Bogus claims against Fed boss being watched closely; Indian CPI stay low; Australian household spending rises; Google's AI chops power its valuation; UST 10yr at 4.18%; gold hits new record, oil stable; AU$1 = 67.2 USc

Here's our summary of key economic events overnight that affect Australia with news gold and other commodity prices have pushed up into record territories again as geopolitical risks rise. (Crypto's are notable by their impotence in the background, irrelevant in this environment.)

Perhaps one reason is in the US, where the President has used his weaponised Justice Department to pressure the Federal Reserve to bow to his will. The clearly bogus criminal charges are being resisted by chairman Powell. The unseemly crisis could aggravate risk premiums worldwide. So far interest rates have remained stable (you can be sure that bond markets will be watching intensely), but the USD is noticeably weaker.

It has not been in the limelight recently, but we should note that US grain farmers are facing tough trading, with them being shut out from the China trade for soybean and corn. Trump seem to have thrown them under the bus.

In India, consumer price inflation rose to 1.3% in December from 0.7% in November but below the market consensus of 1.5%. Despite the rise, this rate remains well below the Reserve Bank of India's tolerance limit of 2%-6%. Prices fell less for food (down -2.7%), which represent nearly half of the consumer basket.

Here in Australia, household spending rose strongly in November, up +1.0% from October, up +6.3% from November a year ago. This result was much better than expected.

And Canberra said it will buy and stockpile key rare-earth minerals from domestic producers to strengthen defence and technology supply chains and reduce reliance on China. They are initially focusing on antimony and gallium under a new A$1.2 bln program.

The UST 10yr yield is now just over 4.18%, up +1 bp from this time yesterday. The key 2-10 yield curve is still at +64 bps. Their 1-5 curve is now at +23 bps and the 3 mth-10yr curve is little-changed, now by +56 bps. The China 10 year bond rate is down -2 bps at 1.87%. The Japanese 10 year bond yield is down -1 bp at 2.08%. The Australian 10 year bond yield starts today at 4.67%, down -1 bp from yesterday.

There were two UST bond auctions today. The 3 year Note came in with a median yield of 3.56%, little different to the equivalent event a month ago. The 10yr bond came in with a median yield of 4.13%, compared to 4.12% at the equivalent event a month ago.

Wall Street has opened its week with the S&P500 very little-changed, up +0.1%. Overnight, European markets also opened subdued between Paris's no-change and Frankfurt's +0.5%. Yesterday Tokyo closed up +1.6% however, Hong Kong was up +1.4% and Shanghai ended its Monay up +1.1%. Singapore closed up +0.5%. The ASX200 also closed up +0.5%. 

We should perhaps note that Alphabet (Google) briefly hit US$4 ​trln in market valuation earlier today, the second company to do that after Nvidia, as they sharpened their AI gains, both with impressive integrated solutions, and a recent deal with Apple (who was pushed into third place on the valuation table).

The price of gold will start today at US$4617/oz, and up +US$108 from yesterday on the risks from the unsettled US Fed. Silver is now up at over US$80.50/oz.

American oil prices are unchanged from yesterday at just on US$59/bbl, while the international Brent price is still at just under US$63.50/bbl.

The Australian dollar is up +20 bps from yesterday, now at just under 67.2 USc. Against the Japanese yen  we are up +60 bps at ¥106.2. Against the euro we are unchanged at 57.5 euro cents.

In offshore trading the Chinese yuan (CNH) has strengthened well past the 4:USD level, and rising.

The bitcoin price starts today at US$92,071 and up +1.2% from this time yesterday. Volatility over the past 24 hours has been modest also at just on +/- 1.2%.