Kia ora,

Welcome to Wednesday'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 weak economic news just isn't going away.

American retail sales rose +1.1% last week from the prior week, but compared to the same week a year ago they are dragging, now down -8.7% and worse than the prior week's -7.5% year-on-year fall.

That would be because consumer confidence fell sharply in July, and the fall was more than expected. They are less optimistic about the short-term outlook, and worried about the labour market.

Wall Street is unable to book any gains today, and is down marginally in afternoon trade. Overnight, European markets were also mixed. Yesterday, Shanghai and Hong Kong both rose +0.7% but Tokyo slipped -0.3%. The ASX200 also fell, by -0.4% but the NZX50 ended the day little-changed.

The US Fed is meeting and the results of these discussions won't we released until tomorrow our time. But they have extended their emergency loan facilities due to expire in September until December.

In Congress, partisan disputes look like there will be no action on the two relief plans proposed. In fact, the Republican plan may not even be supported by a large minority in their own party. There is little legislative time before existing support programs expire.

In Canada, China is making every effort to get a Huawei daughter released over money laundering charges. And that may include sacrificing HSBC in Hong Kong as it looks for scapegoats.

And in China, their central bank is turning its attention to the partnerships between banks and online platforms, a channel that has driven explosive consumer lending growth recently - and has the potential of major systemic risks.

In Europe, they have extended their ban on bank dividends through to the end of 2020.

New data from airlines shows just how locked-down some economies are. Australia reported the world's largest fall in domestic passenger traffic, and international passenger flights were -97% lower globally in June compared to the same month in 2019.

The latest compilation of COVID-19 data is here. The global tally is 16,540,000 and that is up +209,000 since this time yesterday. Global deaths reported now exceed 655,000 (+5,000).

A quarter of all reported cases globally are in the US, which is up +62,900 from this time yesterday to 4,461,100. US deaths are now just over 151,000 and a death rate of 456/mln (+3/mln). However, the number of active infections in the US fell marginally yesterday to 2,145,700.

China is fighting new coronavirus outbreaks on nine north east cities. And the flooding in central and southern China is intensifying after more heavy rain.

In Australia, there have now been 15,304 cases reported, another +369 since this time yesterday, and still concentrated in Victoria but also small pockets in Sydney's suburbs. Their death count is up to 167 (+6). Their recovery rate has slipped back further to under 62%. There are now 5706 active cases in Australia (+243) and almost all are community transfer.

The UST 10yr yield is weaker today and down -3 bps to 0.58%.

The gold price has pushed on up to a new all-time high of US$1,954/oz and another gain of +US$14/oz for the day. And gold consumption in China shrank -38% in the first half of the year due to the pandemic and high and rising prices.

Oil prices are lower today by about -US$1. They are just above just on US$40.50/bbl in the US and the international price is just on US$43/bbl.

And the Kiwi dollar will also start today softer against all-comers. Against the US dollar we are now at 66.6 USc. Against the Australian dollar we are down at 92.9 AUc. Against the euro we are at 56.8 euro cents. That means our TWI-5 has slipped to 69.9 but still in the general range we have been in all year.

The bitcoin price has risen again, up another +1.1% since this time yesterday to US$10,974.

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.