America back in time for manufacturing numbers
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Why is the ISM employment component crucial ahead of Friday's non‑farm payrolls?
Well, the US has been on holiday, but they are back just in time for the manufacturing ISM read, and a lot of focus is going to be on the employment component of that as we ready ourselves for Friday's non-farm payrolls. Trade has been light and relatively stable for the last few sessions, but could that all turn as we get closer to Friday's numbers? And we'll look at yesterday's GDP partials for Australia as well. It's Tuesday, it's the third of September, 2024. It's the morning call from now. Good morning. Well, the US dollar is marginally down this morning with a naught point two percent rise in the euro and the Aussie dollar is up naught point four percent. The yen is down half a percent. Bond markets and equity markets have been closed in the US.
But in Europe, bond yields are higher. Ten year yields uh are up four basis points in Germany, up seven in Italy and four in the UK. Aussie ten years yesterday. Yields closed at four point oh one percent, now on futures up to four point oh three percent. The Eurostocks fifty is Up 0.3%, a small fall in the FTSE 100. The CSI uh 300 yesterday was down 1.7%. And oil higher today, a 0.7% lift in WTI prices, and 0.8% higher for Brent, up over $77.50 a barrel now. So Rodrigo Catrill is with me today. Not too much to say about the US this morning because it's a public holiday there, of course, but they are back today or Tuesday, their time. when they get right to it.
What did the August European PMI reveal about growth and the ECB’s potential rate cuts?
But uh let's look at Europe though, uh 'cause of course there was a lot there yesterday, the final read of the PMIs for August. And uh yeah, there were some moves up, weren't there, in the final rezi revision. Um but that's up on the earlier read, but month on month actually they generally got weaker. So good and bad news.
Yeah, good good and bad news and and sort of uh uh the conclusion there that that there's still sort of a lacklustreus activity um with the Germany and and France to a lesser extent uh being the big economies in Europe uh a a major concern. So um nothing new there. Uh but certainly in terms of what the data's showing, um um it's it still favours the view that the E C B should be should be cutting in September as well. So I suppose that's one one conclusion from from the data.
Yeah. And the UK, um, you know, again, showing that you know 'cause there's not many countries which actually go over fifty. Uh, but the UK is one of them at fifty three. Uh the others, uh Norway and Greece, they got over fifty as well. But they're heading down, whereas the UK is going up. So uh yeah, once again the UK economy seems to be doing all right.
Yes, and and that example of economic resilience, um um Uh is it's actually notable in terms of how well the the the US uh the the UK economy has been doing. Maybe there's a little bit of that sort of new government honeymoon period that might be playing into it, but certainly um it will be interesting to see
How is the UK’s economic resilience influencing the Bank of England’s easing strategy?
um where they can sustain this these levels and and um and whilst at the same time you you still need to continue to see that evidence of cooling of a cooling label market to you know make it easy for the Bank of England to to continue to ease over over the course of this year. Um if you remember the the vote was you know quite divided in in terms of um how many were willing to to to cut. So Um, that's why we think that when you compare it to to Europe, uh uh less easing should be expected uh over the course of this year.
Yes, definitely. And and if anything, sort of the contrast between the two where Europe from an activity perspective needs to ease, uh but the inflation backdrop makes it difficult, whilst in the UK um um you know the the economic it's is doing well. Um and um you know the the argument is whether you know the clarity in the inflation data uh particularly coming from from wages growth allows them to to continue to ease uh at a nice pace o over over the remainder this year and next year.
Yeah. And of course, you know, when you get a a a sluggish economy, you see it in politics, don't you? So we saw that in the regional elections in Germany overnight, which weren't good news for Olaf Schulz.
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Chapters
8 chapters
1
Why is the ISM employment component crucial ahead of Friday's non‑farm payrolls?
0:01–1:20
2
What did the August European PMI reveal about growth and the ECB’s potential rate cuts?
1:20–2:43
3
How is the UK’s economic resilience influencing the Bank of England’s easing strategy?
2:43–5:07
4
Did China’s Caixin PMI enter expansion territory and what does it mean for growth?
5:07–6:36
5
How might Australia’s latest business indicators affect the modest Q4 GDP growth forecast?
6:36–8:40
6
What impact will the upcoming non‑farm payrolls have on corporate bond issuance this week?
8:40–10:19
7
How is the Australian dollar performing against the US dollar and other currencies this week?
10:19–11:41
8
What could the upcoming US presidential debate mean for Kamala Harris’s momentum?
11:41–12:26