Weakness everywhere you look

<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 'surprise' rise in the official Australian interest rate benchmark comes as the Chinese yuan weakens sharply past 4.1 to the USD. A weaker Chinese economy and higher regional interest rates will cause inevitable ripples in New Zealand.</p><p>But first today, there was another <a href="https://www.globaldairytrade.info/en/product-results/" target="_blank"><strong>dairy auction</strong></a> this morning and another weakish one. For a second consecutive time, prices fell -0.9% in USD terms, but this time that was more than made up by a weakening NZD. In local currency, prices rose +1.7%. The main weakness was the WMP price, down -3.0% from the last event three weeks ago, and a reflection of weak Chinese demand. At the other end of the scale, cheddar cheese rose +7.4%. Today's overall fall just adds to the downward direction we have had almost continuously for the last 15 months now. And it justifies the conservative, falling farm gate payout price indications from both Fonterra and the wider analyst community.</p><p><a href="https://www.redbookresearch.com/" target="_blank"><strong>The American retail impulse continues to weaken</strong></a>, up a meager +0.6% last week from the same week a year ago on a same store basis, far less than is needed just to keep up with inflation. (This isn't measuring all retail sales of course, only those in traditional store premises.)</p><p>The US <a href="https://www.the-lmi.com/may-2023-logistics-managers-index.html" target="_blank"><strong>Logistics Manager's Index</strong></a> has reached a new all-time low and for the first time in its 6.5-year history it has moved into contraction territory. This is the third consecutive month of record lows.</p><p>Canada reported grim <a href="https://www150.statcan.gc.ca/n1/daily-quotidien