Lowe with 'don't go there' warning

<p>Kia ora,</p><p>Welcome to Wednesday’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 RBA governor has set some specific limits to where pay rises shouldn't go - to avoid monetary policy consequences.</p><p>But first up today, the <a href="https://www.globaldairytrade.info/en/product-results/" target="_blank"><strong>dairy auction</strong></a> brought slightly lower overall prices, down -1.3% in USD. But our lower currency turned that into a +0.9% rise from the prior event in NZD. In a reverse of what the derivatives market signaled, WMP prices dipped a little while SMP prices rose. The big mover however was the Cheddar cheese price which dived -9%. Volumes offered and sold were modest in the big scheme of these auctions. Nothing in today's result is by itself going to change farm gate payout prices but todays slip in prices is the sixth in the past seven events and since mid-March when this slide started, <a href="https://www.interest.co.nz/charts/commodities/dairy-prices" target="_blank"><strong>overall prices</strong></a> have fallen -9%. However, from the start of the 2021/22 season in August, prices are up +21%.</p><p>In the US, analyst talking heads are out in force warning of recession. But financial markets are ignoring those.</p><p>Meanwhile, the <a href="https://www.interest.co.nz/sites/default/files/2022-06/cfnai-june2022-pdf.pdf" target="_blank"><strong>Chicago Fed National Activity Index fell</strong></a> to an eight-month low of +0.01 in May from April. Production-related indicators dipped sharply, while the contribution of the personal consumption and housing category fell as well. But jobs, sales, and new orders all rose on that same basis.</p><p>American <a href="https://www.nar.realtor/newsroom/existing-home-sales-fell-3-4-in-may-median-sales-price-surpasses-400000-for-the-first-time" target="_blank"><strong>existing home sales</st