Kia ora,
and 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 news the trade ructions continue with more-of-the-same spinning, producing not much.
But first in the US, the National Activity Index monitored by the Chicago Fed suggests that American economic growth slowed further, and more than expected, in October.
And the DallasFed regional factory survey was lower too in their region, although not quite as large a decline as was expected. The extended fall in new orders is however a special concern in the oil patch.
In Canada, their latest data was better than expected with wholesale trade up in September and reversing the August decline to be +4% higher than a year ago, and inventories were down slightly.
According to the CPB World Trade Monitor, momentum in trade actually rose in September for the first time in four months. True, many of their markers are still flat or negative, but trade can do with a little bright spot these days. "Momentum" is an unusual metric, but it is driven here by a surprise rise in production rather than trade volumes themselves.
In an odd turn of events, Beijing has restated its support for Hong Kong chief executive Carrie Lam after a massive rejection by voters of her administration. Apparently, admitting she has failed is as unacceptable as admitting Beijing has failed to win any meaningful support for its hard-line policies. Beijing has censored all analysis of the Hong Kong vote result inside China, only saying a vote was held. But Beijing's retaliation for the outcome is yet to come. Despite this, Hong Kong financial markets are up strongly on the result, up +1.5%.
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On Wall Street today, equities are up +0.6% in mid-day trade and that follows similar gains in Europe overnight.
Although there is no progress to report in the US-China trade talks, we can report that China is toughening up on IP protection and enforcement, a key demand of the US side. Criminal punishment will become much easier now.
But the trade war is still being fought with China’s imports of American soybeans at their lowest level in three months in October. China delayed unloading of American soybeans at its ports, deliberately backing up the recent order pipeline.
The UST 10yr yield is now at 1.76% which is just -1 bps lower than this time yesterday.
Gold is down -US$4 to US$1,457/oz.
US oil prices are lower at just under US$57.50/bbl. The Brent benchmark is just under US$63/bbl.
The Kiwi dollar is continuing its stable run against the greenback, now still at 64 USc. On the cross rates we are holding up at 94.5 AUc. Against the euro we are little-changed at 58.1 euro cents. That leaves the TWI-5 at just on 69.4.
Bitcoin however is having a volatile ride and is now at US$7,212 which is up +2.5% from the low point it reached yesterday.
You can find links to the articles mentioned today in our show notes.
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