Benchmark yields resume their upward climb

<p>Kia ora,</p><p>Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news it’s all about bonds and interest rates today.</p><p>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.</p><p>And US <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20210458.pdf" target="_blank"><strong>jobless claims</strong></a> 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.</p><p>Much more positive is the latest regional Fed factory survey, <a href="https://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/mbos-2021-03" target="_blank"><strong>this one from the Philly Fed</strong></a>, 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.</p><p>In Canada, their February update of the <a href="https://www.adp.ca/-/media/adpca/redesign2019/images/resource-hub/ner/0221/en_adp_canada_ner_press_release_2021_02.pdf?la=en&hash=1BF5F63214875312777B645BBCF145D761DAD217" target="_blank"><strong>ADP Employment Report</strong></a> wasn't so positive, indicating declining jobs. It is quite a different slant on their labour market from the <a href="https://www150.statcan.gc.ca/n1/daily-quotid