US data soft facing sharp energy cost rises; China lowers its growth target; Australia household spending growth slows; global freight rates rise; UST 10yr at 4.14%; gold eases while oil jumps; AU$1 = 70 USc

Here's our summary of key economic events overnight that affect Australia with news bankrupt US/Israeli decisions to choose war over peaceful pressure are having global consequences.

But first, the Federal Reserve Beige Book for February reported that overall US economic activity increased at a slight to moderate pace in seven of the twelve Federal Reserve Districts, while the number of Districts reporting flat or declining activity increased from four in the prior period to five in the current period. This is not a review that found strong growth.

US jobless claims rose last week by +18,000 from the prior week to 213,000 but most of that can be accounted for by seasonal factors. There are now 2.21 mln people on these benefits, similar to this time last year, but significantly higher than the 2024 levels.

February announced job cuts were lower than in January, but together the first two months have been almost as high as the equivalent 2025 levels. This survey also tracks hiring plans and that is down more than -50% from last year.

Tomorrow the February US non-farm payrolls will be released and analysts expect a low +59,000 gain. That would be half the +130,000 January level, itself historically low.

According to AAA monitoring, average petrol prices (91) in the US are now US$3.25/gal (AU$1.23/L) This is up +9% from US$2.98/gal a week ago, up from US$2.89/gal a month ago, or a +12.5% rise.

US natural gas prices are up +7.2% over the same time-frame but to be fair are still very low. But in Europe, these prices are up +70% (in the UK) and up 53% (in Germany) for example. In India, natural gas prices have tripled for many users over the past few days. It is natural to wonder what Trump would say if the EU (or India) took unilateral actions that imposed similar cost jumps on the US. It is no longer safe to be a 'friend' of the US, or any country that pursues policies that "put me first".

American policymakers are scrambling to assess a wide range of materials where access is at risk. And institutions more broadly are doing the same.

We need to start keeping a closer eye on supply chain pressures. The NY Fed's February monitoring shows it elevated but nothing like the pandemic period, although not yet accounting for the current stresses.

Taiwanese industrial production rose +28.5% in January from a year ago, no surprise given the export order data we have been noting. But it is their sharpest rise in at least a decade, probably longer. However, things are not positive for Taiwanese retail sales; they actually decreased in January. But this was entirely due to Chinese New Year falling in a different period this year.

Singapore retail sales data for January also got twisted by the holiday timing.

The Malaysian central bank kept its policy rate unchanged overnight at 2.75%, saying inflation there is well contained. But they are worried about Middle East conflict effects.

China said it is lowering its growth target - slightly. Premier Li Qiang is set to announce a "around 4.5 to 5%" target while delivering the government work report, a key policy document, at the opening session of the National People's Congress later today. The departure from the "around 5%" growth target for the past three years signals the start of a period of slower expansion in China.

A big focus is on stabilising their moribund real estate markets. 'Stabilising' will undoubtedly mean subsidies and incentives to unlock buyer interest in the sector again. That will be a hard ask, given the widespread pain still in recent memory.

EU retail sales rose +2.3% in January, although slightly less in the Euro Area.

In Australia, household spending rose +4.6% in January from a year ago, the slowest pace since late May, following a +5.0% rise in December. This was a smaller increase than expected.

Global container freight rates, which had been falling every week in 2026 so far, turned +3% higher last week as the early signs of the Middle East pressures started to mount. Outbound China rates are up +10% for the week. However they are still -23% lower than year-ago levels. It might be different when this weeks data is released next week, of course. More currently, bulk cargo rates are up +6% for the week. Shipping traffic in the Straits of Hormuz has ceased altogether. (Live here.) And we should note ships outside the Strait are under attack too, so the conflict stresses are spreading.

Australia has significant food exports into the Middle East region, and they are now disrupted. We noted the sharp rise in fertiliser costs yesterday and more broadly, that is bringing warnings of food shortage consequences.

And as if these crises aren't enough, overshadowed is the Blue Owl private credit car crash in the US, and the wider concerns about their risky loans. Some insiders are now talking about a consequential "bank run" being caused by this.

The UST 10yr yield is now just on 4.14%, up +6 bps from yesterday. The key 2-10 yield curve is holding at +55 bps. Their 1-5 curve is steeper at just on +14 bps (+5 bps) and the 3 mth-10yr curve is now at just on +44 bps (+7 bps). The China 10 year bond rate is stable at just on 1.79%. The Japanese 10 year bond yield is up +4 bps at 2.15%. The Australian 10 year bond yield starts today at 4.80%, little-changed from yesterday. 

Wall Street has opened its Thursday trade with the S&P500 down -1.2% and falling. Overnight European markets were down between Paris's -1.5% and Frankfurt's -1.8%. Yesterday Tokyo ended its Thursday session up +1.9%. Hong Kong was up +0.3% and Shanghai was up +0.6%. Singapore was up +0.7%. The ASX200 ended its Thursday session up +0.4%. 

The price of gold will start today down -US$71 from yesterday at US$5076/oz. Silver is down -US$2 at US$82/oz today.

American oil prices are up more than +US$5.50, up +7% in a day, at just under US$79.50/bbl, while the international Brent price is up the same to be now just on US$84.50/bbl.

The Australian dollar is down -70 bps against the USD from yesterday, now just on 70 USc. Against the Japanese yen we are down -50 bps at ¥110.4. Against the euro we are down -30 bps at 60.5 euro cents.

The bitcoin price starts today at US$71,316 and down -2.6% from this time yesterday, although holding on to a large part of yesterday's rise. Volatility over the past 24 hours has been moderate at just on +/- 2.1%.