US labour market expands faster; US pay rises more than CPI; US consumer debt growth modest; Japan equities slide, more rate rises soon; Aussie data soft; UST 10yr 4.39%; gold & oil up; NZ$1 = 60.1 USc; TWI-5 = 69.2

Here's our summary of key economic events overnight that affect New Zealand, with news global surprises continue to colour investor assessments

First up today, the US economy added many more jobs than expected. Analysts were thinking the expansion would be +200,000 in March from February, but in the end the headline seasonally adjusted gain was +303,000. On an actual, unadjusted basis the gain on employer payrolls was +659,000. The wider household survey saw an even larger rise of more than +1.04 mln in the month to 161.4 mln people employed both on employer payrolls and the self-employed. Adding more than +1 mln paid jobs in a month is very expansionary. Guessing here, but strong immigration (both legal and illegal) is helping fuel the expansion.

Average weekly pay rose +4.1%, bolstering this strength although that was slightly lower than the +4.3% rise rto February. In any case it is more than inflation and it shows that even after absorbing the migrant flow it remains 'real'.

Today investors are looking past the fact that the Fed may delay rate cuts, realising the American economy is in much better shape than they have assumed, and equity prices are rising, even though bond yields are rising too.

The US$5 tln US consumer debt market has been expanding marginally recently although it did show a faster than usual rise in January. The February data out today shows a slower rise and one less than expected. This market indebtedness level runs at 17.8% of US GDP, very much higher than the New Zealand equivalent which is only 3.7% of our GDP.

Unfortunately, Canada's labour market isn't showing the same robust expansion in March, essentially marking time with little change after February's good gains.

China is still on holiday so markets were closed everywhere yesterday except Hong Kong.

In Japan, equity prices fell sharply yesterday as investors reassessed the risks they face there. The 'risk off' mood came from recalibrating Mid-East tensions, the Taiwan earthquake implications, and the sense that US inflation may stay higher for longer delaying Fed rate cuts. And that was before the NFP payroll data was known. The Nikkei225 fell more than -1000 points on Friday. The Yen strengthened. The Bank of Japan said more rate hikes could be on the way.

In the UK, major utility Thames Water's owner has defaulted on debt repayments, making it effectively insolvent. That holding company is Kemble Water Group, and is owned by a consortium of institutional shareholders – mostly pension funds and sovereign wealth funds. Dutch bank ING and two Chinese banks will decide the company's future from here which could affect ist 16 mln customers.

Africa's weakest current, the Zimbabwe dollar is in freefall - again, now more than 25,000 to the USD. Their attempt to have a sovereign currency after a long period of just relying on the USD has failed again. Now the Reserve Bank of Zimbabwe has announced the replacement of its struggling dollar with a new structured currency (the ZiG) backed by a basket that includes foreign currencies, gold, and other precious metals.

While we are talking about struggling currencies, we should note that the Turkish lira is starting to respond to their central bank monetary tightening and is holding at about 32 to the USD. It is still too soon to know whether Argentina's "shock therapy" will stabilise their currency, now at 862 to the USD.

Australian retail sales are rising but slower than their inflation rate. They were up +1.6% in February from a year ago. But in that same time their inflation indicator rose 3.4%. Any way you look at it, that is a volume drop.

The Australian goods trade surplus halved in February from the same month a year ago. It came in at a +AU$6.5 bln surplus, down from +AU$12.9 bln in February 2023. The reasons is the combination of falling exports (-2.4%), and import growth staying high (+17.1%). Of particular note is that both rural and non-rural exports fell more than -3%, but that gold exports were up +25% on that basis.

And as we suggested might happen yesterday, Sydney has been hit with very severe rain and storms. They are continuing. The disruptions are major. And they will affect insurers significantly. Those same insurers dominate New Zealand markets, so their pain will likely be reflected here is rising premiums. They claim they are making no money now on household and car insurance, even as they raise premiums by more than 50%.

And here is another unexpected surprise. The US NorthEast region got hit with a 4.8 magnitude earthquake overnight that sent tremors from Philadelphia to Boston and jolted buildings in New York City. They haven't had one like that in almost 150 years. It did little damage however.

The UST 10yr yield is now at 4.39% and up +4 bps from this time yesterday, up +20 bps in a week. The key 2-10 yield curve inversion is unchanged at -34 bps. And their 1-5 curve inversion is still at -70 bps. And their 3 mth-10yr curve inversion is now at -101 bps and virtually unchanged as well. The Australian 10 year bond yield is now at 4.19% and unchanged. The China 10 year bond rate is holding at just under 2.30%. The NZ Government 10 year bond rate is now at 4.70% and down -2 bps but up +6 bps for the week.

Wall Street is ending its Friday session up +1.0% on the S&P500 and recovering some of the earlier fall, and will end its week down -1.2%. European markets were all sharply lower, by about -1%. Tokyo ended its Friday session down -2.0% yesterday for a weekly -4.1% tumble. Hong Kong ended yesterday unchanged and a weekly rise of +1.2%. Shanghai was closed for their public holiday so their short week ended up +0.9%. The ASX200 fell -0.6% for both Friday and the week. NZX50 ended another -0.2% lower yesterday but was unchanged for the week.

The Fear & Greed index has changed little in a week and is still in the "greed" range, similar ro a week ago and a month ago.

The price of gold will start today much higher by +US$38 from this time yesterday at US$2326/oz and yet another all time high. A week ago it was US$2233 so up US$93 or +4.2% from then

Oil prices have risen a sharpish +US$2.50 to just on US$87/bbl in the US while the international Brent price is now up at just over US$91.50/bbl. A week ago these prices were US$83 and US$87.50 respectively.

The Kiwi dollar starts today at just on 60.1 USc and -¼c softer than this time yesterday. A week ago it was at 59.8 USc so a +¼c higher than then. Against the Aussie we are holding at 91.3 AUc. Against the euro we are softish at 55.5 euro cents. That all means our TWI-5 starts today just on 69.2 and down -20 bps from this time yesterday and up +10 bps from a week ago.

The bitcoin price starts today softer at US$67,794 and down -0.4% from this time yesterday. Today's level is -2.3% lower than this time a week ago. Volatility over the past 24 hours has been moderate at just on +/- 2.5%.

Don't forget to "fall back" on Sunday morning. We get an extra hour. If you still have manual clocks, you will need to adjust them to one hour "earlier".

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