China in new virus battle

<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 China is in a new pandemic battle.</p><p>But first, there was another dairy auction today, and <a href="https://www.globaldairytrade.info/en/product-results/" target="_blank"><strong>this one</strong></a> brought lower prices again - this time down by -1.0% in US dollar terms but in NZ dollar terms it was a more serious -2.3% fall. Almost all this drop is attributed to the high-volume WMP product which fell -3.8%. On top of the continuous sliding from March, these declines are mounting. In March, prices jumped +15%. Since they have given up all of that to be just +1% higher than before the big March gain. Analysts and Fonterra will be re-thinking their <a href="https://www.interest.co.nz/rural-data/dairy-industry-payout-history" target="_blank"><strong>2021/22 farmgate price forecasts</strong></a>. On a pure formula basis, today's prices take it back to $7.92/kgMS and at the lower end of most analyst's ranges and even below Fonterra's mid-point.</p><p>In the rest of the world, the US LMI <a href="http://www.the-lmi.com/july-2021-logistics-managers-index.html" target="_blank"><strong>logistics managers index</strong></a> is holding at its very high level, boosted this month by rising wholesale prices.</p><p>US <a href="https://www.census.gov/manufacturing/m3/prel/pdf/s-i-o.pdf" target="_blank"><strong>factory orders</strong></a> for June came in slightly better than expected, but also slightly lower than for May.</p><p>New <a href="https://www.realpage.com/analytics/apartment-rents-occupancy-soar-june/" target="_blank"><strong>data</strong></a> shows that rents are on the move sharply higher in the US as tenant demand soars. In June, they were up +15% for new leases from a year ago, and average occupancy is at a 20 year high at 97%.</p><p>In China, they are implementing a wave o