Economy Watch

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 ship traffic in the Hormuz Strait is now at a complete standstill. But oil prices have eased slightly all the same. So, Wall Street rose and to new record highs.

In the US, there were +187,000 initial jobless claims last week, a slightly larger increase than seasonal factors can account for. There are now just over 1.8 mln on these benefits, a fall from last week as the very much tighter qualification requirements keep people off these unemployment programs.

US producer prices came in slightly lower than expected for July, up +4.7% from a year ago, down from +5.5% in June and lower than the +4.9% expected. A notable fall in July fuel costs offset all other rises in the month.

There was a well supported US Treasury 30 year bond auction earlier today, but investors wanted and got higher yields. They came in at a median 5.16% (high 5.22%) which is a 25 year high and something of a warning to the US Administration. This was up from the prior equivalent event median of 5.01% a month ago.

Meanwhile, Cleveland Fed President Hammack restated her view that the ‌US central bank should raise rates immediately to bring down too-high inflation and restrain business growth and investment. She is a current FOMC voting member. She said she "lacks confidence" the current do-nothing policy will get inflation back to its target. Meanwhile the Richmond Fed boss Barkin says he is happy to wait. Barkin is not a current FOMC voting member.

In Japan, their central bank wants to raise its 1% policy rate from here, and reports indicate that it has government backing for the move now. It could come at the next review in mid-September. Markets have priced in a 75% chance.

Japanese producer prices have been rising fast recently and were up 7.2% in July from a year ago. But there was essentially no rise in July from June, so they are starting to see some heat dissipate.

India reported strong exports, its third highest monthly total ever, in July, and up +19% from the same month in 2026. But they also reported record high imports, driven by fuel imports.

In the EU. euro area industrial production rose in June, very slightly (+0.1%), when a fall (-0.8%) was expected. In the wider EU region, the gain was even better. Production of consumer goods led the way with a strong June result. Gains in Denmark, Poland and Finland were notable. Germany and France dipped.

In Australia, regulators there are warning that online brokers are targeting retail investors with complex or high-risk products without clearly disclosing their risks or conducting proper onboarding, leaving those who respond exposed to risky products that could see them lose their investments within hours. 

New semi-annual pay data out yesterday in Australia revealed a softening trend in the private sector. Overall average weekly ordinary time earnings for full-time adults were AU$2,084 in May, up just +1.6% overall in the period, up +3.7% for the year. These are the slowest increase rates since 2022. Rises in public sector pay are running at nearly twice the pace of the private sector. Recall, CPI inflation there was at 3.8% in the year to June - so no real gains.

Global container freight rates were up a mere +1% last week from the prior week but are +85% higher than year-ago levels. That weekly data masks sharply higher rates to the US from China, offset by lower rates from China to the EU. Bulk cargo rates fell -4.2% in the past week from a cycle high and are now +45% higher than year-ago levels.

The UST 10yr yield is now just on 4.63%, down -5 bps from this time yesterday.

The price of gold is falling, now at US$4357/oz, down -US$60 from yesterday. Silver has fallen almost -US$1 to just over US$64.50/oz.

Oil prices are down -US$1 from yesterday at just under US$82/bbl in the US, while the international Brent price is now just under US$88/bbl. Hormuz transits have virtually vanished. There has been no crude tankers and only 1 cargo ship exiting over the past 24 hours (0 dark with transponders off) and just two entering for new loads (0 dark), again all Iran-linked. The Red Sea activity is now less than 10 exits at the Yemen chokepoint.

The Kiwi dollar is down another -10 bps from yesterday at just under 58.5 USc. Against the Aussie we are holding soft at 82.9 AUc. Against the euro we have dipped -10 bps to 50.7 euro cents. That all means our TWI-5 starts today at just under 62.1 which is also down -10 bps from this time yesterday.

The bitcoin price starts today at US$63,141 and down -0.4% from this time yesterday. Volatility over the past 24 hours has also been low at just on +/-0.8%.

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 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 the pressure is off the US Fed from inflation threats, temporarily at least.

First today, and as markets had expected, US CPI inflation came in at 3.4% in July, dipping from 3.5% in June. Food prices were up +3.0% from a year ago, petrol prices up more than +24%. From June petrol prices fell -2.9% however, which was a bit more than expected. (In August, petrol prices dipped slightly in the first week, but have since started rising again.) Rents were up +3.2%. Electricity prices were up +4.2%.

US core inflation - without food and energy - was up +2.5% and this is probably the Fed's get-out-of-jail card. US PCE July inflation data is next due August 27.

US mortgage applications recovered notably last week, up +3.6% from the prior week after four of the prior six weeks were decreases. The rise was driven by refinance activity, borrowers who could not wait any longer and taking advantage of a very minor dip in mortgage rates to 6.77% (which will seem high to our readers).

Last week, the US reported a huge surge in crude oil stocks, the larges weekly rise in more than three years. It wasn't expected - in fact another retreat was expected. It is not clear why, because it wasn't driven by imports, according to this data. Strategic reserves will next be reported at month-end.

The August USDA WASDE report has raised its estimates for beef imports in 2026 and 2027, and lowered its expected milk prices marginally.

The US Treasury reported a much larger budget deficit for July than expected, and the expected July deficit was outsized to start with. They ended up with almost a -US$½ tln deficit in the month alone. The public mismanagement is now epic. For their fiscal year to September, they will be reporting a deficit of at least US$2 tln (-US$1.95 tln over the past 12 months), easily a new record. Trump's swamp creatures are helping themselves.

Meanwhile, a well-supported UST 10yr auction delivered a yield of 4.63% today (high ofg 4.68%), compared to 4.53% at the prior equivalent event a month ago.

Canadian building consents jumped notably in June, up +18% from the same month a year ago driven by non-residential construction. Residential construction rose too, just not as sharply as the commercial sector.

In Japan, the Reuters Tankan index for manufacturers rose in August to its highest reading since March. Leading the mood improvement was solid semiconductor demand. But the chemicals also rose along with the metal and machinery sector. Non-manufacturers' sentiment also rose, buoyed by strong domestic consumption. This survey likely points to a similar rise in the official Tankan survey that will come later in August.

Japanese machine tool orders continued their very strong growth in July, up +50% from a year ago and which the value wasn't a record, it was very close. These orders have taken off since March 2026. Demand was huge from both domestic and export customers.

China's vehicle sales slipped below 2.5 mln in July and recorded a year on year dip of -0.3%. But it is the September to December period when their domestic vehicle sales usually peak.

The UST 10yr yield is now just on 4.67%, dipping -2 bps from this time yesterday.

The price of gold is holding at US$4417/oz, up +US$51 from yesterday. Silver has risen +US$1 to just over US$65.50/oz.

Oil prices are down -50 USc from yesterday at just under US$83/bbl in the US, while the international Brent price is now just over US$88.50/bbl. Hormuz transits are still very low. 

The Kiwi dollar is down -25 bps from yesterday at just under 58.6 USc. Against the Aussie we are down -40 bps at 82.9 AUc. Against the euro we have retreated -20 bps to 50.8 euro cents. That all means our TWI-5 starts today at just on 62.2 which is down -30 bps from this time yesterday.

The bitcoin price starts today at US$63,420 and down a -0.2% from this time yesterday. Volatility over the past 24 hours has also been low at just on +/-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.

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 Iran says the Strait of Hormuz will remain closed until the US accepts its conditions. So, stalemate there. However, financial markets are kind of shrugging off these risks. Pakistan claims both sides are still talking however.

First up today, the overnight dairy Pulse auction brought a stabilisation in prices with the powders rising about +2% and the milk fats little-changed from last week's full dairy auction.

In the US, the ADP weekly jobs monitoring of private payrolls continues to slide, and is under +10,000 and its lowest level since the Christmas holiday season.

US existing home sales fell -1.7% in July from June, to be now just +1.7% higher than year-ago levels.

US household debt data shows it having topped out with the June quarter lower than the March quarter, which itself was lower than the December 2025 year end level. This is essentially because standard mortgage debt levels fell. But home equity loans rose, as did credit card debt, and car loans. Delinquency rates for credit card debt and car loans remained elevated but didn't get worse in this Q3-2026 data.

Sentiment in the US SME sector rose in July, but only back to levels that it had prior to the start of Trump's war on Iran. It is now little different to levels they had from the start of 2025 until March 2026.

Eyes are now turning to tomorrow's US inflation data for July. This is expected to stay high at 3.4% and only marginally lower than June's 3.5% and as such it will put pressure on the Warsh-led Fed to move to get inflation back into its policy band around 2%. There seems little likelihood of any progress without some policy action.

Across the Pacific, Singapore’s economy grew +5.9% in Q2-2026, slowing from a +6.3% expansion in Q1 which was their strongest annual growth since Q3-2024. But this latest updated exceeded advance estimates of a +5.7% expansion.

In Malaysia, industrial production slowed again in June and is now 'only' +6.5% higher than year ago levels. It was +8.3% higher on that basis in the month before. But their factory production was up almost +10% on the year-ago basis and that is an accelerating rate. It has been their mining sector that is the one that is falling away.

In Australia, the rebound in business confidence as tracked in the influential NAB survey stalled in July as Middle East uncertainty and oil price volatility continued to weigh on sentiment. Meanwhile business conditions showed signs of stabilising after weakening earlier in the year. A Westpac survey for the same period showed the same thing.

The RBA has left its cash rate target at 4.35% as widely expected. But is has raised expectations that hikes could come soon if inflation does not retreat in the way they want, but only if market conditions don't move first as they need. One thing they do expect is lower house prices and that will help the affordability crisis.

Abd we should probably note that aluminium prices are on the rise again. Although not back to their record high levels in early June, they have shifted sharply up in the past week, perhaps due to their central role in the US-Canada trade discussions. It is a key card Canada holds over the US. Trump's punitive 50% tariffs on Canada are due to kick in on August 20 (NZT).

The UST 10yr yield is now just on 4.69%, dipping -1 bp from this time yesterday but essentially holding its new level. 

The price of gold is holding at US$4366/oz, up merely +US$2 from yesterday. Silver has dipped -50 USc at just over US$64.50/oz.

Oil prices are up +US$1.50 from yesterday at just under US$83.50/bbl in the US, while the international Brent price is now just under US$89/bbl. Hormuz transits are still very low. There have been two crude tankers and only 1 cargo ships exiting over the past 24 hours (1 dark with transponders off) and seven entering for new loads (3 dark), again all Iran-linked. The Red Sea activity is where the focus is shifting and still low with less than 20 either way at the Yemen chokepoint.

The Kiwi dollar is essentially unchanged from yesterday at just over 58.8 USc. Against the Aussie we are down -10 bps at 83.3 AUc. Against the euro we have held at 51 euro cents. That all means our TWI-5 starts today at just under 62.5 which is unchanged from this time yesterday.

The bitcoin price starts today at US$63,563 and down a -0.5% from this time yesterday. Volatility over the past 24 hours has also been low at just on +/-0.8%.

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.

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 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 rising oil prices are reigniting inflation concerns and even equity investors have noticed. Bond investors have bid up benchmark bond rates. The Fed next has to deal with this risk in just over a month, but that investors are moving now indicates the heightened concern that Trump's quagmire isn't getting resolved anytime soon. Certainly, his promise of a deal with Iran "very soon", has vanished.

Meanwhile, the Yemeni Houthis have struck Saudi related tankers and hit a Saudi oil refinery. So, the conflict is spreading.

Markets have reacted as though they expect inflation to rise from here.

In Japan, their official 'economy watchers' July survey is signaling continued improvement, especially in their services sector. These survey results took a sharp tumble when the US attacked Iran and the Strait of Hormuz was shuttered. But since then it has climbed back as time has shown that most of the world has adapted effectively, and that includes Japan. Strong exports and a weaker currency have helped.

You may recall the recent deadly earthquake in the historic city of Kumamoto. But that hasn't stopped Sony and Taiwan's TSMC announcing yesterday a US$6.3 bln new joint investment into an advanced image sensor plant there. Nikkei has the details.

Indonesia’s consumer confidence fell in July from June to its lowest level since April 2025 although still in positive territory. The moderation was largely driven by weaker assessments of current economic conditions.

And staying in Indonesia, their government has appointed the long-experienced deputy central bank governor to the top position made vacant by the President firing him, foregoing the opportunity to appoint the daughter of the President. This will reassure financial markets that some Turkish-like instability is being avoided.

In Australia, bank shares are took a beating yesterday, with Westpac down -5.9%, CBA down -2.1%, ANZ down -1.7% and NAB down -2.4%. The reason is a Westpac Q3 market update that shows their mortgage applications down -11% in the period and are running down -20% following their Federal Budget. Almost all of this fall away is because residential investors are pulling back because the expectation of capital gains is vanishing. Westpac says investor "credit growth" will fall from +9.1% this year to about +4.5% in the next two years. They expect little change in demand by owner occupiers.

And don't forget there is an RBA monetary policy review later today. No-one expects any official rate change, but given the high and sticky inflation levels, there will be a lot of interest in their analysis of why they aren't moving to quash it.

The UST 10yr yield is now just on 4.70%, up +4 bps from this time yesterday.

The price of gold has risen to US$4364/oz, up +US$21 from yesterday. Silver has risen +US$1.50 at just over US$65/oz.

Oil prices are up +US$4 from yesterday at just under US$82/bbl in the US, while the international Brent price is now just under US$87.50/bbl, Hormuz transits have dried right up. There have been no crude tankers and only 2 cargo ships exiting over the past 24 hours (0 dark with transponders off) and five entering for new loads (1 dark), again all Iran-linked. The Red Sea activity is where the focus is shifting and still low with less than 20 either way at the Yemen chokepoint.

The Kiwi dollar is down -10 bps from yesterday at just over 58.8 USc. Against the Aussie we are little-changed at 83.4 AUc. Against the euro we have held at 51 euro cents. That all means our TWI-5 starts today at 62.5 which is down -10 bps from this time yesterday.

The bitcoin price starts today at US$63,860 and down a full -2.0% from this time yesterday. Volatility over the past 24 hours has been modest however at just on +/-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

Shutterstock Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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 we are facing a new burst in inflation as commodity prices rise, oil and gold both are rising, and benchmark interest rates are stuck high waiting to see where these tea leaves settle.

Locally this week we will get June migration data, and inflation expectation updates. There also will be the July PMI update and probably the July REINZ results as well.

In Australia, look out for their NAB business sentiment update, but the key event will be the RBA's rate review on Tuesday even if no-change is expected or priced in. That is despite their CPI at 3.8% and running way above their target range of 2% to 3%, and showing little sign it will get back within range any time soon.

In the US, they will release their July CPI data too (expect 3.4%), their PPI (expect 5.5%) and another consumer sentiment update.

In China, we are awaiting their new yuan debt data which should come late this week and be another quite weak result (expect just +¥45 bln).

Over the weekend China released their CPI inflation data, revealing an annual inflation rate of just 0.5% in July, down from 1.0% in the previous month. Analysts had expected an 0.8% rate in July so this was their lowest level since January. Food prices dropped 1.5% year-on-year, following a 1.6% decline in the previous month and marking the fourth straight month it fell. But beef prices rose +4.5% and lamb prices by +6.2% in July from a year ago. Dairy product prices were -1.5% lower however.

Meanwhile, China’s producer prices rose +3.5% in July from a year ago, slowing from a 4.1% rise in June, and that is their steepest rise in nearly four years. The retreating pace is due to weaker commodity prices, softer domestic demand, and continued pressure from overcapacity. There is also intense price competition in some industries.

China’s exports surged almost +24% to US$398 bln in July in a better than expected result. The gains were driven by strong demand for AI-related technology products and a rush by manufacturers to ship goods to the US ahead of potential new tariffs. Outbound shipments to the US rose +17%, the EU by +16%, and to ASEAN nations by +38%.

And while China reported relatively stable foreign exchange reserves as at the end of July, they also reported that their official gold holdings rose +640,000 oz, almost +20 tonnes in one month. That is the most in a 21 month streak of gold buying.

Meanwhile Typhoon Dolphin is heading for the China coast after clipping Okinawa, due to strike south of Shanghai. It is a Cat 3 storm and over 1 mln people have been evacuated to safer ground.

Taiwanese exports stayed very high at US$75.3 bln, just off record levels, but as time rolls on with these high or record high levels, the year-on-year gains are fading. Still, they managed to report a +33% rise from a year ago, an unusually strong gain. And their trade surplus remained unusually large at +US$17.2 bln, up from +US$14.3 bln in July 2025.

Across the Pacific in the US economy, and even with Trump loyalists controlling the data agency, US non-farm payrolls were reported contracting in July, down -23,000 at the headline level when a very modest +80,000 was expected. That is their worst July result in at least a decade. And it get much worse if you look at actual data because payrolls shrank almost -1.1 mln in July from June before seasonal adjustment. This is the real number of people who lost employment in the month.

Their participation rate inched down while their jobless rate was little-changed at 4.1%.

US inflation expectations for one year ahead edged down to 3.6% in July from 3.7% in June which was the highest since September 2023. The July level is the new baseline since the US attacked Iran. Prior to that, this survey recorded about 3% for the prior two years. Earnings in the same survey are seen to rise +2.8%, so that continues to record an underwater expectation for household finances.

US consumer debt levels rose +3.3% in June with revolving credit rising +6.0% on the same basis as both credit card debt and car loans rising sharply. Student loans recorded an unusual fall.

A weakening labour market and both stubbornly high inflation and inflation expectations will complicate the discussions in Warsh's Fed meetings. Do they cut, hold or raise. There are probably votes for all three options. Markets currently price in half a chance of a +25 bps hike in September. And Trump is back trying to screw the scrum.

There was quite the contrast in Canada with them reporting their employment rose +75,100 in July from June. It will have been a very long time since they had a gain that exceeded their southern neighbour. Their jobless rate fell to 6.4% and a two year low while their participation rate inched up.

Bird flu is spreading in Australia, even if the number of reported cases is still quite minor. There is no way to properly track it, and by the time reports are received, infection is well established....

The UST 10yr yield is now just on 4.66%, up +2 bps from this time Saturday but down -8 bps for the week. 

The price of gold has risen to US$4343/oz, up +US$6 from Saturday, up +US$293 or +7% from a week ago. Silver has held little-changed at just over US$63.50/oz. That is up +US$5.50/oz for the week or a +9.5% gain.

Oil prices are unchanged from yesterday and still just over US$78/bbl in the US, while the international Brent price is still just on US$83.50/bbl, A week ago these prices were US$84.50 and US$88/bbl respectively. Hormuz transits are still very constrained. There have been only three crude tanker and 6 cargo ship exiting over the past 24 hours (3 dark with transponders off) and eight entering for new loads (3 dark), again all Iran-linked. The Red Sea activity is still low with just 20 either way at the Yemen chokepoint.

The Kiwi dollar is unchanged from Saturday at just over 58.9 USc, making it unchanged for the week. Against the Aussie we are little-changed at 83.4 AUc. Against the euro we have held at 51 euro cents. That all means our TWI-5 starts today at 62.6 which is up a bit less than +10 bps from this time Saturday essentially unchanged for the week.

The bitcoin price starts today at US$65,151 and up +0.6% from this time Saturday, up +3.3% from last week. Volatility over the past 24 hours has been very low however at just on +/-0.3%.

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.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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