American labour force expands more than expected; US consumer debt rises; Japanese household spending falls; food prices ease; UST 10yr 4.09%; gold up and oil down; NZ$1 = 61.8 USc; TWI-5 = 70.5

Here's our summary of key economic events overnight that affect New Zealand, with news that good American labour market data, even if there were some downward revisions to prior months, will bolster the Fed in its view it doesn't have to rush to trim official interest rate signals. Next Wednesday's US CPI data will now be important.

First, at the headline level, the American economy added +275,000 jobs in February, beating forecasts of +200,000 and higher than a downwardly revised +229,000 in January. But their unemployment rate ticked up as more people joined their labour force, and wage growth slowed.

Behind the headline numbers (and looking at actual rather than seasonally adjusted numbers), employer payrolls rose by +1.1 mln to 156.5 mln people now employed. That is +2.7 mln more than a year ago. The household survey, which includes self-employed people, rose +665,000 from the prior month to 160.3 mln, and up +602,000 from a year ago. The shift from self-employment to payroll employment continues.

American consumer debt rose by nearly +US$20 bln in January, following a +US$1.6 bln rise in the previous month and way above market expectation of a +US$9 bln rise. Revolving credit, like credit cards, increased by +7.6% on an annualised basis from the previous month. Non-revolving credit, typically auto and student loans, rose by +3.6% on the same basis).

According to the USDA's March World Agricultural Supply and Demand Estimates, the Chinese might be back buying soybean in larger volumes, suggesting the Chinese are struggling with expanding their local output. The same report reveals American beef imports are rising. And that American milk production is slowing.

Canada also released labour force data overnight. They added +40,700 jobs in February, following a +37,300 rise in January. This was double the forecasted +20,000 increase. February brought a notable bounceback (and more) of full-time positions, up + 70,600, while part-time jobs decreased by -29,900..

Across the Pacific, Japanese household spending fell more sharply than expected and continuing a run of retreats, this one the largest in six months. Japanese policy makers might be a bit worried about this latest data trend.

Taiwanese exports are still expanding on a year-on-year basis, although not as fast in February as they recorded in January. After a longish run of decreases, this is the fifth month in the past six where exports have risen.

Later today, all eyes will be on the February data for Chinese CPI inflation (and their PPI data too). Analysts are expecting a turnaround from the recent deflation.

Meanwhile China's Ministry of Finance data shows that interest on debt obligations are rising fast for the Chinese government - in fact a jump of +7.8% in interest payments this year is a bigger relative rise than for their defence spending (+7.2%). If, as some expect, Beijing suffers a ratings downgrade this year from "A1", that cost will only grow.

German industrial production rose +1.0% in January (in 'real' terms) from December but that still leaves it -5.5% lower than the same month a year ago.

Here is an update on the cocoa price - it rose another +7.1% last week. That makes the increase in 2024 alone +65.6%. For chocolate lovers that will hurt. And climate hits on both olive oil and coffee production are seeing these two also delivering sharp price rises as well. But overall, global food prices are not high or creating food inflation concerns. In fact, desperate grain sellers like Russia and Ukraine are helping keep cereal prices down at a level they first reached in 2007.

The UST 10yr yield starts today at 4.09% and down -3 bps from yesterday. That is down -9 bps from a week ago. The key 2-10 yield curve inversion is marginally less at -40 bps. And their 1-5 curve inversion is a little deeper at -88 bps. Their 3 mth-10yr curve inversion is also a little deeper at -130 bps. The Australian 10 year bond yield is now at 3.99% and down -3 bps. The China 10 year bond rate is now at 2.31%, up +1 bps but still near its all-time low. The NZ Government 10 year bond rate is down -4 bps at 4.69%. A week ago it was at 4.82%.

Wall Street has opened its Friday session with a -0.1% dip on the S&P500 and it it closes here, it will be up +0.3% for the week. Overnight European markets were +/-0.1% on average, except London which fell -0.4%. Yesterday Tokyo ended up +0.2% on the day to end its week down -1.3%. Hong Kong rose +0.8% yesterday to end its week down -1.7%. But Shanghai ended up +0.6% (day and week). Singapore was up +0.4%. The ASX200 ended its Friday session up +1.1% for a weekly gain of +1.3%, while the NZX50 was up +1.0% yesterday for a weekly rise of +1.5%.

The Fear & Greed index has eased back slightly to just the "greed" level.

The price of gold will start today up another +US$30/oz at US$2186/oz and another new record high. Most of today's gain has come in the past 2-3 hours. And that is a +4.9% riser for the week.

Oil prices are down another -US$1 at just over US$77.50/bbl in the US while the international Brent price is now just on US$81.50/bbl. Both are -US$2 lower than a week ago.

The Kiwi dollar starts today at just on 61.8 USc and marginally higher than this time yesterday. But it is up +¾c in a week.. Against the Aussie we are still at 93.2 AUc. Against the euro we have firmed slightly to 56.5 euro cents. That all means our TWI-5 starts today at just on 70.5 and unchanged from yesterday but up +20 bps in a week.

The bitcoin price starts today at US$68,834 and up +2.1% from this time yesterday. That means for the week it is up +11%. Volatility over the past 24 hours has been moderate at +/- 2.9%.

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