Caution weighs on markets

<p>Kia ora,</p><p>Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect 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 signs of caution are showing up in all sorts of markets.</p><p>But first, prices held in the overnight <a href="https://www.globaldairytrade.info/en/product-results/" target="_blank"><strong>dairy auction</strong></a> - or at least they did in US dollar terms. But with the rising Kiwi currency, this latest event brought overall prices -2.0% lower in New Zealand dollars. The key WMP and SMP prices were virtually unchanged in US dollars. The best performer was Cheddar cheese, up +1.2% in US dollars but even that was not enough to record a gain in NZD. Overall the changes are not enough to alter any farm gate payout forecast.</p><p>In the US, <a href="http://www.redbookresearch.com/8702.html" target="_blank"><strong>retail sales</strong></a> last week were little changed from the prior week.</p><p>The latest data for <a href="https://www.moea.gov.tw/Mns/dos_e/bulletin/Bulletin_En.aspx?kind=14&html=1&menu_id=6744&bull_id=8674" target="_blank"><strong>Taiwanese export orders</strong></a> were strong, but no better than was expected.</p><p>In China, <a href="https://www.yicaiglobal.com/news/china-sets-target-of-650-million-ton-grain-harvest-this-year" target="_blank"><strong>central planning for food security</strong></a> is in full swing, but despite that, they are <a href="https://www.scmp.com/economy/china-economy/article/3130257/china-trade-us-soybean-imports-surge-320-cent-march-brazilian" target="_blank"><strong>importing vast amounts of food</strong></a>. You get a sense they know this is a strategic weakness, one they are working hard to address. But success looks far away.</p><p>Global trade is rising, and rising fast. The <a href="https://www.bloomberg.com/quote/BDIY:IND" target="_blank"><strong>Baltic Dry freight index</strong></a> is now at a 20 month high, as demand for