Economy Watch

Kia ora,Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news China has dropped the word "prudent" as it changes tack in its approach to economic support. Commodity currencies, including the NZD, got a boost from the shiftBut first, US consumer inflation expectations for the year ahead increased to 3% in November from 2.9% in October which was the lowest since October 2020. Inflation expectations also increased for the three-year-ahead (2.6% vs 2.5%) and the five-year outlook (2.9% vs 2.8%).The same survey shows increasing confidence their pay will increase, driven by those without any college education.Across that Pacific, Japan's Q3-2024 GDP expansion was revised up, which was a surprise even if it was only a minor gain. The growth was still small however.China’s annual CPI rate fell to 0.2% in November from 0.3% in the prior month, missing market forecasts. China's producer prices dropped by -2.5% year-on-year in November, following a 2.9% fall in the previous month and a softer decline than market expectations of a -2.8% fall.Meanwhile, the Chinese Politburo met and told the People’s Bank of China to adopt a “moderately loose” strategy for monetary policy in 2025. The Central Economic Work Conference is about to meet. The move marked an aggressive shift from the previous “prudential” stance since 2011. Along with wording that indicates more fiscal stimulus, they also said they will directly support property and equity markets next year. They are going all-in on new stimulus to try and move their economic needle.Taiwanese exports continue to rise aggressively, up +9.7% in November from the same month a year ago. We get China's November export data later today and it is also expected to show a sharp rise from a year ago, although that may only to try and beat upcoming tariffs from the US.In India, the rupee dropped to nearly 85 to the USD and a record low as evidence of fresh capital outflows magnified the impact of dovish monetary policy and signs that their economy is slowing more than expected.Meanwhile, they are about to change out the Governor of their central bank.Also in India, the close ties between corruption-accused Gautam Adani and Prime Minister Modi were on full display yesterday.In Australia, new data out yesterday shows the median weekly earnings of those in full-time employment rose +6.3% to AU$1700/week (AU$88,400 per year). For women the rise was faster, up +6.5%, for men slower, up +5.2%. In 2022, men had a +18% pay advantage over women. By 2024 this had shrunk to +12%. That current advantage is worth AU$191/week (AU$9,900 per year).The UST 10yr yield is now at just on 4.20%, up +5 bps from this time yesterday.The price of gold will start today at US$2636/oz and up +US$36 from yesterday.Oil prices are aup +US$1.50 to just over US$68.50/bbl in the US while the international Brent price is now just on US$72.50/bbl.The Kiwi dollar starts today at 58.8 USc and up +50 bps from this time yesterday. Against the Aussie we down -30 bps to 91 AUc. Against the euro we are up +40 bps to 55.6 euro cents. That all means our TWI-5 starts today at just under 68.4 to be up +35 bps from yesterday.The bitcoin price starts today at US$97,373 and down -2.4% from this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.6%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news central bank rate cuts are expected this week - from some, but not all. And Shayne Elliott may be about to end his time at ANZ.But first in the week ahead, most eyes will be on the American Consumer Price Index, Then tomorrow (Tuesday) the RBA will review its cash rate target, and is expected to make no change a 4.35% and staying above the RBNZ's 4.25%. Central banks in Canada and the EU as well as Switzerland will review as well. The Canadians are expected to cut by -25 bps, the ECB by -50 bps and the Swiss by -25 bps. Inflation data from India is due too. In China, they deliver CPI, PPI, trade data, and New Yuan Loans data. Back in Australia, we will follow their November labour report and the NAB business confidence report. And perhaps we will get our own REINZ real estate market report for November at the end of this week (although no actual date is set yet).Over the weekend, the headlines say the US economy added +227,000 jobs in November, compared to upwardly revised +36,000 in October which was heavily influenced by Boeing strikes and the disruptions caused by Hurricanes Helene and Milton. The November rise was above market expectations of +200,000. Employment trended up in health care, leisure and hospitality, government, and social assistance while the retail trade lost jobs. Meanwhile, the jobless rate inched up to 4.2%. (This move probably raised the chance of a -25 bps rate cut at the Fed's next meeting, next week, and taking the lower bound top 4.25%.)Looking behind these headlines, total employer payrolls rose to 160.6 mln, a +525,000 rise from October and a +2.2 mln rise from a year ago. This is a significant swelling of employer payrolls. More broadly, their household survey has the employed workforce at 161.5 mln (which includes the unincorporated self-employed). But that survey is not growing in 'actual' terms even if it is in seasonally-adjusted terms.Average hourly pay is up +4.0% in November from a year ago. Average weekly earnings were up +3.7% as overtime worked slipped. These are better gains than expected.This overall bullish labour market report was reinforced by the University of Michigan sentiment survey for December which rose for a fifth consecutive month to its highest level since April. Current conditions sentiment drove this. But rather than a sign of strength, this rise was primarily due to a perception that purchasing now would enable buyers to avoid future price increases. Consumers see inflation trouble ahead.So perhaps they bought more using personal debt? Total American consumer debt jumped +$19.2 bln in October, when a +$10 bln rise was expected. It accelerating from a downwardly revised +$3.2 bln rise in a month earlier. This marked the fastest pace of growth since July, equating to an annual growth rate of +4.5%, up from just +0.8% in September. Revolving credit, including credit card debt, saw a notable +14% increase, the largest since February, following a smaller +1.4% gain in September. Meanwhile, non-revolving credit, which includes car and student loans, grew by just +1.1%, up only slightly from +0.5% the prior monthCanada also released employment data for November overnight. Their employment rose +54,000, almost all of it full-time jobs. But their jobless rate rose to 6.8% and a seven year high, as more people entered their labour market as their participation rate rose.India reviewed its policy rate late Friday and made no change, although they did cut their reserve ratio for liquidity support reasons.In China, home loan interest rates are being driven down into the 3% range (depending on borrower financials) and there is talk that they may fall below that in coming months. There is widespread 'news talk' about how their housing market (and land sales to developers) are recovering, but the real evidence is yet to emerge.But their logistics index indicates improvements in their overall economic activity, reaching a seven year high.In Australia, media reports suggest that Shayne Elliott will step down this week as CEO of ANZ, after nine years in the role.The OECD has released its latest update of its Economic Outlook. While it doesn't specifically cover New Zealand, it does point out in a release note that tensions are creating headwinds for international trade in both advanced and emerging markets, and it will probably get worse. They have a rather stunning chart about trade policy uncertainty, here.The UST 10yr yield is now at just on 4.15%, unchanged from Saturday. The price of gold will start today at US$2633/oz and little-changed from this time Saturday, and down -US$25 in a week.Oil prices are another -50 USc lower at just over US$67/bbl in the US while the international Brent price is now just over US$71/bbl. A week ago these prices were US$68.50 and US$72.50 respectively, so down a -US$1.50 since then.The Kiwi dollar starts today at 58.3 USc and unchanged from this time Saturday but down almost -1 from this time last week. Against the Aussie we down -10 bps at 91.3 AUc. Against the euro we have also held 55.2 euro cents. That all means our TWI-5 starts today at just on 68 to be unchanged from Saturday and down -60 bps in a week. We are approaching a six month low, primarily driven by the surging USD.The bitcoin price starts today at US$99,796 and down -1.2% from this time Saturday. Volatility over the past 24 hours has been low at +/- 0.9%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news all eyes are on the US non-farm payrolls report due out tomorrow, and market activity is hesitant in advance of that.US jobless claims came in at +210,000 last week, a good decrease from the prior week. But it was not as large a drop as the seasonality suggests it should have been, so it counts as a 'rise' on the headline basis. Continuing claims were 1.66 mln and that fall was more than the seasonal effects expected.There are still very few announced job cuts in this huge labour market.So that will probably mean the US November non-farm payrolls report will be a positive one when it is released tomorrow morning. Markets currently expect +200,000 more jobs filled.The US Fed's November Beige Book describes a moderately expanding overall economy.US exports came in at US$266 bln in October, about the 2024 monthly average even though they slipped from the prior month. But they were +1.9% higher than the same month a year ago, in a rising trend that started in June 2023. Imports slipped in October too from the prior month, but these also stayed at about the 2024 monthly average. The US trade deficit in both goods and services reduced in October and runs at under -3% of GDP, a level easily absorbed in such a large country, especially one whose currency is the standard for international trade.Canadian exports and imports both rose in October, and their trade deficit - although on a rising trend - has an even smaller impact on their economy.In Europe, although it slipped in October from September, the volume of EU retail trade was up +2.1% from the same month a year ago. This is perhaps a surprising show of resilience for an economy that is being widely panned as struggling.On the global logistics front, perhaps we should note the Global Supply Chain Pressure Index that the NY Fed monitors. In November, it eased slightly. After the sharp pandemic pressures it eased noticeable in April 2023 and has seen no return since then, despite the ups and downs of things like the major canal stresses. The global logistics network has been remarkably resilient, the pandemic excepted.And last week, global container freight rates rose +6% from the prior week to be +150% higher than pre-pandemic levels still. There were sharp rises in the China-to-Europe trade, more than enough to offset sharp fall in the Chine-to-USWC trade. Going the other way there was a very sharp drop in bulk cargo rates, down -22% from the prior week to their lowest since September 2023 and actually back to levels first reached in 1987.The UST 10yr yield is now at just on 4.18%, down -2 bps from yesterday.The price of gold will start today at US$2637/oz and down -US$15 from this time yesterday.Oil prices are -US$1 lower at US$69.50/bbl in the US while the international Brent price is now just under US$72.50/bbl. These low prices forced OPEC to delay its planned output hike in January.The Kiwi dollar starts today at 58.7 USc and unchanged from this time yesterday. Against the Aussie we up +10 bps at 91.2 AUc. Against the euro we have dipped -10 bps to 55.6 euro cents. That all means our TWI-5 starts today at just on 68.3, and again unchanged from yesterday.The bitcoin price starts today at US$100,825 and up +6.0% from this time yesterday. Volatility over the past 24 hours has been very high at +/- 4.7%. At one point it reached US$103,000, at another back under $100,000.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Kia ora,Welcome to 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's services sector seems to be holding its ownAhead of this weekend's November non-farm payrolls report, the private ADP Employment report out today reveals American private businesses added +146,000 workers to their payrolls in the month, slightly below forecasts of 150,000. This is a reversion to the mean for 2024. Currently analysts are expecting the non-farm payrolls to rise +200,000 when they are reported in Saturday (NZT).New factory orders inched up in October to be +3.4% higher than year ago levels.US mortgage applications rose again and for the fourth consecutive week. This was driven by new purchase activity, helped by a fall in benchmark mortgage interest rates (to 6.69%), but undercut by a fall in refi activity.The giant US service sector expanded at a good solid rate in November, but not as fast as in October, according to the widely-watched ISM survey. The November expansion was also a reversion to the 2024 mean. But the internationally-benchmarked S&PGlobal/Markit version reported a rising expansion in the sector, and to its fastest clip since March 2022. They say it was based on a rise and rise in new orders.The bullish of those two reports is likely to be the more realistic because American vehicle sales rose to an annualised rate of 16.5 mln in November, its strongest pace since May 2021There were services sector reports out for a number of economies overnight and they were mixed.In Canada, their small expansion grew again in the month. In Japan, that sector shifted from contraction to expansion. The Caixin version for China stayed at a modest expansion. But it will be disappointing that all their stimulus efforts so far haven't really moved the needle, and deflationary pressure grow. In India, theri expansion stayed strong, but is being marred by fast-rising inflation. It is inflation fuelled by food and wages and is now running at a twelve year high.In South Korea, the president's martial law move has backfired spectacularly. The stage is now set for an historic vote to impeach him. Democratic forces have prevailed over authoritarian ambition.As we publish, it seems that the French government will fall to a no-confidence vote supported by both far-right and far-left political opposition parties. (But a little history might be helpful for some French parliamentarians. Only one motion of no confidence has ever been passed in France since 1958. It was in 1962 and it was aimed at PM Georges Pompidou, and through him President Charles de Gaulle. A month and a half later, the two men found themselves more secure than ever.)In Australia, their services PMI slipped from a very minor expansion to no expansion in November. But the same survey recorded business confidence rising to its highest level since May 2022, which in the circumstances seems odd. However other Australian confidence surveys report a similar disconnect.The Aussies also released their Q3-2024 GDP result yesterday and it came in with a somewhat surprising miss. Some analysts had expected a surprise, but to the high side given recent data (based largely on the spending surge by their Federal government). But few saw this downside miss coming. The Australian economy grew by +0.3% in Q3-2024, following a +0.2% increase in the prior three quarters. This marked the 12th straight period of quarterly growth but fell short of market expectations of +0.4%. And year-on-year the rise was +0.8% instead of the expected +1.0%. These are still minor moves and given the stimulus in effect, it does lead to a view the Aussie economy is stagnating. But at least it isn't contracting.The UST 10yr yield is now at just on 4.19%, down -1 bp from yesterday. The price of gold will start today at US$2652/oz and up +US$2 from this time yesterday.Oil prices are -50 USc softer at US$69.50/bbl in the US while the international Brent price is little-changed at just under US$73.50/bbl.The Kiwi dollar starts today at 58.7 USc and down -15 bps from this time yesterday. Against the Aussie we up +30 bps at 91.1 AUc. Against the euro we have dipped -20 bps to 55.7 euro cents. That all means our TWI-5 starts today at just on 68.3, and unchanged from yesterday.The bitcoin price starts today at US$95,114 and virtually unchanged from this time yesterday. Volatility over the past 24 hours has remained modest at +/- 1.1%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news of an unexpected development in South Korea.But first, dairy prices edged up slightly again in this morning's latest full dairy auction, but that doesn't really tell the story of this event properly. With the local milk production season now past its peak, lesser volumes were on offer. And buyers seem to have already stocked up for Christmas and Chinese New Year. So it will be no surprise to know that most commodities slipped in price today - apart from a +4.1% surge in the WMP price. Almost alone, this twisted the overall index to a +1.2% rise in USD terms, and a +1.6% rise in NZD termsIn the US last week there was something of a surge in retail sales with the benchmark Redbook index rising 7.4% from the same week a year ago. Buying before Trump's tariff-tax seems to be becoming a thing. Black Friday was in both weeks, this year and last year.Also rising more than expected were US job openings in the US. Their JOLTS report seems to show that October data ends a longish easing in the rising in hiring. It also shows that employees are less afraid to quit to find another job.And more optimism is found in the RealClear Markets/TIPP survey for November.And the US logistics industry seems to be settling into a positive phase with another good expansion in November.Across the Pacific, we should not a rather stunning development in South Korea, our fourth largest trading partner. Martial law has been declared by their embattled President. It seems the 'anti-state forces' he is battling are internal ones in labour unions. Even members of his own party are opposing the declaration. Apparently his wife is a key influencer in this decision. His move looks very uncertain at this time, and legislators have voted against the move.The South Korean currency, the Won, fell hard, back near GFC and Asian Financial Crisis levels.In China, State media is talking up the rise in real estate sales transactions, both by households in some cities, and by developers.And later today in Paris, French legislators will vote on whether to topple the Barnier government.And later today, the Aussie will release their Q3-2024 GDP result - which is expected to show a +1.1% expansion from the same quarter a year ago. That would be about the lowest since the pandemic.The UST 10yr yield is now at just on 4.20%, up +2 bps from yesterday.The price of gold will start today at US$2650/oz and up +US$10 from this time yesterday.Oil prices are +US$2 higher at US$70/bbl in the US while the international Brent price is +US$1.50 higher at just over US$73.50/bbl.The Kiwi dollar starts today at 58.8 USc and unchanged from this time yesterday. Against the Aussie we down -20 bps at 90.8 AUc. Against the euro we have dipped -10 bps to 55.9 euro cents. That all means our TWI-5 starts today at just on 68.3, and down -10 bps from yesterday.The bitcoin price starts today at US$95,045 and down -1.4% from this time yesterday. Volatility over the past 24 hours has remained modest at +/- 1.5%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news all about the state of the world's factories. Globally, manufacturing stabilised in November with a rise in new orders.First up today, there were two factory PMI surveys out for the US for November. Both reported their sector contraction eased noticeably. The widely-watched local ISM version reported that new orders are now back expanding, even if the overall sector isn't. They also found that customer inventories are currently "too low", so that could well indicate an expansion is on the cards soon. And the internationally-benchmarked S&P Global/Markit version was upgraded from their 'flash' report showing similar improvements in new order flows.In Canada, their factory sector expanded with its strongest result in nearly two years.In China, the private Caixin factory PMI was noticeably more positive for November than the official version. New orders drove that improvement too, and they were led by new export orders.The same survey of Japanese factories wasn't as positive and they reported a slightly larger contraction in November.In Singapore, their PMI rose to a small expansion. But it was equal best since December 2018.In Malaysia, their PMI eased in November, only slightly, but it remained under pressure with fewer new orders.Back in China, their 10-year government bond yield has dropped to 2%, a multi-decade low. Modern records for this paper only go back to 2002, but it is easily the lowest since then. The fall comes amid expectations of expanded stimulus from Beijing to support the economy. But expected announcements haven't surfaced so far.There was quite a bit of data released in Australia yesterday. First, their building consent data for October rose but only because of a catchup in apartment consents. It was a big jump. Consents for houses continued to slip however. But they have had overall rises consistently since the start of the year.On the retail sales front, Victoria, Queensland and South Australia saw good gains, but retail sales gains in NSW and WA were weak. However, it seems their Black Friday sales were quite positive, giving retailers there hope that the run to Christmas will be a better trading period.On the factory front, their internationally-benchmarked November PMI contracted at a much slower pace in November, hardly at all, which counts as an improvement for them.The UST 10yr yield is now at just on 4.18%, unchanged from yesterday.The price of gold will start today at US$2640/oz and down -US$9 from this time yesterday.Oil prices are -50 USc lower at US$68/bbl in the US while the international Brent price is -US$1 lower at just over US$71.50/bbl.The Kiwi dollar starts today at 58.8 USc and down -50 bps from this time yesterday. Against the Aussie we up +20 bps at 91 AUc. Against the euro we unchanged at 56 euro cents. That all means our TWI-5 starts today at just on 68.4, and down -20 bps from yesterday.The bitcoin price starts today at US$96,401 and down -1.0% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.7%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news China is still stuck in its rut, the US twisted by tariff talk, Japan sees progress, and Russia's currency gets a big downgrade.But first, this coming week will end with the US non-farm payrolls report, and analysts expect a sharp recovery to +183,000 added jobs, far higher than the unusual (pre-election) October report of just +12,000. Before that they will deliver their JOLTs report, and there will be factory order data, more PMIs, and more sentiment surveys.India will review its official interest rate. South Korea and Turkey will report CPI inflation rates. Australia will report its Q3-GDP on Wednesday. And there will be many other PMI reports.In fact, over the weekend, China said its official factory PMI made a tiny improvement to maintain its small expansion. It was its second 'positive' result in a row and its best since April. At the same time the minor positive reading for its services sector disappeared. Taken together, this paints a picture of an economy without any expansion. We will get the Caixin PMI data tomorrow, and that has tended to be marginally more positive recently.In Japan, their central bank boss said they are "approaching" a decision with a view they will raise their policy rate from the current 0.25% to 0.50%. They like their current data track, but they hesitate because they don't have a firm fix on the damage the incoming US Administration will do."I am not worried much about Japan's financial system because ample capital, stable deposits and access to liquidity have been ensured," he said. In contrast, he noted that "non-bank financial institutions are posing a grave problem" in the US and added that "they deserve to be closely monitored."Japanese consumer sentiment recovered somewhat in November, still positive, but nothing like what they had from December to March earlier in the year.Japanese retail sales rose +1.6% in October, recovering from the weak September expansion, but still much lower than what they have achieved monthly since early 2022. At least it is back heading in the "right" direction.And Japanese industrial production rose +1.6% in October from a year ago, ending two months of retreatSouth Korea's industrial production rose in October at a very strong +6.3% pace from a year ago, after the unusual stumble in September, returning to the average expansion they have had since September 2023. So it will be no surprise to learn that their exports kept rising strongly in October, as did their imports.However Korean retail sales slipped in October to be -0.8/% lower than a year agoIndia's economic expansion is 'consolidating', delivering a somewhat disappointing Q3-2024 result. Their economy rose +5.4% from the previous year, slowing from the +6.7% expansion in Q2-2024 and well below market expectations of a +6.5% increase. It was their softest pace of growth since Q4-2022. Still, even at the latest lower rate, it is rising on a per capita basis.This miss adds pressure on the Reserve Bank of India to cut its policy interest rate which currently stands at 6.5%. They review it next on Friday.The Indian currency fell on the news to a record low against the USD. Although not a record low against the NZD, it is has been close to that since the whole period from end of 2020.In the US, early reports from card companies and industry monitors show that in-store retail sales growth for Back Friday sales was quite modest - even disappointing - and up only +0.7% from the same day a year ago. But online sales activity burst higher, up more than +14% on the same basis.In Canada, their Q3-2024 GDP growth came in +1.0% higher than a year ago, up +0.3 for the quarter. This was not enough to prevent a fall in per capita GDP. On that basis it fell -0.4% in the third quarter, which was the sixth consecutive quarterly decline.In Europe, inflation expectations in the euro zone for the year ahead edged up slightly in October to 2.5%, and stayed steady for three years out at 2.1%, the ECB's monthly Consumer Expectations Survey showedEU CPI inflation rose to 2.3% in October, up from 2.1% in September, but still clearly in a down-trend that started in November 2022.In Russia, their currency suddenly fell over the weekend to near record lows (a record if you exclude the full invasion spike in 2022). The falls were not only vs the USD, but the Chinese yuan as well. The economic pressure on the Russian economy is mounting as it suffers severe distortions and indigestion, the longer it presses its invasion of Ukraine.In Australia, private sector debt rose +6.1% in October from a year ago, driven primarily by business debt growth, up +8.3% on the same basis, but housing debt growth was up +5.3% too. Other personal debt only rose +2.2% in October. (From a Kiwi perspective, these are relatively fast rises. Late last week equivalent RBNZ data showed business debt rising only +1.1%, housing debt rising only +3.5%, and personal debt up only +1.7% in the year to October.)In Australia there is some scepticism that their debt tide rise will be maintained.And their housing market is showing signs of exhaustion. November data shows sales volumes -4.6% lower than a year ago. The largest drop in the volume of home sales has been in Sydney, where sales over the rolling quarter were estimated by CoreLogic to be more than -15% lower than a year ago. But that isn't easing their rental crisis where the vacancy rate is less than 1%.The UST 10yr yield is now at just on 4.18%, unchanged from Saturday but down -23 bps from this time last week. The price of gold will start today at US$2649/oz and down -US$10 from this time Saturday, and down -US$56 from this time last week.Oil prices are little-changed, still just over US$68.50/bbl in the US while the international Brent price is just under US$72.50/bbl. A week ago these levels were $2.50/bbl higher, so a retreat from then.The Kiwi dollar starts today at 59.3 USc and up +10 bps from this time Saturday. But it is up +1c from this time last week. Against the Aussie we up +60 bps at 90.8 AUc. Against the euro we unchanged at 56 euro cents. That all means our TWI-5 starts today at just over 68.6, and little-changed from Saturday, up +50 bps from a week ago.The bitcoin price starts today at US$97,372 and up a minor +0.3% from this time Saturday. Volatility over the past 24 hours has been low at +/- 0.9%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news the world's dominant financial market is closed today, so this will be a thin report. Wall Street will be back in a limited capacity tomorrow (their Friday).In the US, a record 80 mln people are expected to travel at least 100 kms this holiday weekend.But the Canadians are not on their Thanksgiving holiday break. They have it on the second Monday in October, so it has already been for them.And new data shows on average, Canadians work 33.5 hours per week. But payroll earnings are rising, up +5.2% in September from a year ago. That is a faster pace than recently. The growth in average weekly earnings can reflect a range of factors, including changes in wages, composition of employment, and hours worked.The Bank of Korea cut its base rate by -25 bps yesterday to 3.0% during its November meeting. It was a cut not expected and was the second straight month of rate reductions, bringing borrowing costs to their lowest level since October 2022.In Hong Kong, prices for private residences stopped falling in October. The smallest units, 40m2 and smaller, saw a +4.3% rise from September, ending a long decline that started in 2019. But those are still -7.8% lower than a year ago, and down -27% since mid 2019. The brader market is down -9.9% in the year. The interruption of the decline was due to the cancellation of some stamp duties and the opening up the market to mainland Chinese buyersThe EU sentiment surveys were broadly stable in November.In Australia, private capital investment rose +1.1% in Australia in Q3-2023. And that was despite a -1.9% drop in the mining sector. And you can see that in the distribution by State. New South Wales led the way with a +3.6% rise followed by Victoria's +3.2% gain. The largest falls were in South Australia (-11%) and the Northern Territory (-17%). WA was down too, but a lesser -1.3%. Large building projects involving large scale upgrades in the manufacturing sector, and large data centre projects, were the drivers. Many companies in this survey say they plan an investment surge in 2025. Westpac described the trend as a "once in a generation structural change".As part of a last-minute set of deals to get most of its agenda passed in preparation for their 2025 federal election, their government has accepted a Green Party inspired compromise to split the RBA board in two, one for rate setting, and another for governance. The Green's goal was to force the RBA to cut rates, killing the RBA's independence, but it is not clear this aspect was achieved.Container freight rates are down another -2% last week from the week before. Outbound China to the USWC saw the largest fall, down -5% in the week. Bulk cargo rates are down -7% in a week. That now puts them -34% lower than a year ago, but a year ago was when they suddenly spiked.The UST 10yr yield is now at just on 4.24% and unchanged from this time yesterday.The price of gold will start today at US$2642/oz and virtually unchanged, down just -US$1 from this time yesterday.Oil prices are little-changed, still just over US$68.50/bbl in the US while the international Brent price is just over US$72.50/bbl.The Kiwi dollar starts today at 58.9 USc and down -20 bps from this time yesterday. Against the Aussie we down -30 bps at 90.6 AUc. Against the euro we unchanged at 55.8 euro cents. That all means our TWI-5 starts today at just under 68.4, and down -20 bps from yesterday.The bitcoin price starts today at US$95,260 and down -0.8% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.4%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Kia ora,Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news rising consumer demand in the world's largest economy is still driving the world's economy, a trend that started nearly a century ago - and still, it shows no sign of ending anytime soon.First we should note that the American Thanksgiving holiday starts tomorrow, so there is a big data dump today. Most Americans will have a four day 'holiday' (although the bond market will trade on their Friday). That frees them up for the start of the end-of-year retail rush. Given the good shape their economy is in, it is likely to be a positive retail season.US jobless claims rose last week but by less than seasonal factors would have accounted for, so the headline change was regarded positively. The level of continuing claims rose too, but not as sharply as they did in the same week a year ago. So no early signs of labour market stress here.And there was a good rise in mortgage applications last week from the week before (+6.3%), and slightly better that can be accounted for by seasonal factors (+1.7%). Perhaps more impressive is that these rises came despite benchmark mortgage interest rates rising to their highest level since July.And the October pending home sales rose +2.0% to be +5.4% higher than a year ago. This is a further sign the US housing market may have touched bottom.US durable goods orders rose in October, up +5.3% from the same month in 2023, but by less than expected. And that was because the 2023 level was slightly weaker than normal. Capital goods orders rose +5.4% although non-defence capital goods orders were only up +2.9%.The Chicago area PMI came in weak in November, continuing its year-long retreat in a result that would have disappointed everyone.There were no surprises in the second estimate of the American Q3-2024 GDP growth rate, coming in unchanged from the first estimate at +2.8%, and a consistent expansion since Q3-2022. This is an expansion fuelled by consumer spending.But the same data showed core PCE rose to +2.8%, up a tick from +2.7% in Q2. Although this was as expected, this inflation measure is the one favoured by the US Fed, so it is a shift that they will take into account.Today's UST bond auction of seven year paper was very well supported, and for the first time in a long while, the median yield fell from the prior equivalent event. Today it came in at 4.14%, whereas a month ago it was at 4.17%.China industrial profits were expected to fall -3.0% in the nine months to September and in the end they came in down -4.3% on that same basis. Not a huge slip, you may think. But ytd comparisons hide a lot and for September alone, they were -23% lower than in the same month a year ago. There is a definite profit squeeze going on in China.In India, their parliament was suspended so that debate on the links between the ruling BJP political party, and the American-indicted Adani Group could not proceed.In France, their government is close to collapse.In the EU, the European Parliament is moving to get the bloc to “revoke Hong Kong’s special customs treatment” and review the status of its economic and trade office in Brussels over a long-running national security trial that last week saw 45 opposition figures jailed for between four and 10 years.Markets thought the October CPI indicator in Australia would report a rise from the September level of 2.1%. But in the end there was no change. (Food, however, was up +3.3%, and also unchanged from September.) This overall result eased financial market fears that the RBA would have to weight harder against inflation. However, the 'hold' puts rate cuts there back in the frame earlier than otherwise assumed.Australian construction work completed in Q3-2024 also came with a positive surprise, up +3.2% from, the same quarter a year ago. Dragging on this result was virtually no change in residential construction. But unlike in the June quarter, every sector made some positive contribution to the overall gain. The actual result was way better than the limp +0.3% expectation.The UST 10yr yield is now at just on 4.24% and falling -8 bps from this time yesterday.The price of gold will start today at US$2642/oz and up +US$13 from this time yesterday.Oil prices are down -US$1 at just over US$68.50/bbl in the US while the international Brent price is just on US$72.50/bbl.The Kiwi dollar starts today at 59.1 USc and up a full +80 bps from this time yesterday. Against the Aussie we are +70 bps higher at 90.9AUc. Against the euro we up +20 bps at 55.8 euro cents. That all means our TWI-5 starts today at just under 68.6, and up +50 bps from yesterday.The bitcoin price starts today at US$96,058 and up +1.7% from this time yesterday. Volatility over the past 24 hours has been high at +/- 3.1%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news that financial markets are being rattled somewhat by the isolationist rhetoric from the incoming US President on tariffs, especially as they will apply to Canada, Mexico and China. However, despite the incendiary nature of the talk, the market reactions have been relatively mild with the expectation the adults in the room will calm things in January.But these reactions have hit commodity currencies.One reason restraining Trump might work is that his mind is still in the 2020 past. In fact the Biden Administration has been particularly successful in restraining drug importation, fentanyl in particular, that overdose deaths are falling rather fast now. And restraining the drugs trade from China and Mexico is a motivating reason for those tariff threats. (It was during the last Trump Administration that those deaths spiked.)Anyway, away from the ramblings of a bitter old man, first up today, we can report higher dairy prices for two key commodities at the overnight GDT Pulse auction event. SMP rose +0.5% in USD terms and was up +1.8% in NZD terms. WMP rose another +2.2% in USD terms to be up +3.5% in NZD terms. This will give upside to all the analyst farmgate payout forecasts, and it seems likely they will coalesce around the $10/kgMS mark now. That, of course, would be a record high.In the US, their retail impulse is staying 'healthy' as measured by the Redbook survey, and last week it rose +4.9% above the same week a year ago, holding the expansion we have observed for the past eight months.This was supported by a rise in consumer sentiment, as measured by the Conference Board survey. It is now at the top of the range that has prevailed over the past two years. November’s increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding their labour market.Further, there was an improvement in the Texas services sector in November, taking into an expansion. And a return to expansion was also reported for the service sector in the mid-Atlantic states.But none of this has spilled over into confidence in home buying, yet anyway. New home sales in October dropped more than 17% from the previous month to at a seasonally adjusted annualised rate of 610,000. And that takes it -9% lower than the same month a year ago.Singapore’s factory production rose by only +1.2% in October from a year ago, slowing sharply from a downwardly revised +9% rise in the previous month and disappointing analysts. Activity slowed significantly for biomedical manufacturing.Here's something we rarely report on, but is an indication of the tight ASEAN economies. Car sales in Thailand sank -36% in October from a year ago to be the seventeenth consecutive month of decline, driven primarily by high household debt and significant tightening of loans.Later today in Australia, we will be following the October CPI indicator and it is expected to reveal a small rise from the prior month.Join us at 2pm for the RBNZ's Monetary Policy Statement and the OCR review. A -50 bps rate cut is widely expected. But it will be a twelve week gap until the February 19, 2025 MPS, so this review has to carry them through a period which may have considerable international uncertainty attached to it.The UST 10yr yield is now at just on 4.32% and rising +3 bps from this time yesterday.The price of gold will start today at US$2629/oz and down -US$2 from this time yesterday.Oil prices are little-changed at just under US$69.50/bbl in the US while the international Brent price is just under US$73.50/bbl.The Kiwi dollar starts today at 58.3 USc and down a minor -10 bps from this time yesterday. Against the Aussie we are +20 bps higher at 90.2AUc. Against the euro we down -20 bps at 55.6 euro cents. That all means our TWI-5 starts today at just on 68.1, down another -10 bps from yesterday.The bitcoin price starts today at US$94,496 and down another -1.2% from this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.5%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.