US & China move to ratchet down tensions

<p>Kia ora,</p><p>Welcome to Tuesday’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 of some truly huge industrial orders being announced in Paris.</p><p>But first we should note that the US is on a Federal holiday today and most financial markets are closed there.</p><p>However there was some interesting data out overnight. Their <a href="https://www.nahb.org/news-and-economics/press-releases/2023/06/builder-confidence-moves-into-positive-territory-in-june" target="_blank"><strong>home builder confidence index</strong></a> rose to its highest reading since July last year, and easily beating what was expected. Although the improvement was off a low base, it was due to solid demand, a lack of existing inventory and improving supply chain conditions. And the improvement came even though credit conditions are tightening and construction loans became more difficult to get.</p><p>In Canada <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/230619/dq230619a-eng.htm?HPA=1" target="_blank"><strong>producer prices are sliding faster now</strong></a> and overall cost deflation is accelerating for firms. Prices dropped a full -1.0% in May from April to be a massive -6.3% lower than a year ago. The reason is almost all to do with falling energy prices which were down -33% in a year, so apart from that industry, no-one is particularly worried about that. Their producer prices have now retreated to where they were in January 2022.</p><p>Perhaps we should note that international natural gas prices are now quite low, back to where they were in 2014. They were first at this level in 1995. Coal prices have dived as well, back to levels first reached in 2011. In fact, shipments of coal from the key Australian port of Newcastle have hit <a href="https://www.afr.com/companies/mining/newcastle-coal-exports-poised-to-hit-five-year-low-20230619-p5dhn6" target="_blank"