[Music] this is economy watch what you need to know about New Zealand's economic life today brought to you by interest.co.nz Kiora and welcome to Thursday's economy watch where we follow the economic events and trends that affect AOA I'm David chasten and this is the international Edition from inoc co.nz and today we leave with news inflation is easing in the world's largest economy first up today the American August CPI inflation rate slowed for a fifth consecutive month to 2 1.2% it's lower since February 2021 and Below Market expectations of 2.6% but it was up 0.2% from July which was expected meanwhile their core inflation rate steadied at a three-year low of 3.2% but this core rate was up 0.3% from July so some mixed signals here energy costs were very much lower rents and travel costs were a little higher but there were only modest Market movements after this data Benchmark bond yields firmed slightly the US dollar Rose and Wall Street took it in a stride shaking off the pre-released Jitters none of this will change the FED meeting discussions a week from today today's data probably locks in a 25 basis point rate cut rather than the option of a 50 basis points cut American mortgage application levels were little changed last week continuing at a low level but mortgage rates fell with the Benchmark rate falling under 6.3% however that was was not enough to entice any significant change in housing market activity lower yields were also on full display in the US Treasury 10-year bond auction today's event was strongly supported with a median yield of 3.61% down from 3.98% at the prior equivalent event a month ago across the Pacific China's August vehicle sales were soft they were 2.45 million units in the month 5% lower than for August 2023 and this was despite a Beijing program to Boost's key domestic Market 1.1 million of the units sold that's 45% were either EVS or hybrids in July sales were 5.4% lower than a year ago without the support you have to wonder what levels they would end up at in August Chinese long-term government bond yields had a fresh low yesterday underscoring strong investor appetite for these expected capital gains even as the central bank intervenes to Tamp down what it considers a bubble the yield which moves inversely to price on the China government 10-year bond fell to 2.16% at one point that's its lowest level since 2015 the starting point for comparable data that has Beijing official scrambling and threatening Traders and that is not the only problem they face in the financial sector recently Beijing cracked down on banks offering higher than official rates for deposits and that had the perhaps predictable outcome that depositors especially corporate depositors withdrew their deposits from Banks and shifted them to places they get better Returns the effect on bank balance sheets was substantial and there is now a new scramble to shore up this sudden Distortion in a key update from an RBA official yesterday they reinforced their guidance that the labor market is a key element in their hawkish views on inflation and its slly trajectory they see it staying tight enough to prevent inflation from falling to where they need to get it that rein forced last week's comments by governor bulock who said that monetary policy will need to remain sufficiently restrictive there until inflation actually moves towards the central bank's 2 to 3% Target clearly they don't think they're there yet rate cuts are are ways off in Australia the US Treasury tenure yield is now at 3.67% and up three basis points from yesterday and the price of gold will start today an insignificant $1 higher at $2,514 an ounce and oil prices are recovered a $150 just on to 6750 a barrel in the US while the international Brent price is now just over $70.50 a barrel and the Kiwi dollar starts today at 61.3 us cents and 20 basis points softer than this time yesterday against the Aussie were down 40 basis points at 92 Australian cents against a EUR 20 basis point sof at 55.6 C that all means our trade weighted index starts today at 69.3 and 30 basis points lower than yesterday and the Bitcoin price starts today at $ 57,6 N2 and up 0.99% from yesterday volatility over the past 24 hours has been moderate at just done plus or minus 2.2% you can find links to the Articles mentioned today in our show notes and you can get more news affecting the economy in New Zealand from interest.co.nz Kiora I'm David chaston and we'll do this again tomorrow