US data average; Bank of Canada signals more urgent approach; Taiwan shines; BofE holds; Aussie jobs shrink; NZ slips in Happiness update; UST 10yr at 4.24%, gold and oil firmish; NZ$1 = 57.5 USc; TWI = 66.8

Here's our summary of key economic events overnight that affect New Zealand with news we are slipping in the Happiness rankings, and slipping fast in the inequality measures within it.

But first, last week's American initial jobless claims report brought no surprises, coming it at a similar level to the prior week and exactly as anticipated. But the seasonal factors suggested they should have decreased a bit more than they did. There are now 2.13 mln people on these benefits, +6% more than year-ago levels.

There were a lot more existing homes sold in the US (excludes new-built homes) in February than either in January or than were expected. But they were still at a lower level that a year ago, and the volume of listings rose +5.1% from a year ago.

The latest regional Fed factory survey was from the Philly Fed and its rust-belt region, and while it remained positive, most markers declines in March. New order level declines were part of that.

And that is consistent with the Conference Board's latest update of American leading indicators, which declined in February.

Across the border in Canada, and perhaps somewhat surprisingly, producer prices rose +4.9% in February from a year ago, an easing of the price pressure from January. But it is still the second fasted rise on this basis since the end of 2022. Raw material cost increases are keeping this measure up.

And staying in Canada, their central bank boss signaled a policy change overnight in light of the economic impacts from US tariff threats; rather than setting policy on a median term outlook, the time may have come for faster, more nimble responses to short-term pressures, he suggested.

China kept its Loan Prime Rates unchanged at yesterday's review with the one-year rate, a benchmark for most corporate and household loans, steady at 3.1%, while the five-year, a reference for property mortgages, holding at 3.6%. Both rates are record lows.

Taiwanese export orders starred again in February. They soared by +31% from a year ago to US$49.5 bln, easily beating market expectations of +22% growth and rebounding sharply from a small January slip. You can see why the mainland government covets the independent offshore island.

German producer prices rose only modestly again, a trend they have been in for four months now after exiting deflation over the prior 17 months.

The English central bank left its policy rate unchanged at 4.5% at their overnight meeting. This was as expected.

In Australia, their February labour market data was a surprise disappointment - for the ruling Labor Party at least. The number of people in paid employment fell by -53,000 when a +30,000 rise was widely expected. This is not a small miss, and 'unwelcome' ahead of their upcoming election campaign. But the number of people jobless also fell, and by -11,300, which managed to keep their jobless rate unchanged at 4.1%. The reason both fell is because their participation rate fell to a nine-month low of 66.8%, down sharply from January's 67.2%. People are leaving their workforce faster than usual, many of them boomers. Monthly hours worked in all jobs shrank. Financial markets didn't react badly because it probably will shift the RBA away from worrying about 'tight labour markets' and open up the possibility of rate cuts.

Global container freight rates fell another -4% last week to be -31% lower than year-ago levels. But they are still +59% higher than pre-pandemic levels, even though the down trend is gathering pace. Again it is lower rates on outbound cargoes from China to the US that is driving the decline. Bulk cargo rates however were +3.6% higher than week-ago levels, -17% lower than year-ago levels, but still +60% above pre-pandemic levels (which were unusually low, it must be said).

In another global report, New Zealand is virtually tied with Australia as the 12th happiest country in the 2024 edition of the World happiness Report released overnight. The usual Scandinavian set is at the top, with Costa Rica, but oddly, both Israel and Mexico now rank higher than us, which seems a little odd. Neither Australia nor New Zealand rank well on the inequality measures.

The UST 10yr yield is now at 4.24%, down -4 bps from yesterday at this time. The key 2-10 yield curve is steeper at +27 bps. Their 1-5 curve inversion is now -6 bp. And their 3 mth-10yr curve inversion is now also -6 bps. The Australian 10 year bond yield starts today at 4.43% and down -7 bps from yesterday. The China 10 year bond rate is now at 1.93% and down -3 bps. The NZ Government 10 year bond rate is now at 4.60%, down -6 bps from yesterday.

Wall Street has opened its Thursday trade with the S&P500 down -0.2%. Overnight European markets were mixed in the large range of London down -0.1% and Frankfurt down -1.2%. Yesterday, Tokyo closed down -0.2%. Hong Kong ended its Thursday session down -2.2%. Shanghai was down -0.5%. Singapore was up +0.6%. The ASX200 ended its Thursday trade up +1.2%. But the NZX50 only rose +0.1% at the end of the day's trade.

The US P/E ratio is now above 20, so a correction in this unusually high valuation level may be painful if and when it comes.

The price of gold will start today at just on US$3038/oz and up a net +US$5 from yesterday.

Oil prices are up another +50 USc from yesterday at just on US$68/bbl in the US and the international Brent price is at just on US$72/bbl.

The Kiwi dollar is now at 57.5 USc and down -40 bps from this time yesterday in a continuing retreat. Against the Aussie we are down -10 bps at 91.3 AUc. Against the euro we are down -20 bps at 53 euro cents. That all means our TWI-5 starts today just on 66.8, and -40 bps lower.

The bitcoin price starts today at US$83,747 and down -1.0% from this time yesterday. Volatility over the past 24 hours has again been moderate at +/- 2.2%.

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