Wall Street rises as fears ease

<p>Kia ora,</p><p>Welcome to Thursday’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 today is Budget Day in New Zealand and we will have full coverage this afternoon.</p><p>But first in the US, the good rise in <a href="https://www.mba.org/news-and-research/newsroom/news/2023/05/17/mortgage-applications-decrease-in-latest-mba-weekly-survey" target="_blank"><strong>mortgage applications</strong></a> we noted last week have been reversed in the latest report and they were down a sharpish -5.7% to be -26% lower than year-ago levels. The benchmark 30 year fixed mortgage rate was little-changed.</p><p>American <a href="https://www.census.gov/construction/nrc/pdf/newresconst.pdf" target="_blank"><strong>housing starts</strong></a> unexpectedly rose in April from March, advancing +2.2% to an annualised rate to above 1.4 mln. But data for March was revised lower. And building permits fell although they are still sitting at a higher level than completions.</p><p>This American data may not be stellar, but fears of a debt default seem to be easing with both sides saying a deal can be done. And we should note that stresses in the US regional banking markets seem to be easing - and you can see that as share prices for those thought most at risk, recovering.</p><p>In China, <a href="http://www.stats.gov.cn/sj/zxfb/202305/t20230517_1939606.html" target="_blank"><strong>house prices</strong></a> were little-changed in April - for new builds at least. But the declines for existing resales continue with 34 of 70 housing markets recording falling 'second-hand' house prices in the month and 61 or the 70 recorded falling house prices year-on-year.</p><p><a href="http://www.mofcom.gov.cn/article/xwfb/xwsjfzr/202305/20230503410374.shtml" target="_blank"><strong>Foreign direct investment</strong></a> into China was also weak in April, continuing the 2023 trend. It rose jus