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 the cost of crude oil is stuck at US$100/bbl still despite G7 promises to release reserves, principally because of Trump's renewed threats at Iran. Resolution of a key driver of inflation and policy uncertainty seems far off.
This week will be quiet from an economic data point of view in New Zealand befitting school holidays, but we will get some interesting updates of Auckland real estate activity from Barfoots, and lending by purpose from the RBNZ. And the NZIER's closely-watched quarterly survey of business opinion will drop as well, along with a full dairy auction.
In Australia, the focus will be on updated consumer sentiment surveys, and a key inflation expectations survey. And don't overlook that some key Australian eastern states have adopted summer time (except in Queensland).
Next week, the focus will remain on the US-Iran standoff and efforts to reopen the Strait of Hormuz and bring an end to the conflict in the Middle East. The bond market will also remain in the spotlight following the recent surge in government bond yields both in the US, and in France.
In the US, services PMIs and preliminary University of Michigan Consumer Sentiment data will drop this week. Elsewhere, the Reserve Bank of India will announce its monetary policy decision. The OPEC meeting, and developments surrounding Brazil’s presidential election round one this weekend will also remain key events for global markets.
In China, markets will remain closed for the Golden Week holiday through October 7, with no major economic releases scheduled for next week. But we will be watching holiday economic activity.
In Japan, we will be watching machine tool orders, and the Reuters Tankan index for October. Taiwan will release export and trade figures.
Over the weekend the G7 has agreed to a major release of strategic fuel reserves to keep a lid on energy prices. But so far the news hasn't really moved the cost of crude. And there was disappointing data out in the world's largest economy.
US non-farm payrolls were expected to rise +90,000 in September following the August +162,000 gain - a level that lacked confirmation from just about every other labour market metric. The actual September data was out on Saturday and that involved some embarrassing reversals. Not only was the August level revised sharply lower (-19%), the September headline gain was reported at just +29,000. Regular gains in this headline number above +200,000 ended when Trump took office in early 2024.
But we also look at the actual data behind these seasonally adjusted headline numbers and that reveals a much more stable situation with a gain of +333,000 from August, about the same gain in each of the prior two years from July to August although these gains were very much larger in the years 2019 to 2023. That is the payroll data. But the wider situation that includes all people working, there was an even better improvement in September from August, but the seasonal patterns here have gotten very random recently. That throws the veracity of this data into question, especially as it coincides with the change in leadership of this agency, from proper statisticians to political appointees. We should all regard BLS data with caution these days - even the poor results.
US vehicle sales fell to a 16.0 mln annual rate in September, well lower than expected 16.6 mln rate and the lowest sales rate since February.
New factory orders were little-changed in August from July which was a fast slowing but what was expected. However they are now +8.8% higher than August a year ago following gains earlier in the year. Much of that is data center buildout because computer equipment orders were up +17.5% on that year-on-year basis.
In China, which is on its week-long holiday, there is some encouraging data about internal activity and spending emerging. Their railway network handled 25.2 mln passenger trips on Friday, the first day of the holiday, setting a new single-day record.
There was some interesting data out over the weekend from the EU, who reported Euro Area CPI inflation at 3.8% in September, far higher than August's already high 3.2% and above the expected 3.5%.
They also reported a lower current account surplus of +1.6% of GDP in Q2-2026, down from +2.0% in Q1-2026. It was also lower than for Q2-2025.
The UST 10yr yield is now just on 5.28%, unchanged from Saturday, up +12 bps for the week.
The price of gold is at US$4140/oz and up a minor +US$2 from Saturday, down -US$150 for the week. Silver is at just over US$60.50/oz and up +50 USc today, down -US$4/oz for the week.
Oil prices have dipped -50 USc/bbl from Saturday to just over US$91/bbl in the US, while the international Brent price is up +50 USv to US$102.50/bbl. A week ago these prices were US$92.50 and US$104.50/bbl respectively. The G7 has agreed to release more from their strategic reserves. It is a deal that removes the threat of the US banning diesel exports. And we should note a flurry on missile attacks on tankers in the Hormuz region in the past few days.
The Kiwi dollar is up +10 bps from Saturday, now at just under 56.2 USc. Against the Aussie we are down -30 bps at 80.7 AUc. Against the euro we are down -10 bps at just on 49.7 euro cents. That all means our TWI-5 starts today at just under 60 and up +10 bps from Saturday but still close to a 17 year low. It is down -40 bps from this time last week.
The bitcoin price starts today at US$85,373 and up +0.8% from Saturday, up +1.1% from a week ago. Volatility over the past 24 hours has been low at just on +/-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.
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Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

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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 factories are mostly in expansion mode, driven by a new order surge and despite the rising cost pressures.
But first, monitored US job cuts stayed quite low in September at about 44,000, similar to August, and similar to the level in September a year ago.
US initial jobless claims dipped last week to 157,000, a shift that is explained by seasonal factors. There are now 1.5 mln people on these benefits, a substantial fall, as qualification restrictions keep many from extending this support.
The September ISM factory PMI was little-changed from its good August level. Price pressures persist but new orders are staying at good levels. The alternate S&P Global factory PMI showed a better result and to its best levels since the pandemic. The same new order drivers were picked up here too, and the cost pressures as well.
Little in these two reports will restrain the Fed from targeting inflation and with less worry about hurting jobs. But the tame PCE inflation report yesterday is shifting the tone among overnight Fed speakers away from an October rate hike. The Treasury market eased on the comments.
In New York, the US Court of International Trade has held hearings on whether Trump's revised tariff policies are legal. This three judge panel struck down his first approach. The next decision is expected before Christmas although it could be earlier if no new or novel arguments are presented.
In Canada, their factory PMI is still expanding but at a slower pace and now at a six month low. Output rose despite a decline in new orders affected by tariffs challenges Cost inflation surged to its highest since July 2022. Confidence in their outlook dropped as firms grapple with supply-side disruptions.
Across the Pacific, China is on its Golden Week holiday which will last until October 7.
Very strong new order growth has powered the September Taiwan factory PMI to a fast expansion. Apart from the pandemic recover, this puts their expansion back on par with the very good 2018 level. This is the sort of expansion you might see in an emerging economy (say like India) but unusual for a developed economy - and far faster than in its jealous, giant neighbour to its west.
South Korean exports came in very much higher than expected in August. Recall they it US$100 bln in June for the first time and have grown since then, hitting a new all-time record of US$121 bln in August which is up +83% from the same month a year ago. Of course, electronics are the key driver.
The S&P Global PMI for India reported a pickup in new orders too.
The EU factory PMI gathered pace in September from their fastest pace in new orders since March 2022.
And staying in Europe, Binance is thumbing its nose at regulators who have ordered it to wind down its operations there. It has no license to operate but is using an obscure legal exemption to stay active.
Meanwhile, August exports from Australia rose +15.3% from a year ago while imports rose +16.3% on the same basis. That means their merchandise trade surplus fell to just +$495 mln in August, its lowest August in ten years. the average August surplus over that period has been ten times that level (ie $5.2 bln).
Staying in Australia, Cotality’s Home Value Index fell -1.1% in September, the sixth straight month of falling values.‍ Brisbane had the sharpest monthly drop. Across the state capitals, almost every suburb (97%) has recorded value declines over the past three months, as a broad-based negative housing cycle sets in.
Global container freight rates were little-changed again this past week, and are now +166% higher than year-ago levels. The sharp rises in May and June have been sustained and are showing no signs of normalising. There were falls in the Chine to EU trade again, offset by rises in the China to US trade. Bulk cargo rates fell -9% and off their recent peak, to now be +44% higher than year-ago levels.
The UST 10yr yield is now just on 5.24%, down -6 bps from yesterday.
The price of gold is at US$4166/oz and up +US$12 from yesterday. Silver is at just over US$60.50/oz and up +50 USc.
Oil prices have risen +US$1/bbl from yesterday to just over US$92/bbl in the US, while the international Brent price is up US$3 to US$98.50/bbl.
The Kiwi dollar is down -30 bps from yesterday, now at just on 56 USc and that is a ten month low. Against the Aussie we are down -10 bps at 81 AUc. Against the euro we are up +20 bps at just on 49.9 euro cents. That all means our TWI-5 starts today at 59.9 and down -20 bps yesterday and close to a 17 year low.
The bitcoin price starts today at US$84,230 and essentially unchanged from yesterday. Volatility over the past 24 hours has been low at just under +/-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.
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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 the bond market warnings don't seem to be being taken seriously by policy makers. They are ignoring them at their peril.
US mortgage applications fell sharply again last week as their benchmark 30 year home loan rate rose to 7.30% and a three year high.
However, after three months of slowdown, the precursor ADP employment report showed a +90,000 gain for private sector jobs. In a longer perspective this level is modest, but it is much better than recent outcomes. Saturday's non-farm payrolls are now expected to deliver a similar gain but that will be sharply less than the August one (one you may recall that was received with deep scepticism).
The third and final estimate of Q2-2026 US GDP growth came in at a +2.2% rate, down from the +2.5% rate in Q1-2025. But it was an upward revision from their second Q2-2026 estimate so it has had a positive impact on market views. Higher consumer spending, and more from the data center buildout activity were the main reasons for the upgrade.
Meanwhile, the August PCE inflation metric came in at 3.4% which was little-changed from July and lower than expected. Personal disposable incomes rose +4.8% in August from a year ago while personal consumption expenditures rose +6.1%. The bond market seems sceptical of this data as the softer-than-expected inflation number had no effect stopping the US Treasury yields rising.
The Chicago PMI bounced back in September after the August disappointment, back to levels it has had for most of 2026.
US crude oil stocks rose modestly last week when a small fall was anticipated. (There is no update on their Strategic Reserve holdings.)
The US booked a very elevated merchandise trade deficit in August of -US$132.6 bln and far above the high -$115 bln expected. Clearly the Trump tariff strategies are failing to restrain trade. Exports were up almost +14% (mostly aircraft) but imports surged +28% from the same month in 2025 (mostly data center goods).
China said both its official factory and services PMI's shifted into a small expansion in September from a modest contraction in both in August. This was a better result than was expected. In addition, the S&P Global factory PMI for China was released. It recorded a modest expansion in August, and that improved in September. The unofficial version for their services sector remained very modest however - but at least it improved as well.
In something of a surprise, Korean industrial production came in sharply lower in August than anyone expected. It was expected to rise +4% as it did in July, but it actually fell -2.2%, so a notable miss.
German inflation came in at 3.3% in September, its highest since the end of 2023.
French sovereign bond risk is rising sharply and investors and analysts are warning of significant trouble if France does not get its fiscal house in order. The key metric being watched is the discount to the equivalent German bond yields which is suddenly at a 14 year extreme, a shift that has burst into the open in just the past few days.
Australian inflation rose from 3.5% in July to 4.0% in August in a rise at was basically expected (4.1%) by economists, the financial markets - and presumably the RBA. Their core (trimmed mean) inflation rates was unchanged at 3.6%. Fuel costs were obviously the big mover (+5.6%), but housing costs were up 5.7%, education up 4.7% and education costs up 3.9%. So the rising cost pressures are broadening out. Food was up 3.0%.
There was a notable fall-off in Australian building consents in August, down -6.1% and largely due to a retreat in multi-unit approvals.
Global air passenger travel fell in August, largely due to pullbacks in both North America and the Middle East. But the gains in the Asia/Pacific region were modest too with international travel in that region barely changed. But domestic air travel in Chin was up an impressive +5.8%
The UST 10yr yield is now just on 5.30%, up another +3 bps from yesterday and a new high since June 2007. The 30 year yield is at 5.65%, up +5 bps and its highest since January 2001.
The price of gold is at US$4154/oz and up +US$6 from yesterday. Silver is at just over US$60/oz and down -US$1.50.
Oil prices have risen +50 USc/bbl from yesterday to just over US$91/bbl in the US, while the international Brent price is down -US$5 to US$98.50/bbl. Iran said it had received a US response to its latest proposal to resurrect the ​collapsed ceasefire in the Gulf, days after President Donald Trump said he had rejected it.
The Kiwi dollar is little-changed from yesterday, still at 56.3 USc and that is still a ten month low. Against the Aussie we are up +30 bps at 81.1 AUc. Against the euro we are holding at just on 49.7 euro cents. That all means our TWI-5 starts today at just on 60.1 and up +10 bps yesterday and still hovering at a 17 year low.
The bitcoin price starts today at US$84,277 and up +1.6% from yesterday. Volatility over the past 24 hours has stayed modest, also at just under +/-1.6%.
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.
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Audio soundtrack opening is licensed from Shutterstock, Track 1219389 Monetization ID TFGEPGEI0LHEIJAI

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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 the bond market is shouting louder warnings at US policymakers. And China is rolling out more stimulus and subsidies to counter a growing slowdown there.
First today, the overnight Pulse dairy auction delivered mixed results although both the SMP and WMP prices rose from the prior event, up by about +1.6% in USD terms. But as the NZD took a bit of a thrashing overnight, these prices were up more than +3% in local currency terms.
Also mixed were the August US JOLTS labour market data. While much of it was little-changed, the number of job openings fell by an outsized -256,000 to just over 7 mln, the lowest in five months. Analysts had expected them to rise to 7.23 mln so this is a notable miss. And the fall was broad-based in most sectors and most regions, although the South did manage to book a small rise.
The US Conference Board reported a sharp fall in consumer sentiment in September, in fact taking it to its lowest since 2014. While it isn't as low as the University of Michigan survey yet, it is tracking in the same negative direction, both for its Present, and Expected monitoring of sentiment.
Yesterday we reported a positive Dallas Fed factory survey, even if it is suffering high cost challenges. But today's update on the Texas services sector is not so bright with a 'stall' reported and their first decline in four months. They also reported increased strain in input and selling prices.
Canada reported that their August economic activity rose, their tenth rise in the past twelve months and through a difficult period. That likely puts their GDP up +1.7% real from a year ago. Their 'resilient economy' may be enough for the Bank of Canada to start hiking rates again to contain the inflation pressures building again. The next rate review there is on October 28 (the same as the RBNZ).
In China, businesses there are said to be facing weak demand ahead of their Golden Week holiday. And that has pushed the Chinese central bank to lower a technical interest rate. And Beijing is to start subsidising mortgage interest rates for low income borrowers, aiming to create demand in their housing markets.
EU business and consumer sentiment sagged in September, but to be fair the overall level is still sitting close to its long-run average. The movement is basically due to lower confidence by consumers as they look forward to winter and an uncertain energy outlook.
In Australia, the RBA delivered the expected +25 bps rate change. That raises this rate to its highest in the developed world. They emphasised their strong commitment to the inflation fight and noted that more hikes may be needed before that is won. They are in an "whatever it takes" mindset now, and their new rate levels are 15 year highs.
Meanwhile, global air cargo demand rose +4.4% in August from a year ago, largely on work-arounds from the disrupted seas trade on major routes. International volumes were up +5.3% with Asia/Pacific volumes up +5.5%. But it was the +10.1% jump in North American volumes that is the standout feature, a notable rush to shore up supply lines ahead of more expected policy disruptions.
The UST 10yr yield is now just under 5.27%, up another +3 bps from yesterday and a new high since June 2007. The 30 year yield is at 5.60%, up +6 bps and its highest since January 2001.
The price of gold is at US$4148/oz and up +US$11 from yesterday. Silver is at just under US$61.50/oz and almost -US$1.
Oil prices have fallen -US$2.50/bbl from yesterday to just over US$90.50/bbl in the US, while the international Brent price is just under US$103.50/bbl and also down -US$2.50. This is all due to the US releasing more from their strategic reserves, although Saudi Arabia also confirmed that its pipeline repairs are complete too.
The Kiwi dollar is down a sharpish +40 bps from yesterday, now at 56.3 USc and that is now a ten month low. Against the Aussie we are unchanged at 80.8 AUc. Against the euro we are down -20 bps at just on 49.7 euro cents. That all means our TWI-5 starts today at just over 60 and down -40 bps yesterday and that takes us down to a level we last had in 2009, a 17 year low.
The bitcoin price starts today at US$82,936 and down -0.8% from yesterday. Volatility over the past 24 hours has been modest at just under +/-1.0%.
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 the rejection of the Iranian peace proposal by the US has meant diplomatic efforts to resolve the issue have lost momentum and financial markets have downgraded prospects across the board, even though the release of some recent data has generally been positive.
First, the very positive August Dallas Fed factory survey has been repeated in September even if not quite at the same level. The last time they had two successive positive reports at this level was in March 2022, and prior to the pandemic recovery, in 2018. If there is a downside in this report it is that cost pressures are rising fast and faster than prices are rising.
Fed Governor Lisa Cook said overnight that future productivity gains from AI may not be enough to offset near-term price pressures, warning this trend could drive up US inflation.
Meanwhile the US and China are working on a US$30 bln tariff reduction framework, have agreed to establish an AI dialogue, and agreed to Increase flights between the two countries. But all this just seem window-dressing talk at this stage. No actual deals have been agreed. Remember the Beijing meetings in May where large airplane and ag products were announced, neither of which resulted in contracts or trade.
China's industrial profits were up +4.2% in August to just over ¥690 bln from the same month in 2025. For the eight months of 2026 they are up +15.7% so this latest period is recording a notable slowing in their growth. But it is still growth. Most observers had expected the growth rate to pick up to +18% so there is a disappointment in this data, and reflected in today's Shanghai equity markets.
Singapore's industrial production rose a sharp +15.4% in August from a year ago and driven by a +28% surge in electronics products.
India’s industrial production rose +8.0% in August from a year earlier, up from an upwardly revised +7.4% in July and well above market expectations.
Later today we will be watching the RBA's monetary policy review which is widely expected to deliver a +25 bps hike to 4.6%. Financial markets have priced that change in at a 92% chance. Note, that isn't 100%. But of course most interest will be in how these policymakers see the track from here. Some observers think it will hit 5.35% before the middle of next year before the RBA is done hiking.
Before then we should note the release of the 2026 Global Cities Index from Oxford Economics. They say the top city is New York, followed by London, Paris and then Seattle ahead of San Francisco. Sydney came in at #13 (a fall from 7th), Melbourne at #16 (a fall from 6th) and Brisbane at #36 (a fall from 23rd). Auckland was ranked #60, Wellington ranked #75 and Christchurch at #96. No New Zealand rankings changed from last year. The index claims to assess the strengths, weaknesses and future potential of the world’s 1,000 largest cities.
The UST 10yr yield is now just on 5.24%, up +7 bps from yesterday and a new high since June 2007. The 30 year yield is at 5.55%, up +5 bps and its highest since January 2001.
The price of gold is at US$4137/oz and down -US$148 from yesterday. Silver is at just over US$61.50/oz and down -US$3.
Oil prices have risen +50 USc from yesterday to just over US$93/bbl in the US, while the international Brent price is just under US$106/bbl and up +US$1.50.
The Kiwi dollar is unchanged from yesterday, still at 56.7 USc. Against the Aussie we are up +20 bps at 80.8 AUc. Against the euro we are also up +20 bps at just on 49.9 euro cents. That all means our TWI-5 starts today at just on 60.4 and up +10 bps yesterday.
The bitcoin price starts today at US$83,618 and down -0.9% from yesterday. Volatility over the past 24 hours has been modest at just over +/-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 tomorrow.
Track 1219389
Monetization ID TFGEPGEI0LHEIJAI

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