Sources of demand for gold. (Chart via The Daily Shot)

Eurozone shares +0.6% US shares +0.7%, bouncing back after 1% fall Friday that was partly due to tariffs. Nas +1% US 10 yr yld +0.4bp to 4.5% Oil +2.1% to $72.5 Gold +1.6% to $2907.5 Iron ore +0.6% to $107.3 Bitcoin $97.3k ASX futures +0.4% $A 0.6278 with $US index +0.2%

Trumps 25% tariff on alum & steel: In 2024 Aust alum & steel exports to US were $808m. Hopefully we get an exemption as we have trade deficit with US, but maybe not = bad for Aust producers but at just 0.03% of GDP trivial macro impact. Real risk for Aust is reduced global trade.

Chinese CPI inflation rose to 0.5%yoy in Jan mainly due to higher food and tourism prices due to the earlier than normal Lunar New Year. Expect a fall back in Feb. Producer price deflation was unchanged at -2.3%yoy. (Goldman Sachs chart)

Prelim Domain auction clearances Syd 72%=final ~67%,Feb norm 67% Mel 68%=final ~62%,Feb norm 65% Clearances are continuing to get a boost from increased rate cut talk, particularly in Sydney. So far the bounce has come on low volumes. #ausecon

Trump says will announce “reciprocal tariffs” that would affect “everyone”. “They charge us. We charge them”..suggesting it will match imposts on US imports into other countries (could include VAT). Could be alternative to 10-20% general tariff. Tariff war a long way from over!

US Uni Michigan consumer sentiment down on concerns about a boost to inflation from tariffs. 1 year ahead inflation expectations up sharply to 4.3% for the same reason and 5-10 yr ahead inflation expectations also rose to 3.3% from 3.2%. (Bloomberg charts)

US Jan payrolls +143k, < exp and earlier payrolls revised down but recent payrolls revised up. Unemp fell to 4% from 4.1% Avg hrly earnings +0.5%m/4.1%y, > exp but could be due to a mix shift Leans a little hawkish suggesting even less chance of a Mar Fed cut (EvercoreISI charts)

Eurozone shares -0.4% (+0.5% wk) US shares -1% (-0.2% wk) w hawkish jobs, consumer conf down & Trump to unveil “reciprocal tariffs” US 10 yr yld +5bp to 4.49% Oil +0.5% to $70.9 Gold +0.2% to $2860.7 Bitcoin $95.7k Iron ore +0.3% to $106.7 ASX futures -0.8% $A 0.6271 w $US +0.3%

US initial jobless claims +11k still low,continuing claims +36k Dec qtr productivity growth slowed to 1.2%annualised or 1.6%yoy. With compensation +4.3%yoy, growth in unit labour costs rose to 2.7%yoy..a bit above levels consistent with the 2% inflation target EvercoreISI charts

Eurozone shares +1.6% US shares +0.4%, Nasdaq +0.5% US 10 yr yld +2bp to 4.44% Oil -0.9% to $70.6 Gold -0.4% to $2856.5 Bitcoin $96.9k Iron ore +1.9% to $106.6 ASX futures -0.2% $A 0.6284 with $US index flat

RT @AMP_AU: Simplifying Investing🎙️📺new ep! Episode #141: Is it "Job Done" on inflation? We catch up on: gains in markets, a look at Trumps…

Aust Dec trade surplus fell to $5.1bn, from $6.8bn with exports +1.1% (with rural and iron ore up) but imports +5.9%mom (with capital goods +10.6%mom).

The fall in the ECB’s Wage Tracker (based on collective bargaining agreements & labour mkt indicators) points to a sharp fall in wages growth and a further fall in inflation. Equals many more ECB rate cuts.

Well at least homelessness in Australia (at about 0.15% of people is not as bad as the US or UK…but any homelessness is bad! And will get worse if we don’t get on top of the 200-300k housing shortfall. (Chart via The Daily Shot)

Eurozone shares +0.1% US shares +0.4%, Nasdaq +0.2% US 10 yr yld -9bp with Tres Sec Bessent saying he and Trump want lower 10 yr ylds Oil -2% to $71.2 Gold +0.9% to $2868 Bitcoin $96.5k Iron ore -1.4% to $104.6 ASX futures +0.9% $A 0.6282 with $US index -0.2%

US Jan services ISM -1.2 to a still ok 52.8 with softer orders,stronger emp. Prices paid fell to 60.4. Jan ADP emp +183k > exp but other job indicators have been mixed, Jan will see annual revisions and the ADP survey not always a reliable guide. (Bloomberg & EvercoreISI charts)

He’s right! “If high school students can grasp Ricardo’s theory of comparative advantage and free trade, why do politicians continue to push protectionist policies?” #ausecon

Japanese wages growth remains up…supporting the case for further gradual BoJ tightening. (Goldman Sachs chart)

US quits data is still pointing to a further fall in wages growth.