US jobless claims rise; US factories very positive; China faces bond maturity wall; Aussie jobless rate dips; UST 10yr at 1.73%; oil drops but gold firms; NZ$1 = 71.9 USc; TWI-5 = 73.9

Here's our summary of key economic events overnight that affect New Zealand, with news it's all about bonds and interest rates today.

First up, selling of US Government bonds accelerated today, sending yields higher again, just a day after the US Fed had briefly calmed the market. The Fed's own raised internal growth forecasts for the US economy are probably behind the push higher.

And US jobless claims rose last week in an unexpected turn. But to be fair the actual rise was a small +23,000 but the seasonally adjusted number was twice that and that is the one being heavily reported. The numbers claiming their Pandemic Unemployment Assistance benefit almost halved from the prior week. Overall, less than 4.5 mln people are now on these benefits, a big drop in a week. Now that new additional stimulus payments are going out to people directly, this fall isn't quite the social crisis it was last year.

Much more positive is the latest regional Fed factory survey, this one from the Philly Fed, a heartland industrial region. They reported a sharp increase in both growth and optimism. They also report a sharp rise in the prices factories are paying for inputs.

In Canada, their February update of the ADP Employment Report wasn't so positive, indicating declining jobs. It is quite a different slant on their labour market from the official data.

In China, they are facing a wall of bond maturities over the next eight weeks. NZ$300 bln matures this month and another NZ$200 bln in April. This pressure is seeing most new issues cancelled as their financial markets try to absorb this short-term pressure. It will probably be handled with Beijing's support and adjustment, but it does point out there are still strange unbalanced forces at play in the debt-heady Chinese economy.

Overnight there were central bank policy reviews in a number of countries. Taiwan, Indonesia, Egypt and the UK all kept rates unchanged. Brazil raised theirs by +75 bps. Japan will announce their review later today and it is unlikely they will change any settings.

In Australia, they have announced their jobless rate has dipped from 6.4% in January to 5.8% in February, an improvement far greater than expected. A year ago it was at 5.1% however. Total employment rose to 13 mln, a gain of +88,700 but only back to where it was a year ago. Underemployment rose to 8.5% and their participation rate slipped slightly.

And staying in Australia, you may have noticed they have had their quietest bushfire season in more than ten years. Normally the headlines are about smoke plumes that stretch all the way to New Zealand at this time of year. This year is different, with storms and wet weather replenishing their waterways and water supplies.

In New York, Wall Street is lower in early afternoon trade today with the S&P500 down -0.4% reacting to the jobless claim spike. Overnight European markets were up an average of +0.5%. Yesterday, all the main Asian markets were higher with Tokyo up +1.0%, Hang Kong up +1.3% and Shanghai up +0.5%. The ASX200 ended yesterday down another -0.7%, and the NZX50 Capital Index was down -1.0%.

The latest global compilation of COVID-19 data is here. The global tally is still rising and at a fast pace, now at 121,427,000 and up +509,000 in one day. Global deaths reported now exceed 2,674,000 and +10,000 in one day, and much of that from the raging situation in Brazil. Vaccinations in the first world are rising however and in the US a third (112.1 mln) have now had this protection. They are running six weeks ahead of the target Biden set at his inauguration. That is quelling the US daily death rate which was up just +1000 yesterday. The number of active cases there fell yesterday to 7,297,000 (-26,000 more in a day), resuming the reducing trend and taking the number currently infected down to 2.2% of their population.

The UST 10yr yield is up +8 bps from yesterday at just on 1.73% and that makes it a 15 month high. The US 2-10 rate curve is rising, steeper at 158 bps. Their 1-5 curve is also steeper at +81 bps, while their 3m-10 year curve is up to +173 bps. German long-dated bonds have also hit their highest yields in a year. The Australian Govt 10 year yield is up +11 bps at 1.90%. The China Govt 10 year yield remains unchanged at 3.28%. And the New Zealand Govt 10 year yield is also little-changed, up just +2 bps at 1.80%. It's move up may come later today.

The price of gold starts today up +US$5 in New York at US$1733/oz.

Oil prices have dropped hard today, down -US$3/bbl and are now just under US$61/bbl in the US, while the international price is now just under US$64/bbl.

The Kiwi dollar opens today at under 71.9 USc and slipping back to where it was before yesterday's US Fed announcements. Against the Australian dollar we are -½c lower at 92.3 AUc. Against the euro we unchanged at 60.3 euro cents. That means our TWI-5 opens today at 73.9 and very little different to where it was a week ago.

The bitcoin price will start today at US$59,627 and up +US$4245 or +7.7% from this time yesterday. In between, volatility in the past 24 hours has been high at +/- 4.4%. The bitcoin rate is charted in the exchange rate set below.

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