'Reorder month' powers up factory PMIs globally; India & US reduce reciprocal tariffs; another US shutdown; Australian house prices rise again; UST 10yr at 4.27%; commodity prices retreat fast; NZ$1 = 60.1 USc; TWI-5 = 63.8

Here's our summary of key economic events overnight that affect New Zealand with news commodity prices are still falling after last week's crazy surge. The retreats are widespread and substantial. Oddly, it isn't having much effect on commodity-based currencies however.

But first today, the January factory PMIs for the US were positive, based on good new order growth. The closely-watched local ISM version expanded for the first time in 12 months, preceded by 26 straight months of contraction. Prices rose sharply for both inputs and outputs, and some buying appears to be to get ahead of expected price increases due to ongoing tariff issues, they said.

Meanwhile the S&P Global factory PMI came in with similar trends, finding rises in production when sales growth was subdued. These two surveys are positive, but we should remember that January is "reorder month" and with the tariff threats lingering, it might mean this distortion is playing an outsized role.

In China, their PMI's trends were not too different from the US, even if they were in contrast to their official version. They reported an expansion in production at a faster pace amid higher new orders. Employment rose. Output charges increased for the first time in 14 months.

In Taiwan, their factory sector recovery gathered pace in January, but cost pressures intensified.

In Singapore and Malaysia, they recorded a January uptick, but the expansions there are still modest in their factory sectors.

India and the US announced an agreement to lower tariffs and lower the temperature in their trade disputes. Given that India's exports to the US were already rising even with the higher tariff's, this is likely to be a substantial boost for India.

Back in the US, and under the radar, they have entered a new federal government shutdown, with layoffs. This one is expected to be short because a deal between Congress and the White House seems to be in effect. But it will delay this weekend's non-farm payrolls report announcement.

In Australia, Cotality said low supply levels, first home buyer incentives and a resilient labour market are combining to keep house prices rising. They are up +9.4% nationally from a year ago. But there is wide variation. They said mounting affordability and debt headwinds are butting up against 'fragile sentiment'. This is especially true where the prices are highest, in Sydney and Melbourne, where prices rose only +6.4% and +5.4% in January from a year ago, the least of any major city. The median house price in Sydney is now AU$1.29 mln (NZ$1,5 mln). It is now also above AU$1 mln in Brisbane at AU$1.055 mln (NZ$1.22 mln).

The UST 10yr yield is now just on 4.27%, up +3 bps from this time yesterday. The key 2-10 yield curve is still at +71 bps. Their 1-5 curve is now at +33 bps and the 3 mth-10yr curve is now at +57 bps. The China 10 year bond rate is holding at 1.80%. The Japanese 10 year bond yield is down -2 bps at 2.23%. The Australian 10 year bond yield starts today at 4.83%, up +2 bps. That is near its highest since 2011. The NZ Government 10 year bond rate starts today at 4.65%, up +1 bps.

Wall Street has started its week positively with the S&P500 up +0.7%. Overnight European markets closed up between London's +1.2% and Paris's +0.7%. Yesterday Tokyo ended its Monday session down -1.3%. Hong Kong fell a sharpish -2.2% and Shanghai fell even more, down -2.5% which is a big drop for them. Singapore slipped -0.3%. The ASX200 retreated -1.0%. But the NZX50 ended down just -0.1%.

The price of gold will start today down -US$183 from yesterday at US$4707/oz. Silver is down -US$6 to US$US$78.50/oz. Non-precious metals are falling hard too.

American oil prices are down -US$3 at just under US$62/bbl, while the international Brent price is now just on US$66/bbl.

The Kiwi dollar is down -20 bps against the USD from yesterday, now at 60.1 USc. Against the Aussie we are also down -20 bps at 86.3 AUc. Against the euro we are up +10 bps at just on 50.9 euro cents. That all means our TWI-5 starts today just under 63.8, and down -10 bps from yesterday.

The bitcoin price starts today at US$78,946 and recovering +2.0% from this time yesterday. Volatility over the past 24 hours has been high at just on +/- 3.0%.

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