• US CPI. Cooling US inflation helped stabilise risk sentiment. US bond yields dipped. USD tread water, as did the NZD. AUD drifted a bit lower on Friday.• Event radar. US holiday tonight. Lunar New Year started. RBNZ meets this week (Weds). US GDP (Fri night AEDT) & AU jobs data also out (Thurs). Global Trends There was a mixed performance across markets at the end of last week with encouraging US inflation data in the driver’s seat. US equities stabilised on Friday after the previous sessions tech/AI-led selloff. Nevertheless, the S&P500 still recorded its 4th, albeit small, decline in the past 5 weeks. US bond yields fell with the 2yr and 10yr rates declining ~5bps. The policy expectations driven US 2yr yield is now tracking at the bottom of the range it has occupied since Q4 2022. In FX, the USD index consolidated with EUR treading water near ~$1.1872 and USD/JPY hovering at the lower end of its 3-month range (now ~152.67). GBP nudged up (now ~$1.3644), the NZD was range...

Consumer price growth avoided a widely-feared acceleration in the United States last month, giving the Federal Reserve room to adopt a slightly more accommodative stance in the months to come. According to data published by the Bureau of Labor Statistics this morning, the core consumer price index—with highly-volatile food and energy prices excluded—climbed 2.5 percent in the year ending in January, matching consensus estimates among economists polled by the major data providers ahead of the release, and was up 0.2 percent from December. On a headline all-items basis, prices rose 2.4 percent year-over-year—slower than the 2.5 percent expected in markets—and shelter costs showed signs of decelerating more sharply after playing a significant role in keeping inflation elevated since the pandemic. Evidence of tariff-induced price pressures remained unclear, with core goods costs remaining restrained. Core goods prices excluding autos have risen just 1.6 percent over the last year—the fastest...

Good morning. The dollar is edging lower even after yesterday’s stronger-than-expected jobs data drove a hawkish repricing in US growth and monetary policy expectations. Treasury yields are holding steady, North American equity indices are setting up for a mixed open, and most major currency pairs—including the Australian and Canadian dollars, the British pound, and the euro—are trading within tightly-defined ranges. January’s headline payrolls figure came in nearly double consensus forecasts and unemployment fell unexpectedly, reducing market-implied odds of an early rate cut, lifting 10-year yields and triggering a sharp dollar rally. The surface details looked positive: 130,000 new jobs against a 65,000 consensus, unemployment down to 4.3 percent from 4.4 percent, and wage growth accelerating to 0.4 percent. Yet the dollar’s gains proved fleeting. By the close, the greenback had fallen against a basket of major peers, suggesting investors were not comfortable abandoning...

• US data. US jobs report supported sentiment. This & ‘hawkish’ comments by RBA’s Hauser helped AUD outperform. AUD at levels last traded in Feb ’23.• Rate repricing. Markets factoring in another RBA hike by August. Relative interest rates are AUD supportive. But has it moved up too fast? Global Trends There was a more positive tone across markets overnight with better-than-expected US jobs data allaying fears about the state of the economy and supporting sentiment. While US equities retraced their initial positive reaction the S&P500 still recorded a modest gain (+0.1%). US bond yields rose with the larger jump at the front end of the curve (US 2yr yields +6bps) reflecting reduced US Fed rate cut expectations. Across commodities, base metals like copper (+1.1%) and energy prices (WTI crude oil +1.2%) increased, while in FX it was a more mixed picture. Once again, while the USD index ticked up thanks to some strength against the EUR (now ~$1.1870), GBP...

After slowing sharply over the last year, the US job creation engine showed signs of accelerating last month, frustrating market expectations for a rapid easing cycle from the Federal Reserve, and allaying fears of a dramatic slowdown in consumer spending. According to delayed data just released by the Bureau of Labor Statistics, 130,000 jobs were added in January—topping the 68,000-position consensus forecast—while the unemployment rate slid to a rounded 4.3 percent from 4.4 percent previously. Average hourly earnings climbed 0.4 percent month-over-month, jumping from the 0.1-percent pace set in the prior month, and rising 3.7percent in year-over-year terms. Revisions muddied the picture somewhat. Updates made to the November and December prints showed 17,000 fewer jobs were added than initially estimated, and a number of technical adjustments subtracted 862,000 roles over the year, bringing 2025’s average monthly job creation rate down to 15,000 from 49,000 previously—and well below...

The dollar is weakening and yields are nudging lower after US consumer spending surprisingly flatlined in December, underpinning expectations for more monetary easing in the months ahead. According to figures published by the Census Bureau this morning, total receipts at retail stores, online sellers and restaurants were little changed over the holidays after a 0.6 percent gain in November, and so-called “control group” retail sales—with gasoline, cars, food services, and building materials excluded—fell -0.1 percent, missing forecasts set at 0.4 percent. The US remains the global consumer of last resort—overall retail sales were still up 4 percent year-over-year in 2025, and import volumes have gone from strength to strength despite the ongoing noise from the White House—but it is clear that marginal spending growth is increasingly coming out of household savings, suggesting that momentum could slow further after tax refunds are paid out in the coming months. The dollar came under...