Markets have second thoughts

<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>Today we lead with news markets are having second thoughts after yesterday's across the board surges.</p><p>First, American <a href="https://www.mba.org/2022-press-releases/march/mortgage-applications-decrease-in-latest-mba-weekly-survey-x295238" target="_blank"><strong>mortgage applications fell</strong></a> rather sharply last week, and <a href="https://www.freddiemac.com/pmms" target="_blank"><strong>mortgage interest rates</strong></a> rose sharply too. These shifts are undoubtedly related.</p><p>Perhaps they are taking a toll on <a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" target="_blank"><strong>new home sales</strong></a>, which fell unexpectedly in February. A bounce-back from a weakish January was expected but didn't eventuate. The median price of a new home in the US fell to US$400,000 (NZ$575,000) indicating the market is shifting to less expensive units.</p><p>The US Treasury <a href="https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/R_20220323_3.pdf" target="_blank"><strong>auctioned a 20 year bond today</strong></a>, and event that was well supported even without much Fed activity. They sought US$19 bln and were offered US$47 bln. The median yield rose from 2.33% at the <a href="https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/R_20220216_2.pdf" target="_blank"><strong>prior event</strong></a> (five weeks ago) to 2.60% this time.</p><p>Singapore's <a href="https://www.singstat.gov.sg/-/media/files/news/cpifeb2022.ashx" target="_blank"><strong>inflation rate rose</strong></a> to 4.3% in February, a rise from 4% in January and a new nine year high for them.</p><p>Taiwan's <a href="https://eng.stat.gov.tw/point.asp?index=5" target="_blank"><strong>industrial production</strong></a> is staying very elevated and was up +10