Middle East 'ceasefire' shaky. Iran gets gatekeeper advantage. Fed watches inflation risks rise. China truck sales hit 5yr high. EU retail activity rises.

Here's our summary of key economic events overnight that affect Australia with news the US-announced ceasefire with Iran is struggling to hold, with Iran accusing the US and Israel of violations, and Iran launching attacks (counter-attacks?) on Gulf state assets. Israel seems very uncommitted to the US claims. There are thousands of ships waiting to transit the Strait of Hormuz, but they must first pass Iran's new gatekeeper reviews.

The oil price has fallen back but only to mid-March levels and still +50% higher than the levels that prevailed at the start of March. And this is doing nothing to restore deliveries of refined product.

However, first in the US, the Federal Reserve released the minutes of its March 18 meeting, which exposed how isolated Steven Miran is on that committee. In fact, some members were open to rate hikes at that time. The vast majority of participants judged that upside risks to inflation and downside risks to employment were elevated, and the majority noted that these risks had increased with developments in the Middle East. They saw the conflict in the Middle East would likely lead to more persistent increases in energy prices and these higher input costs would be more likely to pass through to core inflation. Those risks are likely still there since their meeting given that crude oil prices had risen from US$63/bbl to US$95/bbl when they met, and are at that same level today.

US mortgage applications stayed low last week, restrained by lower refi activity.

Meanwhile, and in an odd move against the mood shift today, investors got higher risk premiums for the US Treasury 10 year bond auctioned today. The median yield came in at 4.23%, compared to the 4.16% at the prior equivalent event a month ago.

In China, a surge in heavy truck sales, especially LNG and EV versions, is bolstering a view that 2026 will turn out positively for them. Some of this was just a rebound from a weak, holiday-affected February. But those truck sales were at a five year high in March.

Taiwan's CPI inflation rate showed no reaction to the events in March at all, which does seem a bit unusual and an outlier result.

There was an Indian central bank review of their monetary policy overnight, and they left their rate unchanged at 5.25%.

In Europe, they reported February producer prices fell -2.7% from a year ago. But this is mainly due to the February 2025 base being unusually elevated.

They also reported that EU retail sales volumes were up +1.7% in February from a year ago.

The UST 10yr yield is now just on 4.28%, down -7 bps from yesterday. The key 2-10 yield curve is little-changed at +50 bps. Their 1-5 curve is lower however, down -5 bps at +24 bps and the 3 mth-10yr curve is flatter at +64 bps (-6 bps). The China 10 year bond rate is little-changed at 1.81%. The Japanese 10 year bond yield is down -2 bps at 2.37%. The Australian 10 year bond yield starts today at 4.92%, down -7 bps.

Wall Street is in a relief rally today, up +2.3% on the S&P500. That follows European markets which bounced back even more, between Paris's +4.5% and Frankfurt's +5.1%. Tokyo was up +5.4% at its Wednesday close. Hong Kong rose +3.1% while Shanghai rose +2.7%. Singapore only managed a +0.8% gain however. The ASX closed its Wednesday trade up +2.6%.

The price of gold will start today up +US$64 at US$4740/oz. Silver is up +US$3 at US$75/oz.

American oil prices are down -US$20 at just on US$95/bbl, while the international Brent price is down -US$15, also at just on US$95/bbl. The traffic through the Strait of Hormuz is moving again, but only for those that pay Iran's 'reconstruction tax'. The US has effectively shifted this waterway from being open and free, to an Iranian asset and chokepoint.

The Australian dollar is down -20 bps from yesterday at this time at 70.5 USc. Against the Japanese yen we have dipped -10 bps to ¥111.8. Against the euro we are down -10 bps at just on 60.4 euro cents.

The bitcoin price starts today at US$71,919 and up +4.6% from this time yesterday. Volatility over the past 24 hours has been high at just on +/- 3.3%.