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.

And today we lead with news this week we may start to see some hard data from the US and how the Trump insurgency is affecting the world's largest economy. Already sentiment surveys seem pretty negative.

For us, the week ahead will be dominated by the March quarter financial system data releases from the RBNZ on Wednesday.

Internationally, we will remain trapped watching the chaotic policy changes from Washington and trying to assess how they may impact us. Wall Street's earning season releases will also be a big influence, especially results from Big Tech. And the Americans will release their Q1-2025 GDP results, PCE inflation data, and their ISM PMI survey results. And at the end of the week we will get the April non-farm payroll results for the US labour market.

The Bank of Japan is scheduled to review its monetary policy, but they are unlikely to make any changes in the fog of uncertainty around trade policies. Australia will release its Q1-2025 CPI data (expect a dip to 2.2%). China will release its official PMI survey results.

Over the weekend, China said its March industrial profits were better than expected, but private sector profits slipped again. However, overall profits rose +0.8% from a year ago. Also better were foreign company profits which were up +2.8% on the same basis.

China said they are adding another ¥500 bln in medium-term lending facility funding. This is the second month they have pushed out substantial additional liquidity in this way.

And China says more than 120 million people have benefited from their old-for-new consumer goods trade-in subsidy program, driving sales of more than ¥720 bln.

And the BS meter is on high after Trump said that “we’re meeting with China” on tariffs, comments aimed at soothing jittery financial markets. But Chinese officials say no talks have taken place.

In fact, China cancelled some large pork and soybean orders to US suppliers. American farmers not only have to bear the brunt of trade policy gone rogue, they are also battling rouge weather.

Singapore said its industrial production rose in March, a bounce-back from a weak February result. But the recovery wasn't as strong as analysts had expected.

Across the Pacific, US initial jobless claims fell last week to +209,700 and to the level expected. But seasonal effects suggested this reduction should have been larger. There are now 1.89 mln people on these benefits, still higher than year ago levels. This is despite Federal pressure on States to deny long term undocumented workers access to benefits.

New durable goods orders jumped in March by +10.9%, the largest rise in seven months. Capital goods orders rose +24.1%. But non-defense, non-aircraft capital goods orders were only up +1.8%. This is probably why the March or April PMIs didn't note a general rise in factory orders.

US existing-home sales fell -5.9% in March from February to be -2.4% lower than one year ago.

Meanwhile the Kansas City Fed factory survey reported lower activity, higher costs, and unchanged order levels.

Nationally, the Chicago Fed's National Activity Index reported a small slip in March. This is consistent with the overall Fed Beige Book monitoring.

And finally for the US, the UofM sentiment survey for April was -8.4% lower than for March, -32% weaker than a year ago. These are big drops. Year-ahead inflation expectations surged from 5.0% in March, an unusually high level, to 6.5% this month, the highest reading since 1981.

North of the border, Canada reported February retail sales and they slipped from January to be +2.1% ahead of year ago levels. This data is volume data, so a real increase.

And its election day in Canada (tonight NZ time). There has been a notable surge in early voting. Official data for this was released a week ago, and that showed 7.3 million electors had voted in advance at that stage. This is a +25% increase from the 5.8 million electors who voted in advance in the last federal general election in 2021. They have 27.6 mln eligible voters this time.

The UST 10yr yield is now at 4.25%, up +1 bp from this time Saturday.

The price of gold will start today at US$3318/oz, and up +US$88 from Saturday.

Oil prices have held from Saturday be still just over US$63/bbl in the US and the international Brent price is now just under US$67/bbl.

The Kiwi dollar is now at 59.6 USc, down -10 bps from Saturday at this time. Against the Aussie we are down -10 bps at 93.2 AUc. Against the euro we unchanged at 52.5 euro cents. That all means our TWI-5 starts today still just on 68 and unchanged from Thursday, but up +40 bps from a week ago.

The bitcoin price starts today at US$94,238 and down -0.8% from this time Saturday. Volatility over the past 24 hours has again been low at +/- 0.7%.

You can find links to the articles mentioned today in our show notes.

You can get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston. And we will do this again tomorrow.