US still hampered by supply-chain disruption. Allbirds and Hertz make news. Taiwan's strength continues. German confidence suffers.
Kia ora,
Welcome to Tuesday's edition of 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 of some large, notable and strategic corporate deals underway.
But first we should note that the Chicago Fed's National Activity Index dropped to a seven month low, suggesting the American economic expansion lost momentum for a second consecutive month. Production-related indicators dragged suggesting the main reason was supply-chain issues, while sales, orders, and inventories and employment-related indicators all rose.
Meanwhile, the Dallas Fed factory survey was all positive in October, although the cost pressure being noted there is extreme.
In San Francisco, sneaker brand Allbirds is preparing an IPO worth NZ$375 mln and valuing the company at NZ$2.8 bln (and about the same size as Chorus). It's a major success story based on a Kiwi development of merino wool for running shoes.
And in other corporate news, rental car heavyweight Hertz has made the single-largest purchase ever for electric vehicles, ordering 100,000 Teslas, worth about $4.2 billion of revenue for the carmaker.
In China, a data point to note. A quarter of all economic activity in the whole country happens in the Shanghai area and the Yangtze River Delta region. It is a strategic concentration that makes Beijing uncomfortable which is why they are promoting the expansion of the Pearl River Delta, where Hong Kong is located.
Taiwan's September industrial production hit yet another new record high, and the year-on-year growth remains very high. Their retail sales actually expanded (minimally though it might have been), reversing three months of quite sharp reductions.
In Germany, business confidence fell yet again in October, the lowest level since April and slightly below market expectations as supply bottlenecks continued to weigh on Europe's largest economy. Expectations for the coming months were significantly more pessimistic too.
In Australia, their Government is tipping in NZ$2.2 bln of public money to 'encourage' Telstra to buy the Pacific operations of Digicel. The alternative is that Digicel will be owned by China. Digicel is the South Pacific's main cell phone network.
The UST 10yr yield opens today unchanged at 1.64%.
The price of gold will start today up +US$15 at US$1807/oz.
And oil prices are softish, down -50 USc to just under US$83.50/bbl in the US, while the international Brent price is unchanged at just on US$85/bbl.
The Kiwi dollar opens today marginally firmer at 71.6 US. Against the Australian dollar we are softer at 95.6 AUc. Against the euro we are firmer at 61.7 euro cents. That means our TWI-5 starts today at just under 75.1, and still well over the top of the 72-74 range of the past eleven months.
The bitcoin price is also up +5.6% since this time yesterday, and now at US$63,648. Volatility over the past 24 hours has been high at just over +/-3.3%.
You can find links to the articles mentioned today in our show notes.
And get more news affecting the economy in New Zealand from interest.co.nz.
Kia ora. I'm David Chaston and we’ll do this again tomorrow.