Tradeables inflation ahead

<p>Kia ora,</p><p>Welcome to Tuesday'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 that costs seem to be rising fast in both the US and China.</p><p>But first we should note that the giant container ship that was blocking the Suez Canal has been <a href="https://www.suezcanal.gov.eg/English/MediaCenter/News/Pages/nav_29-03-2021.aspx" target="_blank"><strong>refloated</strong></a> and has moved under its own power to a passing lake (Great Bitter Lake) where it will be inspected. Now the task is to clear the 437 waiting ships that built up in the seven days of this crisis. Industry experts say it will take 4 or 5 days to clear that backlog. But the work of the lawyers and insurers will take much longer to resolve.</p><p>The Dallas Fed is the latest American region to <a href="https://www.dallasfed.org/research/surveys/tmos/2021/2103.aspx" target="_blank"><strong>report</strong></a> a sharp improvement in their factory survey. New orders help power this survey to its highest level ever. But they also reported fast rises in costs and payrolls.</p><p>In Washington, a US Fed official has <a href="https://www.federalreserve.gov/newsevents/speech/waller20210329a.htm" target="_blank"><strong>directly said</strong></a> it will not keep policy interest rates low to save the Federal Government budget cost, nor will it buy US Treasuries just to fund the Federal Government. The claim is that monetary policy has economic goals only, and won't consider the fiscal impact on government. </p><p>Meanwhile on Wall Street, a very ugly liquidation is taking place. A fire sale of stocks from a large investor slammed global investment banks, which said they could incur substantial losses related to the trades approaching US$30 bln. This is a huge systemic risk. Credit Suisse and Nomura are especially at risk. The equity market slumped on the news, but has recovered since.</p><p>In Chin