Failing China hurting commodity producers badly

<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>And today we lead with news China's woes are affecting us, devaluing our currency to a nine month low. And the AUD is suffering similarly.</p><p>But first today, we can report that <a href="https://www.newyorkfed.org/newsevents/news/research/2023/20230814" target="_blank"><strong>American inflation expectations</strong></a> continue to retreat, falling to their lowest since April 2021 and are now at 3.5% in July for the year ahead (and that is down from 3.8% in June). This mirrors the sort of levels we had noted in recent consumer sentiment surveys. Although this is not back to what the Fed says it needs, it is clearly on track, and consumers themselves seem to believe the Fed's actions won't bring a renewal of price pressure.</p><p>The same survey showed households’ perceptions about their current financial situations and expectations for the future improved. The share of respondents expecting to be better off a year from now is the highest since September 2021.</p><p>India however does not have control of inflation. <a href="https://www.mospi.gov.in/sites/default/files/press_release/CPI_PR_14aug23.pdf" target="_blank"><strong>Retail prices consumers face jumped to 7.4% in July</strong></a>, the highest since April 2022. A rise was expected, but nothing like that. It is a jump from 4.9% in June caused mainly by sharply rising food prices that were up +11.5%, their highest since January 2020, and in turn led by the cost of vegetables which were up an eye-watering 37% for the year.</p><p>As high as that may be, it is nothing like what the Argentines are facing. They just reported CPI inflation running at the rate of 116% and yesterday <a href="https://tradingeconomics.com/argentina/currency" target="_blank"><strong>the Argentine peso was devalued sharply</strong></a> to 350 to the USD. This was