Economy Watch

40 Episodes
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By: Interest.co.nz / Podcasts NZ, David Chaston

We follow the economic events and trends that affect New Zealand.

Global food prices surge
#465
04/08/2021

Kia ora,

Welcome to Friday'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 global food prices rocketed high again in March.

But first, there was a somewhat surprising rise in US jobless claims last week, surprising because it cuts across the recent narrative that things are improving fast in their labour market. There were +741,000 new claims last week, well above the expected level of +680,000. Now there are j...


US optimism gathers steam
#464
04/07/2021

Kia ora,

Welcome to Thursday'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 there has been a very large rise in consumer credit growth in the US in February as optimism gathered steam.

It rose a rather remarkable +7.9% year-on-year, or up +US$27 bln from January, the largest rise ever. There was a good rise in credit card (revolving) balances, but the really big increase was for personal loans...


House price distortions spread globally
#463
04/06/2021

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 focus might be going back on to global house price distortions as both Canadian and Australian regulators show signs they, like New Zealand, are worried about what their pandemic QE has done to these asset prices.

But first, the overnight dairy auction was essentially unchanged by holding on to most of the gains f...


Yellen wants MNCs taxed harder
#462
04/05/2021

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 Janet Yellen is calling for a global minimum tax on multinationals.

But first up today, the IMF has released a series of global economic reports, the heart of which show rising economic growth rates especially in the first world, but problems for the developing world and rising inequality. The improving American economy is drawing b...


Q1-2021 ends on positive notes
#461
03/31/2021

Kia ora,

Welcome to Thursday'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 international economy is basically healthy again as we move into the long holday break

First today, the new US President has announced his big infrastructure plan, a US$2.25 tln proposal and funded in part by raising the corporate tax rate and 'closing loopholes'. Believe it or not, Wall Street likes the plan and r...


Expectations higher than realities
#460
03/30/2021

Kia ora,

Welcome to Thursday'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 we are a period of messy transition before the expected global economic growth surge arrives.

In the US, retail sales as tracked weekly by the Johnson Redbook are increasingly hard to judge because of the 2020 pandemic distortion. But there are no signs in 2021 that consumers have started spending their latest stimulus payments in a si...


Tradeables inflation ahead
#459
03/29/2021

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 that costs seem to be rising fast in both the US and China.

But first we should note that the giant container ship that was blocking the Suez Canal has been refloated and has moved under its own power to a passing lake (Great Bitter Lake) where it will be inspected. Now the task i...


Shipping stress rises
#458
03/28/2021

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 the world waiting for a high tide and a full moon in Egypt.

While dramatic, and the so-far six-day Suez Canal blockage will have a global impact, especially on shipping issues and costs, it is a crisis that will affect Europe the most (and play heavy in their media). It will have a much lesser i...


Inflation pressures rise
#457
03/25/2021

Kia ora,

Welcome to Friday'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 of new inflation risks from the dramatic Suez Canal blockage that will upset most global supply chains.

But first in the US, there was a sharp drop in initial jobless claims last week, falling more than -100,000 to 657,000 and the lowest in a year. In addition there were 242,000 Pandemic Unemployment Assistance claims filed, also a...


Corporates caught on social contract standards
#456
03/24/2021

Kia ora,

Welcome to Thursday'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 corporate social action plans are under the microscope today.

But first, the warnings we have been reporting earlier this week keep coming in the US. Now the February durable goods order data shows them -1.1% lower than for the prior month, and that is a worse outcome than the +0.8% rise expected. It is also w...


Pullbacks everywhere
#455
03/23/2021

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 it is risk-off today in international markets and the New Zealand dollar has been rated sharply lower.

The latest weekly Johnson Redbook tally of American retail sales shows them stumbling along with the same month-on-month pullback. They are up year-on-year but that is only because the pandemic retreat was biting in 2020. The 2021 retail impulse i...


Benchmark yields retreat as some key data stumbles
#454
03/22/2021

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 from the major economic powers.

US existing home sales fell more than the -3% month-on-month than was expected for the shorter February month. In fact they fell a rather sharp -6.6% which is being blamed on rising mortgage interest rates, cold weather and tight supply. However, it is more likely that higher prices (and d...


Has the fear of inflation vanished?
#453
03/21/2021

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 policy makers no longer seem to fear inflation even as the global economy gears up post-pandemic and commodity shortages loom.

In China, ANZ analysts are pointing out that as much as 40% of the total 'social financing' that supports the expansion of their real economy was in fact borrowers needing more to make interest payments. G...


Benchmark yields resume their upward climb
#452
03/18/2021

Kia ora,

Welcome to Friday'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┬ánews itÔÇÖs all about bonds and interest rates today.

First up, selling of US Government bonds accelerated today, sending yields higher again, just a day after the US Fed had briefly calmed the market. The Fed's own raised internal growth forecasts for the US economy are probably behind the push higher.

And US...


The Fed upgrades growth, but holds settings
#451
03/17/2021

Kia ora,

Welcome to Thursday'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 markets have been waiting all week for - the Fed to speak. 

They has been meeting and today sharply upgraded their forecasts for American economic growth in 2021. Elsewhere they left their pandemic setting for monetary policy unchanged in what is essentially a cautions review. But that growth upgrade reinforces market moves to raise long te...


Anxious times on US recovery
#450
03/16/2021

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 that although American stimulus funds are just now being released, there is nervousness about whether they will really juice up their recovery, or will recipients just pay down debt?

But first up, today's dairy auction has given back some of the prior event's stellar gains. You will recall it rose +15% two weeks ago, but t...


China's data raises recovery questions
#449
03/15/2021

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 China has released a large set of economic data and not all of it is as positive as it first seems, or their officials claim.

But first, the New York Fed's survey of factories in its region in February was increasingly positive with and increase in new orders. But costs and prices rose at t...


Only meaningless praise permitted?
#448
03/14/2021

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 China is increasingly closing itself off from most meaningful scrutiny.

Tracking what is really going on in China is getting harder as it veers toward media controls that don't permit anything but sycophantic praise for Beijing. It's controls are now pervasive.

But we do know that their African Swine Fever risk is r...


US turns some important corners
#447
03/11/2021

Kia ora,

Welcome to Friday'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 of a wide range of variation in the major economies, and their prospects, as they exit the pandemic.

US jobless claims fell slightly last week, down to 709,000 and slightly less than expected. That was their lowest level in four months. There were another 478,000 initial Pandemic Unemployment Assistance claims. That leaves 4.6 mln people on these b...


A bifurcated world
#446
03/10/2021

Kia ora,

Welcome to Thursday'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 expected fast rise of the US economy is leading to the world splitting faster into two clear economic camps.

But first in the US, the latest inflation reading, this one for February, has their CPI rising to +1.7%, a rise that was expected. That is up from +1.4% pa in January. Food prices were up +3.6% p...


An optimism surge
#445
03/09/2021

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 optimism is flooding in about 2021 economic prospects.

The OECD is saying that the Biden stimulus plan will effectively add +1% to the global economic growth outcomes, as it releases its forecast that the world's economy will expand by +5.6% in 2021. This will be led by the US (+6.5%), China (+7.8%) and India (+12%). This latest forecast is hugely more o...


Recovery brings renewed climate risks
#444
03/08/2021

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 f...


Expanding again
#443
03/07/2021

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 both of the world's largest economies are getting activity expanding again.

China's trade surplus rose very sharply in the first two months of 2021 with exports up +60% and imports up more than +20%. That generated a huge +US$103 bln surplus and far above the expected +US$60 bln. The result was also far above how they ended 2020. E...


Food prices lead inflation up, bond yields jump again
#442
03/04/2021

Kia ora,

Welcome to Friday'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 bond rates are taking a new turn higher today, rising as you hear this.

Annual inflation in the OECD area picked up to 1.5% pa in January 2021, compared with 1.2% in December 2020. On a "without food and energy basis (ie core inflation), New Zealand contributes a +1.9% pa rate to the OECD, a relatively high level.


The reflation trade isn't going away
#441
03/03/2021

Kia ora,

Welcome to Thursday'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 reflation trade regained some momentum today, and that is getting the equity market's attention.

But first, there is another non-farm payrolls report out tomorrow night (NZT) and the precursor ADP Employment Report was released today suggesting it will be a lackluster affair. The ADP report came in with a much smaller jobs gain t...


Dairy prices leap +15%, WMP up +21%
#440
03/02/2021

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 financial markets have been quiet overnight but the dairy market has signaled a boom.

Dairy prices have leapt in the overnight auction by a spectacular +15%, the biggest jump in 6┬Ż┬áyears to their highest level in 7 years. The sharp shift higher was led by a spectacular rise for WMP which was up +21%, and butter which was...


Risk rally starts the week
#439
03/01/2021

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 more settled bond markets are allowing equity investors to jump back in.

But first, the global expansion in manufacturing extended into February, but results were very uneven. Germany and the US are recording strong results, while China is slipping back towards a stall. In all cases however, cost inflation is at a near-decade high.


A 'bleak future' for debt investors?
#438
02/28/2021

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 other than the New Zealand lockdown. We start this week with the bond market volatile, some key commodity prices wavering, and a stronger greenback.

But first, ChinaÔÇÖs February factory activity in has fallen back to its weakest expansion since the pandemic disruption a year ago - and that is per the official data. Its...


Bond yields make huge move up
#437
02/25/2021

Kia ora,

Welcome to Friday'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 where the most interesting move globally has been the forced move by our Government to have the RBNZ target housing. Interest rate rises may become a self-fulfilling consequence.

But first in the US, new orders for durable goods in January rose much more than in December and came in much higher than expected with a...


The elevator is going up
#436
02/24/2021

Kia ora,

Welcome to Thursday'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 our currency is on a fast elevator up today as the reflation trade picks up too.

But first, mortgage applications fell away sharply last week in the US, held back by rising interest rates, especially the 30yr fixed. The weather isn't being mentioned as a reason but it must have had some impact, in T...


China, the neighbour from hell?
#435
02/23/2021

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 China seems not to care what the international community thinks of them.

But first, the Fed boss has been testifying at the US Congress and has said they are not contemplating any rate rises and they are a long way from reaching either their employment of inflation goals. But he does see 'hope for a...


Economic tide rising
#434
02/22/2021

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 economic tide seems to be rising, and so do interest rates.

There hasn't been any first tier economic data out in the US overnight but the second tier data has been notably positive. The Chicago Fed's National Activity Index was up to a three-month high in January. And the Dallas Fed's regional factory s...


Commodity prices up, interest rates up
#433
02/21/2021

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 both commodity prices and interest rates are rising sharply.

But iron ore prices slipped on Friday after hitting their highest level in more than nine years just a day before. A local survey of stocks of steel products in showed a significant increase, turning around the idea steel mills would ramp up output after t...


US labour market stutters
#432
02/18/2021

Kia ora,

Welcome to Friday'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 US labour market is struggling to regain some momentum.

US jobless claims were actually little-changed from the previous week, although on the more usually-reported seasonally adjusted basis they were up and the prior week was revised higher. There are now 4.9 mln people on these benefits, a fall of almost -100,000 but mainly because q...


Sharply higher benchmark interest rates
#431
02/17/2021

Kia ora,

Welcome to Thursday'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 we are seeing sharply higher benchmark interest rates and steeper rate curves.

Improving economic growth prospects, ramped up vaccine rollouts, and impending new major stimulus in the US are all combining to juice up "the reflation trade". Markets see all this combining to generate inflation at a level we haven't experience in more than a...


Dairy prices rise yet again
#430
02/16/2021

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 we had another good dairy auction - but our currency retreated in its shadow.

The overnight dairy auction has brought higher prices again, up +3.0% in US dollar terms and up +2.1% in New Zealand dollar terms from the prior event. That makes the gain since the start of this current dairy season last year at +25% i...


Real world turn up?
#429
02/15/2021

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 that there is a sense that more positive economic data is starting to assert itself.

Today is a public holiday in the US, President's Day (or what used to be known as Lincoln's Birthday). Markets are closed there. Parts of their Mid-West are also closed due to a very cold blast of winter weather. A...


China puts heat on NZ over TPP membership
#428
02/14/2021

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 apart from the local community COVID spread in South Auckland.

First, a 7.3 magnitude earthquake hit off Fukushima prefecture in northeastern Japan late Saturday night, causing no deaths but causing widespread power outages in the region. There was no threat of a tsunami from the quake. This one is being said to be an aftershock f...


The Year of the Ox off to a slow start
#427
02/11/2021

Kia ora,

Welcome to Friday'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 China's Spring Festival migrations will be very muted this year.

But first in the US, they reported 813,000 actual new jobless claims for last week, higher and above what was expected. The prior week's tally was revised up too. However, on a seasonally adjusted basis they can report a small decline. There are now 5.0 mln p...


Inflation still hard to find
#426
02/10/2021

Kia ora,

Welcome to Thursday'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 expectations of higher inflation aren't being borne out in today's data.

But first, the new US Administration's 2021 Budget is expected to be announced soon, but isn't available yet. We will update this item when it comes to hand.

American mortgage applications slipped last week while their mortgage interest rates turned a l...