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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 inflation's pressures are building everywhere, even if oil prices took a small dip today.

But first, overnight there was a Pulse dairy auction where prices dipped marginally in USD except for SMP, but were all higher in NZD, although this too was only marginal.

In the US, the ADP weekly jobs data rose to an average of a +20,000 jobs gain per week over the past four weeks. That recovers it back to late June levels.

Meanwhile the Richmond Fed factory survey was expected to rise marginally in September, but it fell and its first retreat in  six months. This was essentially driven by retreating new order levels and order backlogs shrank as well. Input and output costs both rose however and at a faster pace in both cases.

There were a few Fed speakers out overnight. New York Fed boss Williams defended how they have been handling monetary policy, although he didn't give any guidance on what is coming next. Vice Chair Jefferson also avoided guidance comments although he has been on record recently of supporting their rate hikes. But Richmond Fed boss Barkin did address the recent rising trend and what comes next. More hikes are possible, he said.

There was a giant US Treasury two year bond auction overnight and this one did not display the sagging demand of the other recent events. However, it came with much higher yields. This lates one delivered a median yield of 4.74% (high 4.79%), up notably from the 4.16% at the prior equivalent event a month ago. This is a meaningful rise given the 2 year Note has the largest supply of any maturity they offer - US$79 bln. Just for this bond, that has the US Treasury paying +14% more in interest pa than just a month ago. Debt servicing is becoming an ugly problem, and fast.

Just when you might have thought Taiwanese export orders couldn't grow much faster, they did in August. They exceeded US$100 bln in the month for the first time, up a staggering +71% from a year ago (which itself was rising and close to a record at the time). In local currency, they were up +82%.

After improving since April (that is, betting less negative)

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