Episode Details

Kia ora,

Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

And today we lead with news all about the state of the world's factories. Globally, manufacturing stabilised in November with a rise in new orders.

First up today, there were two factory PMI surveys out for the US for November. Both reported their sector contraction eased noticeably. The widely-watched local ISM version reported that new orders are now back expanding, even if the overall sector isn't. They also found that customer inventories are currently "too low", so that could well indicate an expansion is on the cards soon. And the internationally-benchmarked S&P Global/Markit version was upgraded from their 'flash' report showing similar improvements in new order flows.

In Canada, their factory sector expanded with its strongest result in nearly two years.

In China, the private Caixin factory PMI was noticeably more positive for November than the official version. New orders drove that improvement too, and they were led by new export orders.

The same survey of Japanese factories wasn't as positive and they reported a slightly larger contraction in November.

In Singapore, their PMI rose to a small expansion. But it was equal best since December 2018.

In Malaysia, their PMI eased in November, only slightly, but it remained under pressure with fewer new orders.

Back in China, their 10-year government bond yield has dropped to 2%, a multi-decade low. Modern records for this paper only go back to 2002, but it is easily the lowest since then. The fall comes amid expectations of expanded stimulus from Beijing to support the economy. But expected announcements haven't surfaced so far.

There was quite a bit of data released in Australia yesterday. First, their building consent data for October rose but only because of a catchup in apartment consents. It was a big jump. Consents for houses continued to slip however. But they have had overall rises consistently since the start of the year.

On the retail sales front, Victoria, Queensland and South Australia saw good gains, but retail sales gains in NSW and WA were weak. However, it seems their Black Friday sales were quite positive, giving retailers there hope that the run to Christmas will be a better trading period.

On the factory front, their internationally-benchmarked November P