Reaction to US tariff-tax mess weighs on markets and trade; US data underwhelming; Fed says US 2025 job gains were an illusion; iron ore price falls; UST 10yr at 4.03%; gold rises again, oil on hold; NZ$1 = 59.7 USc; TWI-5 = 63.1

Here's our summary of key economic events overnight with news American financial and business markets are struggling to adsorb what the fallout is from paying tariff-taxes that have been ruled illegal. US Customs has stopped imposing these IEEPA ones.

But the effect of the new expected 15% ones is confusing everyone. Both China and the EU have stopped work on formally approving their 'deals' with Trump until they get some clarity. And it is possible that Australia will be a net loser in this realignment.

Meanwhile US factory order data for December was weaker than expected, falling from November to be now +6.3% higher than the same month a year ago. (Almost all that year-on-year rise came in the year to May however. Since then it has fallen a net -3.8%.)

Slightly more positively however, the Chicago Fed's National Activity Index rose (marginally) in January after booking a larger than expected fall in December. But analysts had expected a bigger bounce back after nine consecutive retreats.

The Dallas Fed factory survey came in with a positive (but tiny) positive reading. This was only the third positive monthly reading since mid 2022, so it is notable. And they reported a second straight month of new order growth, something they haven't had since 2022.

This data comes as Fed Governor Christopher Waller said in an overnight speech that the US probably shed jobs in 2025, rather than the officially reported +181,000 gain. We must always remember that Trump fired the BLS boss when the levels reported weren't to his liking. But while that gives him short-term relief from bad news, he can't hide from the overall trend.

Across the Pacific, China will return from their public holiday today, but in fact their Spring Festival does still run until March 6. However financial markets return today.

Singapore's CPI inflation rate came in at 1.4% in January and its highest since December 2024 although not as elevated as the 1.6% expected. However, their core inflation rate is only 1.0% and well below the 1.6% expected.

In Europe, Germany’s Ifo Business Climate Index rose in February from January to its best level since August, slightly better than market expectations.

And we should probably note that the iron ore price has slipped below US$100/tonne in a trend lower that started at the start of 2026.

The UST 10yr yield is now just under 4.03%, down -6 bps from this time yesterday. The key 2-10 yield curve is flatter at +59 bps (-2 bps). Their 1-5 curve is now at just on +8 bps (-5 bps) and the 3 mth-10yr curve is holding at just on +34 bps (-5 bps). The China 10 year bond rate is unchanged at just on 1.81%. The Japanese 10 year bond yield is down -1 bp at 2.10%. The Australian 10 year bond yield starts today at 4.72%, down -1 bp from yesterday. The NZ Government 10 year bond rate starts today at 4.39%, up +2 bps from yesterday.

Wall Street has opened its week lower with the S&P500 down -1.0% so far in Monday trade. European markets were lower too between London's very slight dip and Frankfurt's -1.1% fall. Yesterday, Tokyo fell -1.1% as well. Hong Kong rose +2.5%, but Shanghai was on the last day of its holiday, so didn't trade. Singapore was up +0.5%. The ASX200 ended its Monday trade down -0.6%. But the NZX50 rose +0.8%.

The price of gold will start today up +US$103 from yesterday at US$5208/oz. Silver is up +US$2 at US$86.50/oz today.

American oil prices are holding at just on US$66.50/bbl, while the international Brent price is still just over US$71.50/bbl.

The Kiwi dollar is little-changed against the USD from yesterday, still just under 59.7 USc. Against the Aussie we are up +10 bps at 84.5 AUc. We are lower against the yen. Against the euro we are down -10 bps at 50.6 euro cents. That all means our TWI-5 starts today down -10 bps from yesterday, now just over 63.1.

The bitcoin price starts today at US$65,418 and down -3.2% from this time yesterday. Volatility over the past 24 hours has been moderate at just over +/- 2.4%.

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