All systems go for a Fed cut next week
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What are the latest US equity gains and currency movements driving market sentiment?
So the Bank of Canada cut rates by fifty basis points. The ECB expected to cut today, and the latest inflation data from the US providing no reason to move from the expectation that the Fed is gonna cut next week as well. Only the RBA this week and probably the Bank of England next week are holding out, it seems, and Australian employment data out today. It's Thursday, it's the twelfth of December, twenty twenty-four. It's the morning call from NAB. Good morning. So the US dollar is up again, up naught point three percent, almost at one oh six point seven on the DXY. Against that a naught point four percent fall in the Euro and in the yen. The Aussie is down naught point one percent, naught point two percent lower for the pound.
The Aussie now below sixty-three point seven US cents. The Kiwi dollar down naught point two percent this morning. Uh ten year treasuries are up four basis points, up six basis points for ten years in Canada. In Europe, well up one basis. Basis point in France and Germany, down one for UK ten-year guilts. Aussie ten years. Well, they were down four basis points yesterday to four point one eight percent. This morning on futures, two basis points higher, uh a bit over four point two percent. A good session for US equities. At the close, a one and three quarter percent rise in the Nasdaq, up over twenty thousand now to a new high. Not point eight percent up for the S P, also a new high. The Dow though, down naught point two percent.
The Russell 2000 is up half a percent. Several of the big techs also hitting new highs in this session. And in Europe, the Eurostocks fifty closed up a little, uh just under 0.2%. The FTSE one hundred up a quarter percent, the DAX up 0.3%, and oil rising again up two and a half percent for WTI and one point nine percent for Brent, Brent heading up to seventy three sixty a barrel. So a great session for tech stocks in the United States.
How does the recent US CPI print influence expectations for a Fed rate cut next week?
Here's Nab's Gavin friend. I guess uh there was nothing extraordinary in the CPI print in the United States. So uh the assumption is now there is nothing to stop the rate cut from the Fed next week and uh and that's reflected in equities.
Yeah, good
morning Phil.
I think that's right. Yeah, the uh so the the economic indicator of the week and the last Uh release that could reasonably alter the Fed's raid decision, I think. Uh didn't surprise.3 of the core, point three on the headline. If you look at the last three decimal points on the core, point three zero eight. The so-called supercore measure, um, services less housing rose point three four after point three one in October. Um I mean it's true. Back to back, as we've seen now for the last four months in the core. That won't get us too.
And within That um owner's equivalent rent, that fictitious measure, um, which accounts for a twenty tw a chunky twenty-seven percent, as well as um primary rents, both rose by just naught point two percent on the month. These downshifts, you know, mark an encouraging signal that Um as we're seeing in other sort of rental data in the US, the general trend in rents continues downwards, which is something that the Fed is obviously going to going to look uh very favorably on. I mean, as we've seen in the CPI reports in recent weeks, there are there are a myriad of things which pop up and down and prevent the broader decline uh to target, um, you know, underlining that sort of you know off use phrase the last
mile is the hardest, I mean it certainly is. However, prices of lodging away from home, hotels if you like, jumped to three point two percent. I mean they're they're not a big um they don't have a big weighting in the CPI basket, but the the the three point two percent was was enough to have a meaningful impact upside on on inflation. And elsewhere Food prices, food prices rose four um from point two uh the month before.
Why did the Bank of Canada implement a 50‑basis‑point rate cut and what does it signal for future policy?
Um and it particularly notable in uh places in in areas such as meat and eggs, which rose strongly. Clearly no one is uh taking notice of Dr. Zeus and that famous line, what was it, green eggs and ham?
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Chapters
8 chapters
1
What are the latest US equity gains and currency movements driving market sentiment?
0:01–1:42
2
How does the recent US CPI print influence expectations for a Fed rate cut next week?
1:42–4:04
3
Why did the Bank of Canada implement a 50‑basis‑point rate cut and what does it signal for future policy?
4:04–6:31
4
What does today’s Australian employment data reveal about the RBA’s stance on interest rates?
6:31–8:46
5
How are ECB and Bank of England rate decisions expected to unfold this week?
8:46–10:33
6
What are the ECB’s inflation forecasts and potential two‑stage rate‑cut strategy?
10:33–12:21
7
Could the Swiss National Bank be the last major central bank to cut rates this year?
12:21–13:49
8
What upcoming NAB podcasts and market updates should listeners watch for next week?
13:49–15:07