In the economic arm wrestle, the US outpaces China

<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 American economic data is generally more positive while Chinese economic data is generally less positive.</p><p>First, American <a href="https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf" target="_blank"><strong>durable goods orders for May</strong></a> came in better than expected with a +12% rise from year-ago levels. As good, orders for capital goods also rose +12% on the same basis reflecting that board rooms are still investing strongly. For both measures, the month-on-month gains also beat forecasts.</p><p>Also positive, <a href="https://www.nar.realtor/newsroom/pending-home-sales-edge-higher-0-7-in-may" target="_blank"><strong>pending home sales</strong></a> broke a six-month skid with a slight rise of +0.7% in May from April. There was a noticeable surge in the Northeast region. Year-on-year they are down however -13.6%.</p><p>Not positive however is the <a href="https://www.dallasfed.org/research/surveys/tmos/2022/2206.aspx#tab-results" target="_blank"><strong>Dallas Fed factory survey</strong></a> for June with a sharpish deceleration recorded. Of particular concern is the quick fall-off in new orders.</p><p>In Japan, new data shows that the Bank of Japan now owns half of all bonds there, a relentless buildup as they continue their easy money policies to bring back inflation.</p><p>Meanwhile, Russia has defaulted on its foreign debt. It can't pay largely as a result of sanctions inhibiting its ability to shift funds. It's their first default of foreign debt in 100 years. But during Russia’s financial crisis and ruble collapse of 1998, then president Boris Yeltsin’s government defaulted on $US40 bln of its local debt.</p><p>The struggles of China's industrial companies continued into May. In the month, <a href="http://www.stats.gov.cn/tjsj/zxfb/202206/t2