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Back to EpisodesDespite challenges, global economy still expanding solidly
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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.
Today we lead with news we are now in the peak vacation season in the northern hemisphere with policy activity relatively low. But US petrol costs are high in this summer driving season.
Trump continues to claim he is negotiating with Iran. Iran continues to deny any talks are taking place. Still, this stalemate is a relatively peaceful one, but one that leaves Iran and Oman holding all the cards in the Hormuz Strait.
In the US, their widely-watched ISM factory PMI came in slightly better than expected with a good expansion, one marginally stronger than the S&P Global PMI result we noted yesterday. This ISM version recorded stronger new order flows and prices increasing at a slower pace.
In China, their top leadership is 'vacationing' as usual at the beach resort of Beidaihe. Oddly, Xi doesn't appear to be there.
Over the weekend we noted that China's official factory PMIs all turned down, and into contraction territory. The private S&P Global version has been less gloomy in the past, but yesterday's release also shows a sector slipping in July from June. But at least this alternate version is not yet contracting. And they feature rising new order levels, which is promising.
India's July factory PMI is still expanding at a solid pace, but that paces has now slipped to its lowest in five years. New order intakes are rising but slower, and input cost pressures are easing there.
And while we are at it, we should note that the factory PMIs for Japan, South Korea, Taiwan and Malaysia all remained quite positive and expansionary. All of these noted that cost pressures are also easing now. The Australian version is rising too, but cost pressures there are still elevated.
In Australia, the Cotality Home Value Index dropped -0.7% in July from June, the sharpest m