About Turn on Risk
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Why did global markets shift into a classic risk‑off mood today?
Markets flipped into classic risk-off mood overnight, but it wasn't just the tasks. That also concerns over AI. Software stocks have been hit particularly hard. The feds Chris Wallace says the US probably lost jobs last year, so that makes the next FOMC meeting a coin flip in his words. Whilst German IFO showed that Europe is on the way back. So did New Zealand's retail sales. And today, China back from their lunar holiday. What will they do about their currency? It is Tuesday, the twenty-fourth of February, twenty twenty six. It's the morning call from NAB. Good morning. Well, big falls in the US stock market today, one point three percent off the Nasdaq, one point one percent off the S P in Europe. The DAX is down one percent as well.
Bond yields are much lower, six basis points off ten year treasuries. Most of Europe is down just two or three basis points, down four though, in the UK and Canada. Aussie ten years seem to be exempt from all that, down just one basis point yesterday to four point seven two percent, and just one basis point lower than that this morning on futures. The US dollar The dollar has fallen a tiny bit more, but the Aussie is the biggest mover of the majors. But the opposite to yesterday, it's down almost half a percent to just below 70.5 US cents. The yen rose almost half a percent. And oil down a little, but only 0.3% or so. Spot gold though at one and three quarter percent, silver up five point three percent, but we're still, of course, way off those highs that we saw at the end of last month.
But a bit of movement. And here's Nab Jul, uh a very different story this morning. It seems like the classic Risk Goff story, doesn't it? Buy bonds, sell shares, move to safe haven currencies. Oh you know, except for the US dollar, obviously, for obvious reasons.
Good morning. Well summarised. I think we can move on.
How did the US Supreme Court trade‑policy ruling affect market sentiment?
But no, that's certainly that's the case. I mean obviously, you know, as we were digesting the news over the weekend and I think a little bit of um scepticism if you like, that the uh the way that US markets in particular greeted the um the Supreme Court ruling that invalidates the uh the reciprocal and fentanyl related tariffs um was was going to survive the day and and you know that scepticism has obviously proved justified. So there's obviously been this interplay between, you know, the fact that that ruling, you know, does you know do something at least to restore, you know, investors' faith in the separation of powers that underpins the US Constitution, you know, and the adherence to the rule of law, including, you know, a rules-based trade policy.
But I think it's just the uncertainty about what the future um trade landscape will look like, you know, just at a point where you know most countries were was had signed or on the cusp of signing trade deals. So whether they were sort of good, bad, or ugly, at least removed a lot of the uncertainty. And now we're back in And a very uncertain environment and what happens, you know, at the end of the hundred and fifty day period, um, that is when the sort of statute of limitations on this fifteen percent new um global baseline tariff that that Trump announced on Saturday um comes to an end. So I think, you know, uncertainty is ruled and certainly in stocks we've seen sort of defensive um sectors, if you like, of uh
You know, consumer discretionaries have uh have have suffered, financials have suffered and the defensive sectors have done relatively better.
Yeah, well in fact consumer staples are up one point two percent today. So that sort of says it all of it, doesn't it? But also intermingled in all of this is the AI story, in particular what it means for software companies, because they are the ones that have been hit the hardest. So the iShare's expanded tech software ETF is down five percent today, down over twenty seven percent so far this year. So we've got that story intermingled with uh with the TAF story as well, haven't we, today?
No, actually. And I wonder whether and obviously we've got um you mentioned it yesterday with Rodrigo, but we've got NVIDIA reporting this week and also um Salesforce, which is one of those, you know, software as a service companies that um, you know, d did get a little bit of a a beating up, you know, following the, you know, the news of the release of, you know, Anthrop Anthropic's um clawed, you know, AI tool and what that potentially was going to do to the uh
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Chapters
7 chapters
1
Why did global markets shift into a classic risk‑off mood today?
0:01–1:39
2
How did the US Supreme Court trade‑policy ruling affect market sentiment?
1:39–5:18
3
What does Chris Wallace’s labour‑market signal mean for the next Fed decision?
5:18–7:42
4
Why are AI and software stocks under pressure and what are the earnings outlooks?
7:42–9:42
5
Is the German economy really picking up after the IFO and PMI data?
9:42–11:26
6
How are New Zealand retail sales and China’s post‑Lunar‑New‑Year currency moves influencing FX?
11:26–13:00
7
What are the latest forecasts for the Chinese renminbi and Australian interest rates?
13:00–13:36