Here's our summary of key economic events overnight with news that inflation is here. How long for is the question.
US consumer prices rose by the most in more than eight and a half years in March with both the headline and core inflation measures coming in higher than forecast.
The annual figure came in at 2.6%, which was ahead of the forecast of 2.5% and up from just 1.7% in February.
Higher petrol prices contributed largely to the increase, but it's significant to note that the core inflation measure, excluding food and energy costs, came in at 1.6% - which was also higher than the market forecast at 1.5%.
In terms of the monthly figures the headline rise was 0.6%, up from 0.4% in February and the core inflation figure was 0.3% (ahead of forecasts of 0.2%), which was up from 0.1% in February.
The US Federal Reserve is taking the view that inflation will blip up but it will be short-lived. This is the attitude most central banks around the world are taking. Time will tell.
China’s exports rose sharply in March while imports growth surged to the highest in four years in yet another boost to the nation’s economic recovery. However, the exports were below market expectations, while the imports were much higher than expected. China's trade surplus shrank to US$13.8 billion in March, while forecasts had been for a US52.05 billion figure.
Chinese exports last month jumped 30.6% to US$241.13 from a year ago in US. dollar terms, lagging the 35.5% increase that analysts polled by Reuters had expected. The country’s imports in US dollar terms rose 38.1% in March to US227.34 billion from a year ago, exceeding the 23.3% increase those analysts had forecast.. Market commentators suggested the latest data showed that China’s economic recovery is entering “a different phase.” indicating that the domestic economy and levels of consumption were now increasing.
Other experts said the recovery of foreign factories, along with high global commodity prices, will put pressure on China's exports, which may be volatile in the second half of this year.
Investor sentiment in Germany fell unexpectedly in April, the ZEW economic research institute said, citing rising fears that private consumption could be depressed as Europe’s largest economy gets closer to extending lockdown measures. The ZEW said its survey of investor economic sentiment fell to 70.7 points, its first drop since November 2020, from 76.6 the previous month. A Reuters poll had forecast a rise to 79.0.
In the UK gross domestic product (GDP) is estimated to have grown by 0.4% in February 2021, as government restrictions affecting economic activity remained broadly unchanged. The service sector grew by 0.2% in February 2021, as wholesale and retail trade sales picked up a little but, overall, consumer-facing services industries remain well below pre-pandemic (February 2020) levels.
In Australia the March NAB Business Survey showed business conditions rose to a record high in March, driven by strong increases in all sub-components – which are now also all at record highs. The strength in conditions is evident across all states and industries. Forward orders – which also rose to record levels – points to ongoing strength in activity with the pipeline of work rising further.
And still in Australia consumer confidence as measured by the ANZ Roy Morgan survey has soared. Headline consumer confidence shot past its long-run average value to 114.1 with a gain of 5.9%,reaching its highest value since September 2019. Current financial conditions’ took a huge leap of 8.3%, while future financial conditions rose 4.8%. Current economic conditions gained 7.1% and future economic conditions jumped 4.5%. Time to buy a major household item improved 5.7%.Weekly inflation expectations rose 0.2% to 3.9%, its highest level since the early stages of the pandemic, but the four-week moving average remained steady at 3.8%.
In New Zealand our central bank the RBNZ will be having its latest Monetary Policy Review at 2pm today. Catch all the news on that here.
On Wall Street, the S&P500 is up +0.3% in early afternoon trade. Major European markets were up an average of +0.2% overnight. Yesterday, the Shanghai market ended down -0.5%, Hong Kong was up +0.2%, while the very large Tokyo market closed up +0.7%. The ASX200 rose +0.1% yesterday, and the NZX50 Capital Index rose a strong +1.1%.
The latest global compilation of COVID-19 data is here. The global tally is still rising, now 136,893,000 have been infected at some point, up +684,000 in one day. Global deaths reported now exceed 2,950,000 and up +10,000 in one day. Vaccinations in the world are also rising fast, now up to 806 mln (+17 mln) and in the US more than half of their population (188.1 mln) have had at least one dose as they achieve a very fast rollout. The number of active cases there fell to 6,870,000 and down just -2,000 overnight.
The UST 10yr yield is down -4 bps at 1.63% and falling quickly. A few hours ago it had risen to 1.70%. The US 2-10 rate curve is flatter at 146 bps. Their 1-5 curve is flatter at +78 bps, as is their 3m-10 year curve at +161 bps. The Australian Govt 10 year yield is down -2 bps at 1.71%. The China Govt 10 year yield is softer by -3 bps at 3.19% in an unusual and extended fall. But the New Zealand Govt 10 year yield is up +2 bps at 1.76% in an unusual counter move.
The price of gold starts today at US$1747/oz and up +US$14 in a day.
Oil prices are marginally firmer from this time yesterday, now just over US$60/bbl in the US, while the international price is now just over US$63.50/bbl.
The Kiwi dollar opens a little firmer today at 70.5 USc. Against the Australian dollar we are also slightly firmer at 92.3 AUc. Against the euro we are unchanged at 59 euro cents. That means our TWI-5 is just above 72.7.
The bitcoin price will start today at US$63,225 and up a strong +5.7% from this time yesterday. That is close to the record high US$63,707 it reached at 3am this morning. Volatility in the past 24 hours has been high at +/- 3.4%. 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 ».