Trying to not "over-react"

<p>Kia ora,</p><p>Welcome to Thursday’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>And today we lead with news financial markets are struggling to respond to the enhanced geopolitical threats and are doing so by "not over-reacting". In the background, volatility was lower and earnings reports were positive. A speech by Fed boss Powell is due soon.</p><p>But first up today, the release of the important US Federal Reserve's <a href="https://www.federalreserve.gov/monetarypolicy/files/BeigeBook_20231018.pdf" target="_blank"><strong>Beige Book</strong></a> was an irrelevant affair, reporting little change in October from September. All the usual strengths are on display (labour market, for instance) along with all the usual threats (the housing market, and inflation, although that is broadly easing in these reports).</p><p>The American mortgage market hit a new low last week. <a href="https://www.mba.org/news-and-research/newsroom/news/2023/10/18/mortgage-applications-decrease-in-latest-mba-weekly-survey" target="_blank"><strong>Mortgage applications fell</strong></a> by -6.9% in the week ending October 13, the sharpest decline since April. Volumes are now their lowest since 1995. Refinancing applications plunged -9.9% in the period, while applications to purchase a home dropped by -5.6%. Meanwhile mortgage interest rates touched 7.7% plus points for their standard 30 year loan, a 23 year high.</p><p>Meanwhile <a href="https://www.census.gov/construction/nrc/pdf/newresconst.pdf" target="_blank"><strong>housing starts</strong></a> picked themselves off the canvas in September from August's unusual low, but are still quite groggy. They are -7.2% lower than year ago levels which themselves weren't a high standard. Building consents don't give any indication their residential new-build market is about to recover.</p><p>Canada however is <a href="https://www.cmhc-schl.gc.ca/professio