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.

And today we lead with news that the run to the end of the quarter is proving to be a subdued affair.

First up today, the American retail impulse is not in great shape. Compared with a year ago, retail sales were up only +2.8% last week on a same-store basis. This isn't anywhere near strong enough to cover inflation, so retail sales volumes are shrinking - and probably have done for the past month.

However, on an actual basis, the American merchandise trade deficit shrank in February, coming in at -US$71.5 bln for the month and down from the year-ago level of -US$84 bln. That is because their exports rose +5.4% year-on-year and imports fell -1.9% on the same basis.

The Richmond Fed's factory survey in the mid-Atlantic states recorded improvements in March in both employment and new orders, and an overall modest improvement in business conditions. Although still elevated, the costs component fell sharply in March. Overall, this is an interesting contrast to the weak Texas survey we noted yesterday.

The latest survey of American consumer confidence is the widely-watched one from the Conference Board, and that shows a modest rise in March. But there is no sign in here that inflationary expectations are receding.

In China, a high-ranking trade official has been charged with taking bribes. She pleaded guilty when charged.

But Chinese exports of construction equipment are still going strong, in fact now exceeding domestic sales. Exports were up +34% in February from a year ago.

In France, financial prosecutors raided several of France’s biggest banks, including Société Générale, BNP Paribas, HSBC and Natixis, as part of a investigation into what authorities say is one of Europe’s biggest tax thefts involving taxes on dividend payments. German authorities were also involved. Although it is a scheme devised by their clients, the accusation is that banks also profited because they handled the transactions.

In Australia, retail sales were up in a marginal way in February, barely beating the very lame expectations analysts had. Clearly this sector is cooling now.

The UST 10yr yield starts today at 3.54%, up +2 bps from yesterday. 

The price of gold will open today at US$1970/oz and up +US$14 from this time yesterday.

And oil prices start today up nearly +US$1.50 from yesterday at just over US$73.50/bbl in the US. The international Brent price is now just over US$78.50/bbl. 

The Kiwi dollar is up +½c against the USD and now at 62.5 USc. Against the Aussie we are little-changed at 93.2 AUc. Against the euro we are firm at 57.6 euro cents. That means the TWI-5 is now up at 70.3 with a +30 bps daily rise.

The bitcoin price is lower again today, now at US$26,886 and down another -0.9% from this time yesterday. Volatility over the past 24 hours has been modest at +/-1.0%. The US charged Bankman-Fried overnight with bribing Chinese officials.

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’ll do this again tomorrow.