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.
Today we lead with news global financial markets are showing nerves ahead of tomorrow's US CPI data, not only because there is upside risk that will restrain the US Fed from, rate cuts, but also gun-shy after getting non-farm payrolls reports they basically didn't believe. Sanitised US data is a risk no-one wants (other than the White House.)
First in the US, there were 248,000 initial jobless claims last week, a small decrease but the one explained by seasonal factors. There are now 2.215 mln people on these benefits, more than the 2.19 mln in the same week a year ago.
And American existing home sales came in sharply lower in January that the good December level. They ran at a -4.4% lower rate than in January 2025, and even lower than the unusually low January 2024 level. They fell everywhere and was the largest fall in four years, although prices rose marginally from a year ago.
The New York Fed released a detailed review of "who pays" the Trump tariff taxes, and surprise, surprise, they found it is almost exclusively (90%) Americans who pay. Who knew? They also found that after these tariffs, China's share of US imports is basically unchanged. Some people are slow learners - tariff taxes are a tax on yourself. But you have to take stage one economics to learn this stuff.
In India, they released CPI inflation data overnight and it came in at 2.75%, their highest since May. And we should also probably note that protests in India are growing against their recently-agreed free-trade deal with the US.
In China, their Spring Festival / Chinese New Year formally starts on Tuesday, and a lot depends on the consumer spending patterns during this two week annual break. Forward bookings for travel indicate a record level of travel, a sharp jump in international travel, and a preference for independent, non-package holidays. Thailand, Russia, Turkey and the Philippines are getting outsized bookings this year.
Separately, China has rolled back its steep tariff penalty on EU dairy products.
In Australia. consumer inflation expectations rose in February to 5.0%. This follows a seven-month period of below five-per cent expectations. The increase in February is present across a number of inflation expectations measures.
And staying in Australia, chances are rising that extended drought conditions related to the return of an El Niño weather pattern that may come later in 2026. It will be hotter there too. If that occurs, there will be spillover implications for New Zealand, particularly for the rural sector.
Global container freight rates were little-changed last week (-1%), to be -38% lower than year-ago levels. Once again, the key change were weaker outbound China rates. Although shifting in between, bulk cargo rates are essentially unchanged from a week ago, but they are +150% higher than year-ago levels. (But that base was unusually low.)
The UST 10yr yield is now just over 4.11%, and down -6 bps from yesterday in a hard shift to 'safety'.
The price of gold will start today down -US$122 from yesterday at US$4953/oz. Silver is down a very sharp -US$8 at US$76/oz and even more volatility.
American oil prices are down -US$2 at just over US$63/bbl, while the international Brent price is now just under US$68/bbl.
The Kiwi dollar is down a minor -10 bps against the USD from yesterday, now just over 60.5 USc. Against the Aussie we are up +20 bps at 85.2 AUc. We are down again against the yen. But against the euro we are unchanged at 51 euro cents. That all means our TWI-5 starts today also little-changed, still at 63.9.
The bitcoin price starts today at US$66,288 and up +0.5% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.7%.
You can get more news affecting the economy in New Zealand from interest.co.nz.
Kia ora. I'm David Chaston and we’ll 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 of what seems to be an outlier jobs report that has financial markets sceptical.
US non-farm payrolls were claimed to have risen +130,000 in January in delayed data released today, far above the downwardly revised +48,000 level for December and more than double analysts' collective estimates. All the gains seem to be in their healthcare sector. If it stands, it undermines the case for Fed rate cuts.
Market reactions have not been supportive, with bond yields rising, rate curves fattening, the equity markets falling, and the USD falling.
The detail of this jobs report remains 'interesting' all the same. Raw (not seasonally adjusted) data shows payrolls actually fell -2.65 mln in January from December, down -2.85 mln from November. And nested within this data are revisions for calendar 2025 now showing employment growth for 2025 revised down to +181,000 from +584,000 previously reported, implying average monthly job gains of just +15,000.
These revisions bring the official data back looking like the private ADP data - except for the January headline result. Markets expect this to be revised sharply down in coming months.
US mortgage applications fell again last week, the third consecutive dip, although not as sharp as the prior two.
There was another US Treasury bond auction overnight, this one for their ten year Note. It was well supported. The median yield came in at 4.11%, down from the 4.13% at the prior equivalent event a month ago.
Meanwhile, the US budget deficit keeps getting worse. It will grow in fiscal 2026 to -US$1.85 tln, the Congressional Budget Office said overnight. Current policy settings are worsening the country's fiscal picture amid low economic growth, particularly the enormous tax-cuts for the rich. They say the "One Big Beautiful Bill" tax cuts will will add $4.7 tln to US deficits.
Across the Pacific, there is still no inflation in China, and it has turned toward deflation faster than expected. Their annual inflation rate eased to +0.2% in January from an already very low 0.8% in the previous month. This is its lowest level since October and below market estimates of 0.4%. Food prices fell for the first time in three months (-0.7% vs 1.1% in December) while non-food inflation slowed sharply too (0.4% vs 0.8%). Meanwhile, Chinese producer price deflation eased to -1.4%.
China also released January car sales data, coming in at 2.35 mln for the month. However, that was -3.3% lower than for January 2025 and +-3.8% lower than the same month in 2024. Notably soft were NEV sales in January. Perhaps we are seeing signs of maturing (or exhaustion?) in this very dynamic market. It's is hugely important to China's industrial base, selling more than 34 mln units in 2025.
In Australia, the number of new owner-occupier new home loan commitments rose +7.5 in the December 2025 quarter compared with a year ago. On a value basis, that rose +18.9%. For housing investor loans for the same periods, the number of new loans rose +24%, and their value rose +32%.
The UST 10yr yield is now just under 4.17%, and up +2 bps from yesterday. 
The price of gold will start today up +US$58 from yesterday at US$5075/oz. Silver is up +US$3.50 at US$84/oz and extending its new volatility.
American oil prices are up +US$1 at just on US$65/bbl, while the international Brent price is now just under US$70/bbl.
The Kiwi dollar is up a minor +10 bps against the USD from yesterday, still just under 60.6 USc. Against the Aussie we are down -50 bps at 85 AUc. We are also down against the yen. But against the euro we are up +20 bps at 51 euro cents. That all means our TWI-5 starts today little-changed, still at about 63.9.
The bitcoin price starts today at US$65,965 and down -5.1% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.8%.
You can get more news affecting the economy in New Zealand from interest.co.nz.
Kia ora. I'm David Chaston and we’ll 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 financial markets are taking more notice of the lackluster US economic data today, with Wall Street equity markets hesitating, bond yields in a defensive twist, and the USD staying weaker.
But first, the overnight dairy Pulse auction not only confirmed the prior week's sharp rises, it added to them. WMP was up a marginal +0.4% from a week ago to be up +14% from the start of 2026. Butter was up +6.8% from last week, up +18% year-to-date. And the SMP price was up +1.7% from last week, also up +14% so far this year. Everyone in the industry will welcome this confirmation of the recent rising trend, even if some of it is just USD weakness.
Not so positive was the US retail sales report for December, which showed zero growth from November, to remain +2.3% higher than a year ago. Given CPI inflation is +2.7%, there is clear stagflation involved here.
Meanwhile the weekly ADP employment report only showed private payrolls gaining +6,500 nationally, well within the margin of error. But at least it was better than the prior week's no-change.
The January NFIB optimism index was also little-changed and still below the benchmark 100 level.
US household debt as at the end of 2025 was recorded at US$18.8 tln, a +4.2% rise from the end of 2024. Non-housing debt rose only +2.6% in the same period, so Americans are taking on more housing debt at a faster pace. The same report shows delinquency rates on all loans rose to 4.8% of outstanding household debt, the highest level since 2017, driven by higher defaults among low-income and young borrowers.
The overall soft US data probably helps make the case for another Fed rate cut at their next meeting on March 19, 2026 (NZT) but there is a lot to be revealed before then.
In Australia, consumer sentiment slipped in February, and not insignificantly. Recall, the RBA has recently pushed through a rate rise. Analysts say the fall is a muted response compared to previous rate hikes. Over 80% of those surveyed expect interest rates to rise further in the next 12 months. Homebuyer sentiment has sunk as price expectations hit new 15 year high.
Meanwhile, the NAB business sentiment survey results inched up in January, although revenues softened. That was offset by costs easing a bit faster.
The UST 10yr yield is now just under 4.15%, and down a sharpish -5 bps from yesterday.
The price of gold will start today down -US$55 from yesterday at US$5018/oz. Silver is down a sharp -US$3 at US$80.50/oz and continuing its extreme volatility.
American oil prices are down -50 USc at just on US$64/bbl, while the international Brent price is now just under US$69/bbl.
The Kiwi dollar is little-changed against the USD from yesterday, still just under 60.5 USc. Against the Aussie we are up +20 bps at 85.5 AUc. Against the euro we are holding at 50.8 euro cents. That all means our TWI-5 starts today unchanged at 63.9.
The bitcoin price starts today at US$69,517 and down -0.7% from this time 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’ll 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 Taiwan's export prowess shows no signs of flagging.
But first, US inflation expectations fell to 3.1% in January, the lowest in six months, compared to 3.4% in December. Consumers expect a slowdown in prices for petrol, and a slight easing in rent rises. But they still expect food prices to rise 5.7% over the next year.
The release of US labour market data, and their CPI update later in the week is where the focus is currently. And the US dollar is weak again, back near its post-pandemic low.
In China, their economy is gearing up for the Year of the Horse. China's Spring Festival holiday starts a week from today on February 17 and runs to March 3, 2026.
Taiwanese exports in January were spectacular yet again. They were up +70% year-on-year to an all-time high of US$66 bln in the month, following stunning +43% growth in the previous month. Analysts were expecting a +50% rise. It is a virtuous result with every category of their export trade rising. Exports to the US jumped +150%, and are now accounting for one third of their third export trade - about the same as it is toi China.
Malaysia's industrial production rose +4.8% in December from a year ago, the sixth straight month it has expanded by more than +4%.
In Australia, household spending fell -0.4% in December on a seasonally adjusted basis. The only category that rose notably was alcohol sales. This follows rises of +1.0% in November and +1.4% in October. Household spending over the year remains high, up +5.0% in the year to December 2025.
The UST 10yr yield is now just over 4.20%, and little-net change from yesterday.
The price of gold will start today up +US$107 from yesterday at US$5073/oz. Silver is up a sharp +US$5.50 at US$83.50/oz after recovering from a 2026 low.
American oil prices are up +US$1 at just on US$64.50/bbl, while the international Brent price is now just under US$69/bbl.
The Kiwi dollar is up +30 bps against the USD from yesterday, now just under 60.5 USc. Against the Aussie we are down -½c at 85.3 AUc. Against the euro we are down -10 bps at just on 50.8 euro cents. That all means our TWI-5 starts today just over 63.9, and up +10 bps from yesterday.
The bitcoin price starts today at US$70,013 and down -1.0% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.5%.
You can get more news affecting the economy in New Zealand from interest.co.nz.
Kia ora. I'm David Chaston and we’ll 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 all eyes will be on the US tech industry selloff that gathered pace last week, delivering collateral damage to cryptos, and a very volatile ride for precious metals.
But first, this coming week will feature the delayed release of the January US non-farm payrolls report on Thursday (markets expect +70,000), and their CPI report on Saturday (markets expect 2.5%). Deviation from those expected levels will likely have financial market implications.
Australia is set for a busy data week, with releases including household spending, consumer and business confidence, building permits, home loans, and consumer inflation expectations.
In New Zealand the key data this week is for Q4-2025 ready mixed concrete, and migration updates. Plus Q1-2025 inflation expectation data.
China will release its CPI and PPI data on Wednesday (expect 0.4%) as well as January new loan data this week too.
In China over the weekend, their FX reserves got a boost from the weak USD in January which helped boost these by +US$41 bln from December to US$3.4 tln and the highest in more than a decade. That is up from US$3.2 tln in January 2025. They also added to their gold holdings, adding +40,000oz in the month to 74.19 mln oz. That is up +US$1.8 tln in a year.
Also over the weekend, US economic data looked shaky. Initial US jobless claims rose by +22,000 from the previous week to 252,000 on the last week of January, sharply above market expectations of 212,000. There are now 2.215 mln people on these benefits, up +78,000 from a week ago but that is lower than a year ago (2.252 mln), even if it is very much higher than two years ago
US job openings fell by -386,000 to 6.5 mln in December, the lowest since September 2020 and well below market expectations of 7.2 mln.
Job layoffs in January came in at 108,500, the highest level for a January since 2009.
The University of Michigan’s consumer sentiment index rose marginally in February from its record low levels and it was a third consecutive monthly increase. Analysts had expected it to dip again. Despite the improvement, sentiment remained roughly 20% below January a year ago. The gains were driven largely by consumers with significant stock holdings, while sentiment among households without significant equity exposure stagnated at depressed levels. Year-ahead inflation expectations fell sharply to 3.5% from 4.0% in January, the lowest level since January 2025, while longer-term inflation expectations edged up for a second month to 3.4% from 3.3%.
The jobless rate in Canada fell to 6.5% in January from 6.8% in the previous month, undershooting market expectations of 6.8%. But this 'improvement' was only due to fewer people looking for work. Their labour force contracted by -94,000, pushing the participation rate down to 65.0% from 65.4%. They lost -25,000 jobs in the month, interrupting the recent run of gains. But this was driven by a -70,000 fall in part-time jobs whereas full-time positions rose +45,000.
Meanwhile Canadian retail sales data in both November and December came in quite positive.
And their January Ivey PMI remained expansionary, a surprise because it was expected to shift back into contraction.
Japan has been voting in their snap national election. It was essentially a referendum about Sanae Takaichi, a die-hard conservative in the Shinzo Abe mould. She has won convincingly with a rare single-party majority. Actually, it is better that that, a rare two-thirds super-majority.
There was an election in Thailand as well, one where the ruling conservative/royalist/military party won, with 45% of seats decided, plus the proportional representation seats.
At the end of last week, around the world, there were a series of central bank policy updates. The Reserve Bank of India kept its its key policy rate at 5.25% during its overnight February after cutting it by -25 bps at the prior December meeting. This is what was expected.
In the EU, the ECB left its policy interest rates unchanged at its first policy meeting of 2026, on the basis that inflation is stable an within its target policy range. It is the "good place" the central bank wants to see.
The Bank of England left its rate unchanged too, at 3.75%. But that was a close-run thing with a 5-4 vote.
German factory orders surged +7.8% in December from November, defying market expectations for a -2.2% drop and accelerating from November’s marginally revised +5.7% gain. It is up more than +13% from a year ago. It marked the fourth straight monthly increase and the strongest since December 2023.
Australia recorded a merchandise trade surplus of +AU$6.7 bln in December, down -23% from the same month in 2024, taking the full 2025 surplus to +AU$45.0, which in turn was -33% lower than for all of 2024. Exports were $523.2 bln for the year, up only +1%. That gain was only possible because gold exports rose +66% to AU$60.9 bln for the full year. Rural exports rose +13.7% to AU$77.5 bln in 2025. Other mineral export receipts tanked.
The UST 10yr yield is now just on 4.21%, unchanged from Saturday.
The price of gold will start today very little-changed from Saturday at US$4966/oz. Silver is also little-changed at US$78/oz. In China, gold sales to investors topped those for jewelry from the first time in 25 years.
American oil prices are down about -50 USc at just on US$63.50/bbl, while the international Brent price is now just on US$68/bbl. A week ago these prices similar.
The Kiwi dollar is down -10 bps against the USD from Saturday, now just under 60.2 USc. Against the Aussie we are little-changed at 85.8 AUc. Against the euro we are down -10 bps at just on 50.9 euro cents. That all means our TWI-5 starts today just under 63.8, and down -10 bps from Saturday.
The bitcoin price starts today at US$70,693 and up +1.1% from this time Saturday. But it is still down -10% from this time last week. Volatility over the past 24 hours has been modest however at just on +/- 1.9%.
You can get more news affecting the economy in New Zealand from interest.co.nz.
Kia ora. I'm David Chaston and we’ll do this again tomorrow.