US jobless claims rise, factory surveys improve; US rural sector suffering; China bank lending improves; Australian inflation expectations stay elevated; UST 10yr at 4.16%; gold stays high; oil drops hard; AU$1 = 57.4 USc

Here's our summary of key economic events overnight that affect Australia with news of plenty of gritty data, but none of it really amounting to anything significant.

Actual US initial jobless claims rose +32,000 last week to 331,000. But that was a lesser rise than seasonal factors would suggest so they are taking that as a 'win'. There are now 2.31 mln people on these benefits, up from 2.27 mln this time last year and that is a post-pandemic high. (Financial markets prefer the seasonally-adjusted data, even if that doesn't actually reflect the impact on real people.)

The New York Fed's Empire State factory survey rose in January on a modest rise in new orders, putting behind it the November dip. It was a very similar story for the Philly Fed factory survey which rose in January for the first time in four months.

The January update to the Fed Beige Book saw overall economic activity increasing at a slight to modest pace in eight of the twelve Federal Reserve Districts, with three Districts reporting no change and one reporting a modest decline. This marks an improvement over the last three report cycles where a majority of Districts reported little change. Employment was little-changed. But cost pressures due to tariffs were a consistent theme almost everywhere.

In the US rural economy, the rejection of US farm goods internationally is causing exceptionally tough times. Banks are refusing to lend because borrower prospects are so poor. It's an existential crisis for many. Far from the 'great again' promise, it is shaping up to be a rural disaster.

Indian exports rose in December, but the gain was marginal. But trade with the US is little affected with exports to the US down just -1% since Trump's swingeing tariffs on India. For the full year, India had a trade deficit of -US$305 bln, a notable rise from 2024. India is no China trade behemoth - yet.

Chinese banks extended ¥910 bln in new loans in December, sharply higher than the unusually low ¥390 bln in November. A year ago, the December level was ¥990 bln but at least this year it was above market expectations of ¥800 bln. New bank lending in China has been at unusually low levels for more than six months now. To encourage more, the central bank has lowered interest rates on targeted rural and SME lending. It also unveiled a ¥1 tln (AU$200 bln) relending facility for private enterprises.

The inability of some Australian state governments to repair their balance sheets after the pandemic free-spending is worrying at least one credit rating agency. S&P is warning NSW and Queensland in particular that they are now at greater risk of a downgrade from their AA+ rating. Heavy infrastructure spending and rising entitlement claims are hurting, as well as the political reluctance to raise taxes.

And staying locally, consumer inflation expectations came in at 4.6% in January, little changed from the 4.7% in December. Households still see elevated price pressures and has been at this general level for more than eight months. (Official November CPI was 3.4% and the December update comes on January 28, 2026.)

Global container freight rates slipped -4% last week, ending a string of five consecutive rises. Most of that was driven by retreats in the China-US trade. This index is now -39% lower than year-ago levels. The bulk cargo rates fell sharply this week, down -13% to be +44% higher than year ago levels.

The UST 10yr yield is now just on 4.16%, up +2 bps from this time yesterday. The key 2-10 yield curve is now at +60 bps. Their 1-5 curve is now at +23 bps and the 3 mth-10yr curve is now at +53 bps. The China 10 year bond rate is down -1 bp at 1.84%. The Japanese 10 year bond yield is also down -1 bp at 2.17%. The Australian 10 year bond yield starts today at 4.69%, up +2 bps from yesterday. 

Wall Street has opened its Thursday with the S&P500 up +0.6% in a modest tech rebound. Overnight, European markets were mixed between London's +0.5% rise and Paris's -0.2%. Yesterday Tokyo closed down -0.4%. Hong Kong was down -0.3% and Shanghai mirrored that. Singapore closed up +0.4%. The ASX200 closed up +0.5%. 

The price of gold will start today at US$4603/oz, and down -US$10 from yesterday. Silver is up at US$92.50/oz.

American oil prices are sharply lower from yesterday at just under US$59/bbl and down -US$2.50, while the international Brent price is now at US$63.50/bbl.

The Australian dollar is up +20 bps from yesterday, now at just under 67.1 USc. Against the Japanese yen we are up +40 bps at ¥106.3. Against the euro we are up +40 bps at just on 57.8 euro cents.

The bitcoin price starts today at US$96,711 and down -0.7% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.2%.