A weekend meltdown

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news nowhere is the change of economic mood sharper than in crypto markets.</p><p>The selloff in those markets has deepened over the weekend, and the bitcoin has now fallen below US$20,000 for the first time since December 2020. In New Zealand dollars, it is threatening NZ$30,000. That means it has lost three quarters of its "value" since its peak in November 2021. Engine-room companies in the crypto machine are laying off staff.</p><p>The cryptocurrency industry was built on swagger, enthusiasm and optimism. All three are in short supply these days as these losses and layoffs mount.</p><p>Meanwhile, American <a href="https://www.federalreserve.gov/releases/g17/Current/default.htm" target="_blank"><strong>factory output slipped</strong></a> slightly in May from April, but remained up +4.8% from a year ago, in data released today. It was the first slip in four months and the second in eight months. Overall industrial output rose in May from April because of output from 'mining' and 'utilities'. That meant overall American industrial output was +5.8% higher than year-ago levels even though capacity expanded only +0.8%. Still, the small monthly slip does feed into the idea that the US economy's expansion is slowing down.</p><p>Canadian <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/220617/dq220617b-eng.htm?HPA=1" target="_blank"><strong>producer prices rose</strong></a> a heady +15% in May from a year ago, and the rise in May from April ran at a rate above that.</p><p>The Bank of Japan left its key short-term interest rate <a href="https://www.boj.or.jp/en/announcements/release_2022/k220617a.pdf" target="_blank"><strong>unchanged</strong></a> at -0.1% and that for 10-year bond yields around 0% during its June meeting, by an 8-1 vote, as widely expected.</p><p>But over t