US data lackluster; China data better than expected; Australia data lackluster too, knocked by Geelong fire; bulk freight rates rise; big shifts in tourism focus; UST 10yr at 4.31%; gold holds as oil rises; AU$1 = 71.6 USc

Here's our summary of key economic events overnight that affect Australia with news of little progress in renewed US-Iran 'peace talks'. They seem to have descended into talks about extending the ceasefire rather than resolving any issues. The Strait of Hormuz is still essentially closed. Complicating the oil supply picture is that US crude inventories fell by -9.1 mln barrels last week, far exceeding analysts’ expectations for a modest +154,000-barrel increase. This is actually a big deal and has driven the oil price higher today.

In the US, initial jobless claims rose to 214,000 last week, but not as high as seasonal factors would have indicated. There are now 1.89 mln people on these benefits, less than this time last year but more than two years ago.

But American industrial production fell in March from February, its first fall in four months. That makes it only +0.7% higher than year-ago levels, and hardly a surge in re-shoring. If it wasn't for the growth of AI centers and the electricity required to run them, this would have been a very disappointing result - and it probably is more most companies.

That said, the latest update from the Philadelphia Fed's factory survey was quite positive in April, driven by good growth in new orders. Of course they are measured in nominal dollars and these firms reported notable rises in inflation, for both costs and prices.

In China, new home prices across 70 key cities fell -3.4% in March from a year ago, a minor worsening from a -3.2% decline in February. That was the 33rd straight month of contraction and the steepest drop since May 2025. Pre-owned home sales prices fell harder although for the first time in a while some key cities recorded month-on-month rises in prices.

China said its Q1-2026 GDP expansion was up 5.0%, and better than the 4.8% expected and the official target of "about 4.5%". And its industrial output was up +5.7% in March, they said. But their retail sales only grew 1.7% which will have been a disappointment because they really need a better rise in internal demand. All the good data reported is somewhat undermined by their data that shows electricity production fell again and for a fourth month, up just +1.4% from March 2025.

Australia's March labour market report was pretty tame. The employment rose by +17,900 (about the +20,000 expected) and the number of unemployed people fell by -4,000 in the month. The unemployment rate remained steady at 4.3%. Full-time employment increased by +52,500 to 10,174,400 (after the -27,700 fall in February) while part-time employment decreased by -34,600 to 4,593,300.

The expected inflation rate rose by 0.7 percentage points in April to 5.9% in Australia. It was 5.2% in March. The sharp rise in April reflects the recent spike in oil prices, and makes it its highest since November 2022. In contrast, wage change expectations have remained unchanged for the past five months.

In Australia, the big fire at the Geelong Vic. refinery, one of only two in the country, has major implications for Australia's fuels. They will need to import more from a global system already strained with demands on it. (The other one is the Ampol one in Brisbane.) Talk of needing emergency fuel savings measures, especially in Victoria, are growing.

Global container freight rates dipped -3% last week from the prior week to be little-changed from a year ago. But bulk cargo freight rates rose +16% last week, and are now almost double what they were this time last year.

Global travel rose +4.1% in 2025 according to new research with 80 mln people on the move. But they are increasingly avoiding the US where visitor numbers fell -5.5%. The main gainer is China where visitor numbers rose +9.9% and is predicted to eclipse the US has the main global destination - at this rate in just three years. It is a fast reversal.

The UST 10yr yield is now just on 4.31%, up +3 bps from this time yesterday. The key 2-10 yield curve is at +53 bps (+2 bps). Their 1-5 curve is at +23 bps (+3 bps) and the 3 mth-10yr curve is at +64 bps (+5 bps). The China 10 year bond rate is now at 1.78%, unchanged. The Japanese 10 year bond yield is also unchanged at 2.41%. The Australian 10 year bond yield starts today at 5.00%, up +3 bps from yesterday.

Wall Street is marginally firmer with the S&P500 up a little less than +0.2% in Thursday trade. European markets mixed between Frankfurt's +0.4% and Paris's -0.1%. Tokyo rose sharply, up +2.4% in its Thursday trade. Hong Kong was up +1.7%, and Shanghai was up +0.7%. Singapore was dipped -0.3%. The ASX200 also dipped -0.3%. 

The price of gold will start today little-changed, down just -US$5 at US$4488/oz. Silver is down -50 USc at US$78.50/oz.

American oil prices are up +US$2.50 at just over US$95/bbl, while the international Brent price is up US$4, and now at US$99.50/bbl.

The Australian dollar is down -10 bps from yesterday at this time at 71.6 USc. Against the Japanese yen we are up +10 bps at ¥114. Against the euro we are unchanged at just on 60.8 euro cents.

The bitcoin price starts today at US$74,361 and up +0.2% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.5%.