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	Podcast:		Economy Watch
	Episode:		Standing by
	Category:		Business
	Duration:		00:04:07
	Publish Date:		2021-06-15 19:42:48
	Description:		Kia ora, Welcome to Wednesday'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 a sense of caution is noticeable in markets ahead of tomorrow's US Fed meeting. But first, the overnight dairy auction was another soft one, falling for the sixth time in the past seven events with a -1.3% decline. But this time there is kind of a silver lining because the NZD is at a two month low, so in New Zealand dollars the overall price rose +0.6%. The key WMP price slipped -1.8% and the SMP price fell -1.7% from the prior auction. This continual set of slippages may be starting to have analysts reassessing their bullish farm gate milk prices for the upcoming 2021/2022 season. In the US, there has been a range of second-tier data released overnight and most of it was disappointing, even if markets are ignoring it ahead of tomorrow's US Fed meeting results. American retail sales slipped in May from April and the slippage was more than expected. But it is still +20.7% higher than for May 2019. Consumers are pulling back from buying big-ticket durable goods, but now spending much more of consumption like eating out in a notable shift. Factory input costs rose a rather sharp +1.5% in the month to be +6.6% higher than a year ago. Services costs didn't rise as much. US industrial production rose a bit more than expected in May from April and is now +16% ahead from the pandemic-affected year-ago level but still -0.6% lower than in May 2019. The New York Fed's factory survey for the state is still expanding at a healthy clip, but less so than in May and less than expected. Canada's factories are facing sharply higher input costs too, jumping the most in more than 45 years. German inflation came in pretty much as expected at 2.5% pa and this was despite fuels rising more than +10%. In Australia, their central bank released the minutes of its dull June 1 meeting. But there was an interesting titbit in the record of those discussions. The RBA wants to see quicker wage growth to help spur inflation towards target. But they are seeing firms acting to not raise wages by adopting non-wage measures to attract and retain staff, such as one-off bonuses and more flexible working arrangements. Some firms were also opting to ration output because of labour shortages, rather than pay higher wages to attract new workers, they said. The UST 10yr yield starts today unchanged at 1.50%. The price of gold starts today at US$1857/oz which is down another -US$6 from this time yesterday. Oil prices are up more than +US$1 overnight at just under US$72/bbl in the US, while the international Brent price is still just on US$73.50/bbl. Demand from China is supporting this price. The Kiwi dollar opens today at 71.2 USc with a minor devaluation since this time yesterday. Against the Australian dollar we are also firmish at 92.7 AUc. Against the euro we are softish at 58.7 euro cents. That means our TWI-5 starts today at 73 and a two month low. The bitcoin price is now at US$40,393 and up a very minor +0.4% from this time yesterday. Volatility in the past 24 hours has been moderate at +/- 2.4%. 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.
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