Episode Details

Kia ora,

Welcome to Friday’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 we are living in a new world of imposed distortions. Ethical politics or business dealing is out the window. Trust is being replaced by force. It is hard to see how this will end well. After all, business relies on trust, honesty and integrity. Without it, why would you make a deal? The result can only be higher risk premiums.

First, the annual Davos meetings are underway, and today they were dominated by US Presidential bluster where we claimed he would force interest rates down, force the oil price down, and force other countries to "put America First". He also threatened any country who challenged the American FANGs with taxes on their activities in their own countries. Billionaires don't see the need to pay taxes - their fair share, or any share - to anyone.

US jobless claims fell back sharply from last week's big seasonal increase. But the fall was not as much as seasonal factors would have anticipated. On a seasonally-adjusted basis they rose. There are now 2.24 mln people on these benefits, which is actually the highest since the last Trump Administration. (Interestingly, the new US-DOL leadership 'hid' this data, shifting it to a 'new' location.)

In the regions, the December factory survey from the Kansas City Fed revealed a further contraction. New order levels were low, and despite improved manager sentiment, they actually don't expect new order levels to rise much.

In Canada, retail sales rose much more than expected in December, their best December rise since 2019, and the biggest any-month gain since May.

Japan said its exports rose +2.8% in December from a year ago, meaning that eleven of the past twelve months recorded export growth. Only nine of the past twelve recorded import growth.

And all eyes turn to the Bank of Japan and their expected +25 bps rate hike, later today.

A rise in South Korean business sentiment in January comes after authorities there reported a quite soft Q4-2024 GDP growth outcome.

Singapore's CPI inflation was up +1.6% in December, the same as November and slightly more than the +1.5% expected.

Taiwanese retail sales rose +2.9% in December with a modest performance. But Taiwanese industrial production surged +20% in December from the same month a year ago which itself wasn't especially soft.

In China, they are

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