Episode Details

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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 markets are in a holding pattern waiting to see what damage Trump & Netanyahu cook up on the war front. Meanwhile there are thunderstorms in Brazil, and on Wall Street

Meanwhile, democracy made a somewhat unexpected comeback over the weekend with anti-autocratic parties in both Brazil and Serbia suffering defeats. Trump's endorsements seem to be poison in both campaigns. Now we await the Israeli election, another where Trump endorsed a strongman ruler. We won't get this result for a few days however.

In the US, the Dallas Fed factory survey expanded solidly although they said growth 'moderated' on a sharp fall in new orders received. Both prices paid and prices received rose from already high levels.

Meanwhile, the Chicago Fed National Activity Index rose minorly in September from August, suggesting overall economic activity increased slightly in the month.

There was a large US Treasury 2yr Note auction overnight with demand slightly lower, but the median yield fell to 4.66% (high 4.71%) compared to the prior equivalent event a month ago of 4.74%.

Singapore said its industrial production was up only +3.4% in September from a year ago and that was their slowest expansion since February 2025 on a sharp reversal in their electronics sector. But it was their biomedical sector that took the sharpest hit.

Taiwan however reported a very sharp rise in their retail sales in September, an unusual +8.5% expansion from a year ago and their fastest growth since the pandemic recovery period in January 2023 and prior to that in February 2018. That is impressive given their CPI inflation is only 2.7%.

Also impressing was German business sentiment as measured by the IFO survey in October. Again, apart from the pandemic recover, it is now at its highest level since just before than pandemic.

In Australia, their real estate market is in 'turmoil', with a major standoff between unrealistic sellers and exhausted buyers that has pushed their auction market into reverse. Less than half of properties are selling, a falling trend that has their residential property participants worried.

The UST 10yr yield is down -1 bps fr