Investors shake off their fears

<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 the NZ currency is rising as commodity currencies are back in favour again. Bond yields are up, equity prices up. Risk is back 'on'.</p><p>The OECD is <a href="https://data.oecd.org/trade/trade-in-goods.htm#indicator-chart" target="_blank"><strong>reporting</strong></a> that world trade in goods reached a new record high in Q2-2021 beating the previous record in Q1-2021. But a large part of this rise is price inflation in commodity prices, and demand stress due to shipping and supply issues around semiconductors. Trade was uneven however with most changes confused by the varying 2021 bases. Most advanced countries saw rising exports, but China was notable for its export shrinkage. And that is consistent with what Chinese officials are <a href="https://www.yicaiglobal.com/news/china-foreign-trade-growth-eases-in-second-half-may-slow-drastically-next-year-minister-says" target="_blank"><strong>warning</strong></a> about the rest of 2021 and 2022.</p><p>In the US, <a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" target="_blank"><strong>new home sales</strong></a> were expected to dip in July, but in fact they rose. While they are running well below the pandemic-affected levels of a year ago, they remain +10% above the equivalent 2019 levels.</p><p>That may be a positive surprise, but the latest <a href="https://www.richmondfed.org/-/media/richmondfedorg/research/regional_economy/surveys_of_business_conditions/manufacturing/2021/pdf/mfg_08_24_21.pdf" target="_blank"><strong>Richmond Fed factory survey</strong></a> in the mid-Atlantic states isn't. It is the first of these surveys to record a manufacturing slowdown in the US. All three component indexes, for shipments, new orders, and employment, decreased but remained positive even if only just. These may have