US data uninspiring; China services PMI expands faster; EU inflation retreats; Australian cost of living indexes mixed; UST 10yr at 4.27%; precious metals still volatile; AU$1 = 69.8 USc; bitcoin slides faster

Here's our summary of key economic events overnight that affect Australia with news the real economic markers in the world's largest economy painted a very lackluster picture today.

US mortgage applications retreated again last week, for a second consecutive week. But these are still running well above year-ago levels. The refinance activity retreated but the big fall was for new purchase finance.

Private businesses in the US added just +22,000 jobs in January according to the comprehensive ADP survey, (sample size of 26 mln) following a downwardly revised +37,000 rise in December and below forecasts for a +48,000 rise. Among these lackluster totals hiring in the health care sectors was a standout, adding +74,000 jobs. It was retrenchment in many others, including manufacturing.

Remember the January non-farm payrolls report won't be released at its usual time on Saturday (AEST) due to the shutdown delays. It will now come next Thursday, February 12 (AEST).

Meanwhile the ISM services sector PMI stayed in relatively good shape in January, although December was revised lower. New order growth slowed however, and price increases, pushed by tariff-taxes, rose.

This is not translating into consumers buying cars at a higher rate. In fact, in January the annualised rate was only 14.9 mln vehicles, the slowest month since December 2022, and -4.1% lower than in January 2025.

In China, and unlike the official January services PMI which was more negative, the private S&P Global version is more positive. The RatingDog China General Services PMI rose in January to a better expansion, from December’s six-month low and better than market expectations. It's the strongest expansion in their services sector since October, driven by stronger growth in new orders, and a fresh increase in foreign sales.

Meanwhile China said its fiscal revenue fell in 2025 for the first time since the pandemic. Sharp falls in non-tax takings outweighed a modest recovery in tax revenue.

In Europe, the surging value of the euro helped push down their January CPI inflation level to 1.7%. Food, however, was up 2.7%.

Here in Australia, the ABS released some living cost indexes yesterday, following the overall 3.8% December CPI. They say living costs for 'employees' rose just +2.2% in the year to January, but for 'aged pensioners' it was up +4.2%.

The UST 10yr yield is now just on 4.27%, down -2 bps from this time yesterday. The key 2-10 yield curve is still at +71 bps. Their 1-5 curve is still at +34 bps and the 3 mth-10yr curve is now at +59 bps. The China 10 year bond rate is holding at 1.81%. The Japanese 10 year bond yield is up +1 bp at 2.26%. The Australian 10 year bond yield starts today at 4.84%, down -1 bp.

Wall Street has started its Wednesday weaker with the S&P500 down -1.0% on tech sector pullbacks. Overnight European markets closed mixed between Frankfurt's -0.5% and Paris's +1.0%. Yesterday Tokyo ended its Wednesday session up another +1.0%. Hong Kong was unchanged but Shanghai rose +0.8%. Singapore up +0.4%. The ASX200 rose +0.8%.

The price of gold will start today down -US$120 from yesterday at US$4860/oz. Silver is down -US$1 to US$85.50/oz. Some non-precious metals are lower too.

American oil prices are up a bit less than +US$1 at just under US$63.50/bbl, while the international Brent price is now just on US$67.50/bbl.

The Australian dollar is down -40 bps against the USD from yesterday, now just over 69.8 USc. Against the Japanese yen we are down -10 bps at ¥109.4. Against the euro we are also down -40 bps at just on 50.8 euro cents. 

The bitcoin price starts today at US$72,550 and down another -3.3% from this time yesterday, and falling. The last time it was this low was in November 2024. Volatility over the past 24 hours has been moderate at just on +/- 2.6%.