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 all eyes are on the US non-farm payrolls report due out tomorrow, and market activity is hesitant in advance of that.

US jobless claims came in at +210,000 last week, a good decrease from the prior week. But it was not as large a drop as the seasonality suggests it should have been, so it counts as a 'rise' on the headline basis. Continuing claims were 1.66 mln and that fall was more than the seasonal effects expected.

There are still very few announced job cuts in this huge labour market.

So that will probably mean the US November non-farm payrolls report will be a positive one when it is released tomorrow morning. Markets currently expect +200,000 more jobs filled.

The US Fed's November Beige Book describes a moderately expanding overall economy.

US exports came in at US$266 bln in October, about the 2024 monthly average even though they slipped from the prior month. But they were +1.9% higher than the same month a year ago, in a rising trend that started in June 2023. Imports slipped in October too from the prior month, but these also stayed at about the 2024 monthly average. The US trade deficit in both goods and services reduced in October and runs at under -3% of GDP, a level easily absorbed in such a large country, especially one whose currency is the standard for international trade.

Canadian exports and imports both rose in October, and their trade deficit - although on a rising trend - has an even smaller impact on their economy.

In Europe, although it slipped in October from September, the volume of EU retail trade was up +2.1% from the same month a year ago. This is perhaps a surprising show of resilience for an economy that is being widely panned as struggling.

On the global logistics front, perhaps we should note the Global Supply Chain Pressure Index that the NY Fed monitors. In November, it eased slightly. After the sharp pandemic pressures it eased noticeable in April 2023 and has seen no return since then, despite the ups and downs of things like the major canal stresses. The global logistics network has been remarkably resilient, the pandemic excepted.

And last week, global container freight rates rose +6% from the prior week to be +150% higher than pre-pandemic levels still. There were sharp rises in the China-to-Europe trade, more than enough to offset sharp fall in the Chine-to-USWC trade. Going the other way there was a very sharp drop in bulk cargo rates, down -22% from the prior week to their lowest since September 2023 and actually back to levels first reached in 1987.

The UST 10yr yield is now at just on 4.18%, down -2 bps from yesterday.

The price of gold will start today at US$2637/oz and down -US$15 from this time yesterday.

Oil prices are -US$1 lower at US$69.50/bbl in the US while the international Brent price is now just under US$72.50/bbl. These low prices forced OPEC to delay its planned output hike in January.

The Kiwi dollar starts today at 58.7 USc and unchanged from this time yesterday. Against the Aussie we up +10 bps at 91.2 AUc. Against the euro we have dipped -10 bps to 55.6 euro cents. That all means our TWI-5 starts today at just on 68.3, and again unchanged from yesterday.

The bitcoin price starts today at US$100,825 and up +6.0% from this time yesterday. Volatility over the past 24 hours has been very high at +/- 4.7%. At one point it reached US$103,000, at another back under $100,000.

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.