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 open and fair availability of information is subject to wild distortions in two of the world's largest economies.

Americans are at their mid-term polls in an election that seems to turn on vast amounts of self-interested billionaire money and admitted-Russian interference - and for some reason these influences seem to be working in battle-ground contests. It seems likely a grim result for proper democracy is about to be rewarded, and again in the face of the popular vote. Gerrymandering wins again.

These results, and the American CPI data for October which is due on Friday (NZT) are the next big market movers.

Their rise in consumer credit was slightly less than anticipated in September, but the miss was minor and indicates a sensible expansion, not anything to be concerned about. For one thing, it rose less than inflation, so isn't revealing any consumer debt stress.

And American retail sales chugged on last week, up +7.6% from the same week a year ago on a same-store basis.

In China, they are celebrating reporters and news media "loyal to the party", so they too are under the influence of powerful forces. Different to the US, but still malign. It is difficult to then work out the true state of the Chinese economy.

In Taiwan, compared with the same month last year, exports fell in October, but only marginally and by far less than was expected. And there was a sharpish rise in imports there, so their trade surplus halved in the month.

In Europe, retail sales eased higher (on a 'real', inflation-adjusted basis) in September and by the amount expected. This was an improvement over the prior month.

In Australia, the widely-watched NAB business confidence survey fell in October, taking it to its lowest reading since December 2021 and leaving it below the long-run average. It comes amid growing concerns over rising interest rates and a gloomy global outlook.

The Westpac-Melbourne Institute Index of Consumer Sentiment for Australia fell in November to its lowest level since April 2020 as rising interest rates and surging inflation weighed on family finances and the economy. November’s reading also remained at contractionary levels for the ninth straight month.

The UST 10yr yield started today at 4.14% and down -7 bps from this time yesterday. 

The price of gold will open today at US$1717/oz. This is up a sharpish +US$39 from this time yesterday.

And oil prices start today -US$2 lower than this time yesterday at just on US$90/bbl in the US while the international Brent price is just on US$96.50/bbl.

The Kiwi dollar will open today at 60 USc and up +¾c since this time yesterday. Against the Australian dollar we have stayed firm at 91.6 AUc. Against the euro we are down marginally at 59.2 euro cents. That all means our TWI-5 starts today at 69.9 and +40 bps higher than this time yesterday.

The bitcoin price is now at US$20,480 and down -1.1% since this time yesterday. However, volatility over the past 24 hours has been very high at just on +/- 4.3% with some wild swings from more market instability.

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

And 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.