Here's our summary of key economic events overnight with news benchmark interest rates are rising despite the political tensions.
Somewhat surprisingly, American inflation expectations eased a bit in January, falling from 6.0% to 5.8% as the expected inflation over the next year in the large New York Fed national survey. This is the first decline in short-term inflation expectations since October 2020. Similarly, median three-year ahead inflation expectations decreased by 0.5 percentage point to 3.5%. The decline in medium-term inflation expectations was broad-based across age, education, and income groups and is the largest one month decline in the measure since the inception of the survey in 2013.
The yield on the benchmark US 10-year Treasury note rose again to above 2% on Monday and the 2-year/10-year yield curve fell to the flattest since July 2020, as bets for a +50 bps rate hike from the Fed increased again. St. Louis Federal Reserve President Bullard has reiterated his call for +100 bps of hikes by the end of June during the interview on CNBC.
Meanwhile, another Fed official, Esther George from the Kansas City Fed, said the central bank should consider selling bonds from its US$9 tln asset portfolio to address high inflation and guard against harmful effects that can result from raising short-term rates above long-term rates.
Cross-border traffic between Detroit and the Canadian city of Windsor is returning to normal after a bridge crossing the Detroit River reopened following a week of demonstrations.
In India, their inflation rate rose to 6.0% in January, and up from 5.7% in December. Its a seven month high, and food inflation is rising within it.
India has started a rolling series of elections which will be held progressively until the Presidential election in July. It is likely to be a time of heightened tensions in India, with the extremist BJP Party stoking Hindu nationalist sentiments as it tries to hold on to power, and that currently seems likely. India is becoming a significantly less tolerant society under the BJP and will be a more difficult place to do business. And a difficult and unreliable ally if the BJP retains power.
In the UK, a regulator there has told a set of 'buy now pay later' firms to issue refunds of excessive late-payment fees and rewrite their contracts so the terms are clearer. This ruling affects Afterpay, Openpay, Laybuy and Klarna - three Aussie firms and a Swedish one (in which CBA has a minor stake).
In NSW, there has been a fall to 6,184 new community cases reported yesterday, now with 56,194 active locally-acquired cases, and another 14 daily deaths. There are now 1,649 in hospital there, off their high. In Victoria they reported 7,104 more new infections yesterday. There are now 53,707 active cases in that state - and there were 2 deaths there, and unusually low. Queensland is reporting 3,750 new cases and also 6 deaths. In South Australia, new cases have slipped to 1127 yesterday and 3 more deaths. The ACT has 375 new cases and no deaths, and Tasmania 408 new cases and no deaths. Overall in Australia, there were 19,680 new cases reported and 25 daily deaths.
The UST 10yr yield opens today at 2.00% and +8 bps higher than this time yesterday. The UST 2-10 rate curve starts today flatter at +40 bps. But their 1-5 curve is m21%. The China Govt ten year bond is +1 bp firmer at 2.81%. But the New Zealand Govt ten year is lower by -3 bps at 2.78%.
On Wall Street, the S&P500 is down a minor -0.1% in their Monday afternoon trade. Overnight, European markets all closed sharply lower, mostly by -2.0% or more. Yesterday, Tokyo ended down -2.2%, Hong Kong was down -1.4% and Shanghai was down -1.0%. The ASX200 ended its Monday session up +0.4% but the NZX50 fell a very sharp -1.8%.
The price of gold starts today at US$1862/oz and up another +US$3 from this time yesterday. Given the political tensions you might have thought the gold price would be rising faster.
And oil prices are holding high at just over US$92/bbl in the US, while the international Brent price is marginally softer at US$93.50/bbl.
The Kiwi dollar will open today at 66.1 USc as the greenback firms. Against the Australian dollar however we have slipped to 92.8 AUc. Against the euro we are holding at 58.5 euro cents. That means our TWI-5 starts today lower at just on 70.8 but that is where it was a week ago.
The bitcoin price is up a minor +0.9% since this time yesterday and now at US$42,679. Volatility over the past 24 hours has stayed modest at +/- 1.5%. Interestingly, a huge surge in crypto ads during the American Superbowl seems to have had virtually no influence in demand or prices - unless it stopped them falling.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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