Markets uncertain of where to from here

<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>Today we lead with news the data is a bit shaky today and the way forward less clear and uncertainties rise.</p><p>American <a href="https://www.mba.org/news-and-research/newsroom/news/2022/10/26/mortgage-applications-decrease-in-latest-mba-weekly-survey" target="_blank"><strong>mortgage application levels</strong></a> fell less than expected last week, but that still takes them to <a href="https://tradingeconomics.com/united-states/mba-mortgage-market-index" target="_blank"><strong>their lowest level since 1998</strong></a>. This trade survey shows the benchmark 30 year fixed mortgage interest rate rose to 7.16% plus points, their highest since 2001.</p><p>So it is no surprise that <a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf" target="_blank"><strong>new home sales fell -11% from year ago levels</strong></a>. It is small comfort that this fall is less than expected. The prior month rise was clearly just an outlier and the downward trend remains. <a href="https://tradingeconomics.com/united-states/building-permits" target="_blank"><strong>Building consent levels stabilised</strong></a> however, even if at a low level.</p><p>Rising imports and soft export levels took their merchandise trade deficit to -US$99.6 bln. While that may not be great for them, their import engine sustains the core of global international trade. Their <a href="https://fred.stlouisfed.org/series/A019RE1A156NBEA" target="_blank"><strong>overall deficit</strong></a> will run at about -3% of GDP this year.</p><p>Also not great, their <a href="https://www.census.gov/econ/indicators/advance_report.pdf" target="_blank"><strong>wholesale and retail inventory build</strong></a>, in current dollars, remains up at +25% and +22% year-on-year. These are largely unchanged levels, but problematic all the same.