Are things too good in the lucky country?
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What’s driving the recent strength in US equities and the US dollar’s impact on the Aussie?
US equities continue to do well. The US dollar loses ground and helps the Aussie more than most currencies, but a lot of our focus right now is closer to home. Okay, we've got US wages and retail sales later today. But what about yesterday's household spending for Australia and the NAB Business Survey today? Are they or will they provide more evidence of a growing economy that is buffering up against capacity constraints? Let's talk through all of that. It's Tuesday. It's the tenth of february twenty twenty six, it's the morning call from Nab. Good morning. Well, US shares continue to rise. The Nasdaq uh is at one point one percent, naught point six percent for the S P five hundred in Europe as well. We've got a one point two percent lift in the DAX, one point four percent higher in Spain, one percent up for the Eurostocks fifty.
Not much to speak of in bonds, except Aussie ten years were up four basis points yesterday to four point eight six percent, a smidgen higher than that for yields right now. The US dollar is down two-thirds of one percent Getting below ninety seven now on the DXY. Uh that's helped the Aussie dollar, which is up more than one percent this morning at seventy point nine US cents. And gold uh is going well, it's going for gold basically, uh up two percent, but still a little shy of the all time high. Silver is up over eight per cent. And yet oil also rising. It's up two percent for Brent and WTI. Another session like this one on Brent will actually be well over seven. A barrel. And here's Nabs Udriga Katrill joining me uh this morning.
Uh we should start by looking at the those household spending numbers yesterday for Australia, which fell a little bit in December, but that that was after a particularly strong October, November.
How are Australia’s household spending trends and the latest NAB Business Survey shaping the economy?
And if we compare December with a year ago, household spending is actually up five percent. That's quite a bit.
Morning Phil. Yeah, so um our economies have been highlighting the the potential for a bit of a payback given how strong the prior two months have been. Um so so but when you look at it as you say, like first of all relative to to the previous year and also if you look at the whole quarter, it's actually pretty decent. Um so so it's not not not a a big deal if you like. It's it's not a signal of some renewed weakness. weakness coming from the consumer, but rather um more to do with seasonality. Many of us um you know tend to now do a Christmas shopping in November rather than in December and that clearly is is i is is is starting to show in terms of the patterns in in in the data. Um but overall um you know you look at spending for the quarter which is up by a decent point nine percent um a little bit below what the RBA is thinking but not enough to sort of challenge
Or or make them think whether there's something different or wrong or a signal there. So overall not a great deal to see. Just a um confirmation that uh for now the the consumer is still pre buoyant um and remains, if you like, a little bit um of a concern if you like, in terms of how much uh inflationary um uh pressures coming from the consumer, particularly in the services sector. Impacts is coming from the consumer.
Yeah. Well if inflation is coming down but the spending is going up, then that must mean the volumes are going up. Uh and given that, you know, the big the there's this big concern about capacity constraints, I mean that that does, you know, raise the question about just how inflationary could this be?
Yes, so I I think th there's another kind of emerging thematic there in and um well we're gonna get the map business survey, uh which should be interesting. So it's a little bit of like well, if if you're if you're selling all these goods and services and and you're getting a sense of a solid demand, uh and your margins haven't been kind of, you know, uh great, then you think well maybe now there's an opportunity to to you know to to support my margins. And that in itself also can be another source of inflation. So that's the kind of dynamic that that many, including ourselves, are looking at closely.
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Chapters
8 chapters
1
What’s driving the recent strength in US equities and the US dollar’s impact on the Aussie?
0:01–1:40
2
How are Australia’s household spending trends and the latest NAB Business Survey shaping the economy?
1:40–3:58
3
What do the rising commodity prices (gold, oil, silver) mean for inflation pressures?
3:58–5:36
4
Why could the current level of capacity utilisation trigger another RBA rate rise?
5:36–7:37
5
How will Japan’s two‑thirds parliamentary majority affect fiscal policy and growth?
7:37–9:57
6
What are Europe’s monetary‑policy challenges amid Lagarde’s 2% inflation target?
9:57–12:03
7
How is political uncertainty in the UK influencing the pound and market sentiment?
12:03–13:53
8
Which US economic releases (retail sales, employment cost index, small‑business optimism) will guide the next market move?
13:53–15:05