Kia ora,

Welcome to Monday'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 some big economies may be seeing minor improvement, but it is inconsistent.

First in Japan, a major steelmaker there is to restart an idled furnaced line in response to rising orders from the domestic car and consumer electronics industries. This is the type of positive signal Japan's economy needs.

China might be on holiday, but it is pressing the enforcement of its security laws - in Britain. It says protesters in London are breaking its laws and wants them arrested.

And in China itself, an index monitoring their "new economy" continues to fall away. While it might be the fastest-growing part of their economy, these firms are now struggling with lower investment, employment and innovation as the broad rebound from the pandemic slows in the Middle Kingdom.

Meanwhile, domestic travel is heavy this year. But it is still more than a quarter lower than the same period last year, and spending is lagging even more. (And of course, international travel is but a shadow of last year during this holiday break.)

And China has blocked frozen beef imports from Brazil after they found one shipment contaminated with coronavirus.

A new report says that New Zealand is the sixth best place to retire in, in the world, unchanged from 2019. Top is Iceland, followed by Switzerland. We were beaten out of fifth only just, by the Netherlands. Australia ranks #7, Canada #8, and the USA #16. Holding us high are the 'finances' and 'quality of life' components.

In the US, jobs growth slowed more than expected in September, coming in much less than expected. A weak extension to their bounce back of +850,000 was expected but in the end the increase posted was just +661,000. Remember, +1.5 mln jobs were created in August. That leaves the pandemic job loss since February at -11.4 mln. More layoffs turned permanent, adding to signs that the American economy faces a long slog to fully recover. And those now permanently jobless is rising faster. Their participation rate fell to a very low 61.3% indicating huge numbers have moved out of their workforce and are no longer looking for employment.

But these realities isn't showing up yet in monthly changes in consumer sentiment surveys, even if the latest one is down year-on-year by almost -14%. Sentiment is low, but not getting worse.

And cheap credit, and demand for larger SUVs and pickup trucks has driven a faster-than-expected bounce-back for the American car industry. Sales ran at 15.7 mln per year in September, up from a sales rate of an annual sales rate 15.2 mln vehicles in the year to March. Unemployment isn't affecting this market yet. New-car shoppers are putting down more money and taking advantage of very low interest rates to upsize either to bigger vehicles or vehicles with more options. It can't last if the jobs numbers worsen however.

In Australia, they are getting ready for a new Budget announcement from Canberra. Expectations are high for a tax cut, and one that will backdated to July 1. But top-end tax rates will still be 45% for earnings over AU$200,000 although those on incomes above $AU90,000 will get significant relief but to rates that are still higher than in New Zealand. They expect FBT and investment allowance rollbacks. New spending on infrastructure, FHB subsidies, and grants for manufacturers are also expected. This Budget will be announced tomorrow evening.

The latest global compilation of COVID-19 data is here. The global tally is 34,987,000 and up +558,000 in the two weekend days.

The largest number of reported cases globally are still in the US, which is up +92,000 the weekend to 7,615,000 and of course that includes the White House cluster.

In Australia, there have now been 27,136 COVID-19 cases reported, and that is only +23 more cases than on Saturday.

The UST 10yr yield is relatively firmer today, up +1 bp at 0.70%.

The price of gold is just a little lower this morning at US$1899/oz and a -US$6 slip since where markets ended on Saturday.

Oil prices start the week much lower at just on US$37/bbl in the US, while the international price is down to just over US$39/bbl. These are levels more than -US$3 lower than this time last week.

The Kiwi dollar starts today holding at 66.4 USc and a full +1c higher than this time last week. Against the Australian dollar we are now at 92.7 AUc. Against the euro we little-changed at 56.7 euro cents. And that means our TWI-5 is at 69.8 and +50 bps higher than a week ago.

The bitcoin price is marginally firmer to start the week, now at US$10,613.

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.