Investors panic over inflation threats; IEA sees historic disruption; Taiwan export orders up +24%; China FDI weak; UST 10yr at 4.39%; gold soft; reason for silver surge revealed; oil rises again; AU$1 = 70.4 USc

Here's our summary of key economic events overnight that affect Australia with news US Treasury yields have jumped, and to their highest level in nine months. Investors are coming to realise that Trump doesn't know what he is doing, and the inflation impacts from these mistakes will likely deliver a much more hawkish US Federal Reserve. We may all be in for rising benchmark interest rates.

And it won't help us that credit rating agencies are looking at these impacts and starting to consider downgrades. Risk premium rises will be on top of the benchmark rises.

Meanwhile, the IEA says the market disruptions from the US/Israeli "conflict has triggered the largest supply disruption in the history of the global oil market". They say we should all work from home, and if we drive, drive slowly.

American petrol prices are up a third in just four weeks. That signal from the world's largest economy will be sharply inflationary. By a different means, Trump is effectively imposing a giant carbon tax on everyone.

And what will flow from from that? Sharply higher inflation, and sharply lower global economic activity. That is the definition of stagflation. Everyone suffers because monetary policy needs higher interest rates to restrain the inflation side of the coin. And that undermines the global banking system because stagflation is the worst scenario for bank lending.

Meanwhile, Canadian retail sales rose in February by +0.9% from January to be +1.8% higher than year-ago levels.

But Canada's producer prices rose much less than expected in February. They were up +0.4% from January when a +1.1% rise was expected. For the tear they are up +5.4% however.

Taiwanese export orders are still growing fast but the February rise was only +24% and by the standards of the +60% January rise, this seems a let-down. Analysts has expected another very large rise and so were disappointed. But anyone else would have been over the moon with a +24% rise.

In China, foreign direct investment inflows fell -5.7% to ¥161 bln in February from a year ago, -22% lower than the same period in 2025, and its lowest for this period since 2020. There  were some positive sectors in high-tech, but mostly this is a weakness Beijing won't appreciate.

And Chinese customs data shows why the silver price jumped earlier in the year. China bought up 700 tonnes of the metal in January and February to shore up its strategic reserves. But the buying seems to have eased or stopped, and we are seeing the price dive now.

And staying in China, despite the huge surge in car sales there, over half their car dealers say they are missed sales targets and many are now operating at a loss.

We should probably note that with the Australia-New Zealand "Closer Defence Relations" statement, there is growing expectations that the two countries will buy its replacement frigates from Japan.

The UST 10yr yield is now just on 4.39%, up +11 bps from yesterday at this time, up the same for the week. The key 2-10 yield curve is much steeper at +49 bps (+8 bps). Their 1-5 curve is slightly steeper at +17 bps (+1 bp) and the 3 mth-10yr curve is now at +69 bps (+9 bps). The China 10 year bond rate is up +1 bp at just under 1.83%. The Japanese 10 year bond yield is down -1 bp at 2.26%. The Australian 10 year bond yield starts today at 5.07%, up +5 bps from yesterday and its highest since 2011. It is up +8 bps for the week.

Wall Street has started Friday trade with the S&P500 down another -1.7%, down -2.7% for the week. Overnight, European markets were sharply lower again, between London's -1.4% and Frankfurt's -2.0%. Yesterday, Tokyo closed down -3.4% for a weekly dip of just -0.4%. Hong Kong ended its Friday session down -0.9%, and Shanghai fell -1.2%. Singapore ended down -0.4%. The ASX200 closed down -0.8% for a weekly retreat of -1.7%.

The Fear & Greed index has now moved further into the 'extreme fear' zone today.

The price of gold will start today down -US$14 from yesterday at US$4573/oz. That is down -$453 or almost -10% in a week. And that its its largest fall on more than 40 years. Silver is down another-US$1 at US$69.50/oz, a -14% weekly retreat.

American oil prices are up +US$3/bbl at just on US$98/bbl, while the international Brent price is now just over US$110.50/bbl. The Straits of Hormuz remain no-go areas for most with the situation still extremely unstable. The ships transiting are those approved by Iran, which holds all the cards at present.

The Australian dollar is down -40 bps against the USD from yesterday, now just on 70.4 USc. A week ago it was 70.1 USc. Against the Japanese yen we are up +30 bps at ¥112.1. Against the euro we are down -30 bps at 60.9 euro cents.

The bitcoin price starts today at US$69,626 and up +0.2% from this time yesterday but down -3.3% from a week ago. Volatility over the past 24 hours has been modest at just on +/- 1.4%.