Aussie inflation rocks Kiwi rates

<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 our wholesale rate markets are being roiled by Aussie inflation data.</p><p>But first in the US, orders for <a href="https://tradingeconomics.com/united-states/durable-goods-orders" target="_blank"><strong>durable goods declined</strong></a> -0.4% in September from August, following a downwardly revised rise in August. But analysts had expected a much larger -1.1% drop due to ongoing supply chain disruptions. The September data is the first decline in five months. But we should also note that the September data is more than +14% higher than the same month in 2020. New orders for capital goods jumped +26% on the same basis.</p><p>Meanwhile, the US <a href="https://www.census.gov/econ/indicators/advance_report.pdf" target="_blank"><strong>merchandise trade deficit topped -US$100 bln</strong></a> in September, its largest ever. Exports rose +17% year-on-year while imports rose +18%.</p><p>On Wall Street, tech firms including Google and Microsoft, are reporting record earnings.</p><p>The Canadian central bank had a <a href="https://www.bankofcanada.ca/2021/10/opening-statement-271021/" target="_blank"><strong>rate review</strong></a> overnight and left its policy rate unchanged at 0.25%. But at the same time, they ended their QE program - no more new money printing for them. However they didn't go so far to signal when they might start draining the built-up reservoir of pumped-in liquidity. They added about C$350 bln on Canadian government bonds to their balance sheet over this QE program in about 18 months, or about 20% of annual GDP.</p><p>In September, <a href="http://www.stats.gov.cn/tjsj/zxfb/202110/t20211027_1823834.html" target="_blank"><strong>industrial profits</strong></a> at Chinese industrial enterprises rose +16.3% from the same month a year ago, growing much f