Episode Details

Kia ora,

Welcome to Wednesday’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 US equity markets have made a comeback from yesterday's tech rout. But it isn't a full comeback yet in the tech space. In addition, general economic sentiment is more sober about the 2025 prospects.

But first, last week's US retail sales were up +4.9% from the same week a year ago.

However, new orders for manufactured durable goods fell -2.2% in December from November, following a downwardly revised -2% drop in November and far below market expectations of a +0.6% rise. Year on year, the December month was -3.8% lower than in 2023 and that dragged the full year result lower. Basically it held until December, and then there is this unexpected drop.

Also at a level less than expected and less than the prior month is the January survey results from the Conference Board for consumer sentiment.

The regional Richmond Fed factory survey remained soft in January, and their services sector survey softened too.

And the Dallas Fed services survey also 'moderated' in January.

Things are likely to get more uncertain. Brutal dawn raids are underway on undocumented workers, and the Whitehouse has stopped almost all Federal assistance programs. At the same time, access to the OMB website that can give details on this action has been disabled. Confusion reigns. Most at risk is funding for education, disaster aid, and housing. All up, it is a war on "poor people" in support of billionaires. The US Labor Board has been eviscerated. All foreign aid is halted too as the US gifts the world to China's influence, backed up by bullying of other nation's leaders. US public policy has suddenly become an ethical wasteland.

There was a slightly less-well-supported UST 7yr bond auction today and that brought a median yield of 4.41%. That was less than the 4.49% yield at the prior equivalent event a month ago.

In China, the Spring Festival migration is underway, and they expect a mammoth 9 billion trip events over the period. It will also be a test of their facial recognition tracking system (or "ticket verification system".)

In Malaysia,

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