OECD sees global growth slowing especially in the US and China. Philly Fed survey shows weakening. US home sales growth slows. NY Fed pumps in even more liquidity. Canada jobs growth strong. Japan signals new easing coming. Hong Kong nears recession. Jobs growth weak in Australia.
Kia ora,
and welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.
I'm David Chaston and this is the International edition from Interest.co.nz.
Today we lead with news the largest are slowing the fastest.
The OECD says economic expansions are slowing quickly now in most countries with the fastest slowdowns occurring in the largest economies, especially the US and China. Only Canada and Japan are expected to see rising growth and they are both off low levels anyway. They see New Zealand with a +2.5% growth rate and well above most G20 countries, but probably didn't adjust that after yesterday's weak Q2 result that came in at +2.1%. The OECD report says that world growth has now slowed to its lowest level since the GFC.
In the US, the latest regional Fed survey in the Pennsylvania area, shows a slowing of activity although not be as much markets were expecting.
And the slowing growth in August home sales in the US also came in less-worse than observers were expecting.
On Wall Street, the financial stresses are continuing with the New York Fed having to inject another US$75 bln overnight through the repo system that keeps bank capital stable. That followed a dose of the same size on Wednesday and US$53.2 bln the day before. The lubrication is mounting up, now exceeding US$200 bln.
In Canada, the unofficial survey of jobs growth came in better in August that July, both showing strong gains.
In Japan, as expected, their latest official interest rate review kept rates and policy unchanged, but they did signal that more easing measures may be coming in October.
Domestic unrest and the US-China trade war seems likely to push Hong Kong into recession, according to local government officials. The Hong Kong Monetary Authority has cut its benchmark interest rate by -25 bps to 2.25%.
Forest burning in Indonesia for palm oil plantations has reached extreme levels, blanketing many neighbouring countries in thick smog. Because of the economic power of companies like Wilmar, there seems to be little political will to address the issue.
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In Australia, they reported poor jobs data yesterday, with all the growth in part-time positions. Analysts think this will be a trigger for another RBA rate cut.
The UST 10yr yield is unchanged today at 1.78%.
Gold is in a holding pattern, up +US$2 to US$1,499/oz.
US oil prices are unchanged today at just on US$58/bbl. But the Brent benchmark is up +US$1 to just under US$64.50.
The Kiwi dollar is softer at 63.1 USc. On the cross rates we have firmed a bit to 92.7 AUc. Against the euro we are down to 57.1 euro cents. That leaves the TWI-5 at the same low level it was at this time yesterday, 68.4.
You can find links to the articles mentioned today in our show notes.
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