Confusion from PMIs in both the US and China; Taiwan export orders surge again; Australian GDP rises more than expected; fertiliser prices leap; UST 10yr at 4.08%; gold rises while oil eases; AU$1 = 70.7 USc

Here's our summary of key economic events overnight that affect Australia with news both China and the US have parallel PMI surveys and this month each told wildly different stories about how their February economies were tracking.

But first, after flat-lining in each of the past four week, US mortgage applications rose notably last week, driven by strong refi activity, covering continuing weak new home purchase applications.

The US ADP employment report shows a gain of +63,000 jobs in February, the most since July, following a downwardly revised +11,000 rise in January. Analysts were anticipating a gain of +50,000. But all the gains were in the education and health sectors, and only in small (sub 20 employee) companies. As a result, the data shows no widespread pay benefit from changing jobs. In fact, the pay premium for switching employers hit a record low in February.

The ISM February services PMI for the US expanded more than expected to its best level since July 2022 with gains in all subcategories.

Meanwhile the parallel S&P Global/Markit services told a quite different story, with the expansion in that sector falling to its lowest level since April 2025 amid a weaker rise in sales.

In Taiwan, their exporting miracle has extended with export orders soaring +60% to a new record of US$77 bln in January, besting market expectations of a +51% surge and accelerating from a +44% gain in December. Yes, electronics drove the rise, but they also had strong rises in chemicals, textiles, and metals. Orders poured in from the US, the EU and from China. Export orders a year ago at US$48 bln were not weak, so this is truly an astounding trend.

In China, their official February PMI's were dour affairs, even for them. Both the factory and service sector reports revealed contractions in the month, the factory sector worse than in January, their services sector a slightly less contraction than in the previous month.

But in complete contrast, the private S&P Global/RatingDog surveys found something different, strong expansions in both sectors. New orders drove the factory one to its best expansion in five years, they say, and new business drove their services expansion to its fastest pace in nearly three years.

In Europe, producer prices rose quite sharply in January from December, but most of that was retracing a sharp December fall. Year-on-year they are down -2.1% although most of that fall was earlier in the year.

Here in Australia, the ABS reported that our economic activity rose +2.6% in Q4-2025, compared to the same period in 2024. Analysts had expected it to rise +2.2% on that basis, so it was a very positive outcome. GDP per capita increased for the fourth consecutive quarter and is now +0.9% higher than a year ago, the highest year-on-year growth since December 2022. For the full 2025, this is +2.0% (real) higher than calendar 2024. Compensation of employees rose +6.5% in the year. The household saving to income ratio increased to 6.9%, up from 6.1% in the September quarter. This ratio is now at its highest level since the September quarter 2022. All this data is 'real' after inflation.

And we should note that the aluminium price surged overnight as Persian Gulf refineries declared force majeure on their orders due to the US/Israeli attacks in the area and Iran's response.

The same tensions are forcing up fertiliser prices sharply. Urea prices have jumped +11% in one day. Australia imports two thirds of its urea from the Middle-East.

And despite the "Trump guarantee" and promises of naval protection, if you can get it, insurance costs for shipping in the Persian Gulf has soared by +1300%. Insurers are completely dismissing Trump's 'promises'.

The UST 10yr yield is now just on 4.08%, up +2 bps from yesterday. The key 2-10 yield curve is holding at +55 bps. Their 1-5 curve is still just on +9 bps and the 3 mth-10yr curve is now at just on +37 bps (also little-changed). The China 10 year bond rate is stable at just on 1.79%. The Japanese 10 year bond yield is down -2 bps at 2.11%. The Australian 10 year bond yield starts today at 4.80%, down -3 bps from yesterday. 

Wall Street has opened its Wednesday trade with the S&P500 up +0.8%. Overnight European markets were up between Paris's +0.8% and Frankfurt's +1.8%. Yesterday Tokyo ended its Wednesday session down -3.6%. Hong Kong was down -2.0% and Shanghai was down -1.0%. Singapore was down -2.1%. The ASX200 ended its Wednesday session down -1.9%. 

The price of gold will start today up +US$30 from yesterday at US$5147/oz. Silver is up +US$1 at US$84/oz today.

American oil prices are down -US$2 at just over US$74/bbl, while the international Brent price is down the same to be now just over US$81/bbl.

The Australian dollar is up +60 bps against the USD from yesterday, now just on 70.7 USc. Against the Japanese yen we are up +50 bps at ¥111. Against the euro we are up +30 bps at 60.8 euro cents.

The bitcoin price starts today at US$73,236 and up +8.4% from this time yesterday. Volatility over the past 24 hours has been very high at just on +/- 4.0%.