Economy Watch

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 it is the final day of campaigning in the US mid-term elections and financial markets there are relatively upbeat. Helping is a rather sharp fall in the oil price as the Americans back-track on their tough talk with Iran.
But first in the US, the October factory PMIs were positive, with the widely-watched ISM one rising slightly to a good expansion based on new orders that rose for the first time in four months, and rising output. Inventories expanded, but new export orders didn't although they didn't contract either. Input prices are still rising fast although not as fast as the unusual burst in September.
Meanwhile the internationally-benchmarked S&P Global version revealed rising production and new orders levels albeit at slower rates and broadly matching the ISM levels. However they report price pressures intensified noticeably as supply chain disruption persisted.
Meanwhile, the Canadian PMI expansion fell away noticeably with production and new orders both contracting, their first of 2026. They report a considerable lengthening of delivery times. And price pressures intensified there as well. Factory confidence in their outlook is reported as 'subdued' and job losses are being recorded.
Across the Pacific in China, and unlike the official versions of their factory PMI which recorded a contraction, the private S&P Global (RD) factory PMI in for October held a modest expansion. They reported a rise in new orders and a rise in output. Some went into stock-building however. Encouragingly, these was an easing in cost and price pressures.
We have previously noted the sharp fall in domestic car sales in China, and the rush by manufacturers to sell into export markets. Something similar is happening in their steel industry with sharply lower domestic demand, higher costs (especially for coal), and a focus turn to exports. This shift will undoubtedly raise tensions with the countries they target, especially as Chinese exports benefit from a wide range of national and local subsidies. Even if production output doesn't fall a lot this situation will make Australian iron ore suppliers very nervous about future prospects. In Chinese yuan, these producers are now paying -17.5% less for iron ore than at the start of 2026. In USD, producers are getting -15.5% less on the same basis with prices back to pre-pandemic levels. It is tough being an iron ore miner now. (With copper, the reverse is true with prices up +15% since the start of 2026.)
And there were a number of other factory PMIs out in Asia today. After the weekend one from Japan which revealed a good expansion even if less than in September, South Korea posted much softer but still positive expansion, Taiwan maintained it very good expansion (the best of the region), as did Malaysia. Vietnam's expansion was a bit more modest, but Indonesia found some wind for its sails delivering an expansion that matched Malaysia and Taiwan.
The Indian factory PMI is probably worth a separate mention. Although their level is similar to the US versions, their are seeing good increases in new orders. And this is coming with very modest price changes. That augers well for their export competitiveness.
Eurozone PMI expansions remained solid but modest despite new order growth.
In Australia, the respected Melbourne Institute inflation gauge for September pegged it at 4.8% and a third consecutive monthly rise. This will lock in the +25 bps RBA rate rise later today, taking it to 4.85%.
In Australia there has been a surge in multi-unit residential building consents in September, more than making up for a sharpish fall in consents to build new houses, and allowing the overall level to rise +5.3% from August. That means, September building consents were -0.8% below year-ago levels.
The UST 10yr yield is down another -6 bps from yesterday at 4.87%.
The price of gold is up +US$92 at US$3968/oz. Silver is now just under US$51/oz and up +US$2 from yesterday.
Oil prices have fallen sharply today, down -US$7.50 from yesterday to just over US$96.50/bbl in the US, while the international Brent price is down -US$9 at just over US$104.50/bbl.
The Kiwi dollar is unchanged from yesterday at just on 56.3 USc. Against the Aussie we are up +10 bps at 80.2 AUc. Against the euro we are holding at 50.4 euro cents. That all means our TWI-5 starts today at just on 60 and little-changed from yesterday.
The bitcoin price starts today at US$77,369 and down -1.0% from this time yesterday. 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.
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 economic performance will get judged by electors this week.
Of course, this week will be dominated by the general election here and most analysts see it as a toss-up with the potential for protracted post-election negotiations. But we will also get quite a few updates of how the October real estate market performed. And of course, we will get the Q3 labour market update on Wednesday (little-change, so little improvement, is expected.).
In Australia, the focus will be all on Tuesday's RBA interest rate decision, where a +25 bps rise to 4.85% is widely anticipated. There will be housing market updates, along with PMI data out this week too.
Other central banks doing reviews this week will be those from Sweden, Norway, Malaysia, Brazil and Mexico.
In the US it is all about their midterm elections on Wednesday (NZ time). On the corporate front, their earnings season continues, with some significant companies reporting. And the week will end there with the US monthly jobs report with jobs growth in October expected to be marginally better than the limp September gain. There will also be ISM PMIs, factory orders, trade data and the preliminary University of Michigan consumer sentiment survey.
In China, investors will focus on the October S&P Global (RD) Manufacturing and Services PMI reports, with factory growth seen slowing slightly. Over the weekend the official PMI's were not positive. Their official factory PMI fell to its lowest since July and is contracting again. Their services sector slipped into a slight contraction too. Observers will be hoping the S&P Global/RD versions remain more positive than that.
South Korean exports delivered another stunning result in October, coming in almost double the year-ago result and taking their annual exports to just shy of their 2026 target of US$1 tln. That leaves even Taiwan in its wake at US$850 bln. For Japan annual exports are US$750 bln. For China they are US$3.8 tln, so Korea is more than a quarter of the Chinese level, an amazing result for a country with few natural resources and only 4% of their neighbour's population.
In the US over the weekend, the widely-watched Chicago factory PMI slipped in October from September, but it is still expanding solidly and at about the average elevated pace it has shown for all of 2026
Over the weekend a growing set of Fed governors were speaking with a fairly unified message that the US central bank has more work to do to get on top of inflation. This set included both members who vote on the FOMC and those who don't currently but will get rotated on soon. Last week's no-change capitulation ahead of their election involved risks most of these weekend speakers were uncomfortable with.
In Canada, they said its September GDP dipped slightly from August in a weaker than expected update.
In the EU they posted a +1.5% gain in GDP in Q3-2026 from the same period in 2025. This was slightly better than expected. Keeping this up were the Nordic and Baltic countries, along with good expansions in both Spain and Portugal, Germany came about average, but France posted a small decline.
In Australia, Cotality reported that last week's auction clearance rates in its residential real estate market meant that October had the lowest of any month in 2026.
Updated IATA data shows global passenger travel was weak in September, hurt primarily by weak domestic travel in the US and India. International travel was marginally positive, and that included the Asia/Pacific region.
The UST 10yr yield is down -6 bps from Saturday at 4.93%.
And we should keep an eye on junk bond yields. At the bottom end they are spiking very sharply, Yields on CCC-rated bonds (the lowest tier of junk debt) have spiked past 18% in the US and 21% in Europe, up sharply from earlier in the year. If this spreads up to other sub-investment grade bonds, an ugly bond rout is possible.
The price of gold is down -US$145 at US$3876/oz. Silver is now just under US$49/oz and down another -US$3.50 from yesterday.
Oil prices have risen +US$2 from Saturday to just over US$104/bbl in the US, while the international Brent price is still up at just on US$113.50/bbl.
The Kiwi dollar is unchanged from Saturday at just on 56.3 USc. Against the Aussie we are up +10 bps at 80.1 AUc. Against the euro we are up +10 bps at 50.4 euro cents. That all means our TWI-5 starts today at just on 60 and little-changed from Saturday.
The bitcoin price starts today at US$78,076 and up +0.5% from its much lower level over the weekend as more evidence come to light of the huge hack of Binance by North Korea. Volatility over the past 24 hours has been low at +/-0.5%.
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 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 Google's Q3 profit miss and AI cash burn have revived investor concerns about the whole race for AI dominance and the valuations driving the sector.
And that is so large, it shows up in US national accounts.
First, the US released its early, first estimate of Q3-2026 GDP growth and that shows a very good +3.4% rate, although that is lower than the year-ago level. The major components featured the tech buildout (consumption +2.5%, investment +3.3%, government +0.9%, exports -0.7%, imports -2.6%. The AI buildout contributed 1.2% of that and rising inventories 1.6%. Without those two it would have been rather grim and both apply to only a small slice of American society. The result does not portray what is going on in the economy as a whole, just their tech sector.
The Atlanta Fed's GDP Now monitoring sees Q4 US GDP expanding by +3.2%, so little-change anticipated.
Meanwhile US PCE inflation came in at 3.6%, higher than the elevated 3.4% in Q2. This was hardly a reason for the Fed to defer pushing back against inflation's spread. The best you can say is that inflation is stuck above the Fed's target and has been for all of 2026 and the actions they have taken this year have not been effective in restraining it.
US initial jobless claims came in at 179,000 last week, above what seasonal factors would have indicated despite the new tough qualification criteria. There are now 1.49 mln people on this assistance, -12.8% fewer than year-ago levels. Data for October non-farm payrolls will be released in a week and it is expected to show essentially no expansion.
Across the Pacific, Japanese consumer sentiment stayed positive at the modest level it has been at for most of 2026.
We had earlier noted that EU consumer sentiment weakened in October. Further updates out today show that producer sentiment improved in the month (that is, got less weak), but their services sector weakened.
And as expected, the ECB left its policy rate unchanged at its overnight review. But it did announce that boss Christine Lagarde will end her term early next year, so an interesting campaign for her successor will start soon. Central bank bosses from either Spain or the Netherlands are considered frontrunners to replace her.
Global container freight rates dipped last week but remain at the general high level they have been at since July. That makes them +143% higher than year-ago levels, driven by the higher rates out of China to the US and the EU, in turn due to fuel costs. Bulk cargo rates were largely stable for the week, to now be +36% higher than year-ago levels.
And there was a notable surge in air cargo demand in September, according it IATA data out overnight. This was driven by activity in North America - another rush to beat threatened tariffs - and in the Asia/Pacific region.
The UST 10yr yield is down -5 bps from yesterday at 4.99%.
The price of gold is down -US$17 at US$4018/oz. Silver is just under US$52.50/oz and down another -US$1 from yesterday.
Oil prices have fallen back -US$2 from yesterday to just under US$101.50/bbl in the US, while the international Brent price is als down -US$2 at just on US$114/bbl.
The Kiwi dollar is up +10 bps from yesterday at just on 56.3 USc. Against the Aussie we are also up +10 bps at 80 AUc. Against the euro we are down -10 bps at 50.4 euro cents. That all means our TWI-5 starts today at just over 60 and little-changed from yesterday.
The bitcoin price starts today at US$81,148 and up just +0.9% from yesterday at this time. Volatility over the past 24 hours has been modest at +/-1.3%.
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 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 it now looks like we are going to get an international rush of interest rate hikes before the end of the year - in New Zealand, in Australia, in Japan, in the US and in Canada - after the pre-election pause while likely raised the pressure because inflation's rises didn't pause.
As widely expected, the US Fed kept its 4% policy rate unchanged at at today's meeting on a vote of 10-2. (The two dissenters wanted a rise to weigh against inflation.) Recall they have a rising inflation rate, currently running at 3.7%. But markets now expect a December hike once their elections are out of the way.
Immediately after the Fed decision, the US Treasury yields rose, the S&P500 eased, and the USD rose. But all changes were marginal at best.
Meanwhile there was a small bounce-back in US mortgage applications last week after the prior week's sharp decline. That came as benchmark home loan interest rates eased slightly too.
The US goods trade balance got worse in September to -US$135 bln (up from -US$82.7 bln in September 2025), not only from August, but also worse than analysts had expected and a record deficit apart from in the January-March 2025 rush to beat Trump tariffs due in April 2025. Exports were up +12.5% from a year ago, imports up +27.8% on the same basis.
US inventories are rising too, both wholesale (up +7.4% in a year) and retail (up +4.9%). Part of this will no doubt be because of the surge in imports.
The US recorded another fall in crude oil inventories last week, down -1.9 mln bbls, more than the no-change expected. But there strategic reserves remained little-changed at very low levels.
The Bank of Canada raised its policy rate by +25 bps overnight to 2.5%. And there are calls for another rate hike to keep inflation at bay, currently running there at 3.1%
In Malaysia, they reported that September producer prices were +12% higher than a year ago, a faster rise than was expected
India's industrial production in September eased back to a +6.7% expansion, a lower gain than anticipated.
In Britain they have a special tax on banks, which has become a bit of a political football. A Conservative government brought it in in 2016 at 8%, then falling to 3% in 2023. But overnight they doubled it to 6% to start in 2027.
In Australia, CPI inflation came in at 4.3% in September, up from 4.0% in August, and higher than the 4.2% markets were expecting. At least it isn't as high as the 4.6% in March, but it is their second highest monthly level. The RBA next reviews their 4.6% cash rate target next week on November 3 and financial markets currently price in a 65% chance of another +25 bps rise, lower than you might have expected but on the basis the they might want to wait to see if their earlier hikes have an effect. The AUD rose on the news, their benchmark bond yields rose, and the ASX200 dipped by giving up some earlier gains.
The UST 10yr yield is up +5 bps from yesterday at 5.04%.
The price of gold is down -US$25 at US$4035/oz. Silver is just over US$53.50/oz and down -US$1 from yesterday.
Oil prices have risen back +US$3.50 from yesterday to just over US$103.50/bbl in the US, while the international Brent price is up +US$2.50 at just over US$116/bbl.
The Kiwi dollar is down -70 bps from yesterday at just on 56.2 USc. Against the Aussie we are down -100 bps at 79.9 AUc. Against the euro we are down -60 bps at 50.5 euro cents. That all means our TWI-5 starts today at just under 60 and down -70 bps from yesterday.
The bitcoin price starts today at US$80,386 and down a very minor -0.2% from yesterday at this time. Volatility over the past 24 hours has remained low at +/-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 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 economic issues are coming to a head in both the US and China.
But first up today, there was a Pulse dairy auction overnight which basically recorded lower prices for both SMP and the butter fats, down about -1% in both USD and NZD terms. But the WMP product bucked that trend, up +1% for both.
In the US, the weekly ADP jobs monitoring saw the expansion fall back again last week to under +17,000 new jobs nationwide in private payrolls, the lowest gain since mid August.
US durable goods orders for September were up a very strong +10.0% from a year ago. Non-defence, non-aircraft capital goods orders were up +13.7% on the same basis. The AI buildout is clearly a significant part of this because "computers & electronic products" were up +16.3% within these rises.
However, sales of new single family homes were down -0.6% in September from August, down -5.3% from a year ago.
Surprising analysts, the Conference Board's October survey of consumer sentiment was suddenly very positive, up very sharply when a solid fall was anticipated. The said the turnaround was driven primarily by improved perceptions of current and expected business conditions.
That turnaround was not obvious in the October factory survey in the Richmond Fed's district which is now at its lowest level since February. They report new orders fell and the employment index fell as well.
And we should note that Boeing shares have fallen sharply today as they scale back their delivery targets. They are down almost -10% so far today, down a quarter over the past year. It is another example to the widening gulf between the AI economy and the core industrial base of the US.
In Texas, their services sector did bounce back in October from a weak September and that was better than the expected extended weakness.
In Taiwan, after an unusually positive result in September, their consumer sentiment slipped back but only to the good levels it has been at since May 2025.
Interestingly, there are no local consumer sentiment surveys out for China. Obviously surveyors are concerned about reporting unflattering results. But the OECD has been running a very long-running one beginning in 1990 but the last data point is July 2026. That reveals the post pandemic doldrums have never been shaken over the past three years.
Bolstering sentiment is now a sudden priority in Beijing. Overnight their central bank inject more than ¥1 tln in reverse repo funding into their banking system, a record new injection. And that has the effect of driving down Chinese government bond yields to their own record lows.
And the state-owned investment businesses used to underpin demand in Chinese financial markets looks to be wobbling, no longer as effective as it was once thought to be. If it does fail, it will be a serious undermining of their economy.
Maybe one reason for the sudden action is that 2026 car sales are now forecast to fall -22% in China, to be even below pandemic levels.
Separately, China is reporting that industrial profits rose +14.4% in September from the same month a year ago. That is a very sharp rise from the +4.2% gain in August from a year ago which eased sharply from an +11.2% rise in July. But you suspect Beijing is worried this 'recovery' won't be repeated.
In Brazil, the Bolsonaro party has acknowledged their loss in the election and won't challenge it. But their candidate has fled to the US, although the reason isn't clear. Meanwhile Israel is voting in their elections. The turnout there is reported to be very high.
The grip Visa and Mastercard have on business payments has been highlighted by the global airline industry. They say in 2025 they paid the various payment systems a massive US$20.7 bln in fees to process passenger ticketing transactions. a +10% increase in just two years. The average "Visa tax" was said to be 1.97% of each transaction. Of course, the companies organised themselves to essentially pay no income tax on this extraction, making no contribution to the societies they operate in.
The UST 10yr yield is up +1 bp from yesterday at 4.99%.
The price of gold is up +US$38 at US$4060/oz. Silver is just over US$54.50/oz and up +50 USc from yesterday.
Oil prices have dropped -US$3 from yesterday to just over US$100/bbl in the US, while the international Brent price is down -US$3.50 at just over US$113.50/bbl.
The Kiwi dollar is up +10 bps from yesterday at just on 56.9 USc. Against the Aussie we are down -10 bps at 80.9 AUc. Against the euro we are up +30 bps at 51.1 euro cents. That all means our TWI-5 starts today at just under 60.7 and up +10 bps from yesterday.
The bitcoin price starts today at US$80,547 and up +0.7% from yesterday at this time. Volatility over the past 24 hours has remained low at +/-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.
Track 1219389
Monetization ID TFGEPGEI0LHEIJAI

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