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 that there was little economic data released overnight, so this report will be quite thin - and short.

First up today we should note that China's October vehicle sales surged by +7% from a year ago to just over 3 million units in in the month. This contrasted with the -1.7% drop on that basis in September, and shows that recent government policy measures aimed at boosting the retail market are in fcat having an impact. Domestic NEV penetration exceeded 50% for a third straight month.

That is a bright spot because the wider new yuan loan data for October was weak - again. In fact, very weak. At ¥500 bln new lending in October was the least since 2009. It was well below the low bar analysts had expected of ¥700 bln and emphasises just how little real-economy 'investment' is taking place at present. So far, their stimulus model has been a fizzer.

In the US we should probably note that Q3 earnings for Wall Street have come in very positively with most companies having now reported. And most delivered better-than-expected results. So it will be no surprise that indexes like the S&P500 are running at record high levels.

Following the US election, bitcoin is having a moment, spurred by the perceived influence the crypto-bros will have in the incoming Administration. Bitcoin hasn't changed. It is still not a unit of account, not a medium of exchange, and hardly even a store of value. It's not anonymous either (which makes it an odd choice for the libertarian crypto crowd), and is a clunky transaction device that holders notice when they try to buy (with fiat currencies). But its speculation attributes are currently making holders seem wealthy in fiat terms.

In the real world, we should probably note that Malaysia is going through quite a construction boom, largely for residential buildings. Construction activity rose by +23% in the third quarter of 2024 from a year ago, the tenth consecutive period of heady growth. Construction of non-residential building is booming too.

The UST 10yr yield is now at just on 4.35% and up +4 bps from yesterday. 

The price of gold will start today at US$2616/oz and down -US$68 from this time yesterday.

Oil prices are -US$2.50 lower at US$68/bbl in the US while the international Brent price is now just over US$71.50/bbl.

The Kiwi dollar starts today at 59.6 USc and unchanged from yesterday. Against the Aussie we are up +10 bps at 90.7 AUc. Against the euro we have risen +40 bps to 56 euro cents. That all means our TWI-5 starts today at just on 68.9, and up +20 bps from yesterday

The bitcoin price starts today at US$84,265 and up +5.6% from this time yesterday. Volatility over the past 24 hours has been very high at just on +/- 4.1%.

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.