OECD sees modest growth but higher inflation; US data mixed; UST auctions bring higher yields; Norway holds but now sees rate rises; global freight rates rise only modestly; UST 10yr at 4.39%; gold falls; oil rises; AU$1 = 69 USc

Here's our summary of key economic events overnight that affect Australia with news we are starting to see economic bite from Trump's war on Iran. There is corrosion everywhere today.

The OECD's latest economic update says global GDP growth is expected to hold at 2.9% in 2026 before rising slightly to 3.0% in 2027, driven by strong tech investment and easing tariffs. But the ongoing Middle East conflict makes these projections wobbly due to the energy market disruptions. Inflation forecasts were revised upward, with G20 advanced economies facing 4.0% headline inflation in 2026 they say, 1.2 percentage points higher than previously anticipated.

They see American GDP expansion go from +2.0% this year to +1.7% next year. For China, they see a shift from +4.4% in 2026 to 4.3% in 2027. For Japan, it is stable at +0.9% in both years. Their forecast for Australia is +2.3% growth this year, +2.4% next year.

Back in the US, jobless claims dipped last week, but not by as much as seasonal factors would have indicated. There are now 2.04 mln people on these benefits, down from 2.07 mln a year ago but up from 1.8 mln two years ago.

Meanwhile the Kansas City Fed March factory survey was positive again in March, for a second consecutive month. The month-on-month indexes were all positive except for new export orders.

The overnight US Treasury 7yr  bond auction brought similar results to the earlier 2 and 5 year events - lower offer volumes and much higher yields. This latest 7 year bond had a median yield of 4.19%, up from 3.74% at the prior equivalent event a month ago. Bad management brings higher risk premiums.

In China, state-owned China Eastern Airlines said it will buy 101 Airbus aircraft in a deal worth about US$16 bln, extending a run of big-ticket Airbus orders by major Chinese carriers. That will juice up Airbus's 2026 order book sharply.

In Singapore, manufacturing production fell by -0.1% in February from a year ago, reversing the +12.9% surge in January. This February result was the first month of decline since August last year, driven by weaker output across nearly all sectors - except electronics.

Overnight, Norway's central bank kept its policy rate unchanged at 4.0%. But they do see a hiking possibility in 2026, a turn from where a cut was more likely.

Global container freight rates rose +5% last week from the prior week, and are also now +5% higher than year ago levels. This latest rise makes these costs up +20% from the end of February. Outbound rates from China were the main driver in these latest rates and the overall index would have been much higher except for the decline in EU to US rates. That trade has shriveled to a -29% year-on-year pullback. Meanwhile bulk cargo rates rose +3% in the past week but are -22% lower than year-ago levels.

The UST 10yr yield is now just on 4.39%, up +6 bps from yesterday at this time and its highest since July 2025. The key 2-10 yield curve is marginally flatter at +44 bps (-1 bp). Their 1-5 curve is steeper at +26 bps (+7 bps) and the 3 mth-10yr curve is now at +72 bps (+9 bps). The China 10 year bond rate is down -2 bps at 1.81%. The Japanese 10 year bond yield is up +2 bps at 2.27%. The Australian 10 year bond yield starts today at 5.07%, up +15 bps from yesterday. 

Wall Street is retreating, with the S&P500 with down -1.7% in sinking trade. Overnight, European equity markets were lower between Frankfurt's -1.6% fall and Paris's -1.0%. Yesterday Tokyo dipped -0.3%. Hong Kong was down -1.9%, and Shanghai fell -1.1%. Singapore was down -0.3%. The ASX200 dipped a minor -0.1%.

The price of gold will start today down -US$173 from yesterday at US$4383/oz. Silver is down -US$4.50 at US$68/oz.

American oil prices are up +US$4.50 at just over US$94.50/bbl, while the international Brent price is up +US$7 at just on US$108/bbl. Ship transit traffic in the Strait of Hormuz, already low, has dried up again.

The Australian dollar is -40 bps lower against the USD from yesterday, now at 69 USc. Against the Japanese yen we are also down -40 bps at ¥110.2. Against the euro we are -20 bps lower at just on 59.8 euro cents.

The bitcoin price starts today at US$68,909 and down -3.6% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.1%.