US data positive with some unexpected surprises; Japan rises; India strong; some surprising central bank moves; Aussie labour market rises; UST 10yr 4.28%; gold up and oil slips; NZ$1 = 60.5 USc; TWI-5 = 69.6

Here's our summary of key economic events overnight that affect New Zealand, with news that is full of unexpected data and outcomes.

US jobless claims fell last week to 190,000 and this was lower than expected. The number of people still on this unemployment insurance is lower too, at just over 2 mln. Neither signals growing labour market stress.

The Philly Fed's factory survey was expected to retreat in March following a good rise in February. But it surprised with another good expansion. And these heartland rust-belt manufacturers are looking ahead with surprisingly strong optimism.

Existing home sales jumped and by more than expected in February, up +9.5% from January on a seasonally-adjusted basis. But year-on-year, sales declined in all regions.

Meanwhile the US economic expansion kicks along. The latest internationally-benchmarked PMIs show their service sector activity growth eased to a three-month low amid reports that price pressures that had restricted customers' ability to commit to new projects, while manufacturing production expanded the most since May 2022. Overall, new orders increased but at a slower pace, while the rate of job creation ticked higher, marking the fastest in 2024 so far.

We should also note that a California referendum to raise property taxes to finance 11,000 treatment beds and housing units with health care and social services for homeless people suffering from mental illnesses and addiction, has passed. This is somewhat unexpected given the range of opponents and their well-funded opposition.

In Japan, March is delivering their strongest rise in private sector activity in seven months. Their factory PMI 'rose' to a smaller contraction in March while their services PMI expanded much faster. New orders featured as the driver.

In India, their March PMIs showed a surging manufacturing sector, but it was still overshadowed by even faster expansion in their services sector. India is on a fast-track.

The March 'flash' EU PMI is being held up to a stable level by its services sector which is still expanding and covering a continuing contraction in its manufacturing sector. Things are similar in the UK although their factory sector seems to be in better shape.

And there were a set of European central bank decisions out overnight. First Turkey sharply raised its rate unexpectedly, up +500 bps to 50%! (I kid you not.) And Switzerland unexpectedly cut its key policy rate by 25 bps to 1.5%, making it the first major central bank to cut. And in between, the English reviewed and did nothing, holding their rate at its historically high 5.25%.

In Australia, their labour market report for February has delivered a big surprise. Analysts were expecting a very good +40,000 rise in the employed workforce, but actually they got an extra +78,000 full time jobs in the month, plus an additional +38,000 part-time roles. Their jobless rate slipped to 3.7%. While this is 'good', we should remember that 31% of their 14.3 mln workers are still part-time, an unusually large proportion. (In New Zealand, that level is less than 20%.)

Still, the jobs surge probably means any rate cuts in Australia are now further away.

Australia's population is probably now touching 27 mln. It was at 26.8 mln people in September according to official data, and is growing at a record pace, fueled by immigration and a longer life expectancy among boomers.

Global container freight rates eased another -5% last week but remain unusually high because the reasons for the January surge have not gone away - drought in Panama and pirate activity in the Red Sea. Interestingly, trans-Atlantic rates are now rising while the largest falls are China-to-Europe. Bulk cargo rates are staying elevated.

The UST 10yr yield started today at 4.28% and unchanged from this time yesterday. The key 2-10 yield curve inversion is less at -35 bps. And their 1-5 curve inversion is deeper at -81 bps. And their 3 mth-10yr curve inversion is a bit less at -110 bps. The Australian 10 year bond yield is now at 4.12% and up +7 bps. The China 10 year bond rate is lower at 2.30%. The NZ Government 10 year bond rate is now at 4.66% and little-changed.

Wall Street opened its Thursday session up +0.4% to a new all-time high. The Fed signals underpinned the gains. Overnight, European markets got a boost too which saw London rise by +1.9%, Paris by +0.2% and Frankfurt by +0.9%. Yesterday Tokyo ended up a stellar +2.0%. Hong Kong was up +1.9%, while Shanghai ended unchanged however as the state rescue team took the opportunity to sell down. Singapore ended up +1.4%. The ASX200 ended its Thursday session up +1.1% while the NZX50 was up +0.7%.

The price of gold will start today higher by +US$21 from yesterday at US$2157/oz but in between they surged to well over US$2200 and then fell back quickly too.

Oil prices are lower today by -50 USc at just on US$80.50/bbl in the US while the international Brent price is now just on at US$85/bbl.

The Kiwi dollar starts today at just under 60.5 USc and little-changed from yesterday at this time. Against the Aussie we are down nearly -½c at 92 AUc following their strong labour market news. Against the euro we are still just under 55.7 euro cents. That all means our TWI-5 starts today at just on 69.6 and essentially unchanged.

The bitcoin price starts today at US$66,649 and up +3.1% from this time yesterday. Volatility over the past 24 hours has been very high at just on +/- 4.2%.

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