Economy Watch

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 hostilities in the Persian Gulf are still ongoing and still clouding the global economy

First in the US, the latest Fed Beige Book survey reveals an American economy where activity increased modestly since early July. Ten of the twelve Federal Reserve Districts reported modest growth; two reported no change. Consumer spending grew slightly on balance; reports reflecting both heightened price sensitivity on the one hand and solid high-end purchases on the other. Car sales were mostly subdued, dampened by downbeat consumer confidence, high fuel prices, and rising financing costs.

And that was reinforced by mortgage applications levels that were little-changed and mortgage interest rates that have stayed high and back at early 2025 levels, now 6.79%.

Further, the ADP monthly employment report for private payrolls delivered a +38,000 jobs gain in August, lower than for July and lower than the +47,000 expected. It was a seven month low. Saturday will bring the US non-farm payrolls report update for August which is expected to show a gain of +58,000 - which now may be on the high side. US payroll growth has essentially evaporated since early 2025 and the start of the Trump 2 presidency.

New factory orders however were reported to have risen +10.4% in July from a year ago. This is an impressive result, but you would have thought that activity and employment data would show that surge. However some of the largest gains are in defense aircraft and computer equipment (data centers) which don't have a lot of jobs attached to them.

US crude oil stocks fell again last week and by about double what was expected. And their Strategic Reserves fell too, and by a similar amount. These are dangerously low now.

In Canada their central bank reviewed their policy interest rate by kept it at 2.25% as expected. They seemed somewhat surprised at the resilience of the Canadian economy given the economic attacks from the US, but they also now see that resilience continuing despite the substantial adjustments they have to make. Canadian benchmark bond yields are rising, today at a two year high. But this isn't especially high given the threats. The somewhat hawkish tone wasn't expected and the chances of rate hike there have probably increased.

In Australia, it is coming to light that their central bank has downgraded the US dollar for its foreign currency holdings. (The RBA is somewhat unusual in that they have revealed that pullback. It is likely happening in many other central banks too, as IMF consolidated data suggests.)

And staying in Australia, they released their Q2-2026 economic activity data today, showing a +0.4% expansion for the quarter, to be up +2.1% (real) from a year ago. That was much better than the expected +1.8% expansion. Their per capita growth was only up +0.7% however. The widely expected slowing in 2026 has been much less than observers had expected. And that has significantly boosted the AUD and Australian Government bond yields.

The UST 10yr yield is now just on 4.79%, down -1 bp from yesterday at this time.

The price of gold is now at US$4372/oz, and upUS$37 from yesterday at this time. Silver has risen +50 USc to just under US$65/oz.

Oil prices are up +US$1.50 at just over US$91.50/bbl in the US, while the international Brent price is just under US$96/bbl

The Kiwi dollar is down -40 bps from yesterday at just on 58.5 USc. Against the Aussie we are down -90 bps at 881.5 AUc. Against the euro we are also down -30 bps at 50.5 euro cents. That all means our TWI-5 starts today at just on 61.9, down -50 bps from yesterday.

The bitcoin price starts today at US$77,353 and essentially unchanged from yesterday at this time. Volatility over the past 24 hours has been low at just on +/-0.9%.

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  bond yields worldwide climbing as rising oil prices are raising inflation concerns. Financial markets have raised the chance of widespread interest-rate hikes. US Treasury 10 year yields hit 2025 highs at 4.8%, while Japan’s equivalent rate hit 3% for the first time since 1996. German bund yields climbed to 15-year highs and UK gilt yields to 18-year highs.

Not helping are a new round of attacks by a trigger-happy US on Iran.

But first, there was a full dairy auction overnight and the overall results were modestly positive. Prices in USD were up +0.9% and up +0.6% in NZD. The big mover down was cheddar cheese suffering a -6.6% fall. The big mover up was SMP with a +5.3% gain. WMP was very little-changed. In fact, SMP prices are now higher that WMP prices, the first time like this since July 2022. In between, the WMP premium actually got as high as +US$1550/tonne.

In the US, there were two factory PMIs out for August, both essentially holding a moderate expansion there. The widely-watched ISM one came in fractionally lower than for August, with new orders growing at a slightly slower rate and price pressure little-changed. The internationally benchmarked S&P Global one was little changed, noting output and orders both rising at slower rates, with stock building efforts continuing amid supply issues and higher prices.

The US Logistics Managers’ Index fell for a second consecutive month due to a slowdown in inventory expansion, while logistics costs continued to rise at a high pace.

July JOLTS data shows job openings rising while quits fell, but these changes were actually quite minor.

The US RCM/TIPP optimism index is still in an easing trend that started in early 2025, but it has held at a modest level in August, similar to the June and July levels. There were offsetting shifts with greater confidence among investors and higher-income households, but a deterioration in sentiment for non-investors and lower-income households.

Meanwhile the Dallas Fed services sector activity moderated in August, but is still expanding.

The Canadian factory PMI was little changed where their expansion was maintained at solid rate with output, new orders and employment all rising in August.

Japanese consumer sentiment rose again in August, something it has been doing consistently since April.

As we suspected, the private China factory PMI by S&PGlobal (Rating Dog) came in much more positively that the official version, and expanded at a rate that beat estimates, even if it is modest. How sustainable that improvement is will be interesting to see because input price inflation rose but output prices fell for first time in 2026 so far.

And we should probably note that China's government debt is now at ¥100 tln for the first time (NZ$25.3 tln),107% of their GDP. And that is just their central government. (But to be fair, a notable part of that rise involves a shift from old opaque local government debt to a more transparent national treatment.) While that may seem high (and it is), the equivalent US federal debt level is 124% of their GDP. For New Zealand it is 49%, for Australia 34%.

EU CPI inflation came in at 3.3% in August, the expected level, but up from 2.9% in July. All this rise was fuel cost related. Their core CPI rate actually dipped slightly to 2.4%.

Meanwhile, German retail sales actually fell, and quite hard, down -2.5% in real terms in July from a year ago with the current month drop an outsized -3.4%, so the recent bite has been aggressive. In nominal terms there year-on-year levels are just level-pegging.

Australian building consents were expected to fall in July and they did, and by about the expected amount, down -3.6% from June to remain up +9.0% from a year ago. House consents fell -4.2% but multiunit consents held little-changed (-0.4%). Still, that leaves the multiunit sector up almost +20% from a year ago. (Some of those are likely to have been Bathla developments in Western Sydney, so are unlikely to proceed now.)

The UST 10yr yield is now just on 4.80%, up another +4 bps from yesterday at this time.

The price of gold is now at US$4335/oz, and down -US$97 from yesterday at this time. Silver has fallen -US$1.50 to just under US$64.50/oz.

Oil prices are up +US$4.50 at just over US$90/bbl in the US, while the international Brent price is just under US$94.50/bbl.

The Kiwi dollar is down -30 bps from yesterday at just on 58.9 USc. Against the Aussie we are down -20 bps at 82.4 AUc. Against the euro we are also down -20 bps at 50.8 euro cents. That all means our TWI-5 starts today at just over 62.4, down -30 bps from yesterday.

The bitcoin price starts today at US$77,297 and down -2.0% from yesterday at this time. Volatility over the past 24 hours has remained modest at just on +/-1.2%.

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 renewed fighting in the Persian Gulf from Trump's 'forever wars' is pushing oil prices up again and sentiment lower on the impending new shot inflation will get.

So, the yield on the US 10-yr Treasuries rose again now to 4.76%, its highest since January 2025. with market bets rising for a US Fed rate hike later this month.

But all the US news isn't downbeat. A surge in new orders has accelerated the Dallas Fed factory survey up sharply to its most positive level since January 2025 which was its best since the pandemic recovery, even it that was an isolated event. Price pressures were stable but markedly elevated, rising further for prices paid but easing slightly for prices received.

Across the Pacific, and after the unexpected fall in June, Japanese retail sales surged back in July to be +4.4% higher than year-ago levels and restoring the strong gains they have been posting since March.

In China, their factory PMIs for August improved marginally as expected but not by quite enough to avoid another contraction. Meanwhile their service sector PMIs were also expected to improve, but they didn't, staying with the same contraction they recorded officially in July. We need to note that these official surveys have been running more conservative than the private S&P Global alternatives recently. The S&P Global version is due out tomorrow for the factory sector, and on Thursday for the services sector.

India said its Q2-2026 economic activity expanded +7.8% from a year ago, the same as in Q1-2026 and much better than was expected (+7.1%).

Germany said it’s consumer price inflation rate edged up to 2.9% in August, its highest since April, but below market expectations of 3.0%. In August fuel costs rose more than +10% but food was up only +0.1% from a year ago.

In Australia, the Melbourne Institute's survey shows inflation expectations rose by 0.2 percentage points in August to 4.9%. This follows from a three-month period of moderating inflation expectations. Wage expectations also rose in August, after remaining static for a prolonged period.

And staying in Australia, Cotality reported that house prices fell -0.9% in August from July, following a -1.2% decline in July. Overall, house prices are now -3.6% below their peak, although still +2.7% higher than a year earlier. The housing downturn has now spread across more capital cities and regional centers, and further policy tightening by the RBA points to tougher conditions ahead. Sydney and Melbourne again led the declines, falling -4.6% and -4.7%, respectively from this time last year, the only capital cities to now be lower on an annual basis.

And of course, this comes at the same time NSW Bathla has essentially collapsed, waiting to see it it can get some lifeline loans to finish some in-progress developments. But essentially it is kaput. There is a pre-insolvency scramble underway over the dying carcass.

And staying in NSW, they have had their warmest winter in more than 150 year of records. Now the whole east coast is getting ready for a sizzling summer, as strong as Europe is having. Essentially there was no ski season at Threadbo this year, for the first time ever. New Zealand should prepare for an influx of climate refugees.

More generally, international air cargo volumes were up +4.7% in July from a year ago, up +5.2% in the Asia Pacific region. Interestingly, air cargo volumes into the giant US market were up more than +7%, but they shrank around their domestic market.

Meanwhile international passenger travel actually fell in July, not by a lot to be sure, but a fall is unusual. Both Middle East and US travel shrank. International travel in the Asia Pacific region declined too even if not so pronounced. Australian domestic travel shrank in a similar manner.

The UST 10yr yield is now just on 4.76%, up +4 bps from yesterday at this time, down -2 bps for the week. The 30 year yield is at 5.25%, also up +4 bps and almost back to its October 2023 levels again.

The price of gold is now at US$4432/oz, and down -US$22 from yesterday at this time. Silver has held at just over US$66/oz.

Oil prices are up +US$2 at just over US$85.50/bbl in the US, while the international Brent price is just on US$90.50/bbl.

The Kiwi dollar is up +10 bps from yesterday at just on 59.2 USc. Against the Aussie we are holding at 82.6 AUc. Against the euro we are down -10 bps at 51 euro cents. That all means our TWI-5 starts today at just over 62.7, up less than +10 bps from yesterday.

The bitcoin price starts today at US$78,879 and down a very minor -0.2% from yesterday at this time. Volatility over the past 24 hours has been modest at just on +/-1.2%.

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 

central banks are being forced to acknowledge that their measured approach to inflation control over most of 2026 just hasn't worked and they need a refreashed, tougher approach.

Locally this week, the highlight will be Wednesday's full RBNZ Monetary Policy Statement. With inflation running at 4.1% and rising (it has risen every quarter since December 2024), every observer and financial markets are expecting a full +25 bps rise to 2.75%. The next review is on October 28 which is just over a week before the general election. So we will see just how focused the Breman RBNZ really is on weighing against inflation, even in the face of political pressure. We will get the next CPI result on October 22, and that will be a telling indicator. Financial markets currently price in another +25 bps OCR rise then, at a 60% chance.

We will also get many updates about the local August residential reals estate market, and we will get July building consent data.

In Australia, there will residential real estate updates too, building consent data, and they will reveal their Q2-2026 GDP expansion rate, expected to be up +1.6% from a year ago, much lower than the Q1-2025 expansion of +2.5%.

In the US, the developing conflicts between the Fed's desire to rein in inflation, and the Trump Administration's actions to ignore that threat and to try and push down interest rates will increasingly be watched by markets. There will also be PMIs out pointing to economic activity changes, and the week will end with their August non-farm payrolls report which is currently expected to show a very minor +45,000 jobs expansion.

In Canada there will be a rate review although no change is expected from the current 2.25%. They have a 3% CPI level, and a major challenge from their obnoxious neighbour to contend with.

Japan will release a broad range of economic reports, including the latest industrial production, retail sales, consumer confidence, housing starts and household spending data.

India will release GDP data (expect +7.1%). Malaysia will review its policy rate, but no change is expected from the present 2.75% And there will be PMIs everywhere. And that includes China.

Over the weekend, Japan reported a 2.4% jobless rate in July, their lowest in more than a year and their second lowest since before the pandemic.

And it seems Japan can still surprise. Births from January through June were 342,068, up +0.8% (+2,788 more) from the same period in 2025. It was their first rise for the first half of the year in 11 years.

Malaysia said producer prices there rose at a very fast +9.7% rate in July, their fastest since the pandemic and before that since early 2017.

India reported that its industrial production eased back from a +9.5% expansion rate in June to +7.3% in July. But this was still a better result than anticipated. Meanwhile, Indian bank loan growth has stayed extraordinarily high, up +18.3% from a year ago.

In China, mirroring the Evergrande disaster, China Vanke’s first-half loss widened to -¥16 bln as sales slumped and debt pressure built. Upcoming debt maturities may trigger the end of it.

And the EU released the August results of its business and consumer sentiment surveys. The net outcome is improving sentiment, especially business sentiment. Only consumer sentiment remains low but it is marginally less so in August.

In the US, in his Jackson Hole speech, Fed boss Kevin Warsh flagged that inflation in the American economy is too high but he offered no indication whether he favours keeping interest rates at current levels or pushing them higher. But he did restate that 2% is their inflation target. He gave no indication of rate policy but the inflation warning was enough for financial markets to conclude rate rises are more likely. Especially as he likely doesn't have the votes for a hold or cut.

In the real American economy, the Chicago PMI fell sharply in August into a contraction. The fall was driven by declines in New Orders, Order Backlogs, Production and Supplier Deliveries. It was their first fall in four months and discouraging, suggesting the stockpiling trend may be ending as inventories are now well built.

Meanwhile, the US non-farms payrolls data has gone through their annual adjustment. That says their previous reports of job growth were overstated by 79,000. And that is an adjustment of weak results in the first place. It is another discouraging signal.

And the University of Michigan consumer sentiment August survey was updated too, confirming its early month reading, falling about -6% from last month and landing about -11% below a year ago. They noted continued worries that inflation will remain elevated for the foreseeable future. Current levels are near the post-pandemic lows. In fact they are near the low points this survey got in the pandemic.

In Canada, they reported a revised Q2-2026 GDP expansion of +3.3% for the year. They noted that their household saving rate reached 3.7% in the quarter as growth in disposable income (+2.1%) outpaced nominal household spending (+1.7%). But they also flagged that the July expansion has vanished, no expansion in this latest month. Given the problems with their southern neighbour, it is hard to see an expansion continuing.

The UST 10yr yield is now just on 4.72%, down -1 bp from Saturday at this time, down -2 bps for the week

The price of gold is now at US$4454/oz, and down -US$8 from Saturday at this time, down -US$167/oz for the week. Silver has fallen -50 USc to just over US$66/oz and a -US$3.50 weekly fall.

Oil prices are holding from Saturday at just under US$83.50/bbl in the US, while the international Brent price is just on US$88.50/bbl.

The Kiwi dollar is unchanged from Saturday at just on 59.1 USc, down -70 bps for the week. Against the Aussie we are holding at 82.6 AUc. Against the euro we are up +10 bps at 51.1 euro cents. That all means our TWI-5 starts today at just over 62.6, essentially unchanged from Saturday, down -70 bps for the week.

The bitcoin price starts today at US$79,010 and up +1.7% from Saturday at this time. Volatility over the past 24 hours has been low at just on +/-0.9%.

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 financial markets are awaiting a Kevin Warsh speech at the Jackson Hole symposium, specifically about how he sees the Fed's role when the US Treasury seems to be undermining it. What he says about the fight against inflation, if anything, will be revealing. This has markets hesitating today in anticipation. Although, equity markets are bullish off the strong Nvidia results.

US initial jobless claims fell marginally last week, and by marginally more than seasonal factors would have anticipated. There are now 1.78 mln people on these benefits, little different to a week ago but -7.5% less than a year ago.

The US merchandise trade deficit has come in at -US$119 bln in July, up US$17.4 bln from unusually high -US$101 bln in June and the -US$101 bln in the same month in 2025. Apart from the rush to beat upcoming tariffs just after Trump took office in early 2025, this latest result is a record high. Americans seem happy to pay these tariffs to get the products they need. Exports fell from June while imports rose on the same basis.

At the same time, the stockpiling trend seems to be gathering pace. US retail inventories rose in July as did wholesale inventories and both at an unexpectedly faster pace. Both are now at record high levels. Retail inventories are +3.9% higher than year ago levels now, with wholesale inventories up +5.6% on that basis. There could be an unwelcome reckoning if firms come to decide they are over-stocked. History shows their boardrooms are usually unhappy with excessive stocks.

Meanwhile the Kansas City Fed factory survey shows this with a little-changed report that is holding its expansion. New order levels are similar to last month but are falling for export orders. Input costs are rising faster than selling prices.

There was a US Treasury 7 year bond auction earlier today where the median yield came in at 4.46% (4.51% high). That is more costly that the prior equivalent event a month ago.

In Canada, they reported a surprise current account surplus of +C$8.8 bln in Q2-2026 from a deficit of -C$8.3 bln in the prior quarter and an expected -C$2 bln deficit. It is their first quarterly surplus since the 2022 and the largest since 2005.

Across the Pacific, China said it’s industrial profits rose more than +11% in July from the same month a year earlier. As good as that is, it was the softest pace this year.

The Bank of Korea has raised its policy rate by +25 bps today to 3.00% in a second consecutive move up. They target a 2% inflation rate. Korea has inflation at 2.8% although it did dip in July.

And the Philippine central bank raised its policy rate by +25 bps to 5%, all as expected. They target a 2-4% range and have current inflation at 6.2%.

Taiwanese consumer sentiment was little-changed in August, staying better than it was earlier in the year. But from a long term perspective, it has been relatively low since the pandemic.

Locally, after Wednesday's above expectation Australian CPI result - and plenty of evidence in that that non-fuel, less volatile items are rising in price faster now - we noticed an uptick in the pricing for a chance of a late-September rate hike by the RBA. True, it isn't an odds-on chance yet, but a notable one-day reaction. Currency markets rose on the prospects too. NAB is tipping a September rate hike now.

And staying in Australia, household spending leapt +7.0% in July from a year ago, the fastest growth in the past ten years (apart from during the pandemic recovery). The +1.1% rise in July from June builds on the June +1.0% monthly rise, and the +1.2% May rise. This is impressive momentum. Financial markets had expected only a +0.4% monthly rise and a +4.4% year-on-year rise. It was a broad-based expansion in every sector other than for "furnishings & household equipment". Likely no one saw a result this positive coming. It will bolster bets the RBA will push through a rate rise sooner.

Global container freight rates have stayed high, dipping just -1% over the past week. That puts them +111% higher than a year ago. Bulk cargo rates are up +10% for the week and nearing their yearly high again. From a year ago these rates are up +50%.

The UST 10yr yield is now just on 4.67%, unchanged from yesterday at this time. The 30 year yield is at 5.19%, and also unchanged. 

The price of gold is now at US$4604/oz, and virtually unchanged from yesterday at this time. Silver has risen +US$1 to just over US$69/oz.

Oil prices are up +US$1.50 from yesterday at just over US$84/bbl in the US, while the international Brent price is up the same at just over US$90/bbl. 

The Kiwi dollar is up +10 bps from yesterday at just on 59.5 USc. Against the Aussie we are down -20 bps at 82.7 AUc. Against the euro we are up +10 bps at 51.1 euro cents. That all means our TWI-5 starts today at just over 62.9, and little-changed from this time yesterday.

The bitcoin price starts today at US$80,434 and up +2.5% from yesterday at this time. Volatility over the past 24 hours has remained modest at just on +/-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 of more data that suggests the US economy is not regaining any momentum, and may be about to be tested by record high diesel prices.

US mortgage application levels dipped again last week from the prior week, mainly due to much lower refinancing levels as the high (6.78%) mortgage interest rates stay firm at these levels and a one year high.

Meanwhile US PCE inflation stayed up in July at 3.7% when it was expected to show a small dip. The month-on-month rise was much more than expected. Personal spending rose +5.8% while personal disposable incomes were up +4.2%.from a year ago. So the squeeze continues, and although masked by inflation, many households will be feeling it. And US diesel prices are now at record highs.

US GDP Q2-2026 second estimate came in at a modest +1.5%, and unchanged from its first estimate. Marginally stronger consumer spending was offset by weaker investment and more imports.

The US July durable goods order report came in positively, up +12.9% from the same month a year ago. But without aircraft or defense, it was up +8.7%. Capital goods orders on the same basis were up +13.5%, probably reflecting data center activity.

US crude oil stocks were little-changed last week, a bit less than the modest rise expected. Diesel stocks have hit record lows.

Meanwhile, Meta has agreed to an US$18 bln penalty to be paid over the next decade to resolve claims it designed its social media platforms to addict children. It will change the way it interacts with children. Four of the states who brought the court claim - California, Colorado, Kentucky and New Jersey - were expected to seek substantial civil penalties as wells.

In China, they have China has opened applications for an ¥800 bln policy-based financing tool for local government projects to shore up its slowing economic growth. But there are questions about how much impact this will have in 2026.

Singaporean industrial production extended its very positive run in July, up +5.8% from the same month a year ago and gains similar to most month in 2026.

In Australia, inflation fell in July as expected but not by as much as expected. Their June 3.8% rate fell to 3.5% in July but still well above the expected 3.2% rate assumed by financial markets. That gave the AUD a bounce, likely on the basis that the RBA's tolerance for still-high inflation may be about to get tested. The next RBA rate review is on September 29 however, and the August CPI data won't actually be known by then (September 30) - by the markets, at least. The RBA's inflation target is "between 2 and 3 percent", but it has been over 3% consistently every month for more than a year now.

Global wheat prices are up sharply again today, and to new post-pandemic highs, as Black Sea shipments from both Russia and Ukraine have essentially stopped and prospects for resumption look grim.

The UST 10yr yield is now just on 4.67%, up +3 bps from yesterday at this time. The 30 year yield is at 5.19%, up +1 bp. 

The price of gold is now at US$4603/oz, down -US$45 from yesterday at this time. Silver has fallen -US$1 to just over US$68/oz.

Oil prices are up +50 USc from yesterday at just over US$82.50/bbl in the US, while the international Brent price is unchanged at US$88.50/bbl. 

The Kiwi dollar is down -30 bps from yesterday at just over 59.4 USc. Against the Aussie we are down -50 bps at 82.9 AUc. Against the euro we are down -20 bps at 51 euro cents. That all means our TWI-5 starts today at just under 62.9, down -30 bps from this time yesterday.

The bitcoin price starts today at US$78,459 and down -0.5% from yesterday at this time. Volatility over the past 24 hours has remained modest at just on +/-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 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 oil price has eased overnight on signs of new negotiations between the US and Iran, and relief that the US sanctions weren't as advertised. They exempted Chinese banks, for example. And China said it will support Iran.

But first overnight, the Pulse dairy auction delivered higher prices from last week's full auction event - in USD terms at least. For example WMP was up almost +1%. But the rising NZD turned that into a -0.7% softening.

In the US, ADP weekly private jobs update remains very low with less than +12,000 new jobs added over the past four weeks.

Sales of new homes in the US were unusually low as well with the July level the lowest for that month since 2017 (apart from the pandemic 2022 drop). That puts them -6.5% lower than year-ago levels.

The Richmond Fed's factory survey came in with a positive overall outcome in August, but lower than for July and the lowest since April. Re-shoring isn't a thing in the Mid-Atlantic states. The growth rate of prices paid and prices received rose in the month. Meanwhile their services survey in the region revealed slowing activity, with only slight increases in prices and costs.

And that is consistent with the pullback in consumer sentiment as measured by the Conference Board in the US. It is measure that has been falling away since early 2025.

There was a less well supported US Treasury 2 year bond sale overnight, but the yield dipped to 4.16% (4.20% high) from the prior equivalent event a month ago of 4.27%.

In Canada, they reported lower wholesale sales in July, ending a run of expansions. The decline mainly reflects lower sales of agricultural supplies and minerals and ores. Otherwise little change.

In the escalating trade war the US is waging on Canada, Canada has responded with 50% duties on American dairy products, steel, farm equipment, and appliances.

And copper has risen to a new record high on the uncertainty surrounding US tariff policies. It isn't the only metal trading in the stratosphere of uncertainty. Tin is another example.

Taiwan's July update of industrial production extended its outsized growth reporting (+26.9% from a year ago). And that was matched with high growth of retail sales there (+7.7%)

Later today we will be watching the July CPI update from Australia where a fall in the rate from June's 3.8% to 3.2% is anticipated.

Meanwhile, they are dealing with some major events. Firstly in NSW, a major home builder has collapsed. The Bathla Group has failed owing AU$3.6 bln in debt supposedly due to soaring construction costs which they can't recover just as a sharp decline in property sales hit them. Construction activity has frozen across approximately 15,000 homes, townhouses, and apartment developments currently underway. The vast majority of the AU$3.6 bln of debt is owed to private credit funds and non-bank lenders. There are sure to be cascading impacts.

And bird flu is spreading faster now in Australia. So far more than 300 dead bird events have been confirmed out of 27,000 reports of unexplained dead bird events.

The UST 10yr yield is now just on 4.64%, down -6 bps from yesterday at this time. The 30 year yield is at 5.18%, down -5 bps. 

The price of gold is now at US$4648/oz, up +US$12 from yesterday at this time. Silver has firmed +50 USc to just under US$69/oz.

Oil prices are down -US$3 from yesterday at just over US$82/bbl in the US, while the international Brent price is just under US$88.50/bbl and down -US$3.50. 

The Kiwi dollar is up +20 bps from yesterday at just over 59.7 USc. Against the Aussie we are up +10 bps at 83.4 AUc. Against the euro we are also up +10 bps at 51.2 euro cents. That all means our TWI-5 starts today at just over 63.2, up +20 bps from this time yesterday.

The bitcoin price starts today at US$79,195 and up +0.4% from yesterday at this time. Volatility over the past 24 hours has remained modest at just on +/-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 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 we head into the final week of the northern holiday season with financial markets reacting to tough news on multiple fronts.

US missteps are catching up with them and that is driving higher interest rates and a lower USD, both a which involve an economic squeeze. Then there is the collapse the US-Canada trade relations which has pushed Canada to matching the new US tariffs. This will hurt both countries, Canada as expected, but the US more than they realise. Carney has brought back the Trudeau response, and this time Canadians have rallied around that reaction. Some significant parts of the US are going to get much higher prices. And as Canada supplies the most of its imported oil and gas, if Canada adds tariffs there, the impact on the US will be magnified.

All this will be grist for the Jackson Hole symposium which will be on from Friday to Sunday (NZT). There will be some worried central bankers showing up, and that probably includes Kevin Warsh, likely feeling undermined by Scott Bessent.

The outlook on global interest rates and long-term sovereign yields will again be a key focus this week as investors grapple with rising energy prices, increasing deficit spending, and soaring corporate debt. In the US it will be about personal income and spending, PCE inflation, and durable goods data for July, in addition to the key annual revision to nonfarm payrolls.

Japan will release consumer confidence survey results and its jobless rate, while rate decisions are due in Korea and Thailand which are widely expected to keep their policy rates unchanged at 1% and 2.75%, respectively, while the Philippine central bank could deliver a +25 bps rate hike to 5% as the country continues to face elevated energy and food prices alongside recent wage increases.

Locally it will be about Q2-2026 retail trade outcomes and current employment indicators, some mortgage and KiwiSaver data, and the week will end with the June update to the RBNZ's Dashboard.

And in Australia, investors will watch July inflation data where an easing from 3.8% to 3.2% is expected. And Q2 capital expenditure and household spending figures will also drop this week

In China, investors will focus on the National People's Congress Standing Committee meeting in Beijing from August 25-28, where authorities could signal additional policy support following a string of weak economic data. They will also release July industrial profit results.

Over the weekend, China reported US$11.1 bln in foreign direct investment in July, which was half the US$22.8 bln in July 2025. Year to date, their foreign direct investment is running -8.8% lower than in the same period a year ago.

And also over the weekend China said its forklift sales are going gangbusters in 2026, both for internal use and for export.

CPI inflation rose to 1.9% in Japan in July, their highest since December 2025. (Food prices were up +3.5%.) While the headline rate and the core rate both remain below the Bank of Japan's 2% inflation target, the rising trend may be enough for them to raise their 1% policy rate at their next review on September 18, 2026. They have other reasons to raise their policy rate (like, defending the yen, yielding to the US, needing to get back to 'normal' at some stage, etc.) so this may swing it.

Japanese business activity is expanding at its quickest rate for six months in August, according to the 'flash' PMI data released today. There were good gains for the factory sector, and these were bolstered by modest gains in their services sector. Of not was a steeper rise in new orders. Cost pressures continued to ease from June's recent record, but remained sharp overall, leading to another near-record increase in selling prices. Businesses are finding they can pass on the extra costs.

The 'flash' August PMI's for India show rising activity, especially in their services sector.

In the US, the August 'flash' PMI survey from S&P Global shows factory activity easing and now at a five month low. But the services sector is rising with a marginally stronger expansion. Input cost pressures have remained elevated but mainly due to rising fuel prices. Diesel is up +8.4% from a month ago, petrol up +2.2%.

Consumer price inflation is biting harder now in the US. Trump announced he will temporarily ease beef tariffs to help lower prices. Local beef producers weren't impressed, warning the move would hurt efforts to rebuild herds. And industry observers say the move will have little effect on the high prices. For someone who claims to love free-market capitalism, he acts in a very interventionist, the-government-knows-best manner.

Canada posted a good retail increase for the year to June, up +5.2% although this was a slowing from May. But their July result looks like it will fade somewhat. The weekend USMCA trade deal failure won't help of course.

The EU consumer sentiment survey retailed its July improvement in August. It is still deeply negative, but less so that at any time since February.

And the ECB updated its inflation expectations survey for July and that shows a minor decrease to 2.9% over the next twelve months, from 3.0% in June.

Eurozone business activity continues to rise in August amid stronger manufacturing growth, with their factory PMI now at a 51 month high.

According to the S&P Global 'flash' PMIs for August, growth in the Australian private sector is softer this month as the cost environment becomes more challenging in both the factory and services sectors. But both are still expanding. They are still getting rising new orders (in both sectors), but cost pressures have picked up in August. However the ability to pass those extra costs on retreated to its weakest of 2026.

And in freight news, El Niño is having an impact on Panama Canal traffic volumes. The authority which runs it says it is reducing traffic levels to 32 ships per day from 36 currently, due to the low water levels. That is an -11% reduction.

The UST 10yr yield is now just on 4.74%, unchanged from Saturday, up +5 bps for the week. 

The price of gold is up, now at US$4607/oz, down -US$14 from Saturday at this time, up +US$230 or +5.5% for the week. Silver has dipped -50 USc to just over US$69/oz.

Oil prices are unchanged from Saturday at just over US$87/bbl in the US, while the international Brent price is still just under US$94.50/bbl and up +US$1. From a week ago these prices are +7% higher from then. 

The Kiwi dollar is little-changed from Saturday at just over 59.8 USc, up +90 bps for the week. Against the Aussie we are still at 83.4 AUc. Against the euro we are holding at 51.2 euro cents. That all means our TWI-5 starts today at just over 63.2, down marginally from Saturday on a yen shift, but up +80 bps from this time last week.

The bitcoin price starts today at US$77,147 and down a minor -0.3% from Saturday, but up a whopping +23% jump from last week at this time. Volatility over the past 24 hours has also been modest at just on +/-1.2%.

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 we may be seeing the end of markets regarding US Treasuries as safe-haven assets – although to be fair it isn’t clear what would replace it.

Long-maturity US Treasury yields rose today to reverse the drop we noted yesterday. The yield on the US 10-year bond rose back towards the earlier 20-month high this week before the Bessent action, and the yield on the 30-year bond rose back too.

A couple of points are worth making first before we review today's data updates. The first is that it has been the role of the Fed to do QE activity. Maybe Warsh isn't keen now because he is committed to shrinking the Fed's balance sheet. It grew because the Fed wanted to push down rates, and that came with the consequence of massive bond buying. In fact, they moved the needle with "whatever it takes" to the tune of US$3.5 tln in the GFC and the subsequent stabilisation. And then another US$4.5 tln for the pandemic response that started in 2020. They have only paid down US$2.5 tln since. Warsh wants to get that significatly lower.

Now Bessent wants to do his own QE, in his case to avoid the political consequence his boss will face - at least push it off "till later'. But his announcement talks of a 'doubling', and that is only an extra of +$2 bln. The Fed was effective with trillions. But Bessent wants to do the same thing with billions. Wall Street hedge funds will be looking for a Bessent put, and unless he delivers his objective the hole thing might collapse rather quickly. Bessent should know - he was a billionaire hedge fund manager on Wall Street who made his fortune gaming the system. The Bessent initiative hardly lasted one day.

And this comes as the US Treasury's latest daily cash and debt balances statement shows public debt now exceeds US$40 tln (Table IIIC).

Why is this important for us? Well, the world's economy is still being driven by US middle-class consumer demand, the only economic engine large enough to shift the global needle. And we rely on a healthy upbeat global economy. China says it is making an attempt to duplicate this internal consumer demand, but by all accounts it is not succeeding, in part because Chinese consumers are still very risk averse and prioritising savings over consumption, and more so recently.

Meanwhile, initial jobless claims in the US fell to 172,000 last week, a slightly larger dip than seasonal factors would have indicated. There are now 1.8 mln people on these benefits, also marginally lower than the week before.

The August Philly Fed factory survey came in much stronger than expected, building on an outsized July expansion. This is all about current activity. Oddly, new order levels fell. But price pressures did moderate this month.

The Conference Board said its Leading Index for the US ticked up in July, marking the fourth increase over the past six months. Most components were positive in July except consumer expectations, which continued to be a notable drag.

In Canada, their July producer prices index rose from the prior month to be -12.4% higher than year ago levels. Their raw materials index is up more than +18% on the same basis.

Across the Pacific, Japan said its exports swelled +23% in July from a year ago and to an all-time record high, boosted by AI-related semiconductors and data center equipment. Meanwhile, imports were up almost +28%, boosted by fuel imports which were up more than +53% in value. and total imports also hit a new record high. The net was a small trade deficit on merchandise.

China held its key lending rates at ultra low levels in the regular monthly update. But these very low rates aren't exactly generating a boom, more just holding things together. The People's Bank of China kept its key lending rates at these record lows for a 15th straight month. And that is what analysts were expecting.

And remember Evergrande? Well yesterday a Chinese court sentenced its founder and boss to life imprisonment for "massive fraud".

Orders for Taiwanese exports soared +62% in July from a year ago to a new record high of US$98 bln. That follows an outstanding +59% jump in June. Booming global demand for AI-related and technology products continued to fuel overseas sales. This is on top of a July 2025 increase of +21% which at the time seemed like an outstanding achievement.

Malaysian exportsjumped an outstanding +38% in July from a year ago to a record high. This was led my electronic exports to the US. Meanwhile, their imports rose +36%, with the fastest rises from India, South Korea, and then China.

In Europe, German producer prices rose in July too, only at a +3.0% year-on-year rate but that was their fastest since April 2023.

Australian inflation expectations rose by 0.2 percentage points in August to 4.9%. This follows a three-month period of moderating inflation expectations. Wage expectations also rose in August, after remaining static for a prolonged period.

Staying in Australia, full-time jobs rose +16,300 in July but part-time jobs fell -32,200 in the month for a new decrease in employment levels. So instead of the expected +15,000 rise in jobs, they had a -15,800 net fall. While this may seem like a big movement, in fact the June positive result was quite elevated so a leveling out is probably to be expected.

Global container freight rates were up +4% last week from the prior week to be double what they were a year ago. Outbound rates from China to the US drove the increase with those up +9% for the week, up +180% from a year ago. Meanwhile bulk cargo rates fell -7.5% this past week to be +40% higher than year-ago levels.

The UST 10yr yield is now just on 4.70%, up +5 bps from this time yesterday. The 30 year yield is at 5.24% and up +4 bps. 

The price of gold is up sharply, now at US$4520/oz, up +US$17 from yesterday at this time. Silver has risen another +US$2 to just over US$68.

Oil prices are up US$1 from yesterday at just over US$86.50/bbl in the US, while the international Brent price is now just over US$93.50/bbl and up +US$2. 

The Kiwi dollar is up +10 bps from yesterday at just over 59.4 USc. Against the Aussie we have risen +30 bps to 83.6 AUc. Against the euro we are up +10 bps at 50.9 euro cents. That all means our TWI-5 starts today at just over 62.9, up +10 bps from this time yesterday.

The bitcoin price starts today at US$72,813 and up another large +6.8% from yesterday. Volatility over the past 24 hours has also been high at just on +/-3.5%.

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 on Monday.

Track 1219389

Monetization ID TFGEPGEI0LHEIJAI

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