China house prices fall further; China bank lending soft; India bank lending strong; Malaysia growth strong; US inflation modest; China & US on holiday; UST 10yr at 4.06%; gold firmish and oil holds; AU$1 = 70.7 USc

Here's our summary of key economic events over the weekend that affect Australia with news the modest US inflation rate reported for January is fueling a disconnect and scepticism in US households.

But first, here the key data will come on Thursday with our January labour force updates. And the RBA will release the minutes of it February 4 meeting on Tuesday, always a potential market-moving event.

The US Fed will also release its minutes this week. And we will get the advance estimate of Q4-2025 US GDP, as well as the Fed's preferred inflation gauge, the PCE. Canada will chime in with its own key releases.

In China, markets will be closed for the week-long Lunar New Year holiday from February 16 to 23, although January foreign direct investment data is still expected to be released. Elsewhere, trade figures are due from Singapore, Malaysia, and New Zealand, while Malaysia will also publish inflation data.

Over the weekend, China reported that that price deflation in their housing market picked up in January for a third straight month at a faster pace, overall down -3.1% from a year ago. In January, the year-on-year sales price of existing homes in first-tier cities fell by -7.6%. Specifically, prices in Beijing, Shanghai, Guangzhou, and Shenzhen falling by -8.7%, -6.8%, -8.3%, and 6.5% respectively. In second- and third-tier cities, the year-on-year sales prices of existing homes fell by -6.2% and -6.1%. Prices for new-built houses fell too, but only by -2.1%.

Staying in China, and as expected, the normal January surge in new yuan lending by banks occurred again this year, but by less than expected and by a -8.2% lower level than for 2025, -4.3% lower than for January 2024. And it was -5.8% lower than what was expected. It is a soft result and is typically followed by a sharply lower level of lending in February during the Spring Festival/CNY period. 2026 is off to a languid start for them.

Meanwhile, China's export economy is still functioning at full speed. Their current account surplus widened to an unprecedented US$242 bln in Q4-2025, sharply higher than the US$164 bln recorded a year earlier.

India also released bank loan data overnight, and their firms are borrowing up big. In fact, it was up +14.6% in January from a year ago, the strongest surge in a year.

Malaysia reported that its economic activity rose +6.3% in Q4 2025 from a year ago, revised up from an initial 5.7% and accelerating from 5.4% growth in Q3. This was their sharpest expansion since Q4-2022, with broad gains in agriculture, driven by oil palm output (+16%), manufacturing, and services.

On Saturday in the US CPI inflation came in at 2.4% for the year to January, slightly below the expected 2.5%. Core inflation came in at the expected 2.5%. This result was all due to lower petrol prices and falling used car prices. However, food was up +2.9%, and rents were up +3.0%. Electricity prices were up +6.3% (thank you, AI) and home gas was up +9.8%. It will be hard for households to feel inflation is under control.

And key will be how the US Fed will interpret this data when setting their policy rates at their next meeting on March 19, 2026 (AEST). Markets currently expect a hold, and at least until the middle of the year.

And one reason food prices seem higher there than the official data is that US beef cattle herd is now at its lowest in 75 years. This helps explain why US imports are soaring, and prices are high & rising.

And don't forget, it is a long holiday weekend in the US for Washington's Birthday/President's Day. US-based activity will be low tomorrow and that will show up in our financial markets.

The UST 10yr yield is still just under 4.06%, little-changed from Saturday but it is down -15 bps from this time last week. The key 2-10 yield curve is holding at +65 bps. Their 1-5 curve is holding flatter at just over +18 bps and the 3 mth-10yr curve is flatter at +35 bps (down -2 bps). The China 10 year bond rate is up +2 bps at just on 1.82%. The Japanese 10 year bond yield is down -2 bps at 2.21%. The Australian 10 year bond yield starts today at 4.75%, up +4 bps today but down -11 bps for the week. The NZ Government 10 year bond rate starts today at 4.50%, unchanged from Saturday and down -7 bps for the week.

The price of gold will start today up +US$21 from Saturday at US$5041/oz. Silver is down -50 USc at US$77.50/oz today.

American oil prices are little-changed at just under US$63/bbl, while the international Brent price is still under US$68/bbl.

The Australian dollar is little-changed against the USD from Saturday, now just on 70.7 USc and down a bit less than -10 bps. Against the Japanese yen we are down -10 bps at ¥108.1. Against the euro we are unchanged at 59.6 euro cents.

The bitcoin price starts today at US$68,565 and down -0.8% from this time Saturday. Volatility over the past 24 hours has been modest at just under +/- 1.5%.