Sentiment sags globally

<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 global demand worries kneecapped many commodity prices overnight. The NZD suffered from the trend.</p><p>The overnight dairy auction came in better than expected, but expectations were pretty negative. Overall prices were unchanged in USD terms when a -2.4% drop was anticipated. But in NZD terms it did record a -1.4% retreat. And that was on the lowest volumes sold since June 2019. The key WMP price was unchanged in this event But butter gained +5.5%. However cheese fell -3.3% and SMP fell -2.3%. All up a forgettable auction.</p><p>In the US there was surprising strength in the number of <a href="https://www.census.gov/construction/nrc/pdf/newresconst.pdf" target="_blank"><strong>new housing starts in May</strong></a>, up sharply from April to more than an annualised 1.6 mln rate. That was its highest build rate since April 2022 and way above the expected 1.4 mln annualised rate. It is also +11% higher than year-ago levels. And residential building consents rose in May from April too, but they are -13% lower than year-ago levels.</p><p>In Canada, <a href="https://woodindustry.ca/wildfires-across-canada-forcing-sawmill-closures/" target="_blank"><strong>more sawmills are closing</strong></a> due to the extending wildfires across the country from British Columbia to Quebec. This is putting upward pressure on international sawn timber prices, and potentially log demand - just as their southern neighbour has a house building industry needing more product.</p><p>As widely anticipated, China's central bank <a href="http://www.pbc.gov.cn/rmyh/108976/index.html#LPR" target="_blank"><strong>cut key lending rates</strong></a> yesterday in a move to spur investment and consumption after the country's post-pandemic recovery stuttered in recent months. They cut the one-year loa