Strong labour markets help public finances

<p>Kia ora,</p><p>Welcome to Monday’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 that tomorrow's Australian Budget may bring some important positive surprises.</p><p>But first up today, <a href="https://www.fao.org/worldfoodsituation/foodpricesindex/en/" target="_blank"><strong>global food prices are rising again</strong></a>, up in April for the first time in more than a year. But the driver was a sharp rise in the sugar price due to global supply issues. Meat prices rose marginally, but dairy prices fell in this UN-FAO tracking.</p><p>Meanwhile, China's <a href="https://www.safe.gov.cn/safe/2023/0505/22665.html" target="_blank"><strong>foreign exchange reserves</strong></a> have crept up, now just above US$3.2 tln. But theiy remain well below their 2021 levels.</p><p>The <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/6ab8827e863f42e1bc3436d69a07833e" target="_blank"><strong>Caixin services PMI</strong></a> came in at the same level as the official services PMI, both measures recording a healthy expansion.</p><p>And after nine years of fitful trials, the PBoC is finally getting its digital yuan off the ground. Some provincial governments allow trade in the e-yuan. And now public employees are being paid in e-yuan, direct to their phone wallets. </p><p><a href="https://www.singstat.gov.sg/-/media/files/news/mrsmar2023.ashx" target="_blank"><strong>Singapore's retail activity</strong></a> rose +2.2% in March and a sharp deceleration of the February rate. They will be concerned about that fall away. Given they have <a href="https://www.mas.gov.sg/-/media/mas-media-library/news/consumer-price-developments/2023/inflation202303.pdf" target="_blank"><strong>inflation</strong></a> running at +5.5% and the retail data is nominal, that suggests real retail activity is down -3.3%.</p><p>In the US, their economy unexpectedly <a href="https://