Global risk appetite improves

<p>Kia ora,</p><p>Welcome to Friday'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 markets are brushing off signs of rising financial risk, preferring to accent the positives. They are aided by some generally hawkish central bank comments.</p><p>But first in the US, their debt ceiling negotiations have come down to the wire with the traditional bipartisan resolution now very unlikely. The Democrats will have to do it on their own.</p><p>Meanwhile, new US <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20211746.pdf" target="_blank"><strong>initial jobless claims</strong></a> rose last week to +306,000 in a surprise bounce. And the total number of people on these claims rose also, up to 2,535,000 which as also an unexpected rise. It doesn't really help however that the four week moving average is now at its lowest since the start of the pandemic.</p><p>The August report by the Chicago Fed of the <a href="https://www.interest.co.nz/sites/default/files/2021-09/cfnai-september2021-pdf.pdf" target="_blank"><strong>national activity index</strong></a> notes a slowing economic expansion even if it is still expanding well above average.</p><p>The Kansas City Fed factory survey backs that up, <a href="https://www.kansascityfed.org/surveys/manufacturing-survey/tenth-district-manufacturing-activity-remained-solid/" target="_blank"><strong>reporting</strong></a> a good but slowing expansion. But cost and price rises remained very high, they said.</p><p>These reports reinforce the latest <a href="https://www.markiteconomics.com/Public/Home/PressRelease/3ea9d747369341f98b0e55f542fd0d27" target="_blank"><strong>PMI reports</strong></a> for the US factory sector - fast expansion but just not as fast in September as in August. Except for costs and prices which were reported as rising faster. In the <a href="https://www.markiteconomics.com/Public/Home/Pr