Kia ora,

Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect New Zealand.

I'm David Chaston and this is the International edition from Interest.co.nz.

Today we lead with news the global economic recovery is coming with developing nations ignoring the opportunity to restrain their greenhouse gas emissions.

But first, American consumer inflation expectations rose again in February, up slightly to +3.1%. Expectations for petrol price increases rose sharply, up to +9.6% from +6.2% in January. Expectations for rent rises is also a very high +9.0% and up from +6.4% a month ago. Expectations for earning growth is much lower at +2.4%. US households are signaling they expect income pressure is ahead of them.

In Canada, they also have a hot housing market fueled by vast QE cheap money and spurring comparisons to earlier bubbles. Because those earlier events eventually turned bad, there are calls for cooling measures to let their markets down more gently this time. In Toronto, both February's sales volumes and prices leaped to dizzying heights. In Vancouver, the story is very similar.

The OECD is in the final stages of choosing its new chief. Actually, it should have been done by March 1, but the race is especially tight. There are two candidates; an ex EU trade Commissioner, Swedish diplomat Cecelia Malmström, and the ex-Australian Finance Minister, Mathias Corman, a West Australian conservative politician and relative lightweight. That he is still in the race is actually a surprise given his lack of international negotiating experience.

The IEA is noting that there has been a "strong rebound" in carbon dioxide emissions in 2021 after the nearly -6% fall in 2020. Global emissions plunged by almost -2 billion tonnes in 2020, the largest absolute decline in history. Most of this - around -1 billion tonnes, which is more than the annual emissions of Japan - was due to lower use of oil for road transport and aviation. China, Brazil and India are the main culprits for the resurgence; the US is the main large economy still reducing its GHG pollution.

In New York, the S&P500 has opened the week with a +1.0% rise in early afternoon trade. Overnight European markets closed with strong gains averaging -2.2%. Yesterday it was all the other way in Asian markets with Tokyo down -0.4%, and Hong Kong down -1.9%. Shanghai was down a substantial -2.3% and that takes it decline since the February 19 five-year high to -7.4%. The ASX200 ended its session yesterday up +0.4% while the NZX50 ended down -0.8%.

The latest global compilation of COVID-19 data is here. The global tally is still rising and at a fast pace, now at 116,967,000 and up +328,000 in one day, so no let-up globally.

The UST 10yr yield is up another +2 bps at 1.60% and its highest in more than a year.

The price of gold starts today down by another -US$20 from yesterday, now just on US$1680/oz. It seems to be one-way traffic for gold these days.

Oil prices have settled back overnight at US$65/bbl in the US, while the international price is up more to just over US$68/bbl. They spiked to over US$70/bbl on an apparent attack on a Saudi key crude oil terminal, but the impact has been minimal on the facility and the threat is diffused for now.

The Kiwi dollar opens today at 71.4 USc and a small slip overnight. Against the Australian dollar we are unchanged at 93.2 AUc. Against the euro we are at 60.3 euro cents. That means our TWI-5 is at 73.7 and only marginally lower overnight.

The bitcoin price will start today slightly lower at US$50,767 and -0.7% lower than this time yesterday. Volatility in the past 24 hours is a more modest +/- 2.4%.

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.

Kia ora. I'm David Chaston. We will do this again tomorrow.