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.

And today we lead with news of some weaker American data overnight that has brought a risk-off tone to financial markets and a pull-away from commodity currencies like the NZD.

US jobless claims rose marginally last week but the weekly series of small rises are now adding up and they are now at their highest in almost 3 months. The level is still very low, even on a post-pandemic basis, but the trend is becoming noticeable. There are now however less than 1.6 mln people on these benefits so those falling off coverage is actually higher than new claimants.

Overall industrial production in the US fell -0.6% in October from September, the most in 4 months and more than market expectations. It is now -0.7% lower than a year ago.

Both the Kansas City Fed and Philly Fed's factory surveys came in with marginal overall improvements for November however. One reported lower new order levels, the other positive levels.

Canadian housing starts were impressive in October, rising from September when a fall from that already high level was expected. These starts were especially strong in Vancouver. Year-on-year they were up +3.9%.

Japanese machinery orders rose in the September data released overnight and by more than expected. But they remain -2.2% lower than year ago levels even if this is the least annual decline in 2023. Their look ahead however isn't especially positive.

Official data for Chinese house prices was glum again, and given the low volumes and sensitivity of this data, maybe not really telling the full story. Anyway that official data reveals further small declines in new house prices, larger declines for used houses. Only 11 of their 70 largest cities posted rises in new prices. And in only 2 of them did used house prices rise. It seems unlikely the official price data really reflects the state of their housing markets.

In Australia, their jobless rate rose to 3.72% in October and it’s highest since May 2022. Employment rose by +54,900 but +37,900 of those were part-time roles. Part time workers now make up 30.7% of their employed workforce, the highest proportion since March 2022.

The recent rising trend in container shipping freight rates came to an end last week with prices falling -2% from the week before. Bulk cargo freight rates are still rising however.

The UST 10yr yield is back down -11 bps from yesterday, now at 4.44% in a return to levels of two days ago. 

The price of gold will start today at US$1982/oz and up +US$21/oz from yesterday.

But oil prices have crashed -US$4.50 overnight, to be just over US$73/bbl in the US. The international Brent price is now down to US$77.50/bbl. Driving this were unexpected high American oil inventories.

The Kiwi dollar starts today at 59.8 USc and back down -½c from yesterday. Against the Aussie we are little-changed at 92.4 AUc. Against the euro we are also down -½c from yesterday at 55.1 euro cents. That all means our TWI-5 starts today at just on at 69.2, and a net -40 bps lower.

The bitcoin price starts today at US$36,570 and up a net +0.6% from this time yesterday. Volatility over the past 24 hours however has also been moderate at just on +/- 2.3%.

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 on Monday.