China's reserves swell; US labour market data weakens; Japan & Thai elections decisive; German factory orders surge; Australian trade surplus shrinks; UST 10yr at 4.21%; gold, silver & oil stable; AU$1 = 60.2 USc

Here's our summary of key economic events over the long weekend that affect Australia with news all eyes will be on the US tech industry selloff that gathered pace last week, delivering collateral damage to cryptos, and a very volatile ride for precious metals.

But first, this coming week will feature the delayed release of the January US non-farm payrolls report on Thursday (markets expect +70,000), and their CPI report on Saturday (markets expect 2.5%). Deviation from those expected levels will likely have financial market implications.

Australia is set for a busy data week, with releases including household spending, consumer and business confidence, building permits, home loans, and consumer inflation expectations.

In New Zealand the key data this week is for Q4-2025 ready mixed concrete, and migration updates. Plus Q1-2025 inflation expectation data.

China will release its CPI and PPI data on Wednesday (expect 0.4%) as well as January new loan data this week too.

In China over the weekend, their FX reserves got a boost from the weak USD in January which helped lift these by +US$41 bln from December to US$3.4 tln and the highest in more than a decade. That is up from US$3.2 tln in January 2025. They also added to their gold holdings, adding +40,000oz in the month to 74.19 mln oz. That is up +US$1.8 tln in a year.

Also over the weekend, US economic data looked 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 fell 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 significant 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 has been voting in their snap national election. It was essentially a referendum about Sanae Takaichi, a die-hard conservative in the Shinzo Abe mold. She has won convincingly with a rare single-party majority. Actually, it is better that that, a rare two-thirds super-majority.

There was an election in Thailand as well, one where the ruling conservative/royalist/military party won, with 45% of seats decided, plus the proportional representation seats.

At the end of last week, around the world, there were a series of central bank policy updates. The Reserve Bank of India kept 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.

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 is the "good place" the central bank wants to see.

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 a 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 +66% to AU$60.9 bln for the full year. Rural exports rose +13.7% to AU$77.5 bln in 2025. Other mineral export receipts tanked.

The UST 10yr yield is now just on 4.21%, unchanged from Saturday. The key 2-10 yield curve is still at +71 bps. Their 1-5 curve is also unchanged at +31 bps and the 3 mth-10yr curve is holding at +53 bps. The China 10 year bond rate is stable at 1.81%. The Japanese 10 year bond yield is up +1 bps at 2.24% although their markets aren't open to record the election reaction. The Australian 10 year bond yield starts today at 4.81%, down -5 bps.

The price of gold will start today very little-changed from Saturday at US$4966/oz. Silver is also little-changed at US$78/oz. In China, gold sales to investors topped those for jewelry from the first time in 25 years.

American oil prices are down about -50 USc at just on US$63.50/bbl, while the international Brent price is now just on US$68/bbl. A week ago these prices similar.

The Australian dollar is unchanged against the USD from Saturday, still just under 70.2 USc. Against the Japanese yen we are are down -10 bps at ¥110.2. Against the euro we are unchanged at 59.4 euro cents.

The bitcoin price starts today at US$70,693 and up +1.1% from this time Saturday. But it is still down -10% from this time last week. Volatility over the past 24 hours has been modest however at just on +/- 1.9%.