Bogus claims against Fed boss being watched closely; Indian CPI stay low; Australian household spending rises; Google's AI chops power its valuation; UST 10yr at 4.18%; gold hits new record, oil stable; NZ$1 = 57.7 USc; TWI-5 = 61.7

Here's our summary of key economic events overnight that affect New Zealand with news gold and other commodity prices have pushed up into record territories again as geopolitical risks rise. (Crypto's are notable by their impotence in the background, irrelevant in this environment.)

Perhaps one reason is in the US, where the President has used his weaponised Justice Department to pressure the Federal Reserve to bow to his will. The clearly bogus criminal charges are being resisted by chairman Powell. The unseemly crisis could aggravate risk premiums worldwide. So far interest rates have remained stable (you can be sure that bond markets will be watching intensely), but the USD is noticeably weaker.

It has not been in the limelight recently, but we should note that US grain farmers are facing tough trading, with them being shut out from the China trade for soybean and corn. Trump seem to have thrown them under the bus.

In India, consumer price inflation rose to 1.3% in December from 0.7% in November but below the market consensus of 1.5%. Despite the rise, this rate remains well below the Reserve Bank of India's tolerance limit of 2%-6%. Prices fell less for food (down -2.7%), which represent nearly half of the consumer basket.

In Australia, household spending rose strongly in November, up +1.0% from October, up +6.3% from November a year ago. This result was much better than expected.

And Australia said it will buy and stockpile key rare-earth minerals from domestic producers to strengthen defence and technology supply chains and reduce reliance on China. They are initially focusing on antimony and gallium under a new A$1.2 bln program.

The UST 10yr yield is now just over 4.18%, up +1 bp from this time yesterday. The key 2-10 yield curve is still at +64 bps. Their 1-5 curve is now at +23 bps and the 3 mth-10yr curve is little-changed, now by +56 bps. The China 10 year bond rate is down -2 bps at 1.87%. The Japanese 10 year bond yield is down -1 bp at 2.08%. The Australian 10 year bond yield starts today at 4.67%, down -1 bp from yesterday. The NZ Government 10 year bond rate starts today at 4.43%, also down -1 bp from yesterday.

There were two UST bond auctions today. The 3 year Note came in with a median yield of 3.56%, little different to the equivalent event a month ago. The 10yr bond came in with a median yield of 4.13%, compared to 4.12% at the equivalent event a month ago.

Wall Street has opened its week with the S&P500 very little-changed, up +0.1%. Overnight, European markets also opened subdued between Paris's no-change and Frankfurt's +0.5%. Yesterday Tokyo closed up +1.6% however, Hong Kong was up +1.4% and Shanghai ended its Monay up +1.1%. Singapore closed up +0.5%. The ASX200 also closed up +0.5%. But the NZX50 dipped -0.1% in its Monday session.

We should perhaps note that serial underperformer Rakon has received another takeover bid from a previous suitor, this one less than the last, and the frustrated shareholders look like they will finally accept. They will put the mismanagement misery behind them, it seems. They will be selling for $1.55/share. These shares peaked at $5.60 back in the day, $2.08 in 2022. Today they are $1.36, so the market isn't yet pricing in a full chance of the takeover.

At the other end of the scale we should also note that Alphabet (Google) briefly hit US$4 ​trln in market valuation earlier today, the second company to do that after Nvidia, as they sharpened their AI gains, both with impressive integrated solutions, and a recent deal with Apple (who was pushed into third place on the valuation table).

The price of gold will start today at US$4617/oz, and up +US$108 from yesterday on the risks from the unsettled US Fed. Silver is now up at over US$80.50/oz.

American oil prices are unchanged from yesterday at just on US$59/bbl, while the international Brent price is still at just under US$63.50/bbl.

The Kiwi dollar is up +40 bps from yesterday, now at just under 57.7 USc. Against the Aussie we are up +10 bps at 85.8 AUc. Against the euro we are up +10 bps as well at just under 49.4 euro cents. That all means our TWI-5 starts today just on 61.7, and up +30 bps from yesterday.

In offshore trading the Chinese yuan (CNH) has strengthened well past the 4:USD level, and rising.

The bitcoin price starts today at US$92,071 and up +1.2% from this time yesterday. Volatility over the past 24 hours has been modest also at just on +/- 1.2%.

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