The US Fed holds its policy rate, Powell vows to stay as a Governor; US data mixed but fuels inventories dive; Canada holds hawkishly; airline activity wavers worryingly; UST 10yr at 4.41%; gold falls as oil jumps; AU$1 = 58.4 USc

Here's our summary of key economic events overnight that affect Australia with news financial markets are starting to see the international geopolitical risks as something that can undermine their bull run. The oil price rises caused by Trump's Gulf War are messing with the outlook in a much more visible way today.

But first, in the widely expected result, the US Federal Reserve held its benchmark policy rates unchanged at 3.75%, in a 8-1 vote with only Trump's insert wanting a lower rate. Three other members abstained, not supporting language that wanted to lower the easing bias included in the Statement. This is likely the last meeting Powell will lead, although he said he will stay on as a Governor "for a period of time". His term officially ends in January 2028.

Benchmark yields rose, the USD rose, and stocks fell on the news.

US mortgage applications fell -1.6% last week even though benchmark interest rates hardly shifted. The fall affected both refi activity and new home purchases.

US durable goods orders rose +0.8% in March on a seasonally adjusted basis, to be +2.8% ahead of year ago levels. But with US producer prices up +4.0% in the same period, this isn't a 'real' increase.

But there was a big jump in US housing starts in March, up to just over a 1.5 mln annual rate and up more than +10% from February -  and to its highest level since December 2024.

The US trade deficit rose +5.3% in March from February to -US$88 bln for the month, about the level expected.

And US authorities reported that their crude oil stocks dived -6.3 mln bbls last week, and their petrol inventories fell by a similar very large amount. This had a dramatic impact on the WTI crude prices, which jumped.

In Canada, their central bank also held its policy rate at 2.25%, also as expected. Some observers saw the review as hawkish, with rate hikes coming sooner than previously expected.

In Singapore, they reported a sudden and very dramatic jump in producer prices for March, up +21.6% from the same month a year ago, with oil-related prices up more that +60% in March from February.

Germany said its April CPI inflation will be +2.9%, all due to higher energy costs.

Global data out for March air travel revealed an overall +2.1% rise, but international travel dropped -0.6% while domestic air travel rose +6.5%. A large part of the reason was the sudden sharp drop in the Middle East (down -60%). Asia Pacific travel rose +11.5% in the month. Australian domestic travel was up +8.8%.

Meanwhile air cargo activity was severely disrupted by the Middle East conflict and Trump's Gulf War in March. It fell -4.8% overall, with international cargo demand down -5.5%. Asia Pacific demand was up a modest +5.5%, but North American air cargoes fell -1.5% and Middle East cargoes fell -55%. April is likely to be much worse.

Most airlines are cutting flight capacity as the fuel price and availability situation worsens sharply. April data will be bad. May likely even worse.

The UST 10yr yield is now just on 4.42%, up +7 bps from this time yesterday. The key 2-10 yield curve is now at +49 bps (-3 bps). Their 1-5 curve is now at +30 bps (+2 bps) and the 3 mth-10yr curve is at +76 bps (+5 bps). The China 10 year bond rate is now at 1.75%, down -1 bp. The Japanese 10 year bond yield is down -1 bp at 2.46%. The Australian 10 year bond yield starts today at 5.02%, down -5 bps from yesterday.

Wall Street was lower today with the S&P500 down -0.1% in Wednesday trade, but ended unchanged. Overnight European markets were mixed between London's -1.2% drop and Frankfurt's -0.3% fall. Yesterday Tokyo was on holiday. Hong Kong rose +1.7% while Shanghai was up +0.7%. Singapore fell -0.6%. The ASX200 ended down -0.3%.

The price of gold will start today down -US$56 at US$4543/oz. Silver is down -US$2.50 at just over US$71/oz.

American oil prices are up +US$6.50 at just on US$106.50/bbl, while the international Brent price is up +US$7.50, and now at US$118.50/bbl.

The Australian dollar is down -40 bps from yesterday at this time at 71.3 USc. Against the Japanese yen we are down -10 bps at ¥114.3. Against the euro we are down -20 bps at just on 61 euro cents.

The bitcoin price starts today at US$75,931 and down -0.3% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.5%.