RBA wrongfoots economists

<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>And today we lead with news the Australians look like they have finished their rate-hiking cycle.</p><p>But first up today there was another <a href="https://www.globaldairytrade.info/en/product-results/" target="_blank"><strong>dairy auction</strong></a> overnight and it wasn't a good one. Overall prices fell -4.3% in USD terms, although they were down a much lesser -2.1% in NZD terms. It was the dominant WMP price that took the main beating, down -8.0%. All this comes with volumes sold almost the most of 2023. Buyers were out for bargain WMP and they got it. Fortuitously, all the other products offered basically held the line. And it would have been much worse if the NZD wasn't sharply lower than at the prior event.</p><p>Elsewhere the economic data out overnight was quite mixed.</p><p>In the US there were two factory PMI's released for July. The widely-watched local <a href="https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/july/" target="_blank"><strong>ISM</strong></a> one came in with a lesser contraction than in June, but its ninth straight month of contraction. The internationally-benchmarked <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/f228fb3309884ca2a2f2c6adab5b18a7" target="_blank"><strong>Markit</strong></a> version was less negative as well. If there was an upside, it was that the 'best bit' was that the new order contraction eased in both surveys.</p><p>Similarly, pressures have evaporated in their supply chains with the <a href="https://www.the-lmi.com/july-2023-logistics-managers-index.html" target="_blank"><strong>LMI</strong></a> easing again in July.</p><p>Pressure is also easing in their labour markets with the June <a href="https://www.bls.gov/news.release/jolts.nr0.htm" target="_blank"><strong>JOLTS report</