Economy Watch

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Kia ora.
Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.
I'm David Chaston and this is the international edition from interest.co.nz.
Today we lead with news oil prices are rising again with Russia answering Trump with energy strikes on Ukraine and the Yemeni fighting raging.
But first, two American economists have been awarded the Nobel Prize in economics “for microeconomic foundations of macroeconomic stabilisation”. Or, showing how well-timed fiscal and monetary policy measures can reduce the economy’s peaks and troughs, and developing ground-up models currently used by central banks and finance ministries across the world.
In the US, there was another Fed voting member out overnight signaling that rate hikes are likely. She warned that an inflationary mindset is taking hold. "I generally think it’s preferable to make smaller adjustments, and to do so relatively quickly, rather than to wait and risk needing a larger course correction," she said. She said the current "stable labour market" gives them room to move.
In China, they reported that less than 3 mln vehicles were sold in September, -8.5% less than in the same month in 2025. September to December is peak season for Chinese car sales so this flop will likely have tough consequences. Despite the fall, that is far more than the equivalent +1.35 mln in the US. But this fall in Chinese EV sales and the immediate prospect exports to the EU will be capped, has seen a very sharp fall in the lithium carbonate price on oversupply fears, down -19.5% over the past month, down -42% from its recent peak in Mid-May.
Indian inflation rose again, now at 5.5% in September and up from 0.2% a year ago. Food makes up most of their index and that was up 7.7%, driven by the cost of onion. Inflation in rural areas was higher than in urban areas.
The UST 10yr yield is little-changed at just on 5.24%.
The price of gold is at US$4164/oz and down -US$30 from yesterday. Silver is down -50 USc at just under US$60.50/oz.
Oil prices have risen from yesterday by +US$2.50 to just over US$94/bbl in the US, while the international Brent price is up +US$2 at US$106.50/bbl. Transiting ships in the Strait of Hormuz are under constant daily attack now.
The Kiwi dollar is down -30 bps from yesterday, now at just on 55.8 USc. Against the Aussie we are down -10 bps at 80.3 AUc. Against the euro we are holding at just on 50.1 euro cents. That all means our TWI-5 starts today at just on 59.7 and down -20 bps from yesterday and a new low since 2009.
The bitcoin price starts today at US$82,540 and down -1.4% 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 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 of new Trump delusions.
But first in the US, it will be a federal holiday tomorrow, Columbus Day, and many official agencies aren't working. But many businesses are treating it as a normal day, so it is sort of a long weekend for some, but not others. It is a normal day for financial markets, Wall Street will open, but there are no federal government data releases.
There will be some early Q3 earnings reports coming through this week from some heavy-hitters including some big banks and big tech. There is optimism ahead of these, underpinning markets. Along the way, they will also release CPI (expect 3.6%) and PPI results (expect 5.9%) later in the week
Locally, we will get migration data this week along with the September PMI (expect another expansion) and selected inflation data, and retail sales (electronic cards) data (expect another contraction).
In Australia, we will be watching the September labour market data this week where a rise of +20,000 jobs is anticipated, after August's surprisingly good +40,000 gain. We will also get the NAB business sentiment report. And some will find the RBA minutes interesting.
China will release export data, inflation data, new car sales results, and new lending data this week too.
China's new minimum wage levels are now in place. These range from Beijing's ¥27.7/hr (NZ$7.35) down to just ¥18/hr (NZ$4.80) in some rural areas.
Over the weekend, Japan said its machine tool orders hit a record high in September, underpinned by strong foreign orders, although the growth of domestic orders was strong too. This augers well for their factory sector over the next six months or so.
Malaysia released some positive August data over the weekend, with manufacturing output rising +9.9% from a year ago, retail sales up +3.8% by volume, and jobs growth of +28,800 in the month - although you might have thought the strong factory activity data would have generated a better labour market expansion. The type of production they are getting in electronics isn't particularly job-heavy.
In the US, the latest update of the widely-watched University of Michigan consumer sentiment index has it falling again, now down to its second lowest level ever after the record low recorded in May. (Don't forget, this is from monitoring that started in 1946.) Frustration over the cost-of-living continues to mount. Inflation expectations crept higher again.
In Canada, and as expected, their jobless rate inched up to 6.5% and they recorded a loss of -68,300 jobs in September, about half of them full-time jobs. It is the second month in a row they have had a net jobs decline, and they have never had three consecutive job-loss months. But it is looking likely that could be the case when the October data is released. And that in turn might reduce any chances of a rate hike there.
In Europe, China and the EU have inked a deal to cut Chinese ​exports of hybrid cars by more than half. This comes after an EU negotiator went to Beijing to try an stem their ballooning trade deficit with ‌China. China also agreed to release more rare earths supply to the EU.
In Australia, the weekend real estate auction activity was unusually weak, with less than half the properties offered selling, an unusually low level for them - and now a trend after the prior weeks drop.
The UST 10yr yield is down -1 bp, now just on 5.24%, unchanged from Saturday, down -4 bps from this time last week.
The price of gold is at US$4194/oz and little-changed from Saturday, up +US$59 from this time last week. Silver is at just under US$61/oz, unchanged but up almost +US$2 for the week.
Oil prices have held firm from Saturday to just over US$91.50/bbl in the US, while the international Brent price is holding at US$104.50/bbl. A week ago these prices were US$91.50 and US$102/bbl respectively.
The US deal to buy diesel from Russia which will help them fund the war on Ukraine seems to have had no impact yet on prices in the oil market. 'Friends' at the White House will make money out of it but there is certainly no impact at the pump. (And Trump's overnight "energy ceasefire' was news to both Zelensky and Putin neither of whom seem to know anything about it, and Moscow hasn't commented. So it is probably just Trump talking to himself.)
The Kiwi dollar is up +10 bps from Saturday, now at just on 56.2 USc and essentially unchanged from this time last week. Against the Aussie we are holding at 80.4 AUc. Against the euro we are still at just on 50.1 euro cents. That all means our TWI-5 starts today at just on 59.9 and unchanged from Saturday, unchanged for the week.
The bitcoin price starts today at US$83,723 and up +1.3% from Saturday. 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.
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 that while the tech industry is driving key parts of global trade, investors are pulling back from funding the splurge.
But first in the US, initial jobless claims came in at 170,300 last week, a +12,000 rise from the previous week but about what seasonal factors would have anticipated. There are now just over +1.5 mln people on these benefits, a notable fall from a year ago (1.68 mln) and largely due to changed qualification criteria.
Demand at today's US Treasury 30yr bond auction was lower than at the prior event and considerably lower than the same event in August. The median yield came in at 5.57% (high 5.62%), up sharply from the 5.25% at the prior event a month ago.
US wholesale inventories rose in August but at a slower pace than in July. Still, when related to sales levels, these inventories are not elevated. They are held down by stocks of computer equipment and fuel, but are elevated for 'farm products'.
The Atlanta Fed's GDP Now update for the Q3-2026 result has come in at +3.5%, lower than any estimate they have made previously but still well above the 'consensus forecasts' of about +2.5%. Either way, these are good levels for the US.
Meanwhile, US consumer debt rose just +1.9% in August, about half than the expected level and even less than the July level. Perhaps it is a sign of exhaustion given that spending has been rising much faster than incomes recently. Borrowing capacity may have been maxed out. As the spending habits of the American middle class is one of the key driver of the world's economy, the implications of this updated data should not be overlooked.
American farm debt is also causing problems. Reuters is reporting a notable rise in US rural debt along with sharp rises in farm bankruptcies, as a shift to more costly debt sources underlies the struggles American farmers are facing. US-China trade promises sound good when they are made, but the Chinese are using the order flow to keep the pressure on the US Administration. Farmers are caught in this in an ugly way.
Across the Pacific, Taiwan reported another record export result in September, at US$87 bln in the month and a +61% growth from the same month in 2025. They are really cashing in on the AI boom and robust demand for technology products. (Taiwan's exports are more than 20% of China's even though they only have 1.6% of their population.)
In Australia, consumer inflation expectations rose to 5.3% in October, up from 4.9% in both August and September and reaching their highest level since June.
And Australia seems to be ground zero for data-center scepticism by investors. The widely-touted and Nvidia-backed Firmus float will probably fail - and that has rippled all the way to Wall Street where the Nasdaq is down -1.6% so far today. OpenAI's revenues had a huge miss in updated filings out overnight as well. Reality in the tech sector is setting in. Up till now, valuations were based of all the aggressive promises panning out. That was never realistic. Firms like Infratil are taking a hit too. Since they bought into CDC, their share price has fallen -15%. Of course, this example is just on the edge of the whole AI world of overselling.
Global container freight rates eased again this week from the prior week (-2%) but are still up +164% from year ago levels. Longer journeys avoiding the Suez and Panama canals may be a significant factor. Bulk cargo rates eased -4% last week to be +53% higher than year-ago levels. The same journey factors may be at play here too.
And staying global, the World Trade Organisation has raised its forecast of global trading levels in an update out overnight. According to their latest Global Trade Outlook report, merchandise trade volume is now expected to grow by +3.9% in 2026, up from the March forecast of +1.9%, before increasing further by +4.1% in 2027. The revision reflects evidence that global supply chains adapted to disruptions in energy and fertilizer markets, while strong investment in AI-related infrastructure boosted that trade. Services trade growth is expected to remain positive, although prospects have moderated due to the impact of the Middle East conflict on transport and international travel. Services trade volume is expected to grow by +3.3% in 2026, down from +4.8% in the March forecast, before rising by +6.4% in 2027.
The UST 10yr yield is rising, now just on 5.24%, down -5 bps from yesterday.
The price of gold is at US$4125/oz and up +US$14 from yesterday. Silver is at just under US$59/oz and down -US$1.
Oil prices have risen +US$2/bbl from yesterday to just over US$91/bbl in the US, while the international Brent price is up +US$3 to US$103.50/bbl.
The Kiwi dollar is little-changed from yesterday, still at just under 56 USc. Against the Aussie we are up +10 bps at 80.5 AUc. Against the euro we are also little-changed at just on 50 euro cents. That all means our TWI-5 starts today at just on 59.8 and virtually the same as yesterday.
The bitcoin price starts today at US$81,025 and down -2.4% from yesterday. Volatility over the past 24 hours has been modest at just over +/-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 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 risk appetites seem to have weakened overnight as the cost of money shows little sign its rising trajectory is ending.
First in the US, their benchmark 30 year mortgage rate has risen sharply again over the past week, now at 7.49% and its highest since the brief spike in late 2023. Prior to that, it is highest since December 2000. So it will be no surprise to know that mortgage application levels fell sharply again and led down by refinance activity.
Meanwhile, Americans expect inflation to rise faster and be 3.9% in one year's time. That is up from the expected 3.6% a month ago, and higher than the 3.7% rise expected by analysts. Adding pressure, households expect their earnings to rise just 2.6%.
US crude oil stocks took an outsized tumble last week, down much more than expected and down by much more than the prior two weeks of gains. There has been no update of their weekly Strategic Petroleum Reserve data since September 25, but it is very likely to have fallen again.
Rising however are bond yields. The latest US Treasury 10yr bond auction brought a very large jump from the prior event. It was well supported although the US Government had to pay 5.26% median yield (5.30% high) compared to 4.77% at the prior equivalent event a month ago. But the resilient support suggests investors are interested in yields at this level, and that vibe spilled over into secondary market trading and capped rises there.
The US Fed released the minutes of their September 17 meetings at that showed surprising unity of the need for the rate hike they delivered. Clearly they are worried about inflation, less so about risks to jobs.
Across the Pacific, China said its foreign exchange reserves fell slightly to US$3.4 tln in September, their lowest since March, all because of a strong US dollar and rising yields on their foreign bond holdings (which depress that face value of those bonds). Meanwhile their gold holdings rose almost +1% in one month, now at 77.47 mln ounces. That is up from 74.19 mln ounces at the start of the year, up from 73.95 mln oz a year ago or +4.8%. They are clearly picking up the pace of building these gold reserves.
And staying in Chine, car retailers are reported to be having to offer deep discounts to move vehicles, especially luxury vehicles.
Taiwanese inflation might be accelerating again. It was 2.1% in August and September's rate was expected to be similar. But it actually came in at 2.7%, far higher than anticipated. It was their highest rate in 20 months.
In India, and as widely expected, their central bank raised its policy rate by +25 bps to 5.5% overnight, partly to defend the weakening rupee. They indicated that further rises may be necessary.
In Germany, and after a string of declines, industrial production jumped there to be +2.3% higher in August that the same month a year earlier. That is their strongest gain since March 2023. A small gain was expected but the size of the increase wasn't.
In data supplied by the New Zealand Initiative, the 2026 Fraser report of economic freedom ranks New Zealand at 4th in the world behind Hong Kong, Switzerland and Singapore. It does undermine the NZI carping on about New Zealand regulatory restrictions somewhat. Australia ranks #8, the UK #10, Japan #13. The US is #5. The Australian data was supplied by the Institute of Public Affairs, another right-wing think tank.
The UST 10yr yield is rising, now just on 5.29%, up +3 bps from yesterday. The 30 year yield is at 5.6-%, up +4 bps.
The price of gold is at US$4109/oz and down -US$48 from yesterday. Silver is at just under US$60/oz and down -US$1.50.
Oil prices have eased another -50 USc/bbl from yesterday to just over US$89/bbl in the US, while the international Brent price is up +50 USc to US$100.50/bbl.
The Kiwi dollar is down -20 bps from yesterday, now at just under 56 USc. Against the Aussie we are down -10 bps at 80.4 AUc. Against the euro we are little-changed at just on 50 euro cents. That all means our TWI-5 starts today at just under 59.8 and down -20 bps from yesterday.
The bitcoin price starts today at US$83,424 and down -2.6% from yesterday. Volatility over the past 24 hours has been modest at just over +/-1.7%.
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

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 that although the Strait of Hormuz is essentially shut again, alternate flows of crude oil are starting to ramp up. And benchmark bond yields have eased back today.
But first, the overnight dairy auction was a full one and prices rose +1.2% in USD terms, up +3.6% in NZD terms from the prior full event three weeks ago. SMP starred again, up +4.3% while WMP was up +1.2%. But the milk fats were all lower with butter dipping slightly, butter down -1.1%, cheddar down +3.9% and mozzarella down -3.9%. However the overall result is likely enough to confirm Fonterra's recent raising of its payout forecasts.
In the US, the weekly ADP Employment pulse report recorded a 23,750 rise, continuing a trend that started in mid-August.
Meanwhile the US logistics industry has issues. Their LMI rose in September to its second-highest reading in four years, behind only June’s level. It is being driven by high and rising inventory levels and inventory costs. Transport costs are surging. Supply chain pressure is not easing.
We have reported US merchandise trade data for August before, but the same data is now out including services, and that has a similar negative result - a monster US$105.6 bln monthly deficit, worse than in any pandemic month, and only exceeded by the pre-tariff rush in 2025. So after the new tariff levels were introduced - the situation is worse.
However, the optimism survey by RCM/TIPP is marginally better in October than for September. But it remains well below 2025 levels, and those themselves were lower than pre-pandemic levels. Investors are much more optimistic now than non-investors.
Canada is reporting a wider trade surplus in August, in fact its best result since 2022. Interestingly, its surplus with the US is particularly strong.
In Asia, the World Bank has updated its growth forecasts, noting that many countries in the region are getting a very sharp boost from the AI adoption investment. China seems to be excluded from that growth pulse although the eased the rate of growth decline in this latest assessment for China, seeing a +4.3% expansion in 2027, +4.2% in 2028. Indonesia, Vietnam, Malaysia and the Philippines will all do better than China, they say. And of course the World Bank ignores Taiwan at China's insistence and they will do better as well. (Not doing well are the Pacific Islands, unfortunately, lumbered with high fuel costs and without the electronics industry.)
German factory orders tumbled an outsized -10.6% in August from July, but this is more about the unusual jump in the prior month. From a year ago, these order levels ae +2.7% higher. And, as with most German data, this is inflation-adjusted.
In Australia, the Westpac-Melbourne Institute consumer sentiment survey for October makes grim reading too. This is how they introduced these results: :"Australian consumers remain stuck in a cost-of-living nightmare that seems to have no end in sight. At just over 80, the latest sentiment Index is amongst the forty worst reads since our monthly survey began in the early 1970s. We have had two others in this unfortunate group already this year – in April and June – with another eight recorded in 2022–23. Altogether this marks the worst period of recurring extremely weak sentiment since the disastrous recession in the early 1990s."
The UST 10yr yield is easing, now just on 5.26%, down -8 bps from yesterday and off its highs. The 30 year yield is at 5.65%, down -5 bps.
The price of gold is at US$4157/oz and up +US$27 from yesterday. Silver is at just under US$61.50/oz and up +50 USc today.
Oil prices have eased -50 USc/bbl from yesterday to just over US$89.50/bbl in the US, while the international Brent price is down -US$1 to US$100/bbl.
The Kiwi dollar is back up +30 bps from yesterday, now at just on 56.2 USc. Against the Aussie we are up +20 bps at 80.5 AUc. Against the euro we are up +10 bps at just on 50 euro cents. That all means our TWI-5 starts today at just under 60 and up +30 bps from yesterday and a 17 year low.
The bitcoin price starts today at US$85,687 and up +0.5% from yesterday. Volatility over the past 24 hours has been low at just over +/-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