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 rather than understating US jobs growth - which got her fired - the stats agency reporting labour market data overstated Trump's jobs growth, and by some margin.

But first up today, there was a dairy Pulse auction earlier today for both SMP and WMP, and while prices dipped as expected, they didn't dip as much as the derivatives markets had signaled. WMP was down just -0.2% from the full auction the prior week, SMP was down -0.6%. However the firming NZD resulted in about a -1.5% fall in NZD terms.

In the US, small business NFIB sentiment survey for August reported stable conditions with some issues easing, some tightening.

There was a US Treasury 3yr bond auction earlier today that was well supported but less well than the prior equivalent event a month ago. It resulted in a median yield of 3.45%, down sharply from the 3.61% at that prior equivalent event. The outsized shift down likely reflects bond investor risk aversion.

Although it is just a statistical adjustment, updated data shows the US economy added -911,000 fewer jobs in the 12 months through March than initially reported - the largest downward revision since at least 2000. This is a -0.6% adjustment, far more that the average change of +0.2% in total nonfarm employment over the past decade. Nearly all sectors added fewer jobs than initially estimated.

If the US Fed cuts rates next week to bolster their slowing economy, it will likely signal that their are changing their inflation goal from 2% to 3%, and prepared to accept stagflation over stagnation. The risk is they get both.

Across the Pacific, Japanese machine tool orders were up +8.1% in August from a year ago, largely due to a +12% surge in export orders. Export orders made up almost three quarters of this industry's order book in August.

And Taiwan kept up its amazing record of export growth in August. They jumped more than +34% from a year ago and outperforming market expectations of +22% growth.

In Russia, their Federal Treasury reported another deep deficit in August, the second in a row and the first time ever of back-to-back deficits exceeding -1.9% of GDP.

In Australia, ANZ Group's new broom CEO Nuno Matos has kicked off a change program at the four-pillar bank with plans to shed 3,500 Australian staff.

The Westpac-MI consumer sentiment survey slipped on darker views about the economic outlook and less confidence about getting any more rate cuts from the RBA - because inflation is still 'too high'. Analysts had expected this survey to possibly break into net optimism in September, but it was not to be.

Meanwhile the August NAB business confidence report shows it fell a minor 3 points, following four consecutive months of improving sentiment and leaves confidence also close to long run average levels

The UST 10yr yield is now under 4.07%, up +2 bps from yesterday at this time. 

The price of gold will start today at a new high at US$3,641/oz, up +US$9 from yesterday.

American oil prices are marginally firmer, at just over US$62.50/bbl with the international Brent price is +50 USc firmer at just on US$66.50/bbl.

The Kiwi dollar is now at just over 59.3 USc and unchanged from yesterday. Against the Aussie we are down -10 bps at 90 AUc. Against the euro we are up +10 bps at 50.6 euro cents. That all means our TWI-5 starts today at just over 66.6, down -10 bps from yesterday.

The bitcoin price starts today at US$111,080 and down -1.1% from this time yesterday. Volatility over the past 24 hours has been moderate, also at just under +/- 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 will do this again tomorrow.