US data shaky; ditto Canada; Japan ready to vote; India & the ECB hold their policy rates; German factory orders surge; global food & freight indexes fall; UST 10yr at 4.21%; gold, silver & oil up; AU$1 = 70.2 USc

Here's our summary of key economic events overnight that affect Australia with news of widespread rebounds in markets today, but not back to levels from which they fell. The equity rebound looks solid but the commodity ones are questionable. The bond market looks nervous.

And that is because the latest US data looks shaky. Initial US jobless claims rose by +22,000 from the previous week to 252,000 on the last week of January, sharply above market expectations of 212,000. There are now 2.215 mln people on these benefits, up +78,000 from a week ago but that is lower than a year ago (2.252 mln), even if it is very much higher than two years ago

US job openings jell by -386,000 to 6.5 mln in December, the lowest since September 2020 and well below market expectations of 7.2 mln.

Job layoffs in January came in at 108,500, the highest level for a January since 2009.

The University of Michigan’s consumer sentiment index rose marginally in February from its record low levels and it was a third consecutive monthly increase. Analysts had expected it to dip again. Despite the improvement, sentiment remained roughly 20% below January a year ago. The gains were driven largely by consumers with significant stock holdings, while sentiment among households without equity exposure stagnated at depressed levels. Year-ahead inflation expectations fell sharply to 3.5% from 4.0% in January, the lowest level since January 2025, while longer-term inflation expectations edged up for a second month to 3.4% from 3.3%.

The jobless rate in Canada fell to 6.5% in January from 6.8% in the previous month, undershooting market expectations of 6.8%. But this 'improvement' was only due to fewer people looking for work. Their labour force contracted by -94,000, pushing the participation rate down to 65.0% from 65.4%. They lost -25,000 jobs in the month, interrupting the recent run of gains. But this was driven by a -70,000 fall in part-time jobs whereas full-time positions rose +45,000.

Meanwhile Canadian retail sales data in both November and December came in quite positive.

And their January Ivey PMI remained expansionary, a surprise because it was expected to shift back into contraction.

Japan is going to the polls in their snap election, called by new prime minister Sanae Takaichi. The voting starts on Sunday. It looks like her gamble is going to pay off handsomely, with a big win, with her popularity surging among the young.

The Reserve Bank of India kept its its key policy rate at 5.25% during its overnight February after cutting it by -25 bps at the prior December meeting. This is what was expected. They have softer inflation (1.3%) and improving growth prospects (+8.2%). They also have a better US–India trade deal so they raised their 2026 growth estimate.

In the EU, the ECB left its policy interest rates unchanged at its first policy meeting of 2026, on the basis that inflation is stable an within its target policy range. It the "good place" the central bank wants to see. But they do expect it to be quite uneven over the next year because uncertainty is higher than normal, reflecting the volatility of the global policy environment.

The Bank of England left its rate unchanged too, at 3.75%. But that was a close-run thing with a 5-4 vote.

German factory orders surged +7.8% in December from November, defying market expectations for a -2.2% drop and accelerating from November’s marginally revised +5.7% gain. It is up more than +13% from a year ago. It marked the fourth straight monthly increase and the strongest since December 2023.

Australia recorded an actual merchandise trade surplus of +AU$6.7 bln in December, down -23% from the same month in 2024, taking the full 2025 surplus to +AU$45.0, which in turn was -33% lower than for all of 2024. Exports were $523.2 bln for the year, up only +1%. That gain was only possible because gold exports rose +65.8% to AU$60.9 bln for the full year. Rural exports rose +13.7% to AU$77.5 bln in 2025. Other mineral exports tanked.

In testimony at the Canberra parliament, RVA governor confirmed that high government spending does keep pressure on inflation.

The FAO Food Price Index fell for fifth consecutive month in January, driven by lower dairy, meat and sugar prices. But to be fair, the shifts in each of these categories wasn't large - other than for dairy prices. Of course, the recent GDT auction results probably indicate this down-trend has now been arrested.

Global container freight rates fell -7% last week to be -40% lower than year-ago levels. Again, it was outbound China rates that were weak. Bulk cargo rates slipped last week too.

The New York Fed's global supply chain pressure index stayed Elevated in January.

The UST 10yr yield is now just on 4.21%, recovering +3 bps from this time yesterday but down -3 bps from this time last week. The key 2-10 yield curve is still at +72 bps. Their 1-5 curve is now flatter at +31 bps (-2 bps) and the 3 mth-10yr curve is now at +53 bps and much flatter (-6 bps). The China 10 year bond rate is holding at 1.81%. The Japanese 10 year bond yield is down -3 bps at 2.23%, down the same for the week. The Australian 10 year bond yield starts today at 4.86%, up +2 bps, up +7 bps for the week.

Wall Street has started its Friday recovering Thursday's losses on the S&P500 up +1.7% so far and heading for a no-change week.. Overnight European markets all rose between Paris's +0.4% and Frankfurt's +0.9%. Yesterday Tokyo ended its Friday session up another +0.8% to finish its week up +1.3%. Hong Kong was down -1.2% on Friday ending its week -2.0% lower. Shanghai fell -0.3% for a weekly -0.4% dip. Singapore was down -0.8%. The ASX200 fell -2.0% yesterday and ended its week down -1.3%. 

The Fear and Greed Index is now just in the 'fear' zone, from last week's 'greed' position.

The price of gold will start today up +US$108 from Thursday, up +US$190 from yesterday at US$4968/oz. Silver is back up +US$6.50 to US$77.50 but still down a sharp -$8 from Thursday's US$85.50/oz. In China, gold sales to investors topped those for jewellery from the first time in 25 years.

Some non-precious metals are back higher too.

American oil prices are up a bit less than +50 USc at just over US$64/bbl, while the international Brent price is now just on US$68.50/bbl. A week ago these prices were +50 USc higher.

The Australian dollar is up +50 bps against the USD from yesterday, now just under 70.2 USc. Against the Japanese yen we are up +100 bps at ¥110.3. Against the euro we are up +30 bps at just on 59.4 euro cents.

The bitcoin price starts today at US$69,937 and down another -3.6% from this time Thursday after recovering from its US$60,000 Friday dip. But it is still down -15.8% from this time last week. Volatility over the past 24 hours has been extreme at just on +/- 9.1%.