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Kia ora.

Welcome to Monday’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.

Today we lead with news that after more bellicose threats, Trump has backed off hitting Iran as he had signaled, another TACO twist. The region isn't quiet, but the threatened escalation by the US hasn't happened, not yet anyway. The oil price hasn't really eased back yet on this lull and is holding most of last week run-up towards US$100/bbl again. Trumps policy twerking has everyone unnerved.

Away from that and looking ahead locally, this week will feature the big data dump of the June quarter RBNZ series. We will especially be watching household deposit growth, which stalled in May.

In Australia, it will be all about Wednesday's CPI release (expect a small rise to 4.1%) and Friday's PPI (expect a rise to 3.5%).

In the US, the spotlight will be on the Thursday Fed meeting. Analysts expect no-change at 3.75% even though CPI inflation was at 3.5% for June and rising, remaining well above the Fed's 2% target. Even their PCE inflation was running at 4.1% for May. We will get their June update on Friday. In the meantime, financial markets are pricing in more of a chance of a hike - if not at this meeting then two by the end of the year.

There will be a lot of other US data out this week, including a Q2 GDP update, and the Conference Board's sentiment survey. The week will also feature some Big Tech profit results.

In Japan, all eyes will be on Friday's central bank decision, especially on how they intend to respond to their currency problems. Not no change from their 1% rate is anticipated.

In China, it will be all about a big set-piece Communist Party meeting. There will be a lot of interest to see if big new stimulus is announced there. Their PMI's may signal how urgent that is.

Over the weekend in Japan, CPI inflation stayed low in June even if it did rose to a six month high. It came in at 1.7% in June from 1.5% in May, its highest since December. The pickup was largely driven by a slower decline in electricity and fuel prices as government energy subsidies were scaled back.

Japan's private sector expanded to a five-month high in July via a sharp rise in manufacturing production and an improvement in their factory PMI which was driven mainly by the sharpest increase in manufacturing orders for five years.

The July PMIs for India came in notably lower than for June as private sector growth receded and inflation pressure, especially for fuel, intensified. This is putting them in a tough spot with spreading social unrest. Their factory PMI dipped only marginally but their services PMI registered a notable easing.

In the US the first of the

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