Kia ora,

Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.

I'm David Chaston and this is the International edition from Interest.co.nz.

Today we lead 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.

The UST 10yr yield is up +8 bps from yesterday at just on 1.73% and that makes it a 15 month high.

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%.

You can find links to the articles mentioned today in our show notes.

And get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston. We will do this again on Monday.