Commodities surge, including dairy prices; US services sector cools, car sales modest; China car sales it record; notable China climate shift; UST 10yr at 4.18%; precious metals all up sharply; oil lower; AU$1 surges to 67.4 USc

Here's our summary of key economic events over the holiday break that affect Australia with news today is all about commodity prices. Silver has jumped sharply, gold and platinum are up, copper is at a record high, and both nickel and aluminium have surged too. Tin is at a three year high. Lithium is on the move up again too after a two year slumber.

It's not only hard commodities. The overnight global dairy trade auction surprised to the upside. A small gain was anticipated but in the end we got a +6.3% rise in USD terms.

In the US, the S&P Global services PMI for the US retreated back to a modest expansion in December after the good expansion the previous month which was revised lower. This metric is now at an eight month low. New business growth dropped to its lowest in 20 months as inflationary pressure bit harder.

Meanwhile, the Logistics Manager’s Index retreated for a second consecutive month in December. It was the slowest expansion in the logistics sector since April 2024, with the majority of the downward pressure coming from inventory and warehousing markets. Transportation costs rose more than expected.

Total vehicle sales in the US rose to a 16 mln annual rate in December, up from a 15.6 mln rate in November. A year ago they ran at 16.9 mln annual rate, so a -5.3% decline.

In China, total vehicle sales have not yet been announced, but it is very likely they exceeded 36 mln in 2025 with growing strength in the past six months. That will be +14.6% higher than their 2024 level.

China equities hit a decade high in Tuesday trading.

Meanwhile, an historic climate shift is bringing record rainfall to China’s northern regions, overwhelming unprepared cities and upending agriculture, while leaving the traditionally lush south parched.

In Europe, food giant Nestle is recalling infant formula after serious contamination concerns.

The UST 10yr yield is now just on 4.18%, up +2 bps from this time yesterday. The key 2-10 yield curve is still at +70 bps. Their 1-5 curve has held at +24 bps and the 3 mth-10yr curve is now positive by +57 bps. The China 10 year bond rate is unchanged at 1.86%. The Japanese 10 year bond yield is up another +2 bps at 2.14%. The Australian 10 year bond yield starts today at 4.77%, down -1 bp from yesterday. 

Wall Street is firm with the S&P500 up +0.6% and enough to claim a new record high. Overnight, European markets moved up as well, between London's +1.2% and Frankfurt's +0.1%. Tokyo remained enthusiastic, closing up another +1.3% in Tuesday trade, also a record. Hong Kong was up +1.4%, but Shanghai rose another +1.5%. Singapore ended up +1.3%, an unusually large gain for them. The ASX200 ended its Tuesday trade with a -0.5 fall however. 

The price of gold will start today at US$4487/oz, and up another +US$45 from yesterday and heading back up toward its end of year record high. Silver is up sharply to US$81.50/oz and a new record high, and platinum is also back up sharply at US$2430 and also almost at its end of year record high.

American oil prices are down -50 USc from yesterday at just over US$57.50/bbl, while the international Brent price is now at just under US$61.50/bbl.

The Australian dollar is up +30 bps from yesterday, now at just on 67.4 USc. Against the Japanese yen we are up +70 bps at ¥105.6. Against the euro we are up +30 bps at 57.6 euro cents.

The bitcoin price starts today at US$92,515 and down -1.7% from this time yesterday. Volatility over the past 24 hours has again been modest at just on +/- 1.2%.