US data mixed with PPI up, sentiment down, but good jobs data; China export growth fades; Australian sentiment dives; IMF of another recession; UST 10yr at 4.25%; gold rises as oil retreats; AU$1 = 71.3 USc

Here's our summary of key economic events overnight that affect Australia with news the IMF has downgraded its global forecasts and said the world's economy is drifting into unpalatable conditions. A third recession since 2000 is possible, they say. The Strait of Hormuz remains closed by the actions of both combatants. "Talks" are supposedly going on which is exciting equity markets. But bond and currency markets are bracing for stagflation.

But first up today in the US, their labour market does not appear to be cracking according to the high-frequency weekly data from the ADP Pulse tracking. US private employers added +39,250 jobs per week in March. This is a sharp increase from the +26,000 weekly jobs created in the prior period and is the fourth consecutive week of improvement in hiring.

The March NFIB Small Business Optimism Index fell to its lowest since April 2025 and this new level is lower than the lower level expected. They said "the dramatic spike in oil prices has spooked consumers and owners alike. Small business owners are having to absorb those higher input costs and pass them along to their customers”. Their uncertainty measure spiked.

Meanwhile US producer prices rose less than the expected +4.6% jump in March, 'only' rising +4.0% according to official data. Still, that is the fastest rise since February 2023.

A good indicator of how far and how fast the US economy is retreating can se seen in the Atlanta Fed's GDPNow tracking of high-frequency data. The latest data has their expansion below the latest IMF assumptions.

China's March exports rose only a modest +2.5% from a year earlier, whereas their imports rose a startling +27.8%. Despite that, they has so much headroom they still managed to record a trade surplus of +¥355 bln / US$51 bln in March, although about half of what was anticipated.

Yesterday, Singapore tightened their monetary policy in a new effort to ensure inflation does not ruin their economy.

Here in Australia, consumer sentiment has dived lower. The Westpac-Melbourne Institute Consumer Sentiment Index fell heavily in April, falling by a level only exceeded in the depth of the pandemic.

Australian business confidence has plunged dramatically as well. It fell -29 index points, the second largest monthly fall in the survey’s history – with falls of this magnitude previously only seen in the GFC and the onset of the pandemic. Current conditions changed little, but the sentiment outlook has crashed pretty much in the same way consumer sentiment has. Forward orders fell. Costs rose +3.0% in the quarter, more than twice as fast as prices charged (+1.1%).

So it will be little surprise to know that the RBA is worried, really worried. They face a difficult macro backdrop. In a fireside chat, RBA Deputy Governor Andrew Hauser warned of the “nightmare” scenario where inflation accelerates even as growth weakens, complicating policy choices. He was speaking at a New York event.

We all understand that the US abandoning its strategic role in the global economy means new alliances and connections will grow to replace them. But not all of those will be welcome. We should note that the Indonesian President is in Moscow, seeking a realignment with them. It is a balance from recent 'deals' with the US. The US Administration looks just like the Putin Administration to Jakarta.

The IMF now says global inflation is expected to average 4.4% in 2026, up from their projected 3.8% in their January review. They also downgraded their global growth outlook, unsurprising given the mess we are all working through.

The UST 10yr yield is now just on 4.25%, down -5 bps from this time yesterday. The key 2-10 yield curve is flatter at +50 bps (-2 bps). Their 1-5 curve is also flatter at +18 bps (-5 bps) and the 3 mth-10yr curve is flatter at +58 bps (-7 bps). The China 10 year bond rate is now at 1.78%, down -3 bps. The Japanese 10 year bond yield is down -5 bps at 2.42%. The Australian 10 year bond yield starts today at 4.92%, down -7 bps from yesterday. 

Wall Street is firmer with the S&P500 up +1.2% in another relief rally. European markets rose similarly or more, except London which was up +0.2%. Tokyo rose the most, up +2.4% in its Tuesday trade. Hong Kong was up +0.8%, and Shanghai was up +1.0%. Singapore was rose +0.5%. The ASX200 also rose +0.5%.

The price of gold will start today up +US$98 at US$4836/oz. Silver is up +US$4 at US$77.50/oz.

American oil prices are down -US$7.50 at just on US$91.50/bbl, while the international Brent price is down -US$4.50, and now at US$94.50/bbl.

The Australian dollar is up +40 bps from yesterday at this time at 71.3 USc. Against the Japanese yen we are up +50 bps at ¥113.2. Against the euro we are up +30 bps at just on 60.5 euro cents.

The bitcoin price starts today at US$74,709 and up +3.4% from this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.8%.