Dairy prices stop falling

Kia ora,Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.I'm David Chaston and this is the international edition from Interest.co.nz.And today we lead with news the return of Wall Street from their long weekend holiday has been a quiet one, although Saudi Arabia greeted them back with a move that raised oil prices.But first up, the overnight dairy auction delivered a +2.7% rise in overall prices, headlined by the +5.3% rise in the WMP price. (From the last GDT Pulse event, the WMP price rose +10% which is quite something.) This follows seven main events that recorded price declines overall so it isn't clear whether this breaks the declining pattern or not. At the same time the NZD fell too, so the rise at this event in NZD was more than +4.1%. Volumes were much higher this time at over 37,700 tonnes sold. Price movements for other commodities than WMP were modest.US factory orders were expected to fall in July and they did - but not by as much as anticipated. And without aircraft orders they actually rise from June nicely. There had been four consecutive monthly gains in new orders prior with the last one being quite strong, so a settling was expected. Still, year-on-year these orders are still running lower than a year ago, down -1.4%, so pretty lackluster.But there was an expansion in the US logistics sector in August, a shift up from the July contraction. Warehousing and freight activity rebounded.In China, the private Caixin service sector PMI for August came in weaker than expected (in contrast to their factory PMI which came in better). The Caixin services PMI is at 51.8 and down sharply from the July 54.1. That is twelve straight months of expansion although the August result is the weakest in that sequence in 2023. (50 is neither expanding nor contracting.) The official services PMI for August was recorded at 51.0. But at least they are still expanding.In the EU, producer prices fell at a record pace. They dropped -7.6% from a year ago in July but it was in line with market estimates. It was the third consecutive decline in producer prices and at the steepest pace since 2009, largely due to base effects from the surge in energy prices following Russia’s invasion of Ukraine. Hence, energy prices sank by -24% from the -16% in the previous month.Turkish inflation, which peaked at over 85% in October 2022, and then fell to 38% in June, is moving back up strongly again. In August it came in at 59% pa. The more conventional monetary policy that was started in July hasn't had an effect on inflation yet - nor their exchange rate either it seems. Once public policy loses co