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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.

Today we lead with news the oil price has eased overnight on signs of new negotiations between the US and Iran, and relief that the US sanctions weren't as advertised. They exempted Chinese banks, for example. And China said it will support Iran.

But first overnight, the Pulse dairy auction delivered higher prices from last week's full auction event - in USD terms at least. For example WMP was up almost +1%. But the rising NZD turned that into a -0.7% softening.

In the US, ADP weekly private jobs update remains very low with less than +12,000 new jobs added over the past four weeks.

Sales of new homes in the US were unusually low as well with the July level the lowest for that month since 2017 (apart from the pandemic 2022 drop). That puts them -6.5% lower than year-ago levels.

The Richmond Fed's factory survey came in with a positive overall outcome in August, but lower than for July and the lowest since April. Re-shoring isn't a thing in the Mid-Atlantic states. The growth rate of prices paid and prices received rose in the month. Meanwhile their services survey in the region revealed slowing activity, with only slight increases in prices and costs.

And that is consistent with the pullback in consumer sentiment as measured by the Conference Board in the US. It is measure that has been falling away since early 2025.

There was a less well supported US Treasury 2 year bond sale overnight, but the yield dipped to 4.16% (4.20% high) from the prior equivalent event a month ago of 4.27%.

In Canada, they reported lower wholesale sales in July, ending a run of expansions. The decline mainly reflects lower sales of agricultural supplies and minerals and ores. Otherwise little change.

In the escalating trade war the US is waging on Canada, Canada has responded with 50% duties on American dairy products, steel, farm equipment, and appliances.

And copper has risen to a new record high on the uncertainty surrounding US tariff policies. It isn't the only metal trading in the stratosphere of uncertainty. Tin is another example.

Taiwan's

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