Gigantic surge in global debt; US data tame; Taiwanese jobless low, EU inflation low; China warns US over new tariffs; Australian inflation stays high; UST 10yr at 4.04%; gold up, oil softish again; AU$1 = 71.1 USc

Here's our summary of key economic events overnight that affect Australia with news a new global debt cycle is underway.

First up today, the IIF reports that global debt climbed to a record US$348 tln at the end of 2025, after nearly +US$29 tln was added over the year (about as much as US GDP) in the fastest yearly build-up since the pandemic surge. (The OECD will release its own debt report later next week.)

"A powerful mix of fiscal expansion, accommodative monetary policy, and ‘lighter-touch’ regulatory simplification could drive further debt accumulation — while heightening concerns about rising leverage and overheating in parts of the market," they said.

Meanwhile, US mortgage applications were little-changed last week for a third consecutive week, split between a +4% rise in refinance activity and a -5% fall in new home purchases. Given the fall in home loan rates, down to 2022 lows, many thought this application level would have risen.

The Taiwanese jobless rate held at 3.3% in January, a level it has been at for most of the past year.

The EU CPI was reported at 1.7% in January, with the core rate 2.2%, both little-different to December. These are 16-month low levels. Rates tend to be lower in Western Europe, higher in Eastern Europe.

Malaysia's leading index rose in December, little different to the average over the past two months. That means they have good reason to expect Q1-2026 to stay very positive.

The Chinese yuan has hit a three year high against the USD, although that probably says more about the USD than the yuan.

And the Chinese have warned the US that if it imposes new tariffs by raising the 10% rate to 15% as signaled overnight, that will break its current deal with the US and China will respond. That seems enough to restrain the US at this time, for China at least. The EU has said essentially the same thing.

Here in Australia, their CPI inflation came in at 3.8% in January, unchanged from the December rate, but higher than the expected 3.7% dip. The largest contributor was housing related costs, up +6.8%, up from +5.5% in December. This was due to cost rises for electricity, new dwellings, and rents.. This was followed by food, up +3.1%. Recreation costs rose +3.7%. No sign of inflation easing here, and that will attract financial market speculation about the RBA's next rate review.

We continue to see the iron ore price dip, held back by Chinese pressures and official influences.

The UST 10yr yield is now just over 4.04%, up +1 bp from this time yesterday. The key 2-10 yield curve is holding at +57 bps. Their 1-5 curve is still just on +8 bps and the 3 mth-10yr curve is holding at just on +36 bps (up +2 bps). The China 10 year bond rate is up +2 bps at just on 1.81%. The Japanese 10 year bond yield is up +2 bps at 2.13%. The Australian 10 year bond yield starts today at 4.72%, up +3 bps from yesterday.

Wall Street has opened with the S&P500 up +0.8% so far in Wednesday trade. European markets were mixed between London's +1.2% rise and Paris's +0.5% rise. Yesterday, Tokyo rose +2.2%. Hong Kong rose +0.7%, which was matched by Shanghai. Singapore was fell -0.3%. The ASX200 ended its Wednesday trade up +1.2%.

The price of gold will start today up +US$64 from yesterday at US$5208/oz. Silver is up +US$3 at US$90.50/oz today.

American oil prices are -50 USc softer at just on US$65.50/bbl, while the international Brent price is now just over US$70.50/bbl.

The Australian dollar is up +30 bps against the USD from yesterday, now just on 71.1 USc. Against the Japanese yen we are up +10 bps at ¥111.2. Against the euro we are up +20 bps at 60.3 euro cents.

The bitcoin price starts today at US$68,080 and up +6.3% from this time yesterday. Volatility over the past 24 hours has been high at just over +/- 3.1%.