Abenomics to rise again? Surprise as Takaichi wins the leadership race in Japan.

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NAB Morning Call 17 min 2 speakers 3 chapters transcribed 25 days ago
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What were the key market moves in Treasury yields, currencies and equities this week?

Phil Dobbie 0:01
Holidays for many today in Australia, China too, and the US still in lockdown. Uh so not much data around, but central bankers have been talking and will continue to do so this week. Plus, Japan's next Prime Minister, a bit more Shinzo Arbian approach, perhaps, and OPEC Plus Live Production, but not as much as expected. It's Monday, it's the 6th of October 2025. It's the morning call from NAB. Good morning. Well, Treasury yields fell last week, particularly at the front end, so two year treasuries down almost seven basis points, but there again, so were Aussie ten years last week. It wasn't a big week for currency moves. The US dollar lost half a percent on the DXY. The biggest gain was the yen up one point four percent, the Aussie was up almost one percent, the euro up a third of one percent.
Phil Dobbie 0:45
And the biggest gain in equities was in Hong Kong, the Hang Seng up three point nine percent last week, the ASX was up two point three percent. The NASDAQ climbing just one point three percent. And we saw big falls in oil. Brent was down eight per cent uh and uh gold was up two point eight percent, copper seven percent higher on the week. Um, half of that happening on Friday. So here we are, Monday morning. New South Wales, ACT, South Australia, and Queensland all on holiday today. Queensland obviously got a lot to celebrate after last night. Melbourne less so, uh, which is why Nabs Taylor Newton joins us Friday. From Melbourne. He's not been following it, so he's not too fussed. Um but I'm glad someone's working today, Taylor.
Phil Dobbie 1:23
So uh but is Trump's vision of America working? So we had the uh the services ISM on Friday. Neither hot nor cold. I mean it was on the border at fifty, wasn't it?
Taylor Nugent 1:33
Yeah, good good morning, Phil. Um reasonably quiet end to the week on a Friday that, you know, would have had payrolls if it wasn't for the the government shutdown. So instead we're left with the the services ISM is the the key data from Friday, which is a um a bit of a a bit of a less uh clarifying picture than um Fed officials certainly would have been hoping for from the data flow. But um yeah, as you say, the services ISM was below expectations. It fell back to to fifty from fifty-two Um that was on a pretty meaningful uh fallback in both the new orders and the business activity components. So not a particularly uh optimistic signal for the um the sustainability of uh what looks to be a stronger Q three growth outcome, at least as we look forward into into the fourth quarter.
Taylor Nugent 2:14
Um but having said that, you know, it hasn't been a particularly uh uh reliable guide. It's been kind of understating for a while the the strength of services spending that we've seen as the as the hard data rolls in and there is a little bit of a a contrast there to what was a stronger signal out of the uh out of the services PMI or the SP global version. Yeah, so. So I'm not sure there's necessarily too much to uh you know change views there necessarily but certainly it does um you know it certainly was a a weaker signal on on USF services momentum than the recent data flow has been suggesting.
Phil Dobbie 2:50
So a couple of the sub indices, so you might based on that, you know, do we just ignore them? But the employment index in contraction for the fourth straight month, forty seven point two, which is marginally up, so a little less bad for workers. But that's still saying a weaker jobs market if you believe that. And then uh prices up ever so slightly as well. So and lots of comments from respondents, just anecdotal stuff relating relating to the rising cost as a result of tariffs.
Taylor Nugent 3:14
No, that's yeah, that's right. And I think on the on that employment index, uh I think that's interesting given that, you know, obviously a lot of the the private sector and alternative indicators are are getting a lot of focus at the moment in the absence of the the payroll starter. And, you know, as you say, it did tick up a bit to forty seven point two from from forty six point five, but um, you know, that still leaves it below below fifty. And I think that is, you know, pretty much in

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