Elections, labour markets and growth in focus. Korean exports star. China growth stumbles. ditto Canada. EU growth rises. Aussie housing market stumbles too. Global air travel weak.
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Kia ora.
Welcome to Monday’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 economic performance will get judged by electors this week.
Of course, this week will be dominated by the general election here and most analysts see it as a toss-up with the potential for protracted post-election negotiations. But we will also get quite a few updates of how the October real estate market performed. And of course, we will get the Q3 labour market update on Wednesday (little-change, so little improvement, is expected.).
In Australia, the focus will be all on Tuesday's RBA interest rate decision, where a +25 bps rise to 4.85% is widely anticipated. There will be housing market updates, along with PMI data out this week too.
Other central banks doing reviews this week will be those from Sweden, Norway, Malaysia, Brazil and Mexico.
In the US it is all about their midterm elections on Wednesday (NZ time). On the corporate front, their earnings season continues, with some significant companies reporting. And the week will end there with the US monthly jobs report with jobs growth in October expected to be marginally better than the limp September gain. There will also be ISM PMIs, factory orders, trade data and the preliminary University of Michigan consumer sentiment survey.
In China, investors will focus on the October S&P Global (RD) Manufacturing and Services PMI reports, with factory growth seen slowing slightly. Over the weekend the official PMI's were not positive. Their official factory PMI fell to its lowest since July and is contracting again. Their services sector slipped into a slight contraction too. Observers will be hoping the S&P Global/RD versions remain more positive than that.
South Korean exports delivered another stunning result in October, coming in almost double the year-ago result and taking their annual exports to just shy of their 2026 target of US$1 tln. That leaves even Taiwan in its wake at US$850 bln. For Japan annual exports are US$750 bln. For China they are US$3.8 tln, so Korea is more than a quarter of the Chinese level, an amazing result for a country with few natural resources and only 4% of their neighbour's population.
In the US over the weekend, the widely-watched Chicago factory PMI slipped in October from September, but it is still expanding solidly and at about the average elevated pace it has shown for all of 2026
Over the weekend a growing set of Fed governors were speaking with a fairly unified message that the US central bank has more work to do to get on top of inflation. This set included both members who vote on the FOMC and those who don't currently but will get rotated on soon. Last week's no-change capitulation ahead of their election involved risks most of these weekend speakers were uncomfortable with.
In Canada, they said its September GDP dipped slightly from August in a weaker than expected update.
In the EU they posted a +1.5% gain in GDP in Q3-2026 from the same period in 2025. This was slightly better than expected. Keeping this up were the Nordic and Baltic countries, along with good expansions in both Spain and Portugal, Germany came about average, but France posted a small decline.
In Australia, Cotality reported that last week's auction clearance rates in its residential real estate market meant that October had the lowest of any month in 2026.
Updated IATA data shows global passenger travel was weak in September, hurt primarily by weak domestic travel in the US and India. International travel was marginally positive, and that included the Asia/Pacific region.
The UST 10yr yield is down -6 bps from Saturday at 4.93%.
And we should keep an eye on junk bond yields. At the bottom end they are spiking very sharply, Yields on CCC-rated bonds (the lowest tier of junk debt) have spiked past 18% in the US and 21% in Europe, up sharply from earlier in the year. If this spreads up to other sub-investment grade bonds, an ugly bond rout is possible.
The price of gold is down -US$145 at US$3876/oz. Silver is now just under US$49/oz and down another -US$3.50 from yesterday.
Oil prices have risen +US$2 from Saturday to just over US$104/bbl in the US, while the international Brent price is still up at just on US$113.50/bbl.
The Kiwi dollar is unchanged from Saturday at just on 56.3 USc. Against the Aussie we are up +10 bps at 80.1 AUc. Against the euro we are up +10 bps at 50.4 euro cents. That all means our TWI-5 starts today at just on 60 and little-changed from Saturday.
The bitcoin price starts today at US$78,076 and up +0.5% from its much lower level over the weekend as more evidence come to light of the huge hack of Binance by North Korea. Volatility over the past 24 hours has been low at +/-0.5%.
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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