ECB bursts into action

<p>Kia ora,</p><p>Welcome to Friday’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 central bank actions to lean harder against inflation got more pointed today. And that has moved bond markets especially.</p><p>But first, US <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20221538.pdf" target="_blank"><strong>jobless claims</strong></a> inched higher again last week and now 1.45 mln people are on these benefits, well off their all-time lows of a month or so ago, but still historically very low.</p><p>The <a href="https://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/mbos-2022-07" target="_blank"><strong>Philadelphia Fed factory survey</strong></a> for July is now showing retreating conditions. They report on a heartland manufacturing area and the fall away in new orders will be of a special concern. The price pressures are easing but they still remain high from an historical perspective. On the 'plus' side, the jobs and current activity categories of this survey remain quite positive.</p><p>Nationally and more generally, the <a href="https://www.conference-board.org/topics/us-leading-indicators/press/us-lei-july-2022" target="_blank"><strong>Conference Board leading index</strong></a> remains off the boil, but only minorly and little changed in July from June, and is still historically very high.</p><p>As expected, Japan <a href="https://www.customs.go.jp/toukei/shinbun/trade-st_e/2022/2022064e.pdf" target="_blank"><strong>reported</strong></a> a larger trade deficit in June from the higher cost of oil. But the deficit wasn't as large as some had feared. However, the more important news here was the unexpected strength in Japanese exports, reinforcing that there is strong global demand for Japanese high-tech machinery. Exports rose more than +19% in June from a year ago, the 16th straight month of gains.<