US CPI surprises with sharp easing; US factory surveys generally downbeat; Canada SMEs upbeat; many central bank reviews; US-China freight rates rise; UST 10yr at 4.13%; gold up at new record; oil stays low; AU$1 = 57.8 USc

Here's our summary of key economic events overnight that affect Australia, with news there were many central banks reviewing their settings overnight and most stayed unchanged.

But first up today we can report a considerable surprise in the November CPI result. Markets had expected a 3.1% rate. But there was no October reading due to shutdown problems and this may have affected the collecting of November data. In any case the official November result was published as a rise of 2.7%, a sharply lower level no analyst saw coming. Apparently, falling rents were a big part of the retreat. (And don't forget, the last US BLS boss who delivered unwelcome results was fired by the Administration.). In any event, financial markets have taken it at face value, accepting there is no affordability problem, Just as the President has claimed.

And official US initial jobless claims came in at the expected +255,000, so there are now 1.882 mln people on these benefits, fractionally more than the 1.864 mln in the same week a year ago.

In non-Administration controlled data, the news isn't so bright. The Philly Fed's December factory survey fell sharply again, retreating as it has done in the past two months. And this came as new orders actually rose, although from a low level. It is a survey that has reported 'future conditions' very positive for more than a year now, but also reporting 'current conditions languishing.

The similar Kansas City Fed factory survey fell into a mild contraction in December, a sharpish fall from November. Again, those surveyed were still upbeat probably because new orders ticked higher. But more companies are reporting higher prices paid for supplies.

In Canada, they are reporting rising SME business optimism, and the highest since May 2022.

The Taiwan central bank held its policy rate unchanged at 2% overnight. The ECB held their unchanged too at 2.15%.

Sweden held their 1.75% rate unchanged as well at their overnight meeting. Norway held their at 4.0%. But the English central bank had a need to cut theirs, by -25 bps to 3.75%, in a split 5-4 decision (the four dissenters wanted no cut.) Japan will review its policy rate later today and is widely expected to raise it by +25 bps.

Here in Australia, inflation expectations rose to 4.7% in December from 4.5% in November, and have now been at or above 4.5% for six of the past seven months.

Global freight rates for containerised cargoes rose +12% last week to be -43% lower than year-ago levels. The latest rise was driven by very much stronger demand in the outbound China to the US rates. Separately, bulk cargo freight rates fell -13% last week but are now +50% higher than year ago levels.

The UST 10yr yield is now at 4.13%, down -3 bps from this time yesterday. The key 2-10 yield curve is still at +65 bps. Their 1-5 curve is now positive by +17 bps and the 3 mth-10yr curve is now positive by +49 bps. The China 10 year bond rate is down a sharp -5 bps at 1.79%. The Japanese 10 year bond yield is down -1 bp at 1.97% ahead of today's central bank review. The Australian 10 year bond yield starts today at 4.72%, down -4 bps from yesterday.

Wall Street opened firmer in Thursday trade with the S&P500 up +1.1%, jumping on the US CPI result. Overnight, European markets were mixed between Frankfurt's +1.0% dip and London's +0.6% rise. Yesterday Tokyo ended down -1.0%. Hong Kong was up +0.1%. Shanghai ended its Thursday up +0.2%. Singapore dipped -0.1%. The ASX200 ended little-changed. 

The price of gold will start today at US$4367/oz, and up another +US$35 from yesterday, and which we make as a new record high. Silver is at US$63/oz and sharply back off its record high.

American oil prices are slightly firmish from yesterday at just under US$56.50/bbl, while the international Brent price is still just under US$60/bbl.

The Australian dollar is up +20 bps from yesterday, now at just on 66.2 USc. Against the Japanese yen we are +20 bps firmer at ¥102.9. Against the euro we are also up +20 bps at 56.4 euro cents. 

The bitcoin price starts today at US$88,092 and up +1.6% from this time yesterday. Volatility over the past 24 hours has been moderate, at just on +/- 2.3%.