A Swift win for Kamala, and a rogue CPI print
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Did Kamala Harris really win the presidential debate and what does it mean for the race?
So it looks like Kamala Harris won the debate, whatever that means from here. Even the Swifties are behind her. But does that mean Donald Trump is out of contention? Well, no, not yet. US core CPI has risen a little. That wasn't expected, but also not that far out of step. But does it mean a big cut is less likely next week from the Fed? And what about the flat GDP numbers, two months in a row now in the UK? What does that mean for the Bank of England? And the ECB today, a Cut is expected and a choppy yen. We'll look at why that is. It's Thursdays, the 12th of September 2024. It's the morning call from Nab. Good morning. Well, another good day for US equities at the end of the trading day, with just a naught point three percent rise in the Dow though.
The same for the Russell two thousand. They actually both spent a lot of this session in the red. But a one point one percent rise in the S P and a two point two percent lift in the NASDAQ. A lot of that happening in uh in the late trade. Uh Nvidia shares are up eight percent today. The US dollar fell about naught point four percent today, but climbed up marginally for the day. Ultimately, uh, but the Aussie dollar is up 0.3%, up over sixty six point seven US cents. The yen is up but choppy, the Canadian dollar up 0.3%, the pound though down a quarter percent, and the euro is flat on the day. Ten year treasury yields are up two basis points, but yields are lower in Europe, down six for ten year guilt yields today.
Aussie ten year yields were down six basis points yesterday as well. They finished the day at three point eight five percent. Now on futures They are a couple of basis points higher than that. And oil has bounced back. That didn't take long, did it? We've got a two point two percent lift in WTI and Brent is up one point nine percent this morning to a little more than seventy fifty a barrel. Uh Nab's Gavin Friend joins me in London. So um we should talk about US CPI, I think first of all, out last night. The core rate I mean the headline late rate was good news. The core rate though has gone from nint two percent for the month up to
What were the key moves in US equities and commodities after the CPI surprise?
To 0.3%. So wrong way, go back. I guess that might explain why we saw the Dow struggling a bit today. And also, I presume. This means a fifty basis point cut, even though it's pretty unlikely. Next week from the Fed is looking even less likely.
US CPI inflation report for August that was the last big data release, uh, you know, arguably before uh next week's Fed meeting to um to have an impact on the size of uh the cut that is coming. Um and I guess in the context of the fact that, you know, financial markets, investors, then the narrative has shifted away from inflation. um more to impending weakness, especially on the labour market, you know, um it it nonetheless has had an impact. Um you highlighted the headline rate as expected a point to, but the core um on the month a tenth higher. So if we look at the factors that are driving that, we know that um this was, you know, driven by sort of often volatile noisy factors, you know, things like air
Carefares, hospital services, prices, clothing, daycare, but you know, more so by the price of shelter. uh, which rose a half a percentage point on the month after point four last month, and just point two back in June. And uh, you know, I mean this has a, you know, a large, nearly forty percent weighting in in the core and so obviously has a a big impact. Now recall, you know, um in months past we've talked about th th th this whole protracted debate about primary rents, owners equivalent rents. you know, the latter sort of an es an estimation. It's a sec secular argument. Right, you know. There there's there's there's there's a debate on whether, you know, um cuts i in in the Fed funds rate may actually, you know, ease down rents.
I mean that's that's still out there. We can say that um, you know, outside of all of this, sort of big picture rent data captured by Zillow and others, you know, is running at lower levels. And so there's a reason to think that um, you know, both OER and primary rents will also retreat in time.
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Chapters
4 chapters
1
Did Kamala Harris really win the presidential debate and what does it mean for the race?
0:01–1:51
2
What were the key moves in US equities and commodities after the CPI surprise?
1:51–7:03
3
How did the latest US core CPI numbers affect expectations for a Fed rate cut?
7:03–9:20
4
Why might the Fed delay a 50‑basis‑point cut and what are the odds of a smaller move?
9:20–18:42