for the month and extending their rise that started with the Trump challenge in late 2024. Separation from the US has delivered a rising export dividend for China. For the eleven months of 2025 so far, the Chinese trade surplus has now exceeded US$1 tln.Over all of 2025 to the US, their exports fell -18% and their imports fell -13%. To Australia, China's exports are up +8% while imports are down -8%. To New Zealand, China's exports are up +4% while their imports are up +10%.As good as these export numbers are for China, they are also going into debt at an equally impressive rates. China’s central government will likely issue more than CNY12 tln (US$1.7 tln) of new debt in 2026, with a fiscal deficit ratio of at least 4%. There is alarm in some quarters as the expansionist policies get the official tick..In Europe, German industrial production rose +1.8% in October from September, sharply outperforming market expectations for a -0.4% decline. It was the strongest monthly gain since March. Year on year it is up +0.8%. The Germans measure this metric in real, inflation-adjusted terms.The UST 10yr yield is now at 4.17%, up another +3 bps from this time yesterday. The price of gold will start today at US$4191/oz, and down -US$6 from yesterday.American oil prices are down -US$1 at just over US$59/bbl, while the international Brent price is just under US$63/bbl.The Kiwi dollar is marginally softer from yesterday, now at just under 57.7 USc, down -10 bps. Against the Aussie though we are up +10 bps at just on 87.1 AUc. Against the euro we are unchanged at 49.6 euro cents. That all means our TWI-5 starts today at 61.9, and little-changed from yesterday.The bitcoin price starts today at US$89,846 and up +0.4% from this time yesterday. Volatility over the past 24 hours has been modest, at just over +/- 1.6%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again 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 long term global bond yields are rising.The coming week will be one dominated by the final central bank monetary policy decisions of the year. The big one, the one that will likely move markets, is the US one on Thursday NZT. Markets expect a -25 bps cut to 3.75%. There will also be central bank decisions from Canada (Thursday, no change expected), Switzerland (Friday, no change), Australia (Tuesday, no change), Brazil (Thursday, no change), and Turkey (Friday, -100 bps).This week will also feature China releasing a series of key November economic data including for exports (expected to be strong), CPI inflation (expected to rise marginally but stay very low), PPI (still in deflation). Monetary and debt data will also be closely watched. In Japan, it will be all about their Q3 GDP, PPI, and machine tool orders.In India, markets will focus on November inflation data.In Australia, apart from the expected no-change RBA decision, labour market data will likely show their jobless rate edging up, and business confidence surveys are expected to be broadly stable.At the end of last week bond markets kept pushing up long term yields. The rise of Japanese long bond yields has this market concerned. But that just comes on top of where US fiscal stability is heading.In the US, personal income data is in catch-up mode with September details released over the weekend. Income was up +1.9% from a year ago while personal expenditures were up +2.1% on the same basis. Their PCE version of inflation was +2.8% and rising. There are no real surprises in this now-old data.Meanwhile US consumer debt rose +2.2% or +US$9.2 bln in October, less than expected and less than the September rise. Revolving debt (like credit cards) rose at an annual rate of +4.9%. Non-revolving debt which includes car and student loans was up +1.2%.Earlier, the University of Michigan December consumer sentiment survey reported it didn't fall from November, posting a small, probably insignificant gain. That leaves it -28% lower than a year ago. Year-ahead inflation expectations decreased from 4.5% last month to 4.1% this month. Despite the nominal improvements, the overall levels across the board remain quite dismal for most consumers there.Canada reported payroll data for November over the weekend and rather than the expected -5000 dip, they got a +53,600 gain in overall employment. But unfortunately for them, all the gains were in part-time employment (+63,000) with full time jobs shrinking -9,400.This extended better-than-expected labour market report is one of the reasons the IMF's latest review of Canada was quite positive. They are impressed by how Canada is handling the attempted-trashing it has been getting from the US.In China, their foreign exchange reserves, already very large, climbed to US$3.346 tln in November and fractionally less than expected. It was the fourth straight month of increases, to the highest level since November 2015 and it happened even though the US dollar weakened. Meanwhile, the People’s Bank of China continued to add to its gold holdings for the thirteenth consecutive month, with reserves edging up to 74.1 mln troy ounces in November and their value rose +4.5% in a month (in USD).In India, and as expected, their central bank cut its key repo rate by -25 bps to 5.25% at its Friday meeting. They claim confidence in a softer inflation outlook. The RBI has now cut rates by a total of -125 bps since the beginning of the year, bringing the repo rate to its lowest level since July 2022.In Japan, household personal spending fell unexpectedly in October, and quite hard. It was down -2.9% from a year ago, way different to the market expectations of a +1.0% rise, and reversing a +1.8% gain in September. It was the first decline since April. From September, personal spending fell -3.5%, and starkly different from the expected +0.7% rise.In Germany, factory orders rose +1.5% in October from September, better than the expected +0.5% gain but slowing from an upwardly revised 2.0% gain in the previous month. From a year ago, their factory orders are down -0.7% however. The latest data was boosted by a very large (+87%) jump in orders for large equipment like aircraft, ships, and trains. There was also a +12% rise in metal production and processing. In contrast, demand for electrical equipment fell -16%. These are all quite big moves with the overall change.Globally, the FAO says its Food Price Index declined for the third consecutive month in November, with all indices but cereals down. Dairy prices were down -1.6% from a year ago, down -11.5% from their June peak. Meat prices were up +5.0% from a year ago but down -2.7% from their recent September peak.It is probably worth noting that the Argentine wheat crop is going to be huge this year, one that will have global impacts. In Australia, the winter wheat crop will be the second largest ever too.Also worth noting is that Trump's boast to farmers that the Chinese will be back buying American soybeans in a major way was just fantasy. They have bought only minor volumes. Administration officials are now admitting there never was any agreement.And we should also probably note that the copper price is moving up sharply again, back toward its US-tariff-induced July heights.The UST 10yr yield is now at 4.14%, unchanged from this time Saturday, up +12 bps for the week. The price of gold will start today at US$4197/oz, and down -US$18 from Saturday, down -US$13 for the week. Silver is moving higher again, back at over US$58.50/oz and near its record high.American oil prices are holding at just over US$60/bbl, while the international Brent price is still at just under US$64/bbl, and up about +US$1 for the week.The Kiwi dollar is marginally higher from Saturday, now at just under 57.8 USc, up +50 bps for the week. Against the Aussie though we are unchanged at just on 87 AUc. Against the euro we are also unchanged at 49.6 euro cents. That all means our TWI-5 starts today at 61.9, and little-changed from yesterday and from a week ago.The bitcoin price starts today at US$89,503 and up +0.7% from this time Saturday. Volatility over the past 24 hours has been modest, at just on +/- 1.0%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news of some notable and sudden rises in freight rates.But first, US jobless claims came in lower last week than expected at 197,200 in a holiday-affected period. Seasonal factors has expected a lesser decrease. There are now 1.7 mln people on these benefits nationally. A year ago, there were 1.66 mln on them.The November job cut tracking shows it was less than in October, coming in for the latest month at 77,000. That ends a strong of outsized monthly cutbacks although it is +24% higher than year-ago levels. In fact for only the sixth time since 1993 has the year-to-date level been higher than 1.1 mln and the 2025 level is now the highest since the pandemic.There was also catchup data out overnight for US factory orders for September. They were little-changed from August but were +5.3% higher than year-ago levels. They are still struggling to recover official stats and no revised dates are available for their October or November updates.Meanwhile the NY Feds tracking of global supply chain pressure shows it is easing. Their index eased to -0.16 in November, weakening from -0.09 in October. The index reflects deviations in global supply chain conditions relative to its historical average, with negative values indicating below-average pressure.EU retail sales were up +1.6% from a year ago in volume terms in October, better than the expected +1.2% gain. But that was a slowing in their retail expansion from what they have had for most of 2025.In Australia, household spending rose +5.6% in October from the same month a year ago, and that was its fastest rise since November 2023. It was up +1.3% from September alone, its fastest pace since January 2024 on that basis. Spending on all categories except fuel and health costs rose notably in the month. This data adds to the chance the RBA will be raising rates in 2026.Global container freight rates rose +7% last week from the prior week, ending the recent three-week retreats. Outbound rates from China to the US and to Europe rose while trans-Atlantic rates dipped. Overall container freight rates are now -45% lower than year-ago levels. Also rising, and even more sharply were bulk cargo rates, up +18% from a week ago and these rates are now +132% higher than year-ago levels.The UST 10yr yield is now at 4.10%, up +3 bps from this time yesterday.The price of gold will start today at US$4209/oz, and down -US$9 from yesterday.American oil prices are +50 USc firmer at just over US$59.50/bbl, while the international Brent price is now at just under US$63.50/bbl.The Kiwi dollar is little-changed from yesterday, now at just over 57.7 USc. Against the Aussie though we are down -10 bps at just under 87.3 AUc. Against the euro we are up +10 bps at 49.5 euro cents. That all means our TWI-5 starts today at just under 62.2, and little-changed from yesterday.The bitcoin price starts today at US$92,607 and virtually unchanged from this time yesterday. Volatility over the past 24 hours has been modest, at just over +/- 1.1%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

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 financial markets are absorbing some conflicting American data, and moving sideways today, with the USD easing.There were two services PMIs for the giant US economy out today. The ISM version edged up slightly for November, notable because it was expected to edge down. And the result is the best in nine months for this metric. The continued expansion in both business activity and new orders drove this outcome. Similarly, the S&P Global version for the US service sector reported an expansion although less than in October. Both surveys noted high embedded inflation however.US industrial production rose +0.1% in September from August, following a downwardly revised -0.3% drop in August. This means from a year ago, American industrial production is up +1.6%. Better than a decline but nothing like how the tariff-effects were sold. This activity was far better in the Obama years.But the ADP private sector payrolls report for November brought tough news. Businesses cut -32,000 jobs in November, following an upwardly revised +47,000 gain in October. Analysts were expecting this report to show a +10,000 rise based on ADP's weekly reporting. It is the biggest decline in payrolls since March 2023, led by a -120,000 drop at small businesses. We won't get the official non-farm payrolls report for November until December 17 (NZT), in its delayed restart.And the volume of mortgage applications in the US fell by -1.4% from the previous week in the last week of November to the lowest level in nearly three months. And that happened even though the key mortgage rates fell to a four week low.US vehicle sales were modest in November. They rose from October to 15.6 mln units but that is a long way down from the 16.7 mln in November 2024.Across the Pacific in China, their services sector continues to expand, driven by a sustained increase in new business, though the expansion slowed since October.China's local government debt continues to balloon as the lingering real estate slump has led to decreased income from property sales, pushing local government bond issuance for the year to a record high. The total owed by local governments and the local government financing vehicles that fund their projects now sits at a remarkable ¥134 tln (NZ$33 tln).In the EU, producer prices were little changed in October from September, but from a year ago they have dipped -0.2%. So no inflation pressures from this direction.In Australia, their economy grew less than expected in Q3-2025. Economic activity expanded +0.4% from the June quarter. Markets had expected a +0.7% expansion as it had in Q2-2025. Still, it was the 16th straight quarter of expansion. On a yearly basis, their GDP rose +2.1%, less than forecasts of +2.2% and after a +2.0% growth in Q2.The UST 10yr yield is now at 4.07%, down -3 bps from this time yesterday.The price of gold will start today at US$4218/oz, and up +US$32 from yesterday.American oil prices are +50 USc firmer at just over US$59/bbl, while the international Brent price is now at just under US$663/bbl.The Kiwi dollar is up +40 bps from yesterday, still at just under 57.7 USc. Against the Aussie though we are unchanged at just on 87.4 AUc. Against the euro we have also held at 49.4 euro cents. That all means our TWI-5 starts today at just under 62.1, and up +20 bps from yesterday.The bitcoin price starts today at US$92,535 and up +1.9% from this time yesterday. Volatility over the past 24 hours has been modest, at just on +/- 1.8%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news the world is in a slowdown period as the globally large economies show signs of culminating.But we start today with some tough news. The overnight dairy auction saw prices fall to a two year low, the eight consecutive drop in these auctions. Apart from cheddar cheese which made an unexpected large recovery, everything else fell, especially butter which fell to a two year low in NZD and a three year low in USD. Overall, prices retreated +4.3% in USD and -5.4% in NZD. Falls this large have happened before since mid-July 2024. Analysts had already trimmed their current season payout forecasts, and today's event may have them thinking about revisiting them again. Certainly, the trend isn't positive.The OECD says global economic growth to ease to +2.9% in 2026 from +3.2% in 2025 as tariffs, weak trade and geopolitical uncertainty weigh on activity. In the US, growth is projected to slow to +2.0% in 2025 and +1.7% in 2026. For China, they see economic growth of +5% in 2025 and weaken to 4.4% in 2026 and 4.3% in 2027. Consumption will be dampened by high precautionary savings and the payback effect of the now winding down trade-in program.For New Zealand they said after contracting in 2024, the economy is projected to expand by +0.7% in 2025, +1.8% in 2026 and +2.8% in 2027. Growth will be supported by lower interest rates, improving household real incomes, buoyant tourism, and firm commodity export earnings. However, weak confidence, high energy costs, easing net immigration, and elevated uncertainty surrounding trade restrictions are expected to remain headwinds to the near-term recovery. Inflation is projected to remain within the central bank’s target band, easing towards 2%. The unemployment rate is projected to decline from its peak in 2025.For Australia, they said economic growth is now strengthening and becoming more private-sector-driven. GDP growth is projected to quicken to +2.3% in 2026 and 2027, up from 1.8% in 2025. This is consistent with a gradual closing of the small negative output gap, keeping unemployment low while allowing inflation to remain close to target. Risks are balanced, with downside risks from a greater-than-expected softening of labour market conditions while, on the upside, strengthening disposable incomes could bring a faster acceleration of private consumption.The signals in the US were not as negative today. The RCM/TIPP economic optimism Index recovered in December from is sharp November dip. But to be fair, this only returns it to the below-average levels it reported from March to October.But that rebound was not seen in their logistics sector. The Logistics Manager’s Index eased back to its slowest growth in the sector since June 2024. The slowdown is driven by a continued softening of inventory and warehousing metrics but tempered by some expansion in transportation. Warehousing utilisation contracted for the first time in the 9-year history of the index.However, by some accounts the US holiday retail activity was strong, especially for online trade. Shoppers there spent US$14 bln online on Cyber Monday, pushing total online sales over the Thanksgiving weekend to US$44 bln. Spending rose +7.7% during the so-called Cyber Week - the five days from Thanksgiving to Cyber Monday - compared with an +8.2% increase to $41 bln last year and above its prior expectations of $43.7 bln.Across the Pacific, Japanese consumer confidence rose sharply in November from October to its best level since April 2024, with all components improving:In the EU, inflation is running in their sweet spot. Euro area consumer price inflation rose to +2.2% in November, up from 2.1% in October and slightly above market expectations of 2.1%. Services inflation accelerated to +3.5% however (from 3.4%) and its highest level since April, while energy prices declined at a slower pace.In Australia, and after a big September surge, October's residential building permit levels were expected to be tame by comparison. But in the event it was negative and the September rise was revised lower. And that meant the annual level of consents to October were lower than a year ago and its first year-on-year retreat since June 2024.The UST 10yr yield is now just under 4.10%, up +1 bp from this time yesterday.The price of gold will start today at US$4186/oz, and down -US$47 from yesterday. Silver has held up at US$58/oz.American oil prices are -50 USc softer at just under US$59/bbl, while the international Brent price is now at just over US$62.50/bbl. And we should note that natural gas prices dropped back yesterday after the prior day surge.The Kiwi dollar is down -10 bps from yesterday, still at just under 57.3 USc. Against the Aussie we are also down -10 bps at under 87.4 AUc. Against the euro we have held at 49.4 euro cents. That all means our TWI-5 starts today at just under 61.9, and little-changed from yesterday.The bitcoin price starts today at US$90,852 and recovering +6.4% from this time yesterday. Volatility over the past 24 hours has been high, at just on +/- 3.6%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again 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 global economic expansion is tailing off as we come to the end of 2025.First in the US, we can report that new orders in their factory sector are falling. That is a key factor that has driven the closely-watched ISM manufacturing PMI lower, for a ninth consecutive month, and falling at a faster pace. Survey respondents cite problems with the tariff-taxes, and "trade confusion". And they report high price pressure, and rising The November result is below the deterioration expected. It's a result that has cast a pall over Wall Street today.But the ISM report is only one perspective. The rival S&PGlobal factory PMI reported a November expansion, even a modest rise in new orders. But it also noted that a lot of this 'positive activity' is related to inventory building which won't be sustainable without final customer demand. Financial markets seemed to ignore this alternate PMI.The Canadian factory PMi wasn't positive either for November which reported a marginal contraction. Interestingly, it also reported lower inflation pressures.These two North American factory PMIs feed into a global report that has overall output and new orders rising at slower rates but business optimism rising to a five-month high.In India, their October report for industrial production brought an unexpectedly sharp slowdown, hardly above year-ago levels when +4% year-on-year gains had become the norm for the past two years. We will need to wait for their November result to see if October was just an aberration. They will be hoping so.In Japan, their central bank governor has been speaking and has hinted that a rate hike at their next meeting on December 19 is a live possibility. (see pages 6 & 7.)In China, the alternative PMI to the official version has also slipped in a similar way. The S&PGlobal manufacturing sector PMI shows that conditions deteriorated in November, not by a lot, but certainly going the wrong way. There was no growth in new orders.In Australia, the Melbourne Institute inflation gauge for November rose again and is now further above the RBA's 2-3% inflation target range. Interestingly, while this result is higher, it is lower than the official October CPI rate of 3.8%.After a -2.6% quarter-on-quarter fall in Australian company profits in Q2-2025, they were expected to bounce back in Q3-2025. But in the event they stalled, unchanged, in a disappointing outcome and only +1.1% higher than year-ago levels.And staying in Australia, the Cotality house price tracking rose +1.0% in November, a slight softening from the +1.1% gain in October. Annual growth lifted to +7.1%, with quarterly gains tracking a +13.2% annualised pace. Sydney and Melbourne are the laggards, indicating that affordability has reached its serviceability limits.The UST 10yr yield is now just on 4.09%, up +7 bps from this time yesterday.The price of gold will start today at US$4233/oz, and up just +US$15 from yesterday. But silver has surged again to a new record high of US$58.50/oz, up +US$2 from yesterday.American oil prices are -50 USc softer at just over US$59/bbl, while the international Brent price is unchanged at just on US$63/bbl. And we should probably also note that natural gas prices are rising and are now at their highest except for the pandemic period.The Kiwi dollar is unchanged from yesterday, still at just under 57.4 USc. Against the Aussie we are down -10 bps at just on 87.5 AUc. Against the euro we have held at 49.4 euro cents. That all means our TWI-5 starts today at just over 61.9, and up +10 bps from yesterday.The bitcoin price starts today at US$85,426 and down -7.0%% from this time yesterday. Volatility over the past 24 hours has been very high, at just on +/- 4.3%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to 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 we are waiting for the first indications of retail sales, as the US and EU economies make their run to the end-of-year holiday season. It is this retail impulse that powers much of the global economy.Also, in the week ahead we will get local and Australian building consent data, and the Aussies will release the Q3-2025 GDP growth rate, expected to be +2.2% from a year agoIn the US, there will be more catch-up official data releases but their non-farm payroll data for November has been delayed until mid-December now. However ADP will release its new weekly update and the Challenger job cut report will still come out on time. There will be PMIs for the US and no-one expects much change in any of this. Of special interest will be the end-of-week release of the UofM sentiment survey. Few see any improvement there either with it hovering around record lows.Elsewhere there will be a raft of PMI and trade and inflation releases from many countries. And the Indian central bank meets and is widely expected to cut its policy rate by -25 bps to 4.25% despite the surging growth. Fast-falling food prices means inflation is seen as under control there.Over the weekend India said their economy expanded by +8.2% in September from the previous year from the previous year and well above the expected +7.3% Q3-2025 rise and above the +7.8% growth rate from Q2-2025. It was the sharpest annual growth rate rise since March 2024. India trimmed its GST rates and increased government spending when they were faced with swingeing US tariffs, and that, along with re-orienting trade has supported consumer confidence and private investment. In late September, they simplified their multi-slab GST system with the rates for most goods falling from 12% or 28%, to 5% and 18%. This change has been a big part of their boost, giving more of an effect than anticipated.China said its official November PMIs were weaker and their tepid expansion has turned into a general but small contraction. The main change was for their services sector, shrinking for the first time in three years and joining the ongoing small contraction in their factory sector. That factory sector has now contracted for eight straight months. Both measures would be a lot worse if they didn't have deflation in their input costs. The private S&PGlobal version isn't expected to vary much from that when it is released later today, although it may be on the more positive side. Either way, these indicators are not pointing to an economy expanding like their GDP claims.Japan said retail sales were +1.7% higher in October than a year ago (real) and that was very much better than the +0.8% expected and the +0.2% in September. And Japanese industrial production rose +1.5% in the year to October, an unexpected second consecutive month of expansion and the October month also came in much better than expected.In South Korea there was a big separation between the two sectors. Industrial production declined, and quite sharply in October, although this largely reverses the big surge in September. And their retail sales took an unexpected surge, up +3.5% from September to be +2.2% higher than a year ago.In Canada, they released their September GDP growth outcome over the weekend and their forecast for October. The picture was mixed and they seem to be settling into a bit of a yo-yo pattern. July was up +0.3% for the month, August down -0.3%, September up +0.2% and October's 'flash' result down -0.3%. There is a tendency for the 'flash' results to be revised higher. Generally their goods-producing sector is marginally weaker while their services sector is mixed. From a year ago, Canada's economic activity is up +1.4%.Early reports of US retail trade over the weekend seem positive, but heavily focused online.The UST 10yr yield is now just on 4.02%, unchanged from Saturday but down -5 bps from a week ago.The price of gold will start today at US$4218/oz, and up +US$7 from Saturday. And that is a +US$134/oz rise for the week, or +3.2%.Silver surged in Friday US trade to a record high US$56.50/oz. Chinese inventories have dropped to their lowest level in a decade following heavy shipments to London triggered by a supply squeeze. A Comex outage in the US didn't help either.American oil prices are unchanged from Saturday to be just on US$59.50/bbl, while the international Brent price is little-changed at just over US$63/bbl. A week ago these prices were US$58/bbl and US$62.50/bbl, so a +US$1.50 rise in the US but far less internationally.The Kiwi dollar is up another +10 bps from Saturday, now at just under 57.4 USc. A week ago it was at 56.1 USc so a +120 bps rise since then or a +2.1% appreciation. Against the Aussie we are little-changed overnight at just on 87.6 AUc. Against the euro we have held at 49.4 euro cents. That all means our TWI-5 starts today at just under 62, and essentially unchanged from Saturday, up +110 bps for the week.The bitcoin price starts today at US$91,838 and up +1.5% from Saturday. And it is up +6.9% from this time last week. Volatility over the past 24 hours has been low however, at just on +/- 0.9%.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.