Kia ora,

Welcome to Monay'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 commodity prices are on the rise again.

In China, iron ore and coking coal prices are on the move higher as economic activity moves back to boom conditions. Copper has risen to more than a two year high; aluminium is up to near an 18 year high. The recent softness in shipping costs looks like it is turning back up again.

And China's internal freight volumes rose +7.2% year-on-year to October, up significantly on the +5.6% rise in September.

The Chinese leader has apparently said they are open to joining the TPP. It would be a real humiliation for the Americans if that should happen. The TPP was their construct to try to block expanding Chinese influence. But Trump's ill-advised exit has opened this door.

But there are other things to worry about coming from China. They are apparently pushing to have their domestic law apply internationally. The idea is to promote "the rule of law" - in so far as it furthers Chinese aims and controls.

Just over half of American companies are more optimistic about doing business in China on expectations of better trade relations with the US under a Biden administration.

In the US, officials who are about to lose their positions after the election result are sabotaging the US Federal Government programs ahead of the handover. The Treasury Secretary is canceling pandemic support programs (to the horror of the Fed), regulators are suddenly ending Federal oversight protections, and there is a push to sell off public resources in protected areas. It is getting very unseemly, childish and very third-worldish. And the upshot is that millions of Americans are going to face a harder winter economically, already severely stressed by the pandemic.

Over the northern border however, Canadian retail sales for October came in surprisingly strong, up +4.6% year-on-year and well above the September +3.7% gain. It was the fifth consecutive monthly increase since the record decline in April and the best rise so far.

Japan's deflation rate worsened in October, now running at -0.4% is a very disappointing result. And their factory PMI for November doesn't actually inspire any confidence they are moving in the right direction.

But Taiwan does seem to be making progress, especially with its exports. Export orders by Taiwanese companies were up +9.1% in October, continuing a strong run that started in June.

In India, bank loan growth is picking up in a sign they may have turned a corner from their pandemic funk.

But in Europe, consumer sentiment, which was already quite negative, has gotten much worse in November. They are not heading for a happy festive season.

In Argentina, a "one-off" wealth tax is progressing through their their Parliament and will get a final vote at the end of this week. The tax would be levied at progressive rates of 2.0% to 3.5% on assets held in Argentina and at rates of 3.0% to 5.25% for assets held abroad by Argentine residents. It is not a tax on companies. Most of the tax will hit Argentine residents with offshore (dollarised) assets. And because their currency is volatile, it could affect between 10,000 and 30,000 people. Tax compliance in Argentina is very low so estimates of revenue collected may be optimistic.

Back in New York, the S&P500 futures are signaling that Wall Street may open almost -1% lower. The pandemic surge is now reaching epic proportions in North America and Europe, not to mention South America.

The latest global compilation of COVID-19 data is here. The global tally is 58,344,000 and a +1,139,000 rise from Saturday.

The largest number of reported cases globally are still in the US, which rose +346,000 since this time Saturday to 12,471,000 which embedding the higher pace of infection

In Australia, they are not getting any major resurgence.

The UST 10yr yield will start today down -1 bp at 0.82%.

The price of gold is unchanged today at US$1870/oz.

Oil prices are slightly higher to start the week, up +US$0.50 to just under US$42.50/bbl in the US, while the international price is now just on US$45/bbl.

And the Kiwi dollar is holding at 69.3 USc. Against the Australian dollar we have stayed firm at 94.9 AUc. Against the euro we have moved down slightly to 58.4 euro cents. That means our TWI-5 will start this week at 72.

The bitcoin price has settled at a high level, now at US$18,486. And just a reminder; it's record high was US$19,343 in December 2017

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.