All talk from central bankers
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Why are bond yields edging higher despite light data this week?
It's been a light start to the week, data wise, so it's largely word from central bankers helping yields to edge ever so slightly higher, slightly being the operative word. And equities high as well, buoyed on by tech largely, AI and iPhones. And today, PMIs are going to be the focus. Plus, obviously, whatever comes out of the Trump administration. It's Tuesday, it's the 23rd of September 2025. It's the morning call from Nab. Good morning. Morning.
Mm-hmm.
Well, US equities are on the rise again. Not point two percent added to the Dow at the close, not point four percent for the SP, the Russell two thousand is up, not point six percent, and not point seven percent added to the NASDAQ, Apple doing particularly well, it was up almost four percent because demand is high for the iPhone seventeen, apparently, which you can pick up for less than two thousand Australian dollars, but only just less than. Seems rather an extraordinary amount of money, doesn't it, spend on a phone? Uh and NVIDIA is spending a lot of money as well. They're up four percent because they are going to spend a lot on AI. More on that shortly. Meanwhile, the Eurostocks fifty down 0.3%, the DAX down half a percent, the FTSE 100 is up but just 0.1%.
On currencies, a 0.3% fall in the US dollar today on the DXY with the Aussie up just 0.1% to 66 US cents now. The euro is up half a percent. Is up a third of one percent.
How did the recent US equity rally relate to tech and AI demand?
And small movements in bonds, US 10-year Treasury is up just two basis points to 4.15%. No movement at all in Germany and the UK. France and Italy are up just one basis point. Aussie 10 years were at 4.26% yesterday, this morning on futures up for 4.32%. So that's six basis points higher. And small movements in oil, WTI hasn't really changed, and Brent. Is down 0.2% to below 66.6 a barrel, but big moves up in gold, spot gold up 1.7% to 3,747 US dollars. And that is, you guessed it, another new record high. In fact, over 40% return year to date. Wow. So here's Sky Masters with me today from NAB in Sydney. So Sky, you know, light on data, but actually heavy on central bank. rank speakers over the uh the last twenty four hours, including uh Michelle Bullock yesterday at the House Economics Committee.
So did you take much from that? I mean she was quite hawkish, wasn't she?
Yeah, look, I think she was you know, I think that's been the general tone out of the central bank's speak over the past uh twenty four hours, Phil. Like generally, um, both from Bullock and and um some of the Fed speakers overnight have have probably painted a slightly more positive um commentary cu coming out of the the central banks and so you you have seen a little bit of mild repricing in um in expectations for further further rate cuts.
What did Michelle Bullock say that signaled a more hawkish RBA stance?
But yeah, from Michelle Bullock, um yeah, she was speaking in front of the House House committee um yesterday and yeah, you know, s slightly as we said, slightly slightly more more hawkish, you know, she was saying, what did she say? Um, you know, while the labour market conditions have eased a little since we last met with the unemployment rate rising a little, we assess that some tightness still remains. And she she was also noting that you know that they're starting to see um you know some some signs that the private sector is is starting to respond to the monetary stimulus that that the RBA has has provided. So so probably a little bit more hawkish than than um or less dovish than her post meeting comments.
Um and on the back of that, as I said, the OAS market has just slightly unwound um expectations for further um RBA RBA rate cuts, but still sort of the market's still looking at um at sort of cuts by uh November. So the OAS curve is pricing in around nineteen point six basis points of cuts for the November meeting and a cumulative um what are they pricing? Culative twenty five point eight basis points by December. So at least one more rate cut before the end of the year.
Slow, isn't it? So I wonder uh how much this CPI tomorrow could change that. What's it gonna take uh for that is expectation uh for for the RBA to consider more cuts?
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Chapters
8 chapters
1
Why are bond yields edging higher despite light data this week?
0:02–1:22
2
How did the recent US equity rally relate to tech and AI demand?
1:22–2:51
3
What did Michelle Bullock say that signaled a more hawkish RBA stance?
2:51–5:19
4
How are RBA rate‑cut expectations changing after the latest OAS moves?
5:19–6:46
5
Will the upcoming CPI print shift the RBA’s monetary policy outlook?
6:46–8:41
6
What mixed signals are emerging from recent Fed speaker comments?
8:41–10:36
7
How are global PMI figures painting a divergent picture for Europe, the UK and the US?
10:36–12:29
8
What impact could the US‑Argentina intervention have on markets and bond yields?
12:29–13:58