Economy Watch

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 while we were all distracted by the 'culture-war' US election, in fact the world's economy was expanding well, except perhaps in China (but even they are still expanding, just not like the they need).In the US Redbook retail index rose +4.8% last week from the same week a year ago, extending its positive run that started way back in August 2023. This is still not a sign of household financial stress.US consumer inflation expectations for the year ahead edged down to 2.9% in October, a four year low, and dipping from 3% in each of the previous four months. All indications are the US Fed has won its 'soft landing' in its inflation fight.The NFIB Small Business Optimism Index rose in October to its highest in three months in a survey carried out prior to the election result.The RealClearMarkets/TIPP Economic Optimism Index, another measure of US consumer confidence, jumped in November to its highest in over three years. It was a survey carried out after the election result was known.But all this might change if today's trend of sharp rises in both benchmark interest rates and the USD continue. Certainly Wall Street is having second thoughts with a reversal that now puts it lower than election day.In Canada, the value of building consents surged in September to be +11.8% higher than the same month a year ago, rebounding from a drop in the previous month. Residential consents rose +7.5% while non-residential building consents rose +18%.In Japan, machine tool orders resumed their strong expansion in October after the September hesitation. They were up +9.3% from the same month a year ago, and bolstered by strong export orders.In China, policymakers are still trying to find the key to unlock real estate optimism. Their latest move looks like it will be to cut transfer taxes on housing sales from 3% to 1%. The hope is that people will sell and upgrade their residences.And of course, it was the Singles Day/Double 11 big retail event in China this week, and it is going off without special notice in the Chinese media. Given that Beijing is looking to boost consumption, you might have thought it would be getting wall-to-wall coverage, but it isn't. However, despite that, it is still an economically significant sales event.India's industrial production rose +3.1% in September from the same month a year ago, exceeding expectations of a +2.5% growth and rebounding from a -0.1% contraction in the previous month. While this is quite good, it is not back to the average rise for 2024, and even those increases don't really explain why their GDP is rising faster than +7%. India's expansion isn't really based on rising manufacturing prowess.And India is battling inflation and inflation seems to be winning. In October CPI inflation came in at +6.2%, in a rising trend to its highest since August 2023. Worse, food price inflation rose +10.9% over the same period and almost back to the level they had in 2019. Vegetable price inflation is running at +42%. Unless this is curbed, at some point this will cause social unrest.Although it has been negative for nearly three years, the Westpac-Melbourne Institute Consumer Sentiment index in Australia rose in November to its highest level in two-and-a-half years as the outlook on the economy and finances finally turned optimistic.Australia’s NAB business confidence index climbed into positive territory in October 2024, the first positive reading in three months and reaching its highest level since January 2023. There were notable improvements across most industries, except construction and retail. However those surveyed said their business conditions were largely unchanged.The UST 10yr yield is now at just on 4.43% and up +8 bps from yesterday.The price of gold will start today at US$2599/oz and down -US$17 from this time yesterday.Oil prices are +50 USc firmer at US$68.50/bbl in the US while the international Brent price is now just on US$72/bbl.The Kiwi dollar starts today at 59.2 USc and down -40 bps from yesterday as the USD rises. Against the Aussie we are unchanged at 90.7 AUc. Against the euro we have slipped -10 bps to 55.9 euro cents. That all means our TWI-5 starts today at just on 68.8, and down -10 bps from yesterday.The bitcoin price starts today at US$87,134 and up another +3.4% from this time yesterday. Volatility over the past 24 hours has been high at just on +/- 3.6%.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 Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news that there was little economic data released overnight, so this report will be quite thin - and short.First up today we should note that China's October vehicle sales surged by +7% from a year ago to just over 3 million units in in the month. This contrasted with the -1.7% drop on that basis in September, and shows that recent government policy measures aimed at boosting the retail market are in fcat having an impact. Domestic NEV penetration exceeded 50% for a third straight month.That is a bright spot because the wider new yuan loan data for October was weak - again. In fact, very weak. At ¥500 bln new lending in October was the least since 2009. It was well below the low bar analysts had expected of ¥700 bln and emphasises just how little real-economy 'investment' is taking place at present. So far, their stimulus model has been a fizzer.In the US we should probably note that Q3 earnings for Wall Street have come in very positively with most companies having now reported. And most delivered better-than-expected results. So it will be no surprise that indexes like the S&P500 are running at record high levels.Following the US election, bitcoin is having a moment, spurred by the perceived influence the crypto-bros will have in the incoming Administration. Bitcoin hasn't changed. It is still not a unit of account, not a medium of exchange, and hardly even a store of value. It's not anonymous either (which makes it an odd choice for the libertarian crypto crowd), and is a clunky transaction device that holders notice when they try to buy (with fiat currencies). But its speculation attributes are currently making holders seem wealthy in fiat terms.In the real world, we should probably note that Malaysia is going through quite a construction boom, largely for residential buildings. Construction activity rose by +23% in the third quarter of 2024 from a year ago, the tenth consecutive period of heady growth. Construction of non-residential building is booming too.The UST 10yr yield is now at just on 4.35% and up +4 bps from yesterday. The price of gold will start today at US$2616/oz and down -US$68 from this time yesterday.Oil prices are -US$2.50 lower at US$68/bbl in the US while the international Brent price is now just over US$71.50/bbl.The Kiwi dollar starts today at 59.6 USc and unchanged from yesterday. Against the Aussie we are up +10 bps at 90.7 AUc. Against the euro we have risen +40 bps to 56 euro cents. That all means our TWI-5 starts today at just on 68.9, and up +20 bps from yesterdayThe bitcoin price starts today at US$84,265 and up +5.6% from this time yesterday. Volatility over the past 24 hours has been very high at just on +/- 4.1%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.

Kia ora,Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news China's battle with deflationary pressures shows no sign of being won.But first, in the week ahead locally, we will get the REINZ result for October some time this week. And September migration data on Wednesday. Internationally, all eyes will be on American consumer and producer inflation data, retail sales, and speeches by Fed officials, as investors seek clues on their monetary policy outlook in the wake of 2nd Trump Presidency.In China, new yuan loans, fixed asset investment, industrial production, retail sales, and the house price index will be all be released this week. In Australia, their October labour force data will come out, the NAB business confidence survey, and Westpac consumer confidence indexes are expected. Finally, we should watch Indian inflation data.Over the weekend, China said its inflation rate came in at +0.3% in the year to October (and half the modest August level), still giving them disinflation as they stare deflation in the face. Deflation is already in producer prices, and it got slightly worse in October, at -2.9%. That's their fastest fall in almost a year. Both movements were small but they are going the wrong way for them.Among the CPI items, we can see that food prices rose +2.9% in the year to October, so households are feeling some noticeable inflation pressure. Costs eased for fresh vegetables but they are still +22% higher than a year ago, fresh fruit was up +4.7% on that same basis, and pork up +14%. Prices fell however for eggs (-2.5%), milk (-1.7%), beef (-13%), and lamb (-5.9%). So not much for us to be encouraged about here..And China has sharply raised (+40%) their local governments’ debt ceiling to ¥35.5 tln (NZ$8.3 tln) when they announced the total value of the current program increase will by ¥10 tln (NZ$2.3 tln). But officials did not announce additional measures to directly stimulate domestic demand, probably disappointing markets that had been hoping the package would also help consumers. They did say however they are 'studying' such moves, probably waiting to see the impact of the challenge from Trump.Japanese households aren't feeling all that great either. Household spending fell by -1.1% in September from a year ago, a smaller decline than the -1.9% drop in August and better than market expectations for a -2.1% decrease. This marks the seventh month of reduced household spending in 2024.Foreigners love the place however, not only as tourists, but as investors too, raising their equity investment stakes in each of the past six months.Taiwanese exports rose +8.4% from a year ago in October, building from a +4.5% rise in the previous month. Imports were up +6.5%, a slower rate of increase than we have seen in the prior four months. Robust Taiwanese trade contrasts with what its unfriendly and jealous neighbour is able to achieve,Across the Pacific, Americans remain cautious taking on new personal debt. That rose by only +US$6 bln in September, a slowdown from the almost +$9 bln rise in August and well below the expected +US$14.5 bln increase. Now the average balance is US$23,087, up from US$18,008 four years ago. These are not actually high levels. (The divisor we used is the total population 18 years and older.)For the first time since May 2020, the US Fed saw its balance sheet assets fall below US$7 tln last week. That is a -US$53 bln fall in a month, a -US$2 tln fall since it peaked at US$8.96 tln in April 2022.Before their election, consumer sentiment as tracked by the University of Michigan survey, rose for the fourth consecutive month, rising 3.5% to its highest reading in six months. While current conditions were little changed, the expectations index surged across all dimensions, reaching its highest reading since July 2021.The November WASDE report from the USDA sees 2025 with more world wheat, slightly less coarse grains, and more rice. The world's ability to feed itself seems stable, without unusual price pressures. They expect to import more beef from Oceania. In a change they now expect more US milk production even though cow herd numbers might slip slightly. Access to this market now depends on the incoming capricious Administration.The October Canadian labour market report showed a +14,500 rise in jobs, less than expected. But full-time jobs rose more than +25,500 and part-time jobs slipped -11,000, a virtuous twist.The UST 10yr yield is now at just on 4.31% and up +1 bp from Saturday. A week ago it was at 4.37%.The price of gold will start today at US$2684/oz and down -US$1 from this time Saturday.Oil prices are +50 USc firmer at US$70.50/bbl in the US while the international Brent price is now just under US$74/bbl.The Kiwi dollar starts today at 59.6 USc and and down -10 bps from this time Saturday. Against the Aussie we are down -10 bps at 90.6 AUc. Against the euro we have dipped -10 bps as well to 55.6 euro cents. That all means our TWI-5 starts today at just on 68.7, and down -10 bps from Saturday but unchanged from a week ago..The bitcoin price starts today at US$79831 and up +4.9% from this time Saturday. Volatility over the past 24 hours has been moderate at just on +/- 2.9%.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.Today we lead with news with a special eye on unpredictable American policy instability. The Trump win unhinges many things, including the path for central bank rate cuts. The ones announced today may be the last until after the direction of US fiscal policy is revealed for certain.In the shadow of the Trump election win, a range of billionaires are lining up key roles in his administration to extract payback for their support. It is all very unseemly, but should be no surprise. The current estimate is that just six of them have gained more than +US60 bln in the first day. And that will be just the start.The US Fed is about to release the results of its November meetings. A -25 bps rate cut is anticipated, to 4.75%. It may be too soon to expect them to have assessed how they need to prepare for Trump 2.0 policies that are expected to swell the US Federal deficit in a significant way, and re-ignite serious inflation. Their options may be discussed more at their December 19 (NZT) meeting. And that will all be clouded by Trump's expectations of subservience, although he has few options to fire Powell who is safe in the role until mid-2026, and as a governor until 2028.Meanwhile US initial jobless claims came in at 212,300 (actual) last week, almost exactly as expected. There are now 1.65 mln people on these benefits, almost exactly as it was in the same week a year ago and back to pre-pandemic levels even though the employed labour force is now +7.5 mln people larger than pre-pandemic. The US labour market remains unchanged, and stays strong .China is getting an export boost from orders that are anticipating a clampdown on trade with the Middle Kingdom - from both the US and the EU. Exports surged in October by +12.7% from the same month a year ago to a 27-month high, much faster than the forecasted +5% and up from a five-month low of +2.4% growth in September.More reflective of the state of their economy, imports fell -2.3% in October from a year ago to a four month low. Imports fell from ASEAN countries, the EU, and even best-bud Russia, but grew from the US as China hoarded soybean and other grains. Imports from Australia are down -8.7% and from New Zealand -11.1% so far in 2024. Both of us are being weaned from the Chinese economy quite quickly now.Since June, European retail sales have been rising, which you may find counter-intuitive given most of their data is dull and unimpressive. The rise in retail sales is more impressive when you realise that it is volume based, after inflation is accounted for. It was up +2.8% in September from a year ago on that volume basis. There is life left yet in the EU economy.With CPI inflation back down to 1.7% pa, the Bank of England trimmed its policy rate by -25 bps to 4.75% overnight, its second cut since August, and exactly as expected.Both exports and imports fell in Australia in September, something of a surprise. Their export levels fell back to December 2021 levels, and their import levels retreated when September is usually when they peak. The China trade is at the heart of that undershoot.Container freight rates rose +7% last week from the week earlier to be +240% higher than a year ago and +140% higher than pre-pandemic levels. Demand from China to Europe drove these rises, but as we have noted before, this is probably just in anticipation of trade clampdown. Bulk cargo rates were up +2.0% over the past week to be -6.6% lower than the same week a year ago.The UST 10yr yield is now at just on 4.35% and down -7 bps from this time yesterday. The price of gold will start today at US$2693/oz and back up +US$26 from this time yesterday.Oil prices are unchanged at US$72/bbl in the US while the international Brent price is now just under US$75.50/bbl.The Kiwi dollar starts today at 60.2 USc and up +80 bps from this time yesterday. Against the Aussie we are down -20 bps at 90.3 AUc. Against the euro we are up another +40 bps at 55.8 euro cents. That all means our TWI-5 starts today at just on 69, and up +30 bps from yesterday at this time.The bitcoin price starts today at US$75,858 and up +2.2% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.5%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Kia ora,Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news it was a night of celebration in the US, especially for billionaires, and those pushing extreme social and religious views. The decisive second coming of a Trump Administration will free up new divisive narratives that will spill over globally. It is a great time to be a crony capitalist because your influence on a morally bankrupt president will be easy.There will be global economic consequences - almost all of them bad for trade and small countries. Markets have reacted that way already. Impending isolationism is raising the US currency (which will hurt their exporters significantly), commodity prices are already getting a twist, Bond yields are rising, and sharply. And equity markets are rising on the sugar hit of expected lower taxes, ignoring for now the longer term costs of much higher interest rates and much higher inflation as new tariffs essentially impose taxes on US consumers.The change in culture from a free and open society to one that will be bitter and vengeful will drive global consequences we won't like. But we will have to find our way in a renewed thicket of imposed and imported bile. For a while we will have to live in a fact-free world.Economically, US mortgage applications fell -10.6% last week from the prior week, and that is their sixth consecutive retreat. They are now back to level-pegging with the low levels of 2023 at this time. Mortgage interest rates rose sharply last week, and are now likely to rise much faster in the future.Trump's spending plans could add US$7.5 tln to American deficits over 10 years, according to one estimate, far greater than the current track. US Treasury yields rose almost +50 bps in October, when markets were pricing in a higher likelihood of a Trump win. Inflationary pressures from Trump's policies will leave the Fed with less room to cut rates, and keep Treasury yields elevated. The US housing market will be a loser. In fact, that is likely to be generally the case elsewhere because of sharply swelling US deficits.American car sales rose in October to over a 16 mln annual rate. This is another metric likely to be challenged by higher future borrowing costs.There was a UST 30yr bond auction earlier this morning, again well supported. The median yield jumped to 4.57% pa, sharply higher than the 4.32% at the prior equivalent event a month ago. Secondary market yields jumped as well (see below) as investors foresee chaotic and unprincipled public policy starting in 2025.The Central Bank of Malaysia held its overnight policy rate steady at 3% for the ninth consecutive meeting. This was what was expected.The easing of deflation pressures in the EU turned in September to be worse, with their PPI down -3.3% from a year ago.In Australia, the Ai Group Industry Index retreated again in October with a sharp drop, especially for new orders. This index has indicated contraction for the last thirty months.The UST 10yr yield is now at just on 4.42% and up +8 bps from this time yesterday. The price of gold will start today at US$2667/oz and down -US$71 from this time yesterday.Oil prices are down -50 USc at US$72/bbl in the US while the international Brent price is now at US$75.50/bbl.The Kiwi dollar starts today at 59.4 USc and down -60 bps from this time yesterday. Against the Aussie we are unchanged at 90.5 AUc. Against the euro we are up +40 bps at 55.4 euro cents. That all means our TWI-5 starts today at just under 68.7, and actually little-changed again from yesterday at this time.The bitcoin price starts today at US$74,244 and up +5.9% from this time yesterday. Volatility over the past 24 hours has been very high at just on +/- 4.8%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on 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 is surprisingly positive today.Even though there are likely large influences on New Zealand from events halfway around the world, there are some locally too. Later this morning the Q3-2024 labour market report will be released. And we will have full coverage. But before that we have had another dairy auction, and this one will have analysts reaching for their pencils. It was a good one, with overall prices rising +4.8% in USD terms, up +6.2% in NZD terms. That takes them to their best level since late 2022.The gains were widespread, led by butter's +8.3% jump. Demand out of China is the extra push this market got, and it could well bring upside to farm-gate payout forecasts. In the background, animal health concerns in both the US and EU, and weak domestic raw milk prices in China, are driving lower production expectations globally, just when New Zealand production is in an expansion state.But the economic good news didn't stop there.The Redbook tracking of retail sales in the US delivered a +6.0% rise last week from the same week a year ago. That was its best since mid 2022.The American logistics report for October revealed a small rise from a strong September, taking this index to its best expansion since September 2022. Growth is increasing at an increasing rate in all the right metrics.The ISM services PMI for October was sharply positive too, and its most expansionary level since August 2022. Encouragingly, this sharp turnaround was driven by strong new order growth. This survey basically confirmed the expansion in the S&P/Markt services PMI version and its drive in new order growth.US merchandise exports slipped slightly in September from August, but we need to recall that the August level was a record high - and that Boeing's strikes and production woes will have had an effect here. US imports were strong, as you would expect with most sectors of their economy firing on all cylinders.We should note that the strike at Boeing is over, with a startling +44% pay hike over four years (+38% plus compounding). The catch-up will no doubt drive future export results.There was a well-supported UST 10yr bond auction earlier this morning, and that delivered a yield of 4.29%, which compares with the 4.01% at the equivalent event a month ago.Not to be outdone, the Canadian services PMI turned up sharply to expansion as well, also driven by new order growth.In China, the October Caixin services PMI largely mirrored the official version, but recording a better expansion than the official version, in a better-than-expected result.In Australia, as expected their was no change by the RBA to their policy interest rate. But they warned that another interest rate rise was still a possibility, conceding they had been surprised by the scale of the rise in government spending. They are also surprised that housing demand is staying up, despite their highish interest rates.The UST 10yr yield is now at just on 4.34% and up +4 bps from this time yesterday.The price of gold will start today at US$2738/oz and up +US$5 from yesterday.Oil prices are up almost +US$1 at US$72.50/bbl in the US while the international Brent price is now at US$76/bbl.The Kiwi dollar starts today at 60 USc and up another +20 bps from this time yesterday. Against the Aussie we are down -30 bps at 90.5 AUc. Against the euro we are up +10 bps at 55 euro cents. That all means our TWI-5 starts today at just on 68.7, littel-changed from yesterday at this time.The bitcoin price starts today at US$70,108 and up +3.5% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.8%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on tomorrow.

Kia ora,Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news financial market traders are bracing for volatility over the US election-counting period.But elsewhere, global manufacturing remains subdued as new order intakes contract for a fourth successive month. The global factory PMI is dominated by large countries, especially the US and China. But at the positive end are healthy expansions in India, Spain and Brazil. At the other end however is the Eurozone, Turkey and Australia. (New Zealand would be too if it was included in these benchmarked surveys.)New orders for manufactured goods in the US fell by -0.5% in September from the previous month, extending the revised -0.8% decline in August and loosely in line with market expectations of a -0.4% drop. They rose if you exclude aircraft however. Year on year this retreat is -2.1%. But if you exclude defence orders, there is a fall in private sector orders of -3.2% year-on-year.There was a popular UST 3 year bond auction earlier this morning where the median yield came in at 4.09%. But despite high demand, that was +27 bps higher than the 3.82% median yield at the prior equivalent event a month ago.In China, banks are foreclosing on a growing number of apartments after homeowners could not pay their mortgages, as the country’s housing crash threatens the financial system. And the surge is overwhelming their legal system in some places. Bank balance sheets are being weakened by the trend.But maybe this will pass soon? Their housing market got year-on-year growth in October for the first time since February, after a raft of recently introduced supporting measures, according to the latest data released by the Ministry of Housing and Urban-Rural Development. Sales of newly built and pre-owned homes climbed +3.9% in October from the same period last year.India’s factory sector came in with an improvement in performance in October with their PMI rising marginally and regaining momentum. Output growth rose, fuelled by faster increases in total new orders and especially export orders.In Europe, their factory sector remains in a deflationary funk. But at least it isn't getting worse. As measured by the overall Eurozone PMI, October brought a lesser retreat. There is expansion going on in Spain, Greece and Ireland, but Germany, France and Italy are all contracting, even if less so.In Australia, the Melbourne Institute Monthly Inflation Gauge recorded a rise in both monthly and annual inflation during October. The monthly rise (+0.4%) was the most since July. But the annual rise (+2.1%) is still within the RBA's desired range. The monthly and annual cost of living also rose across selected household types (age pensioners, pensioners and beneficiaries, employees, government transfer recipients, and self-funded retirees).Later today, the RBA will review its cash rate target. Almost everyone expects them to hold that rate unchanged at 4.35%.The UST 10yr yield is now at just on 4.33% and down -4 bps from this time yesterday in fairly volatile shifts.The price of gold will start today at US$2733/oz and down -US$3 from yesterday and still well off its high.Oil prices are up almost +US$2 at US$71.50/bbl in the US while the international Brent price is now at US$74.50/bbl.The Kiwi dollar starts today at 59.8 USc and up +20 bps from this time yesterday. Against the Aussie we are down -10 bps at 90.8 AUc. Against the euro we are down -10 bps at 54.9 euro cents. That all means our TWI-5 starts today at just under 68.7, marginally softer from yesterday at this time.The bitcoin price starts today at US$67,740 and down -0.6% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.3%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on tomorrow.

Kia ora,Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news that, while it may be a pivotal week regarding the US election, we are staying away from that event. There are plenty of other places to get whatever slant suits you.In the coming week, the highlight will be Friday morning's US Fed rate decision. Analysts have pencilled in a -25 bps cut to 4.75%. They won't be the only central bank to review their interest rate settings this week. We will also get them from Norway, Brazil, Poland, and the UK, Plus of course Australia tomorrow where analysts expect no change at 4.35%.Back in the US there will be important factory order data, more services PMI results, and more sentiment surveys. There's also German data upcoming. And in China, they will release CPI, PPI, trade data and services PMI results this week.But the big weekend news was the undershoot in the US labour market. The US economy added just +12,000 jobs in October on a seasonally-adjusted basis, well below a slightly downwardly revised +223,000 in September and forecasts of +113,000. It is the lowest job growth since December 2020 on this basis, and it is this one that sets the narrative.The 'reasons' for the low result are said to be a combination of the hurricane effects (they had two), plus the on-going Boeing strike.Regular readers will know that we also look at the actual data, in addition to the seasonally adjusted data. Somewhat surprisingly, that rose a very strong +826,000 to 160 mln people on company payrolls, the highest ever. And that is a gain for the year of +2.1 mln jobs. (The seasonally adjusted data shows essentially the same on an annual basis.)The broader household measure (which includes the unincorporated self-employed) continued its reporting of large shifts away from self-employment and back on to company payrolls. So the overall year-on-year employed gain isn't as large, just under +300,000.Average weekly earnings rose +4.0% in the year to October, the best since March, and far better than current inflation. In the past four years average weekly earnings rose at the rate of +4.5%; in the prior four it was +2.7%.Market reactions to the low headline jobs number suggests they see it as an outlier. Fears were in check, and there seems to be a build-back of the view that the Fed may cut after all at its meeting later this coming week.The widely-watched American ISM Manufacturing PMI unexpectedly fell in October from September and came in below forecasts. This survey pointed to another contraction in the manufacturing sector and the worst since July 2023. In contrast, the globally-benchmarked S&P/Markit version reported an improvement, although it too still records a contraction, just less so. Some are doing well, but some are finding it tough.North in Canada, there was a factory expansion. A rise in new orders pushed their result to a 20 month high.In China, the Caixin factory PMI turned minorly positive, pretty much confirming the official factory PMI there released earlier.In Australia, CoreLogic reports that Sydney has now followed Melbourne and recorded a month-on-month house price drop. Nationally, prices inched ahead because of continuing gains in Brisbane, Adelaide and Perth. But the pace is slowing everywhere now. Affordability limits seem to have been reached.Meanwhile, there was essentially no growth in home loan activity in September from August, and for investors those levels slipped. Both recent trends were weaker than expected, especially for first home buyers.The internationally-benchmarked Australian factory PMI reported that their factory sector contraction eased in October but it still remains in a deep contraction.The UST 10yr yield is now at just on 4.39% and up +2 bps from this time Saturday, up +14 bps in the past week. We should note that Warren Buffett's Berkshire Hathaway reported its Q3 results over the weekend, and that included that its 'cash' pile had grown to US$320 bln/NZ$538 bln (page 2) - most of it in short-term US Treasury Bills. It has swelled because Buffett is selling equity positions, including in Apple. (Fun fact for us; New Zealand's nominal GDP is 'only' NZ$413 bln.)The price of gold will start today at US$2736/oz and down -US$1 from Saturday and still well off its high, and -US$9 lower than a week ago.Oil prices are holding at US$69.50/bbl in the US while the international Brent price is still at US$73.50/bbl. These levels are about -US$2.50 lower than a week ago.The Kiwi dollar starts today at 59.6 USc and down -10 bps from this time Saturday. A week ago it was at 59.8 USc so little-changed. Against the Aussie we are unchanged at 90.9 AUc. Against the euro we are down -10 bps at 55 euro cents. That all means our TWI-5 starts today at just on 68.7, unchanged from Saturday at this time and unchanged from this time last week.The bitcoin price starts today at US$68.139 and down -2.3% from this time Saturday. A week ago it was at US$66,267. Volatility over the past 24 hours has been modest at just on +/- 1.6%.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 on tomorrow.

Kia ora,Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news the American economy continues its remarkable run, although corporate earnings guidance is showing some hesitation.US jobless claims last week came in at +200,000, a decrease and more than expected. Interestingly, this is the same level it was a year ago for the same week. There are now 1.62 mln people on these benefits, also lower than expected.Tomorrow's US non-farm payrolls are expected to grow just +113,000, but today's data on initial jobless claims, job cut data, and yesterday's ADP data all suggests the analyst estimates are well undercooked. Certainly markets think so and see the strong labour market and the pressure it puts on the economy as a reason the US Fed may defer its next rate cut.Today's release of personal income, and personal spending levels both indicate faster rises than expected, also a flag for Fed caution. Core PCE inflation is still running at 2.7%. Real disposable personal income is up +3.1% from the same month a year ago. Real personal consumption expenditures are up the same. It is surprise 'strength' and markets are wary.But not showing strength however was the October edition of the Chicago PMI.The latest update in Canada for average earnings has them rising a rather remarkable +4.6% from a year ago. That is its highest rate since the pandemic, and before that since before the GFC in 2007. This was also quite a data surprise.China's manufacturing activity snapped a five-month contraction in October, as the recent fresh stimulus measures boosted production. But only just. The country's official PMI came in at 50.1 for the month. Their services sector came in at 50.2, also only a minor expansion. It may only just be the start of their expansion, but they are probably disappointed at these early indicators.And a new stimulus measure has been announced in China. Home loan borrowers have been given the right to renegotiate their loan interest rate lower as/if interest rates fall. It's China; a contract is only enforceable if Beijing says it is.The Bank of Japan left its policy rate unchanged at 0.25% on Thursday as political uncertainties hang over the economy after an inconclusive national election result. They also kept their three-year inflation projections unchanged, confident their economy is expanding as they want. They say inflation should stay near 2%.Japanese September retail sales were quite a disappointment, rising just +0.5% from a year ago when a +2.3% rise like they have had for a while, was expected. One to watch.In the EU, the Euro Area CPI inflation rate ticked up slightly to 2.0% in October, again restrained by lower energy costs.In a piece of humourous dystopian theatre, a Russian court has fined Google more than there is money in the world, because YouTube won't disseminate their state misinformation. The amount (in US dollars) is US$$20,000,000,000,000,000,000,000,000,000,000,000. I have no idea how to pronounce that.Breaking a 17 week trend, container shipping freight rates actually rose last week, up +4% from the prior week, to be +126% above pre-pandemic levels. Bulk cargo rates fell -3.5% on the same prior-week basis, to be very similar to what they were a year ago.The UST 10yr yield is now at just under 4.27% and down -2 bps from this time yesterday. Wall Street has started its Thursday with the S&P500 down -1.7%. Earnings guidance from some majors is causing the re-think.The price of gold will start today at US$2739/oz and down -US$37 from yesterday and well off its high.Oil prices are up +50 USc US$69/bbl in the US while the international Brent price is unchanged, still at US$72.50/bbl.The Kiwi dollar starts today at 59.6 USc and down -20 bps from this time yesterday. Against the Aussie we are also down -20 bps at 90.8 AUc. Against the euro we are down -20 bps too at 54.9 euro cents. That all means our TWI-5 starts today at just on 68.6, and - no surprise - down -20 bps from yesterday at this time.The bitcoin price starts today at US$70,389 and down -2.4% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.8%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again on Monday.

Kia ora,Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.Today we lead with news consumers may be anxious about their political future, but they are spending like they are in healthy financial shape.In the US, their economy expanded an annualised +2.8% in Q3-2024, below the 3% in the previous quarter and forecasts of 3%. Holding it back was essentially no growth of inventories and slow expansion of capital investment. But personal spending rose at its fastest pace in more than a year. The US economy is running at a nominal pace of US$29.35 tln of annual economic activity. That is +US$1.4 tln more in a year, or +4.9% more, in nominal terms. (Their increase is about five times New Zealand's total activity, three-quarters of Australia's total annual pace.)The ADP employment report for October delivered a very positive signal, adding +233,000 paid private-sector jobs, when only +115,000 were expected. This will have analysts raising their forecasts for US non-farm payrolls.US pending home sales - a forward-looking indicator of home sales based on contract signings - rose an outsized +7.4% in September and the rise was broad-based, across the nation. But last week's mortgage applications were little-changed, but that level is +10% higher than year-ago levels (which to be fair were weak). Higher benchmark mortgage rates inhibited recent activity.In China, eyes are on the level of interest payments that local government is paying, as they borrow much more, replacing the 'revenue' that has dried up from land sales.Pushed by an unexpectedly positive German result, the EU Q3-2024 GDP rose much faster than expected (even if it is still low).EU sentiment is broadly stable, although there was a small rise in inflation expectations in these surveys.In Australia, their Q3-2024 CPI rate was expected to come in at 2.9%, and their September monthly inflation indicator was expected at 2.4%. They actually came in at 2.8% and 2.1% respectively (a 3 year low), so that eases the pressure on the RBA, although only slightly. Next week, the RBA will be reviewing its 4.35% policy rate, and these results are likely to be seen as an unexpected faster cooling, but largely resulting from the impact of the Canberra's government's Energy Bill Relief Fund rebate. It seems unlikely this distortion will prove enough for the RBA to cut rates.The UST 10yr yield is now at just on 4.25% and down -4 bps from this time yesterday. The price of gold will start today at US$2786/oz and up +US$21 from yesterday and a new high.Oil prices are up +US$1 US$68.50/bbl in the US while the international Brent price is up to US$78.50/bbl.The Kiwi dollar starts today at 59.8 USc and back up +20 bps from this time yesterday. Against the Aussie we are up +10 bps at 91 AUc. Against the euro we are down -10 bps at 55.1 euro cents. That all means our TWI-5 starts today at just on 68.8, and up +0 bps from yesterday at this time.The bitcoin price starts today at US$72,121 and down -0.7% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.5%.You can find links to the articles mentioned today in our show notes.You can get more news affecting the economy in New Zealand from interest.co.nz.Kia ora. I'm David Chaston. And we will do this again tomorrow.