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.

And today we lead with news there are more twists and turns in international trade to report today.

But first in the US, the NY Empire factory survey came in positively in November, on the back of a good rise in new orders. But they got a similar jump in November 2024, and this latest 2025 result is -7.5% lower than that.

In Canada their inflation rate dipped slightly in October to 2.2% from 2.4% in September, and far less than the 3.0% and rising inflation rate last reported in their southern neighbour. Canadian petrol prices fell sharply, and the steam seems to have gone out of their grocery prices.

Meanwhile, foreign investors are finding Canadian securities attractive, raising theri holdings sharply. They increased them by +C$31.3 bln in September, an unusual spike for a month that usually attracts only modest levels. Canadians themselves are choosing local securities increasingly too, in a substantial out-of-cycle rise of their own.

In China, there is increasing talk that the weekend's very soft economic data will bring rate cuts to their loan prime rates when they are next reviewed on Thursday, even a cut in their reserve ratio requirement of banks. Both are currently at record low levels already.

In something of a big positive surprise, Singapore's October non-oil exports rose sharply to S$17.2 bln, up more than +23% from year-ago levels up +15% from September. That is up from the +7% rise in September. Their non-oil exports to Thailand rose a massive +91%, to Taiwan a massive +61%, to South Korea by +38%. Going the other way, their exports to the US dropped -12%, and to both China and Japan were virtually unchanged.

India exports fell almost -12% in October from a year ago, but Indian imports surged more than +16% in the same month. Indian exports to the US fell notably. That has resulted in a huge merchandise trade deficit blowout of -US$41.7 bln and by far and away their largest trade deficit. Fortunately they run trade surpluses for services, but even after than it was still a record -US$22 bln deficit and more than double year-ago levels.

And we should note that aluminium prices, which are already very high, are likely to rise further on tight supply. Rio Tinto is adding surcharges on shipments to the US, where prices are globally elevated anyway due to tariffs, due to the supply shortage and the need for American to have to pay to get the product. That cascades through to consumer prices and inflation. These cost increases will be particularly troublesome for US-made cars.

The UST 10yr yield is now at 4.13%, down -2 bps from this time yesterday.

The price of gold will start today at US$4067/oz, and down -US$14 from this time yesterday.

American oil prices have held from yesterday to be just over US$60/bbl, with the international Brent price still just under US$64.50/bbl.

The Kiwi dollar is now at just on 56.7 USc, and down -10 bps from yesterday. Against the Aussie we are up +20 bps at 87.1 AUc. Against the euro we are little-changed at 48.9 euro cents. That all means our TWI-5 starts today at just over 61.3, and also little-changed from yesterday.

The bitcoin price starts today at US$93,687 and down -0.5% from yesterday and it is now lower than year-ago levels. Volatility over the past 24 hours has been modest at just on +/- 1.5%.

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.