US sentiment rises but factory expansions uncertain; India up; Japan down; China mixed; EU inflation and unemployment falls; UST 10yr 4.25%; gold jumps and oil firm; NZ$1 = 61 USc; TWI-5 = 70.3

Here's our summary of key economic events overnight that affect New Zealand, with news the world's factories are giving quite conflicting signals in February.

With an unexpected fall in new order levels, the widely watched American ISM PMI dipped deeper in contraction in February. The companion internationally benchmarked Markit PMI (now called the S&P Global PMI) told a very different story however in the same market, swinging up sharply to an expansion, and one this survey hasn't had since mid-2022. The driver? well it was a surge in new orders. The two surveys could not have been more different this month, an unusual set of views.

The widely-watched University of Michigan consumer sentiment survey for February is clearly upbeat however. Although consumer sentiment moved sideways in the month, slipping just two index points below January, it is holding the gains seen over the past three months. Expected business conditions remained substantially higher than six months ago. And long run expectations are much higher too.

And it will be no surprise, the Indian PMI rose in February, complimenting its economic expansion.

But the Japanese PMI reported 'deteriorating' factory conditions.

After a sharp +18% jump in January, South Korean exports were expected to rise only modestly (less than +2%) in February on that same basis. But they rose almost +5% on the year-on-year basis pointing to resilience in export demand for them. Much lower imports (due to lower oil prices) enabled them to book a sharp rise in their trade surplus.

In China there were two PMI surveys out as well. The official factor one wasn't very optimistic but the private Caixin version reports improving and expanding factory conditions. It is more understandable in China why the two might vary. The official one focuses on large state organisations, the Caixin one more on private businesses. Still, the results are opposite to what you might have expected. The official version also covered their services sector and that part reported an improving expansion.

In China, it now seems it it news that a large property developer actually is able to make payments on their bonds. Also in their news is that you can get arrested for asking local local government authorities to pay their debts.

EU (Euro Area) inflation fell in February but not by as much as expected. It is now at 2.6% pa on falling energy costs. Like everyone, they are finding the "last mile" hard to achieve. Meanwhile the Euro Area jobless rate fell to a record low 6.2%. But these days, governments get little credit for keeping employment high even when economic activity wavers. But in the sweep of economic history, it is a remarkable factor.

However, the Eurozone PMI does not make for happy reading.

The UST 10yr yield starts today at 4.18% and down -7 bps from this time yesterday and down -7 bps from a week ago. In fact that is a three week low. The key 2-10 yield curve inversion is less at -35 bps. but their 1-5 curve inversion is slightly deeper at -78 bps. And their 3 mth-10yr curve inversion also deeper at -120 bps. The Australian 10 year bond yield is now at 4.11% and down another -3 bps. The China 10 year bond rate is now 2.38%, and just off its all-time low. The NZ Government 10 year bond rate is up a mere +1 bp at 4.82% and down -10 bps from a week ago.

Wall Street has started its Friday session up +0.8% on the S&P500, and a new record high. That makes it +0.8% higher in a week as well. Overnight, European markets were mixed again; Paris was up +0.1%, London up +0.7% and the others in between. Yesterday Tokyo ended its Friday session up +1.9% for a weekly gain of +1.5%. Hong Kong rose +0.5% on Friday to limit its weekly fall to -0.6%. Shanghai was up +0.4% on Friday for a weekly rise of +0.8%. Singapore ended down -0.2%. Meanwhile the ASX200 was up +0.6 on Friday for a weekly gain of +1.6% but the NZX50 ended its Friday trade unchanged for a minor +0.1% weekly rise..

The Fear & Greed index is still at the "extreme greed" level where it has been for almost a month now.

The price of gold will start today up with a strong jump of +US$38/oz from yesterday tp US$2083/oz. And that is also up from US$2038/oz a week ago. Silver jumped sharply too.

Oil prices are up +50 USc at just over US$79.50/bbl in the US while the international Brent price is now just under US$83.50/bbl. Both are +US$3 higher than a week ago.

The Kiwi dollar starts today at just on 61 USc and little-changed from this time yesterday. But that is -1c lower than this time last week. Against the Aussie we are down marginally at 93.5 AUc. Against the euro we have softened slightly to 56.3 euro cents. That all means our TWI-5 starts today at just over 70.3 and little-changed from yesterday, but down -100 bps in a week.

The bitcoin price starts today at US$61,992 and down -0.5% from this time yesterday. But it is up more than +US$10,000 in a week or +22%. Volatility over the past 24 hours has been modest at +/- 1.9%.

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