Russia ignores Trump's 'energy ceasefire'. Nobel Prize in economics. More Fed hiking signals. China car sales disappoint. India inflation jumps. NZD a 17 year low.
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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 oil prices are rising again with Russia answering Trump with energy strikes on Ukraine and the Yemeni fighting raging.
But first, two American economists have been awarded the Nobel Prize in economics “for microeconomic foundations of macroeconomic stabilisation”. Or, showing how well-timed fiscal and monetary policy measures can reduce the economy’s peaks and troughs, and developing ground-up models currently used by central banks and finance ministries across the world.
In the US, there was another Fed voting member out overnight signaling that rate hikes are likely. She warned that an inflationary mindset is taking hold. "I generally think it’s preferable to make smaller adjustments, and to do so relatively quickly, rather than to wait and risk needing a larger course correction," she said. She said the current "stable labour market" gives them room to move.
In China, they reported that less than 3 mln vehicles were sold in September, -8.5% less than in the same month in 2025. September to December is peak season for Chinese car sales so this flop will likely have tough consequences. Despite the fall, that is far more than the equivalent +1.35 mln in the US. But this fall in Chinese EV sales and the immediate prospect exports to the EU will be capped, has seen a very sharp fall in the lithium carbonate price on oversupply fears, down -19.5% over the past month, down -42% from its recent peak in Mid-May.
Indian inflation rose again, now at 5.5% in September and up from 0.2% a year ago. Food makes up most of their index and that was up 7.7%, driven by the cost of onion. Inflation in rural areas was higher than in urban areas.
The UST 10yr yield is little-changed at just on 5.24%.
The price of gold is at US$4164/oz and down -US$30 from yesterday. Silver is down -50 USc at just under US$60.50/oz.
Oil prices have risen from yesterday by +US$2.50 to just over US$94/bbl in the US, while the international Brent price is up +US$2 at US$106.50/bbl. Transiting ships in the Strait of Hormuz are under constant daily attack now.
The Kiwi dollar is down -30 bps from yesterday, now at just on 55.8 USc. Against the Aussie we are down -10 bps at 80.3 AUc. Against the euro we are holding at just on 50.1 euro cents. That all means our TWI-5 starts today at just on 59.7 and down -20 bps from yesterday and a new low since 2009.
The bitcoin price starts today at US$82,540 and down -1.4% from yesterday. Volatility over the past 24 hours has been modest at just over +/-1.1%.
You can 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.
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