Economy Watch

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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 nothing was resolved in the Xi-Trump talks, and nothing is resolved in the US-Iran standoff.
But first, this week will be dominated by the RBA policy rate decision on Tuesday as the next major set piece review in the midst of the global bond sell-off and inflationary pressures. They are widely expected to raise the rate +25 bps to 4.60%, widening the differential to New Zealand. Australia will also release important household spending data, its August CPI update, and building permit data this week.
In New Zealand it will be all about consumer and business sentiment updates, and the usual end of month RBNZ data dump.
The week will end with the US September non-farm payrolls report - expect +100,000, although its cred is being undermined from within. And there will be US data on personal income and spending out this week, other labour market data, and a key PMI report.
In China, the focus will be on the September PMIs, with data from both the NBS and private S&P Global ones expected to point to a modest improvement in manufacturing and services activity. August industrial profits will also be released. Meanwhile, Chinese markets will be closed from October 1 to October 7 for the National Day holidays.
Of course, the global geopolitical mess rolls on chaotically, so we will be watching for either diplomatic agreements or escalatory strikes between the US and Iran.
Over the weekend in the US, August durable goods orders were essentially unchanged from July, which was better than the expected -0.4% decline. From a year ago they are +8.4% higher although we should note that PPI inflation ran at 5.4% in the same period. Non-military capital goods orders are up +5.8% on a year-ago basis, but given the huge surge in data center buildouts this is surprisingly weak.
Late last week, US petrol prices breached the +50% rise since Trump's war on Iran started in early March. Diesel prices are now up +67% in that market.
The University of Michigan September survey of consumer sentiment tracks anxiety of the inflationary pressure these sort of cost increases are bringing and the weekend update is grim reading. Only once since this survey started in 1946 has this reading been as low as it is now - and that was in May. Year-ahead inflation expectations jumped from 4.0% in August to 4.6% this month, the highest reading since June. The current level substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 levels.
Financial markets are betting that rising inflation will be more important to the Fed than falling sentiment and the US Fed will raise rates at its next meeting on October 29, which is just days ahead of their mid-term elections. This market positioning is more than 2:1 now, and is bolstered by recent Fed speakers who are clearly worried that delays could cause them to lose control of the US inflation impetus.
Over the weekend China was on holiday for Mid Autumn Festival and their central bank said it injected up to ¥1 tln of liquidity into their banking system for this holiday via reverse repos. (During the same holiday last year it injected ¥735 bln in reverse repo operations, but later it revealed another ¥500 bln in direct repo purchases.) And they have their Golden Week holiday starting this week (October 1 - 7) and much depends on their internal spending impulse during this period. Beijing economy watchers will be nervous.
The UST 10yr yield is now just on 5.17%, unchanged from Saturday but up a net +16 bps from this time last week.
The price of gold is at US$4285/oz and down a mere -US$4 from Saturday, down -US$96 from this time last week. Silver is at just over US$64.50/oz and unchanged but down -US$2 for the week.
Oil prices have held from Saturday to just on US$92.50/bbl in the US, while the international Brent price is still at US$104.50/bbl. The US has rejected Iran's plan to re-open the Strait.
The Kiwi dollar is unchanged from Saturday, still at 56.7 USc but down -50 bps for the week. Against the Aussie we are holding at 80.6 AUc. Against the euro we are also holding at just on 49.7 euro cents. That all means our TWI-5 starts today at just on 60.3 and little-changed from Saturday, down -40 bps for the week.
The bitcoin price starts today at us$84,386 and down +0.5% from Saturday but up a net +4.1% from a week ago. Volatility over the past 24 hours has been low at just over +/-0.7%.
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 tomorrow.
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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 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 US treasury yields are trading at multi-year highs, as stronger-than-expected economic data and elevated oil prices fuelled bets on another Fed rate hike. The 10-year yield topped 5.18%, its highest level since 2007, while 30-year reached a 2004 peak of 5.47%. The gold price is slipping. Many other asset prices face price risks too, especially commercial property and that also comes with leverage risks being exposed.
So far the US-China meetings in Washington DC between Xi and Trump have been all show and no substance.
In the US, there were 163,800 initial jobless claims last week, an increase from last week's unusual low but about the increase that can be accounted for by seasonal factors. That puts the continuing claims at 1.55 mln, a new 60 year low. The qualification restrictions are certainly biting hard now. Early estimates of the September US non-farm payrolls change doesn't support the idea that jobs growth is strong, and certainly not among workers who are being stripped from unemployment protections.
However there was positive news of expanding recent sales of new-built homes. Even though housing starts are falling, sales of these homes rose in August, up +6.4% from July, but still -2.0% below year-ago levels.
The Kansas City Fed factory survey stayed positive in September, holding the expansion level it has had since June. But price pressures intensified, the survey shows.
There was a still well-supported US Treasury seven year bond auction overnight (down only -3.2%) that delivered a median yield of 5.02% (high 5.09%) and that was up sharply from the median of 4.46% at the prior equivalent event a month ago. That is near its highest in 20 years.
Canada reported some positive economic data overnight. It's August retail sales were up +1.3% (real), and more than making up for the -0.7% monthly fall in July. They are up +1.9% (real) from a year ago. And its manufacturing sales were up +1.1% in August. This extends a string of good monthly gains in 2026, with only one month in the past seven showing a dip.
In China, they raised their petrol prices today to ¥8.90/L, up from ¥8.60/L (NZ$2.34/L from NZ$2.26/L).
In Australia, June 2026 data released yesterday by the ABS shows household wealth there has reached AU$19.4 tln, driven by superannuation, but now held back by recently falling housing values. That is average per capita wealth of AU$694,500. There are a vast number of Aussie 'super' millionaires now.
Meanwhile, the August update of their labour force data shows +39,500 more jobs in the month with 14.827 mln people employed. But their jobless rate rose to 4.6% with 722,900 adults unemployed and a rise of +28,200 in a month. Hours worked and participation both rose and underemployment fell (slightly).
Global container freight rates were little-changed overall over the past week. There were some falls in the China-EU trade, but a minor rise in the Chine-USWC trade. Overall prices are now +154% higher than year-ago levels and have topped out for the moment. Bulk cargo rates are +3% higher for the week but also seem topped out. From a year ago, these rates are +55% higher.
The UST 10yr yield is now just on 5.18%, up another +5 bps from yesterday. The 30 year yield is at 5.47%, up +7 bps.
The price of gold is at US$4264/oz, and down -US$30 from yesterday. Silver is at just over US$63.50/oz and down -US$1.
Oil prices have risen +US$4 to just on US$95.50/bbl in the US, while the international Brent price is up +US$4.50 to US$107/bbl. Saudi Arabia says its pipeline repairs will be completed "within days".
The Kiwi dollar is down -10 bps from yesterday, now at 56.6 USc. Against the Aussie we are up +10 bps at 80.7 AUc. Against the euro we are little-changed at just on 49.8 euro cents. That all means our TWI-5 starts today at just on 60.3 and down -10 bps.
The bitcoin price starts today at US$84,103 and down a minor -0.3% from yesterday. Volatility over the past 24 hours has been modest at just over +/-1.1%.
You can get more news affecting the economy in New Zealand from interest.co.nz.
Kia ora. I'm David Chaston and we’ll do this again on Monday.
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 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 stronger American economic data and higher oil prices have built expectations of more rate hikes by the US Federal Reserve. The USD has jumped in response.
However, US mortgage applications fell again last week but that is really no surprise because that market saw its benchmark 30 year mortgage rate jump to 7.12% and its highest since May 2024. It was refinance activity that saw the biggest pullback.
Meanwhile, US business growth surged to its fastest for over five years and job gains accelerated according to the S&P Global PMI. Both their service sector and their factory sector are sharing in the gains. But at the same time price pressures are also intensifying with a sharp spike in costs. Input costs surged to their highest since October 2022; selling prices jumped too but at a lesser rate.
US crude oil stocks were expected to fall again last week, but instead they rose and by much more than expected. However that didn't stop their strategic reserve holdings from falling again, staying at dangerously low levels. Nor has it curtailed retail pump prices. More generally, the world is running down its crude oil buffers - and the price signals seem to be ignoring that risk.
There was a fall in support for the US Treasury 5 year bond auction overnight which delivered a 4.95% median yield (5.04% high) which was up sharply from 4.34% at the prior equivalent event a month ago. Bessent's yield management is failing to deliver and restraint.
Fed governor Barr was speaking overnight and ho reiterated the view that higher rates will be needed to bring inflation back to target. Without much threat on the jobs front and their labour market mandate, markets see the Fed unconstrained in taking sharper action against inflation. He said "risks to achieving our inflation target have increased, while risks to the labor market have receded."
In the US all eyes will now turn to Trump's hosting of Chinese president Xi - who incidentally is coming with no Chinese business leaders.
Taiwan's August industrial production (+23.5%) and August retail sales (+6.5%) data both delivered the strong year-on-year gains we have come to expect from them.
Singapore's inflation rate came in at 2.3% in August, up marginally from July but the increase expected.
Indonesia's central bank reviewed its 5.75% policy rate overnight but left it unchanged.
In India, their flash PMI data for September pointed to a better improvement in business conditions. Output growth was higher in both manufacturing and services companies, with goods producers leading the latest upturn. New orders also rose at a quicker pace, prompting a solid expansion in jobs. Meanwhile, inflationary pressures faded and business confidence strengthened.
The flash S&P Global factory PMI in Australia saw a shift from a moderate expansion in August (52.0) to a minor contraction in September (49.3). Their services sector eased as well but is still expanding in September. On the prices front, the rate of input price inflation picked up to its highest in three months, but remained weaker than seen through the second quarter. Meanwhile, output charges rose at a strong rate that was more pronounced than in August.
The UST 10yr yield is now just on 5.13%, up +16 bp from yesterday. The 30 year yield is at 5.40%, up +11 bps.
The price of gold is at US$4294/oz, and down -US$58 from yesterday. Silver is at just over US$64.50/oz and down -US$2.
Oil prices have firmed +50 USc to just on US$91.50/bbl in the US, while the international Brent price is up +US$3 to US$102.50/bbl.
The Kiwi dollar is down -50 bps from yesterday, now at 56.7 USc. Against the Aussie we are up +10 bps at 80.6 AUc. Against the euro we are down -20 bps at just over 49.8 euro cents. That all means our TWI-5 starts today at just on 60.4 and down -30 bps.
The bitcoin price starts today at US$84,343 and down -2.4% from yesterday. Volatility over the past 24 hours has been moderate at just over +/-2.4%.
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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Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

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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 inflation's pressures are building everywhere, even if oil prices took a small dip today.
But first, overnight there was a Pulse dairy auction where prices dipped marginally in USD except for SMP, but were all higher in NZD, although this too was only marginal.
In the US, the ADP weekly jobs data rose to an average of a +20,000 jobs gain per week over the past four weeks. That recovers it back to late June levels.
Meanwhile the Richmond Fed factory survey was expected to rise marginally in September, but it fell and its first retreat in six months. This was essentially driven by retreating new order levels and order backlogs shrank as well. Input and output costs both rose however and at a faster pace in both cases.
There were a few Fed speakers out overnight. New York Fed boss Williams defended how they have been handling monetary policy, although he didn't give any guidance on what is coming next. Vice Chair Jefferson also avoided guidance comments although he has been on record recently of supporting their rate hikes. But Richmond Fed boss Barkin did address the recent rising trend and what comes next. More hikes are possible, he said.
There was a giant US Treasury two year bond auction overnight and this one did not display the sagging demand of the other recent events. However, it came with much higher yields. This lates one delivered a median yield of 4.74% (high 4.79%), up notably from the 4.16% at the prior equivalent event a month ago. This is a meaningful rise given the 2 year Note has the largest supply of any maturity they offer - US$79 bln. Just for this bond, that has the US Treasury paying +14% more in interest pa than just a month ago. Debt servicing is becoming an ugly problem, and fast.
Just when you might have thought Taiwanese export orders couldn't grow much faster, they did in August. They exceeded US$100 bln in the month for the first time, up a staggering +71% from a year ago (which itself was rising and close to a record at the time). In local currency, they were up +82%.
After improving since April (that is, betting less negative) EU consumer sentiment hit a setback in September, one that was not expected. Winter is approaching there and with the energy supply issues unresolved there, perhaps it is understandable that concerns are rising again.
In Australia, RBA governor Bullock suggested that their labour market is too tight and that is putting upward pressure on inflation. This suggests they will continue raising their benchmark rate until they see the jobless rate rise and labour-cost pressures ease. She is on a track that will create difficult politics. Not helping is the rise and rise of petrol prices, now approaching their pandemic highs again. An RBA rate rise is now almost a certainty next week, taking it to 4.6%.
The UST 10yr yield is now just on 4.97%, up +1 bp from yesterday.
The price of gold is at US$4352/oz, and up a minor +US$7 from yesterday. Silver is at just over US$66.50/oz and up +50 USc.
Oil prices have fallen another -US$4.50 to at just on US$91/bbl in the US, while the international Brent price is down -50 USc to US$99.50/bbl.
The Kiwi dollar is unchanged from yesterday, still at 57.2 USc. Against the Aussie we are up +20 bps at 80.5 AUc. Against the euro we are up +10 bps at just over 50 euro cents. That all means our TWI-5 starts today at just over 60.7 and little-changed.
The bitcoin price starts today at US$86461 and up +0.8% from yesterday. Volatility over the past 24 hours has been low at just over +/-0.6%.
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
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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 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 more policymakers are bracing for dealing with stagflation.
But first, in the leadup to the Xi-Trump talks in Washington, there is a focus on AI and its risks. And there is some pre-celebration from both sides of how good it is going to be. We recently noted that the May Beijing version of these talks has seen the announced 200 plane order for Boeing apparently die. It also seems that the May deal to buy US grains has never materialised either. So you should be sceptical of any current claims about the Washington DC meeting outcomes.
The Chicago Fed's National Activity Index dipped in August from July, suggesting US economic growth is no longer rising. In four of the last six updates, this measure has decreased. New orders are no longer rising in this data, production is contracting.
So that points to increasing stagflation.
Meanwhile Chicago Fed President Austan Goolsbee warned that bringing inflation back down to the 2% target may not be painless and could require pushing employment below target. "This is exactly the painful trade-off between employment and inflation that stagflationary shocks always impose on a central bank. Unfortunately, in environments like that, the only way back is the hard way."
And staying in the US, California has declared a state of emergency as a strengthening El Niño raises the threat of damaging storms, widespread flooding and mudslides across the state for their upcoming autumn and winter.
In Canada, their central bank boss has also been speaking, and warning that their trade difficulties with the US could cut Canadian growth in half to below +1%. It is actually oddly impressive that a dispute this large with an economic adversary as big as it gets can be navigated with any expansion.
In Australia, Reserve Bank Assistant Governor Sarah Hunter was on a Nine Network podcast this morning and emphasised that the RBA is worried about inflation and fighting that threat is where their energies currently are focused.
The copper price is making another push up towards its record high (reached on September 9), this time driven by growing logistics issues.
The UST 10yr yield is now just on 4.96%, down -4 bps from yesterday.
The price of gold is at US$4345/oz, and down -US$38 from yesterday. Silver is at just over US$66/oz and little-changed.
Oil prices have fallen -US$4.50 to at just on US$95.50/bbl in the US, while the international Brent price is down -US$4 to US$100/bbl. There is a bit of hopium involved here as traders watch diplomatic efforts to end the US-Iran war and watch for signs of oil cargo movements. But they are not significant, yet anyway.
The Kiwi dollar is unchanged from yesterday, still at 57.2 USc. Against the Aussie we are holding at 80.3 AUc. Against the euro we are up +10 bps at just under 49.9 euro cents. That all means our TWI-5 starts today at just under 60.7 and little-changed.
The bitcoin price starts today at US$88,791 and up a sharp +5.8% from yesterday. (And we should note that it has risen back to NZ$150,000 for the first time since late January.) Volatility over the past 24 hours has been high at just over +/-3.4%.
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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Monetization ID TFGEPGEI0LHEIJAI

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