US inflation pressure eases, consumers pull back; Tokyo inflation rises above 4%; China emerges from lockdowns; India grows on more debt; Aussie PPI eases; UST 10yr 3.47%; gold up and oil down; NZ$1 = 64.9 USc; TWI-5 = 71.5

Here's our summary of key economic events overnight that affect New Zealand, with news inflationary indicators seem to be easing now.

But first, if you are Auckland reader, we trust you are surviving the downpours. They have been 'amazing', and not in a good way.

Overnight elsewhere we got more detail on the American PCE inflation level and it confirmed the implied rate in the Q4 GDP data. By this measure prices are rising at a +5.0% rate in December which is down from +5.5% in November. But the Q-on-Q rate has slipped away quite a bit to an annualised rate under 2%. Markets liked that data and all rose on the assumption the US Fed is more likely to ease back at its next rate review meeting on Thursday February 2 NZT. (The US January CPI data is not due out until February 15, NZT.)

Also positive is that household incomes are rising (+0.2% in December from November) faster than expenditures which fell more than expected (-0.2%). Consumers themselves are girding for tougher times, it seems. And that may also be a signal the US Fed likes.

Meanwhile American real estate agents are hoping their market funk is easing. Pending home sales unexpectedly rose +2.5% in December from November, the first rise since May, and beating market expectations of a -0.9% drop. Sales were up in the South (+6.1%) and the West (+6.4%) but fell in the Northeast (-6.5%) and Midwest (-0.3%). Still, year-on-year, pending home sales sank a whopping -34%.

So perhaps it is no surprise that consumer sentiment improved in January, even it was only by a small amount and is still historically low.

In Japan, their special Tokyo inflation data came in at +4.4% and the fastest increase since 1981. Tokyo prices are considered a leading indicator for national Japanese prices. But it is not clear that this will motivate the Bank of Japan to ease off its ultra-loose monetary policies. They are determined to wait out the current cost-push inflation until it turns into a demand-driven one, accompanied by wage growth.

In China, despite the extreme cold in some parts of the country, there is evidence that 'opening up' is being embraced by consumers. This is early evidence, and the strength of the return is still to be assessed.

In India, Adani Group shares lost -18% yesterday alone to be down -28% from the start of the year, now down -NZ$75 bln, all on the fallout from the research report published by an American short-seller claiming fraud in the way the company is financed and structured. The stench has dragged down the whole Indian market. However, it may be a one-off event. Gautam Adani is close to the Modi Government, and they have shown rising intolerance for criticism, using the full power of the state to clamp down on critics. Modi is up for re-election and seems attracted to autocratic rule. He is playing his Hindu nationalist cards hard, feeding of the tensions he raises. It is his standard playbook.

Meanwhile, the Indian economy is rising fast, with a growing economic expansion that shines in comparison with China now. But it seems the Indians are just copying the Chinese economic playbook, building it on "more debt" to fuel the expansion. Bank lending rose +16.7% from a year ago. Economic activity rose +7.0%.

In Australia, there is evidence price pressures are easing for businesses. Their producer price index rose +5.8% in the year to December, but only at the annualised rate of +2.8% in the December quarter from the September quarter. We won't get to know how our PPI data tracked in the December quarter until February 21.

Meanwhile, as January draws to a close, Sydney housing market observers are expecting their real estate weakness to mean median prices there have now fallen below AU$1 mln. That will be more than a -12% fall over the past 12 months, down from AU$1.14 mln a year ago (all dwellings).

The UST 10yr yield starts today at 3.52%, and up +5 bps from this time yesterday, and up +5 bps from a week ago. The UST 2-10 rate curve is inverted at -67 bps and little-changed. But their 1-5 curve is less inverted at -106 bps. Their 30 day-10yr curve is now more inverted at -103 bps. The Australian ten year bond is up +6 bps at 3.56%. The China Govt ten year bond is unchanged of course at 2.96%. And the New Zealand Govt ten year is starting today at 4.16% and also up +6 bps. A week ago it was at 4.05%.

Wall Street has started its Friday session firmer with the S&P500 up +0.6% in late trade and heading for an impressive weekly gain of +2.7%. And this is despite a gloomy result from chip-giant Intel. Overnight, European markets were all little-changed on the day but just on the positive side. Yesterday, Tokyo also ended little-changed in Friday trade but up +1.9% for the week. Of course Shanghai is still closed for holidays but Hong Kong was up +0.5% yesterday and up +3.0% for their short week of trading. The ASX200 firmed +0.3% yesterday to be up +0.5% for the week. The NZX50 closed little-changed in Friday trade for a weekly gain of +0.5%.

The price of gold will open today at US$1929/oz and up +US$2 from this time yesterday. It is also up +US2 from week-ago levels.

And oil prices start today -US$2.50 lower, at just over US$79/bbl in the US while the international Brent price is at US$85.50/bbl. This is the same retreat from a week ago.

The Kiwi dollar is little-changed from this time yesterday, now at 64.9 USc. A week ago we were at 64.7 USc. Against the Australian dollar we start today at 91.3 AUc and also little-changed. Against the euro we are up +½c at 59.7 euro cents. That all means our TWI-5 starts today at 71.5, and a small +20 bps gain overnight. For the week however we are -30 bps lower.

The bitcoin price is marginally firmer, now at US$23,116 and up a mere +0.4% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.4%.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».