Economy Watch

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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 markets are in a holding pattern waiting to see what damage Trump & Netanyahu cook up on the war front. Meanwhile there are thunderstorms in Brazil, and on Wall Street
Meanwhile, democracy made a somewhat unexpected comeback over the weekend with anti-autocratic parties in both Brazil and Serbia suffering defeats. Trump's endorsements seem to be poison in both campaigns. Now we await the Israeli election, another where Trump endorsed a strongman ruler. We won't get this result for a few days however.
In the US, the Dallas Fed factory survey expanded solidly although they said growth 'moderated' on a sharp fall in new orders received. Both prices paid and prices received rose from already high levels.
Meanwhile, the Chicago Fed National Activity Index rose minorly in September from August, suggesting overall economic activity increased slightly in the month.
There was a large US Treasury 2yr Note auction overnight with demand slightly lower, but the median yield fell to 4.66% (high 4.71%) compared to the prior equivalent event a month ago of 4.74%.
Singapore said its industrial production was up only +3.4% in September from a year ago and that was their slowest expansion since February 2025 on a sharp reversal in their electronics sector. But it was their biomedical sector that took the sharpest hit.
Taiwan however reported a very sharp rise in their retail sales in September, an unusual +8.5% expansion from a year ago and their fastest growth since the pandemic recovery period in January 2023 and prior to that in February 2018. That is impressive given their CPI inflation is only 2.7%.
Also impressing was German business sentiment as measured by the IFO survey in October. Again, apart from the pandemic recover, it is now at its highest level since just before than pandemic.
In Australia, their real estate market is in 'turmoil', with a major standoff between unrealistic sellers and exhausted buyers that has pushed their auction market into reverse. Less than half of properties are selling, a falling trend that has their residential property participants worried.
The UST 10yr yield is down -1 bps from yesterday at 4.98%.
And we should note that Anthropic has unveiled a US IPO filing ​as the AI race intensifies with a listing shaping up to be a test of investors’ appetite for the technology just as many question the sustainability of high valuations. The filing discloses steep losses, huge revenue gains, and "catastrophic or existential risks to humanity" (see page 46). But by disclosing those risks, they are insulating themselves from lawsuits. But you have to wonder who will sue if AI easts everything. Like everything about AI hype, things are just weird.
The price of gold is up +US$29 at US$4022/oz. Silver is just over US$54/oz, little-changed from yesterday.
Oil prices have dipped -50 USc from yesterday to just under US$103/bbl in the US, while the international Brent price is up +50 USc at just over US$117/bbl which is now higher than its early May peak and closer to its June 2022 US$119/bbl high point.
The Kiwi dollar is down -20 bps from yesterday at just on 56.8 USc. Against the Aussie we are holding at 81 AUc. Against the euro we are down -10 bps at 50.8 euro cents. That all means our TWI-5 starts today at just under 60.6 and down -10 bps from yesterday.
The bitcoin price starts today at US$80,006down -1.8% from yesterday at this time. Volatility over the past 24 hours has been low at +/-0.9%.
You can get more news affecting the economy in New Zealand from interest.co.nz.
Kia ora. I'm David Chaston and we’ll do this again tomorrow.
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A big week ahead of central bank decisions. Inflation elevated, while PMIs positive. Canada retail positive. EU inflation expectations hold. war drums beat louder. Audio soundtrack opening is licensed from Shutterstock, Track 1219389
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Shutterstock Track 1219389
Monetization ID TFGEPGEI0LHEIJAI
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 tech equity wobbles is driving a sudden, sharp flight to the relative short-term 'safety' of government bonds.
The Nasdaq is down -2.5% so far today with Meta down -7.2% (see below), SpaceX is down -8.5%, Google is down -9.6%, and many other FANGS are down about -4.4%.
But first in the US, there was a notable drop in initial jobless claims last week, more than accounted for by seasonal factors. It is hard to know whether this indicates a freer labour market or just much tighter qualification standards. Probably the latter, based on the weekly ADP data. There are now 1.48 mln people on this out-of-work support, the lowest level since late 2022 - and prior to that, the 1970s. The new qualification standards are very tough.
The Kansas City Fed's factory survey eased in October to its lowest level since May although it remains quite positive. New order levels eased and new export order levels fell sharply. That is likely because costs are rising faster again with raw material costs rising much faster than price growth.
Overnight there was a US Treasury 5yr TIPS auction and investors are signaling and getting a much higher risk premium over an above inflation. In this latest result, the premium was 2.30% (median), up from 1.91% at the prior equivalent event four months ago.
In Canada, producer prices were up +14.5% in September from a year ago, a larger rise than was expected and accelerating from August's high +13.2%. Raw materials were up +27% on that same basis. Fuel is the core reason of course, but this cost pressure is spreading.
China said that foreign direct investment fell by -4.3% in September to ¥549 bln (or NZ$145 bln) in the first nine months of the year, compared to a -5.3% drop in the first eight months of 2026. For September alone it was up +1.6% from the same month in 2025. However both benchmarks are unusually low, the lowest in at least 12 years. From the recent peak in 2022, the current September FDI is a remarkable -47% lower.
The Bank of Korea left its key policy rate unchanged at 3% in its review yesterday, as widely anticipated. This came after two rate back-to-back increases earlier in the year because they have CPI running at 3.4% and a 2% policy target. But they claim the rate will fall back into line under the current settings.
In Japan, the expectation now is that their central bank will hold its policy rate at 1.25% at its meeting next week.
In the EU, consumer sentiment is retreating again and more sharply than anticipated. Cost of living issues are at the heart of this deterioration.
In Australia, their reserve bank is in a tough spot with inflation up +4.0% in August and forecast consensus is rise to 4.1% in September when it is reported next Wednesday, while their housing market retreats rather fast, and their labour market seems topped out. Markets currently price in a 55% chance of a hike on Tuesday, November 3. Analysts are more certain one will come on the expectations the September CPI will overshoot.
Global container freight rates rose +2% last week to be +163% higher than year ago levels, rising mainly on the China to EU routes. Meanwhile bulk cargo rates were up +4% in the past week to end their recent easing period. They are now +28% higher than year-ago levels.
The UST 10yr yield is down -16 bps from yesterday to 4.95% in a major defensive move.
Wall Street is down -1.3% on the S&P500 while the Nasdaq is down -2.5% and following the shifts in the risk-off shits in rest of the world on Thursday.
One trigger is the trial loss by Meta who a jury found guilty of fraud on their users. For most of us, our eyes glaze over when we need to read court judgements. But skip to just after para 19 in this one. The judge imposed a US$25 bln penalty with interest accruing at 15% pa. Of course Meta will appeal. That is what grifters do. But more trouble is brewing for Meta and its tolerance/promotion of scam ads. This dodgy behaviour is raising the change that California's Proposition 40 will pass on November 3.
The price of gold is little-changed at US$4137/oz and up +US$5 from yesterday. Silver is just over US$55/oz and down -US$2.50/oz.
Oil prices have risen +US$3 from yesterday to just under US$99.50/bbl in the US, while the international Brent price is up +US$4 at US$112.50/bbl which is now just US$2 off its early May peak and closer to its June 2022 US$119/bbl high point.
The Kiwi dollar is -20 bps lower from yesterday, at just over 56.8 USc. Against the Aussie we are down -10 bps at 81 AUc. Against the euro we are down -20 bps as well at 50.6 euro cents. That all means our TWI-5 starts today at just under 60.6 and down -10 bps from yesterday.
The bitcoin price starts today at US$81,129 and down -3.9% from yesterday at this time. Volatility over the past 24 hours has been moderate at +/-2.4%.
Finally, remember it is a holiday in New Zealand on Monday, Labour Day, and ahead of Wednesday's key RBNZ OCR review.
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.
Track 1219389
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Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

Shutterstock Track 1219389
Monetization ID TFGEPGEI0LHEIJAI
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 the AI buildout is going to cost more as bond investors recoil at the risks involved. Those higher rates will spill out everywhere.
But first, there was a chunky -5.3% fall in US mortgage applications last week from the prior week, making it nine of the past ten weeks of consecutive decline. And apart from holiday weeks, that takes this level back to September 2023 levels. This latest decline comes even though the benchmark 30 year mortgage rate fell to 7.41% although the past three weeks are all higher than any rate since October 2023..
US crude oil stocks fell again last week and by more than -3 mln bbls (down -3.4% in a week) on top of the prior week's -8 mln bbl fall. Their strategic reserves fell too, down -3.1% in a week.
There was a well-supported US Treasury 20 year bond auction earlier today where the median yield came in at 5.42% (5.47% high), compared to the 5.36% at the prior equivalent event a month ago.
And despite posting surprisingly strong earnings, Elon Musk's SpaceX is facing much higher financing costs as his appetite for debt is causing concerns in the CDS markets. Bond investors are finding it hard to get coverage against default risks - there now are few who will offer to take the other side of a CDS transaction. And that spells trouble for all debt-heavy AI tech funding.
Across the Pacific, Japanese exports rose strongly in September, up +16% from year-ago levels, although that was a slower pace than in both July (an all-time record) and August. Still, the September export receipts were ¥11 tln and that matched the March 2026 level to be their second best month ever. But fuel imports more than absorbed those gains so they ran a slightly larger deficit than expected at -¥537 bln (-NZ$6 bln) for the month. They haven't posted a September trade surplus since 2020 and this latest deficit is easily manageable for the world's fourth largest economy (behind the US, China and Germany).
The Indonesian central bank reviewed its policy rate overnight and surprised markets by not raising it from +5.75%. The rupiah fell further although only modestly.
And in Argentina, bond investors are getting skittish as the Javier Milei's reforms fail to deliver and their election is now less than a year away. In Brazil, they have a critical election this weekend. Bond markets there seem unconcerned no matter what the result.
At a conference in Sydney yesterday, an RBA deputy governor said they see the outlook for inflation "materially worse" (12:30) that they were expecting. Markets are assuming that means another rate hike there soon is much more likely on November 3, 2026.
Globally, there has been a rush to fix a critical security vulnerabilities in the PHP coding language that have been identified by an AI review. Apparently 70% of global websites use the code. (That includes us, and we have also pushed through the update now.)
The UST 10yr yield is down -2 bps from yesterday to 5.11%.
The price of gold is little-changed at US$4132/oz and up +US$14 from yesterday. Silver is just under US$57.50/oz and down -50 USc.
Oil prices have fallen -US$1.50 from yesterday to just over US$96.50/bbl in the US, while the international Brent price is down -50 USc at US$108.50/bbl.
The Kiwi dollar is +20 bps firmer from yesterday, at just on 57 USc. Against the Aussie we are down -10 bps at 81.1 AUc. Against the euro we are up +20 bps as well at 50.8 euro cents. That all means our TWI-5 starts today at just over 60.7 and up +10 bps from yesterday.
The bitcoin price starts today at US$84,404 and up a full +2.0% from yesterday at this time. Volatility over the past 24 hours has been modest however at +/-1.5%.
You can get more news affecting the economy in New Zealand from interest.co.nz.
Kia ora. I'm David Chaston and we’ll do this again tomorrow.
Track 1219389
Monetization ID TFGEPGEI0LHEIJAI

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

Shutterstock Track 1219389
Monetization ID TFGEPGEI0LHEIJAI
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 American economic data is notably weaker today.
There was a full dairy auction overnight where the overall prices rose +2.5% in USD terms, up +1.6% in NZD terms. This brought more strength for the powders with SMP up +3.4% and WMP up +4.4%. BMP was up +8.4%. But butter, cheddar and AMF all fell. The result is an overall price level in the middle of the range since the start of 2025. It seems unlikely that farmgate payout forecasts will be changed by these auction results.
In the US. the weekly jobs report monitored by ADP indicated a pullback with hiring decelerating to +18,500 last week, the first reduction since early August and back to levels seen in the September 2025 to March 2026 period.
And bolstering the weak sentiment report we noted yesterday, today data on housing starts in the US was notably weak, down -5.2% in September from August, down -7.4% from a year ago.
It was worse for US pending home sales which were down -7.3% from August, down -11.3% from a year ago. The weakness was in all regions.
At a campaign rally, US President Trump backtracked on imposing tariffs on Canada's Bombardier aircraft maker - after "learning" they have manufacturing facilities in the state he was campaigning in.
In Canada, the results of the Alberta "independence" referendum are in and by a margin of 3:1, voters in that province opted to stay in Canada, a larger affirmation than was expected.
Meanwhile, financial markets and some analysts are pricing in a +25 bps rate hike by the Bank of Canada to 2.5% at its October 29 Monetary Policy meeting.
In China, and as expected, the October Prime Loan Rate review has resulted in no changes. These two rates remain at record lows.
In Taiwan, their export orders leapt to a massive US$114.2 bln in September, far and away a record high and up +67% from the US$70.3 bln in September 2025. As impressive as this is, clearly it will come to an end at some point, but the trajectory since January 2025 is super impressive.
In Indonesia, the prospect of significant social unrest is rising as their economy stutters into a new crisis where their government can't afford the social programs its citizens expect. Their currency is in a dark place at 18,000 rupiah to the USD. An unstable Indonesia full of economic pressures is a huge risk for Australia.
In Germany, producer prices zoomed up +1.9% in September from August to be up +6.7% from year-ago levels. That reprises the March 2023 rise and again all to do with fuel costs. So it is probably no surprise that German sentiment slid in October although not by as much as you might have expected.
In the UK, Google's cloud services failed and hit a broad range of major companies, including banks. Revolut was one of the hardest hit along with Lloyds, NatWest and HSBC.
The UST 10yr yield is down -1 bp from yesterday to 5.13%.
The price of gold is at US$4118/oz and down -US$21 from yesterday. Silver is just under US$58/oz and up +US$1.
Oil prices have fallen -US$5 from yesterday to just over US$98/bbl in the US, while the international Brent price is down -$1 at US$109/bbl.
The Kiwi dollar is +20 bps firmer from yesterday, at just on 56.8 USc. Against the Aussie we are also up +10 bps at 81.2 AUc. Against the euro we are up +10 bps as well at 50.6 euro cents. That all means our TWI-5 starts today at just under 60.6 and up nearly +20 bps from yesterday.
The bitcoin price starts today at US$82,722 and up a bit less than +1.0% from yesterday at this time. Volatility over the past 24 hours has been modest at +/-1.2%.
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.
Track 1219389
Monetization ID TFGEPGEI0LHEIJAI

Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI