US jobs & real estate markets firm. India gripped by Adani corruption case. South Africa cuts rate. S&P500 up on Gaetz withdrawal.
Kia ora,
Welcome to Friday’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 about separate corruption cases involving Gautam Adani, and Matt Gaetz.
But first today, the US labour market is maintaining its strength, despite strikes and tropical hurricanes. Last week only +213,000 people filed for initial jobless claims, well below the prior week, below what seasonal factors would have brought, and below the same week last year. This was a seven month low. Continuing claims inched up the prior week to 1.67 mln but that was about the same level as last year.
Those job gains are helping their housing market. Existing home sales rose in October by +3.5% from the previous month to an annualised rate of just under 4 mln. While this level is pretty tame for them, it is off the September low which had the distinction of being a q14 year low. Industry insiders are hoping October's rise signals a trend turnaround. But it is hard to see with mass layoffs in the US Federal workforce imminent, it might be a vain hope.
In contrast to the big jump in the New York region, the Philly Fed's factory survey dipped in November, but new order levels remained positive, and sentiment ahead did too. It was similar in the same report by the Kansas City Fed, where firms expect increases in production, new orders, and employment in the next six months.
In Canada, producer prices turned up in October after easing in the prior month, to continue a trend that started in April. But the rises are not inflationary.
In India, the depth and pervasiveness of corruption is on display in a case that is gripping the country. The BSE fell -0.5% on the news. And PM Modi is annoyed by the revelations as Adani has been important in his rise. In New York, Indian billionaire Gautam Adani was indicted on bribery charges in a US federal court yesterday, with prosecutors alleging the 62-year-old tycoon and other Indian executives promised more than US$250 mln to Indian government officials to win contracts. Bribery is also at the heart of a Swiss case against the same people. And Indian steel makers have faced similar allegations. But given the pervasiveness of corruption in India at the top level, there is probably little that will change there, especially as the BJP controls their government. The Americans are prosecuting because Adani did not disclose the bribes in documentation for fundraising in US markets, and it was considered to be a material factor for the investments.
Ending a long series of improvement, the EU consumer sentiment survey reported a fall to a more negative result in November. Despite this, data out for EU car sales was quite positive, putting the August and September say behind it and returning to levels that have been 'normal' since mid-2022.
In Turkey, they reviewed their policy rate and held it at 50%. Turkey has inflation running at 48%.In South Africa, they also reviewed theirs and cut it by -25 bps to 7.75%. South Africa has inflation running at 2.8% and falling quickly now. It is back within its target range.
Container shipping freight rates were little-changed last week. Bulk cargo rates spiked during the week, but ended up basically unchanged from last week.
The UST 10yr yield is now at just on 4.42% and up +1 bp from yesterday at this time.
Wall Street started its Thursday little-changed, but then rose +0.7% on the S&P500 and rising when Matt Gaetz said he won't be the US Attorney General.
The price of gold will start today at US$2649/oz and up another +US$26 from this time yesterday.
China has found new gold reserves in central Hunan province, state outlet Xinhua News reported yesterday. China is the world's largest gold producer, accounting for around 10% of global output
Oil prices are again little-changed, up just +50 USc to just over US$69.50/bbl in the US while the international Brent price is now just over US$73.50/bbl.
The Kiwi dollar starts today at 58.6 USc and down -10 bps from this time yesterday. Against the Aussie we are -40 bps lower at 90 AUc. Against the euro we unchanged at 55.8 euro cents. That all means our TWI-5 starts today at just over 68.3, and down -20 bps from yesterday.
The bitcoin price starts today at US$97,247 and up +3.7% from this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.7%.
You can find links to the articles mentioned today in our show notes.
You can get more news affecting the economy in New Zealand from interest.co.nz.
Kia ora. I'm David Chaston. And we will do this again on Monday.