Europe faces brutal choices

<p>Kia ora,</p><p>Welcome to Tuesday’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 the fourth pandemic wave rolling over Europe presents them with brutal choices, and will have global consequences.</p><p>But first up, we can report that Jay Powell will be <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/22/president-biden-nominates-jerome-powell-to-serve-as-chair-of-the-federal-reserve-dr-lael-brainard-to-serve-as-vice-chair/" target="_blank"><strong>re-nominated</strong></a> for a second four-year term as the head of the US Fed. Lael Brainard, an ex-academic, will be nominated as his deputy, replacing Trump appointed Richard Clarida, an ex-PIMCO adviser and academic.</p><p>Separately, Clarida has <a href="https://www.reuters.com/markets/us/fed-policymakers-debate-faster-end-bond-buying-2021-11-19/" target="_blank"><strong>signaled</strong></a> that the Fed will likely taper faster when it announces the decisions at its mid-December meeting.</p><p>The Chicago Fed's <a href="https://www.interest.co.nz/sites/default/files/2021-11/cfnai-november2021-pdf.pdf" target="_blank"><strong>National Activity Index</strong></a> bounced back strongly in October after a weak September result and activity levels picked up noticeably.</p><p><a href="https://www.nar.realtor/newsroom/existing-home-sales-inch-up-0-8-in-october" target="_blank"><strong>Completed home sales</strong></a> in October were unchanged from September, a slowing in this market. But the median price rise to US$393,900 (NZ$565,100) and the available inventory is now low at 10 weeks sales.</p><p>Investor piled in to two UST bond auctions this morning with heavy demand. (<a href="https://www.treasurydirect.gov/instit/annceresult/press/preanre/2021/R_20211122_2.pdf" target="_blank"><strong>2 year</strong></a>, <a href="https://www.treasurydirect.gov/instit/annceresult/press/