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.

Today we lead with news that both China and Turkey seem to be wandering off in the belief that economic management doesn't involve behavioural aspects or consequences.

But first, US jobless claims fell to 178,000 last week taking the total number of people on these benefits to just on 1.2 mln and unchanged from the prior week at a record low. So still no evidence yet of any rising American labour market stress. You may recall that that they peaked in 2020 at over 23 mln.

US existing home sales fell again in September, and apart from the pandemic, are now running at a ten year low. High mortgage interest rates are getting all the blame. But at the same time, sellers are withdrawing as well, so supply is tight, leaving a competitive market for those who want to buy.

American may not be buying housing, but they have rediscovered the travel bug. Most large airlines there are reporting record revenues in the September quarter and they are returning to profitability as consumers continue to prioritise spending on travel.

The Philadelphia Fed factory survey in the heartland Rust Belt region was weak again in October but no more so than for September. New orders were weak in this region, but hiring was still difficult. And although firms are not optimistic about the next six months, they are still committing increased investment for capital expenditure.

In China, Section 9 of the Party Congress report on "Improving the People's Wellbeing and Raising Quality of Life", includes new language about regulating wealth accumulation - "keep income distribution and the means of accumulating wealth well-regulated" it said. An article in The Beijing News that quotes a labour researcher discussing this language says that "a few people accumulated wealth too quickly ... This problem remains to be solved" and that appears to have caused some investor anxiety. (H/T BB)

Taiwanese export orders fell in September as expected, down -3.1%, but that was not as sharp a fall as analysts had pencilled in. But weak demand from mainland China is hurting this data, where these orders were down -19% year-on-year. Compared with almost all other regions they were up more than +15% on the same basis.

Japanese policymakers made fresh threats of intervention after the yen tumbled past the key psychological level of 150 to the US dollar, keeping investors on high alert in case Tokyo steps into markets again to support the fragile currency. Rumours are swirling that the Bank of Japan is in a new round of emergency bond buying.

In Australia, their jobless rate remained steady at 3.5% in September as the number of employed people increased by just +900, and unemployment increased by +8800. Their participation rate was unchanged at 66.6%. We don't get our September labour force data until Wednesday, November 2, 2022.

In Victoria, the state government will revive the State Electricity Commission, reversing two decades of outsourcing energy generation to the private sector. But that is only if they are re-elected on November 26, which at this time seems highly likely.

Global container shipping costs fell another -3% last week. That takes these costs down to below pre-pandemic levels with the benchmark Shanghai to Los Angeles route now under US$2500/ctnr. This emblematic of the sudden fall away in the China-US trade. Global bulk cargo rates were little-changed.

The UST 10yr yield starts today sharply higher again at 4.22%, up another +11 bps from this time yesterday. 

The price of gold will open today at US$1636/oz. This is up +US$6 from this time yesterday.

And oil prices start today up +US$1.50 from this time yesterday at just under US$85/bbl in the US while the international Brent price is just over US$91/bbl. 

The Kiwi dollar will open today at 57 USc and about +½c firmer than this time yesterday. Against the Australian dollar we are little-changed at 90.3 AUc. Against the euro we are +¼c firmer at 58.2 euro cents. That all means our TWI-5 starts today at 67.9, and up +40 bps from yesterday.

The bitcoin price is now at US$19,167 and virtually unchanged from this time yesterday. Volatility over the past 24 hours has however been modest at just +/- 1.1%.

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.

Remember, Monday is a public holiday in New Zealand, Labour Day.

Kia ora. I'm David Chaston and we’ll do this again on Tuesday.