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 China's economic activity over their holiday period will be impressing investors, while the US worries about weakening labour markets.But first, the ongoing US Federal Government shutdown means there is no USDA WASDE report for September that was due today. That will delay scrutiny of "farmageddon" especially for soybean farmers. Bailouts are on the way (in a way Trump hates in other countries) but they won't be large enough to hold off existential issues for many farmers.But despite the shutdown, there was a long-dated bond auction overnight for their 30 year Treasury bond, and it attracted normal levels of support. It resulted in a median yield of 4.67%, up from 4.58% at the prior equivalent event a month ago.Across the Pacific, Japanese machine tool orders for September rose almost +10% from a year earlier to its best September level since the record high in 2022. Driving the increase was export orders, although domestic orders gained too. It is an impressive result for them.Taiwanese exports in September continue to astound. The surged almost +34% from a year ago to more than US$54 bln in the month, their third-highest month ever. Only the prior July and August were larger, so they are on a real roll. This latest data was driven by strong demand for their electronics products, up more than +86% on the same basis. Other machinery exports were good too. You can see why mainland politicians covet their neighbour and want to claim it.In the Philippines, their central bank cut its policy rate unexpectedly by -25 bps to 4.75%.Chian is back from holiday. According to official reports, they estimated the Golden Week holiday generated 888 mln separate travel trips with total overall spending at ¥809 bln (NZ$200 bln). These are record highs with hospitality up +2.7% and tourist spending up +6%. Their overall GST data shows retail activity up +4.5% from year-ago levels for this holiday period. By any measures these are good levels and indicate China's economy is more than holding its own at present. It also indicates that domestic demand can be a sustainable driver for them, much as Beijing has wanted.Supporting this conclusion has been the positive financial market reactions post-holiday from the equity, bond and currency markets.Indonesia reported August retail sales overnight and they expanded at a good pace, up +3.5% from a year ago, and while this wasn't as fast as for July, it does indicate that recent government measures to dig them out of a languid period are working. This is important because social unrest spilled into the streets a few months ago.In Europe, Germany reported August export levels overnight and they came in almost the same as they reported a year ago (€130 bln)In Australia, their October survey of inflation expectations again shows pressure at the top of the recent range. Those expectations edged up to 4.8% from 4.7% in September, continuing high results since June. This is building concerns that Q3 inflation may exceed the forecasts of 3% when it is released on Wednesday, October 29. This latest uptick reflects the impact of unwinding temporary energy subsidies, and elevated labour costs driven by weak productivity.Global container freight rates were little-changed last week, down just -1% from the prior week to be under half year-ago levels. Bulk freight rates were also unchanged for the week to be +5% higher than year-ago levels.The UST 10yr yield is now at 4.15% and up +1 bp from yesterday at this time.The price of gold will start today at US$3980/oz, down -US$73 from yesterday and now well off its high. Volatility is setting in. Silver is down too but not by as much, now just under US$49/oz. Earlier in the day it hit a new ATH before the pullback.American oil prices are down -US$1 at just on US$61.50/bbl, with the international Brent price now just under US$65.50/bbl.The Kiwi dollar is at just on 57.4 USc, down another -40 bps from yesterday. Against the Aussie we softened -10 bps at 87.7 AUc. Against the euro we are down -10 bps at 49.7 euro cents. That all means our TWI-5 starts today at just on 65.2, down -20 bps from yesterday.The bitcoin price starts today at US$120,690 and down -2.0% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 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 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 it seems the absence of official US economic data isn't holding back financial market risk takers, and even the data that is available, none of it very positive, isn't restraining them either.First in the US, consumer debt growth seems to have evaporated in August. They were expecting a 'normal' +US$12 bln expansion, better than last year's +US$9 bln rise. But they only got +US$0.3 bln and far below anticipations. It rose at the slowest pace in six months, held back by a decline in credit card balances. Even car loan growth slowed to a crawl. It is a notable cooling in household borrowing, consistent with the expectation survey we noted yesterday that reported worries about jobs and interest rates are on the rise.US mortgage applications fell again last week, extending the big fall the previous week. This came even though mortgage interest rates also fell.A host of alternative jobs data from Wall Street are pointing in the same direction: the American labour market is losing steam. Many of these reports and surveys are private, for subscribers only, and so give a new advantage to a few. But even this data is still ignored by frothy markets.There was a less-well supported US Treasury auction overnight for their ten year Note, and that delivered a median yield of 4.06% which was up from the 3.99% at the prior equivalent event a month ago.Meanwhile the release of the minutes from the last Fed meeting saw benchmark rate rise slightly, the US dollar halt its rise, and the S&P500 yawn.In Japan, the Reuters Tankan business confidence survey came in quite positive again in September, although lower than for August which was unusually buoyant. Since April this survey has been quite positive.In Taiwan, their September inflation rate fell to 1.25%, their lowest since March 2021 and down from 1.6% in August. It is also now well below their central bank's target of 2%.In China, they return from holiday today and businesses and financial markets will re-open. By official accounts, the level of economic activity during this break was high.The UST 10yr yield is now at 4.14% and up +2 bps from yesterday at this time.The price of gold will start today at US$4053/oz, up +US$80 from yesterday and a new high. Silver is taking off again, now at US$49.50. (By the way its record high was just under US$51 in March 2011.)American oil prices are up +US$1 at just on US$62.50/bbl, with the international Brent price now just under US$66.50/bbl.The Kiwi dollar is at just on 57.8 USc, down another -30 bps from yesterday. Against the Aussie we softened -30 bps at 88.7 AUc. Against the euro we are down -10 bps at 49.8 euro cents. That all means our TWI-5 starts today at just on 65.4, down -20 bps from yesterday.The bitcoin price starts today at US$123,124 and up +1.1% from this time yesterday. 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 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 most of the latest economic data seems to be on a downslide.The overnight dairy auction brought slightly easing prices, although not be as much as the derivatives market had signaled. In the end prices fell -1.6% in USD terms, but in NZD terms they were actually up +1.5% as the value of our currency is weaker.Elsewhere, the American logistics sector is starting to show the building uncertainty in their economy. Their September LMI came in at near its weakest of 2025 with costs and inventory levels up and warehouse utilisation down.The same pullback is showing in consumer sentiment too. It softened in October as reported by the RealClearMarkets/TIPP Economic Optimism Index.And the same wavering sentiment has been picked up in the New York Fed's national survey of consumer expectations. Inflation expectations ticked up to 3.4%, expected income growth fell, and the expectations of losing a job rose.And for the record, the US Federal government shutdown drags on.In Canada, in August, merchandise exports fell -3.0%, while imports were up +0.9%. As a result, Canada's merchandise trade deficit with the world widened from -$3.8 bln in July to -$6.3 bln in August. Exports featured their first decrease since April and the US tariff moves. Their imports featured a rush to import gold.However it may not all be gloom in Canada. Their internal economy may be on a roll. Their closely-watch local PMI surged in September to a 16-month high and smashing market expectations of only a minor improvement.Across the Pacific, we should note that today is the final day of their week-long national holiday in China.Meanwhile, Japanese household spending rose +2.3% in August from a year ago and far better than expected. In fact, it was the fourth straight monthly rise and the strongest pace since May. Helping were government support measures at tackling cost pressures (including the big rice price jump) and the new American tariffs.In Australia, consumer sentiment is receding. The Westpac-Melbourne Institute Consumer Sentiment Index fell in October from September to its lowest reading in six months. Optimism about where family finances are headed is fading. Uncertainty about future interest rate cuts is rising. And pessimism about housing affordability is rising as house price expectations hit new 15-year high. These are retrograde moves.And that is showing up in job ads. The ANZ-Indeed measure of job ads fell -3.3% in September, one of the largest monthly drops in the past 18 months. The latest data was the third consecutive monthly fall and the sixth monthly drop this year so far.And globally, it is probably worth noting that the Boeing 737 has been dethroned as history's most popular jet aircraft. It has now been overtaken by Airbus's A320 which has now produced and delivered 12,260 of this model.Also globally, the World Bank came up with gloomy world trade forecasts for 2026.The UST 10yr yield is now at 4.12% and down -4 bps from yesterday at this time. The price of gold will start today at US$3973/oz, up +US$21 from yesterday and a new high and edging toward US$4000. In fact it hit that level, briefly, about four hours ago. Silver is taking a breather however and is lower todayAmerican oil prices are down -50 USc at just under US$61.50/bbl, with the international Brent price now just on US$65/bbl.The Kiwi dollar is at just on 58.1 USc, down -30 bps from yesterday. Against the Aussie we soft -10 bps at 88.1 AUc. Against the euro we are down -20 bps at 49.7 euro cents. That all means our TWI-5 starts today at just under 65.6, down -10 bps from yesterday.The bitcoin price starts today at US$121,767 and down -2.8% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.0%.And join us at 2pm later today for the results of the RBNZ's Monetary Policy Review. Financial markets are still split on whether it will be a -25 bps or -50 bps cut, but yesterday's weak QSBO might have tipped it to the larger one.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 financial markets are running positively, but without the guardrails of American economic data, while the US Federal shutdown extends. In their absence, consumer and tech speculations are generating considerable froth.But first in China, their Mid-Autumn festival holiday spending should tell us a lot about their economic activity, and the initial signs are promising for them; unprecedented travel levels, active holiday destinations. But we will have to wait for the overall outcomes. The final day of this holiday period is tomorrow.In Japan, their stock market took off in a wave of euphoria following the vote to make Sanae Takaichi the leader of the LDP and PM in waiting. But the yen fell, probably a boon for Japanese exporters.In Europe, August retail sales volumes were mixed. They were up only +1.0% from the same month a year ago, the least in more than a year. But the change from July were slightly more encouraging driven by food purchases, especially in France and Spain. Germany and Italy were laggards however. Easing fuel consumption was part of the reason for the retail growth restraint which they will take as a 'good thing'.In France, a newly appointed Prime Minister resigned when his new cabinet could not survive its first parliamentary vote.In Australia, the Melbourne Institute Monthly Inflation Gauge recorded a +0.4% increase in monthly inflation for September from August, primarily influenced by higher recreation and transport related prices. The monthly cost of living also rose. Annual headline inflation now lies at the top-end of the 2-3% target band at just on +3.0%. This is the same as the last ABS Inflation Indicator for August. At this rate, it seems unlikely that the RBA will be looking at any rate cut at their November 4, 2025 review. But not everyone links like that. The central bank is still expected to slash the cash rate despite these sticky prices, according to the latest quarterly survey of economists by The Australian Financial Review.In the US, no progress at all on their Federal government shutdown. And to distract attention, as autocrats always do, Trump is moving to impose National Guard military presence in major cities, even when the evidence is clear there are no crime waves, as he claims. But the distraction is the point.And we should note that aluminium prices are rising significantly again, up at US$2720/tonne. They are now near their highest ever, (apart from the unusual 2021-22 bubble in the pandemic recovery). Tin, Zinc and even copper are also on the rise. The main metal price not changing much is nickel. Iron ore is also flat-lining, as it has done since early 2024. But precious metals, the ones much more subject to consumer speculation, are surging. The most spectacular is platinum which is up +60% since May. (In the same time, gold has risen +22% and silver +47%).The UST 10yr yield is now at 4.16% and up +4 bps from yesterday at this time.The price of gold will start today at US$3952/oz, up +US$67 from yesterday and a new high and powering toward US$4000. Silver is up too, but less, now at US$48.50/oz.American oil prices are up +US$1 at just under US$62/bbl, with the international Brent price now just on US$65.50/bbl.The Kiwi dollar is at just on 58.4 USc, up +10 bps from yesterday. Against the Aussie we soft -10 bps at 88.2 AUc. Against the euro we are up +20 bps at 49.9 euro cents. That all means our TWI-5 starts today at just under 65.7, up +10 bps from yesterday.The bitcoin price starts today at US$125,294 and up +2.0% from this time yesterday. Volatility over the past 24 hours has been modest however at just on +/- 1.1%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to 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 that while much of the financial world seems disconnected from economic reality, we are about to reminded of our local realities this week.This week will be all about the RBNZ OCR review on Wednesday. Will it be a -25 bps cut or a -50 bps cut? Financial markets do not know, but then again neither do analysts. Banks have been assuming -25 bps at least and have trimmed their one year fixed home loan rates by this much. But since the last OCR review one year swap rates have fallen -31 bps, so if there is a -50 bps cut on Wednesday, expect those swap rates to fall almost immediately, and banks to follow that up with more fixed rate mortgage reductions. Savers will be looking on nervously because the rates offered to them in term deposits also face the same downward pressures.In Australia, it will be all about the Westpac consumer confidence survey, the NAB business confidence survey, and consumer inflation expectations. And of course, parts of the eastern states are now on Daylight Saving Time, so basically back to 2 hours behind New Zealand (except Brisbane, which stays 3 hours behind).The US government shutdown will remain the focus this week in the world's major financial markets as the extended impasse between members of Congress showed little signs of improvement. The shutdown jeopardises releases from US Federal agencies including the trade balance, jobless claims, and the budget statement after the September jobs report and other key data has already been delayed. Still, the minutes from the FOMC's last meeting is still expected.Among non-US governmental releases, October's Michigan Consumer Sentiment surveyed will be eyed.Over the weekend the ruling LDP party in Japan selected a new prime minister, notable because it is Japan's first female prime minister, Sanae Takaichi. Takaichi, 64, was known to be close to the late Prime Minister Shinzo Abe, another prominent right-wing leader of the LDP. She has publicly stated that she sees former UK Prime Minister Margaret Thatcher as her role model. She has been called a "China hawk". Some locally fear they may be getting a Liz Truss.In China, the massive Mid-Autumn Festival holiday travel is underway. China's railways handled an all-time record 23.1 million passenger trips last Wednesday, the first day of the eight-day holiday.Across the Pacific in the US over the weekend, the ISM released its services PMI for September and that showed a sector no longer expanding. New orders did though, barely, but a sharp slowdown from August's rise. Business activity actually contracted, down near the brief dip in mid-2024, and apart from that its lowest level since the pandemic in 2020. Analysts were not expecting this widely-watched metric to be so downbeat.Price rise impulses were restrained. Businesses are not able to pass on the tariff taxes in full, and that makes them feel quite constrained.In Canada, five provinces raised their minimum wages last week, following five who did it earlier in the year. As a result, British Columbia is now at C$17.85/hr (NZ$21.95), Ontario is at C$17.60/hr. Quebec at C$16.10/hr and Alberta is the lowest at C$15/hr (NZ$18.45).Canadian housing markets are operating on a two-track basis now; rising sales volumes and falling sales prices. In Toronto, sales volumes rose +8.5% in September from a year ago to 5592 homes sold, but average prices fell -4.7% on the same basis. And that was despite a central bank rate cut in the month.More globally, the FAO global food price index fell in September and in part that was due to retreating dairy prices. But they are still +9% higher than year-ago levels. On the other hand, meat prices rose again to be +6.6% higher than year-ago levels. Sheepmeat surged on limited supply and good demand. Beef prices rose sharply to all-time high levels.And we should probably note that after rising to €84/tonne in 2024 to start this year, EU carbon prices then fell to about €60/tonne at the end of March. But since then they have risen back to almost €80/tonne now and putting on a bit of a spurt in early October. While local carbon markets are struggling, the same is not true elsewhere.The UST 10yr yield is now at 4.12% and unchanged from Saturday but down -6 bps for the week.The price of gold will start today at US$3885/oz, up +US$3 from Saturday and a new high. That is up +US$113 or +2.9% from a week ago. Silver had another big spurt this week, now just under US$48/oz, a weekly gain of +3.8%.American oil prices are softish at just under US$61/bbl, but down -US$4 from a week ago, with the international Brent price now just on US$64.5 and down -$5.50 from a week ago.The Kiwi dollar is at just over 58.3 USc, little-changed from Saturday but up +50 bps from a week ago. Against the Aussie we holding at 88.3 AUc. Against the euro we are also unchanged at 49.7 euro cents. That all means our TWI-5 starts today at just under 65.6, up +10 bps from Saturday and up +40 bps for the week.The bitcoin price starts today at US$122,805 and virtually unchanged from this time Saturday. Volatility over the past 24 hours has been modest at just on +/- 1.5%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we 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 US is throwing out its existing economic playbooks and replacing it with personal revenge and retribution.First, there is no progress on the US federal government shutdown, other than Trump declaring it an 'unprecedented opportunity' to defund his opponents. The childishness of the approach by a world power is something to behold.Almost certainly, there will be no US non-farm payrolls report tomorrow due to the Federal government shutdown. That will save the Administration from what would likely be an embarrassing result of job atrophy.US-based employers announced 54,064 job cuts in September, the least in three months, compared to 85,979 in August. But of course, October is off to a very rocky start. So far this year, companies have announced 946,426 job cuts, the highest such level in five year when 2,082,262 were announced. It is up +55% from the 609,242 job cuts announced through the first three quarters of last year and is up +24% from the 2024 full year total of 761,358.In Japan, it may have been only a small improvement from August, but Japan’s consumer confidence index rose in September, reaching its highest level since December 2024. Most components improved, including overall livelihood, employment outlook, and willingness to buy durable goods.In Australia, household spending inched higher by just +0.1% in August to be +5.0% than year-ago levels. It was held back by lower spending on booze and recreation, lifted by higher spending on transport.Aussie exports were weak in August, mainly because of lower gold exports. This means August goods exports were -3.5% lower than year ago levels. Imports were +4.5% higher on the same basis.And the Australian First Home Buyer scheme is open and accepting applications. The word is that demand is strong. The scheme allows buyers to buy with extreme leverage - as little as a 2% deposit - all backed up by the taxpayer. The extra demand will come at a time of low listing availability, low new build activity, and already high prices. Analysts expect to be watching future house prices zooming higher because of these new incentives and the existing pressures.Global container freight rates were down another -5% last week from the prior week, and it was the same story; the decline was led by outbound rates from China. Bulk cargo rates fell -11% in the past week to be very similar to year-ago levels.The UST 10yr yield is still at 4.09%, down another -2 bps from yesterday on risk aversion.The price of gold will start today at US$3841/oz, down -US$29 from yesterday.American oil prices are down another -US$1.50 at just on US$60.50/bbl, with the international Brent price now just over US$64/bbl. In the US, these much lower prices are not really flowing through to pump prices with current prices little-different to year-ago levels even though US crude prices are -18% lower than then.The Kiwi dollar is at just on 58.2 USc and up +10 bps from yesterday. Against the Aussie however we are up +30 bps at 88.3 AUc. Against the euro we are up +10 bps at 49.7 euro cents. That all means our TWI-5 starts today at just on 65.4, and up +10 bps.The bitcoin price starts today at US$119,725 and up +1.7% from yesterday. Volatility over the past 24 hours has been modest at just on +/- 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 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 are maintaining a wilful blindness in the face of the arrival of some major threats and poor data.Firstly we should note that the US Federal Government is shutting down having reached its debt limit, and in the absence of a compromise reached between Congress (the Senate in this case) and White House. There is no sign that this issue will be resolved soon. The President is using the event to blame everyone else but himself - and the truth is he probably doesn't care what damage he is doing; he's likely relishing it.But it will likely have significant financial market impacts, although today Wall Street is acting like it will be resolved quickly as usual, holding their breath.However, this shutdown could delay the September jobs report due at the weekend. Some are even saying the shutdown could stretch all the way to the Fed’s next meeting on October 29. (The US Supreme Court has knocked back Trump's attempt to oust Fed Governor Cook, at least until the new year.) Gold posted another all-time high and is on track for an annual rise +50%, while the US dollar is under pressure.Meanwhile, data out overnight shows there was a huge drop in US mortgage applications last week, the largest in nearly a year. Refinance activity dropped the most, but finance for new home purchases dropped notably too. Benchmark mortgage interest rates didn't move much, up just +12 bps and still on a declining trend.News on their labour market front wasn't good for September either. In advance of this weekend's non-farm payrolls report, the ADP Employment Report was expected to reveal a low +50,000 jobs gain. But in fact it came in with a -32,000 jobs loss for the month. It isn't clear yet whether the non-farm payrolls report will be released given the shutdown. The ADP version may be all the markets get on how the giant US labour market is tracking.And it really isn't any better on the factory floor. The latest ISM factory PMIfor September is still in contraction (49.1) with the new order component retreating from August. (But the S&P Global factory PMI which we reported last week is a bit more upbeat. Even so it reports slowing demand.)All this will depress American economic growth. But it may also raise inflation. The frequent shocks to global supply chains from factors such as the American tariffs leave central banks with limited tools to combat rising risks of inflation, according to the Governor of the Canadian central bank in a recent interview.Canada's factories are slowing too.Across the Pacific, similar factory PMIs show Japan contracting, Korea moving back into expansion on strong new orders, Taiwan going backwards, and Indonesia in a minor expansion again on the back of better new orders.So it won't be a surprise to lean that September exports from Korea rose sharply to their best level since mid-2024.In China, their Golden Week national holiday is underway, starting an enormous surge in travel by vacationers. International markets will notice the surge.In Australia, Cotality is reporting a surge in house prices driven by a worrying combination of low new supply, very low listing levels, and new low-deposit arrangements bringing in more demand. House prices jumped in all capital cities in September, led by Perth and Brisbane, but the most notable change is the rise in Sydney.The UST 10yr yield is still at 4.11%, down -3 bps from yesterday.The price of gold will start today at US$3870/oz, up +US$23 from yesterday and a new all-time high. Silver is back up to US$47.50/oz.American oil prices are down another -50 USc at just under US$62/bbl, with the international Brent price now just under US$65.50/bbl and down -US$1.The Kiwi dollar is at just on 58.1 USc and up +10 bps from yesterday. Against the Aussie however we are up +40 bps at 88 AUc. Against the euro we are up +20 bps at 49.6 euro cents. That all means our TWI-5 starts today at just on 65.3, and also up +20 bps.The bitcoin price starts today at US$117,765 and up +4.3% from yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.3%.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we 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 US faces a federal government shutdown as markets start to realise Trump has no problem being reckless and has no problem hurting his 'friends'..But first, there was another Pulse dairy auction overnight. And that brought marginally weaker prices for both SMP and WMP, down a bit less than -0.5% in USD terms. In fact these prices are now at their lowest level of 2025. But because the NZD is falling, the prices achieved actually rose about the same amount in local currency.In the US, the number of job openings in August were virtually unchanged from July at 7.2 mln as was expected.But the Chicago PMI fell again in September, well below market expectations that it would improve. And the dip was sharp, the most in three months.Also weaker was the Dallas Fed services sector with their retail sector retreating rather fast in an unusual move lower.Adding to the downbeat sentiment was the September report from the Conference Board showing consumers are glummer than at any time since the start of the year. A common theme in the survey responses is the impact of rising inflation.And the downbeat sentiment may well get worse, and quickly. The White House seems to relish a full government shutdown to start their fiscal year tomorrow with mass firings rather than furloughs. And Trump says some American cities he considers dangerous should become training grounds for American troops, proposing 'his' troops be used to fight other Americans in their home cities. It is getting toxic very fast there.For their economy, there is a real possibility now that this weekend's non-farm payrolls release will be cancelled because the department releasing it will be closed. If that turns out to be the case, it could mask some quite weak results. Analysts now expect less than a +50,000 gain.Financial markets are downplaying the risks of all this, mainly because there have been many 'shutdown' crises over the decades. But at least the earlier ones involved parties prepared to reach a deal. Maybe not this time.Across the Pacific in China, their official factory PMI contracted again. But even though it is the sixth straight monthly contraction, the pace of decline was the least in that time. (Their factory PMI rose in February and March, but only by marginal levels.) Their official services PMI for September is no longer expanding. These official PMIs have been more conservative than the private surveys (RatingDog, ex Caixin) probably because they have a heavier weighting to Chinese SOEs. The private ones are more attuned to private and foreign enterprises, surveyed by S&P Global, and they report a faster expanding factory sector, and solidly expanding services sector.Meanwhile, China has frozen imports of BHP iron ore in a pricing dispute. BHP is their third largest supplier after Rio Tinto and Brazil's Vale.Taiwanese consumer sentiment rose in September, but to be fair the bar is low because it has been stunted since May.In Europe, Germany said their CPI inflation edged up to 2.4% in September, marginally above the August level. But ist was a rise that was slightly more than expected.In Australia, there were no surprises from their central bank which held its cash rate target at 3.6%. But even though this hold was all priced in, there was some surprising reaction in financial markets. Somehow the decision was regarded as 'hawkish' and the AUD rose and benchmark bond interest rates fell on the news. The strong currency remained although the bond move was later reversed. Air cargo volumes in August grew +4.1% globally, driven by a near +10% rise from a year ago in the Asia/Pacific region. But notably, North American air cargo volumes fell -2.1% on the same basis in August, the weakest global region. And the pattern was similar for passenger travel. Asia/Pacific and Latin America brought strong growth, underpinning a +4.6% expansion, but North America lagged here too, only up +0.5% from a year ago.The UST 10yr yield is still at 4.14%, unchanged from yesterday.The price of gold will start today at US$3846/oz, up +US$16 from yesterday and a new all-time high. Silver is -50 USc softer however.American oil prices are down another -50 USc at just over US$62.50/bbl, with the international Brent price now just under US$66.50/bbl and down more than -US$1.The Kiwi dollar is at just on 58 USc and up +20 bps from yesterday. Against the Aussie however we are down -30 bps at 87.6 AUc and a new three year low. Against the euro we are little-changed at 49.4 euro cents. That all means our TWI-5 starts today at just on 65.1, and unchanged.The bitcoin price starts today at US$112,876 and down -0.8% from yesterday. Volatility over the past 24 hours has been low 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.

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 gold is soaring on US missteps, and oil is falling as demand falters while supply is rising fast.Overnight US data was mixed. August pending home sales came in a little better than expected, up +4.0% from July, but only up +3.8% from year ago levels which themselves were relatively stunted. Less than 20% of American realtors expect the next three months to improve.But the Dallas Fed factory survey reported a sharpish turn lower, a second consecutive monthly contraction in manufacturing activity and the steepest since June. But they still have growth, just far less. New orders dipped again. Costs continue to rise faster than selling prices.The chances of a US federal government shutdown are rising with compromise no longer in anyone's vocabulary. Trump thinks no-one will blame him for his intransigence.And apparently, the next US tariff target is movie production - something both Australian and New Zealand creative industries will look at with trepidation.Singapore reported their producer prices rose. They grew by +1.1% in August from a year ago, after a -2.4% drop in the previous month. And this was their first producer price inflation since March 2025.Later today, China will release its August PMI data, the key releases before their Golden Week holiday break that starts tomorrow.In India, industrial production rose +4.0% in August from a year ago, slowing slightly from the upwardly revised 4.3% growth rate in July, but less than the expected +5% increase. Still, the result continued a reasonable first half of the year, showing that initial tariffs by the Americans did not have a significant immediate impact on their industrial activity.But today's big news will be the RBA's upcoming rate review. Analysts expect no change at 3.6%. Financial markets are of the same view with nothing priced in to secondary market wholesale rates. But the RBA will be weighing the impact of relatively strong labour markets, good economic growth, low budget deficits and a strong fiscal impulse, along with rising CPI inflation touching 3.0% in August. Waiting could leave them with a harder-to-control inflation problem, although to be fair, no-one expects a rise today even if many think it would be warranted and wise.The UST 10yr yield is now at 4.14%, down -5 bps from yesterday.The price of gold will start today at US$3830/oz, up +US$72 from yesterday and a new all-time high. Silver had yet another big spurt, now almost at US$47/oz. This latest surge puts the US gold stockpile at Fort Knox and the NY Fed now worth more than US$1 tln.American oil prices are down a sharpish -US$2 at just over US$63/bbl, with the international Brent price now just over US$67.50/bbl. With global demand wavering, the planned OPEC increase, plus the resumption of Iraqi oil from their Kurdistan region has traders talking about a glut.The Kiwi dollar is at just over 57.8 USc and up +10 bps from yesterday. Against the Aussie however we are down -25 bps at 87.9 AUc and that is the lowest in three years. Against the euro we are little-changed at 49.3 euro cents. That all means our TWI-5 starts today at just on 65.1, down -10 bps.The bitcoin price starts today at US$113,795 and up +3.2% from yesterday. Volatility over the past 24 hours has been modest at under +/- 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 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 even the giant American economy can't seem to maintain its momentum, with Trump grabbing at all the levers of government. He is even taking government domain names and inserting is personal interests. It will become increasingly hard to separate real American economic data from that skewed by his army of MAGA blackshirts who have been inserted into these agencies.The week ahead will be busy, with major economic releases that will culminate with the US September non-farm payrolls report and related labour market data. Ordinarily they impact the policy path for the Fed this year. Markets currently expect jobs growth of less than +50,000 and settling in to a low trajectory. Before that we will get the ADP private employment report (expect even less), results from the JOLTS report, and Challenger job cuts (a big jump is expected by analysts).Besides labour updates, investors will also be on alert for the risk of a US government shutdown at the start of the new fiscal year on October 1The September update of the ISM PMI is due (analysts think it will be more contractionary than in August), and we will also get PMI releases from China, Canada, Brazil, South Korea, and ASEAN countries.Regionally, the RBA will be reviewing its monetary policy settings on Tuesday, and now no rate cut is expected due to rising inflation pressures, so markets expect it to stay at 3.6%. India will also be reviewing its monetary policy position late Wednesday, and no change is expected there either, keeping their rate at 5.5%.Daylight savings time has started in New Zealand of course, but not yet in Australia. So we will be 3 hours ahead of eastern Australia. But Queensland, the Northern Territory, and Western Australia do not observe daylight saving time, making it a patchwork system across their country.Over the weekend, China released August industrial profits data. After struggling all year to July to show any improvement on the equivalent month a year ago, August industrial profits rose at a good clip, up by more than +20% on the prior August's lame result. There was faster growth in the private sector while state-owned enterprises recorded a much smaller decline.And we should note that China is about to go on its 2025 national Golden Week holiday which will run from Wednesday, October 1st to Wednesday, October 8th, an extended eight-day holiday that combines National Day with the Mid-Autumn Festival. This is a major time for domestic and international travel, resulting in busy transportation and tourist activity. Businesses largely suspend their operations in this time but key government departments do operate.Over the weekend, Singapore released industrial production data delivering a large negative surprise. This activity was down a massive -7.8% in August from a year ago. The month-on-month data was sharply negative too. It was largely driven by very big drops in the electronics and biomedical sectors and caught analysts very much by surprise.And over the weekend in the world's largest economy, they released personal income and spending data for August which came in pretty much as anticipated. Personal disposable income rose +0.4% in the month and personal consumption expenditure rose +0.6% on the same basis - all from the prior month. But if you think about it, these are actually fast annualised rises, with costs rising much faster than incomes.This same data shows incomes were up +1.9% from a year ago, consumption up 2.7% on that year-ago basis. And as we noted, recent changes are rising faster than these annual shifts. The Fed will have noticed, as PCE inflation is now running well over 3% and its fastest since February. Goods inflation is 4.2% with durable goods up +5.2% in a year in this data. Clearly the tariff-tax effect is not transitory.The updated September University of Michigan consumer sentiment survey for the US was revised slightly lower to be -21% lower than a year ago. Consumers surveyed continue to express frustration over persistently high prices, with 44% spontaneously mentioning to surveyors that high prices are eroding their personal finances. And they say they expect inflation to be +4.7% higher in a year’s time - interestingly similar to the current goods inflation data.Markets are going to have to accept that inflation is being structurally embedded at above target levels and that the prospect of more rate cuts is receding if the Fed is to have any credibility with an inflation-fighting mandate. Financial markets have priced in one -25 bps rate cut this year, two by the end of January 2026. Politics may deliver them but it will be at the expense of inflation - which is clearly rising again and quite fast.And the US has also arbitrarily decided to impose new tariffs on pharmaceutical imports, adding to the costs their consumers will have to pay, either via import duties or from new facilities to be built locally. If it goes as Trump plans, the excess capacity internationally (after removing production for the US) will cause international prices to fall as US prices rise. Lose-lose for Americans, win-win for international consumers.The UST 10yr yield is now at 4.19%, little-changed from Saturday to be up +5 bps from a week ago.The price of gold will start today at US$3759/oz, down -US$14 from Saturday. That is up +US$78 from a week ago. Silver had another big spurt over the weekend, now up over US$46/oz, a weekly gain of +US$3.American oil prices are down -50 USc at just over US$65/bbl, with the international Brent price now just over US$69.50/bbl.The Kiwi dollar is at just under 57.7 USc and down -10 bps from Saturday, and down -80 bps from a week ago. Against the Aussie we are unchanged at 88.2 AUc but down -60 bps for the week. Against the euro we are down -10 bps at 49.3 euro cents. That all means our TWI-5 starts today at just on 65.2, similar to Saturday at this time.The bitcoin price starts today at US$110,271 and up +0.6% from Saturday. Volatility over the past 24 hours has been very low at under +/- 0.5%.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 tomorrow.