Banks and bombs
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How is the Middle‑East war influencing global market sentiment and oil prices?
The war continues, we can assume for some time yet to come, and markets are becoming more cautious as a result. So how will it test the resolve of the central banks? Because quite a few of them are making their great decisions this week. And most places seem to have economies that are struggling before all of this happened. Australia perhaps one exception. Throwing the rising price of oil, unless the war finishes quickly, it's not a pretty picture, is it? Sorry to be so glum on a Monday morning. It is the 16th of March, 2027. Six it's the morning call from Nab. Good morning. Well, the only currency ultimately gaining through all of this is the US dollar. It was up one point four percent on the DXY last week, whilst the Aussie fell one point four percent on Friday alone.
Uh equities are down just about everywhere. The ASX fell two point six percent last week, but the S P in the United States fell a little less, one point six percent lower. The NASDAQ lost one point three percent, and the US stocks fifty down only half a percent. Meanwhile, bond yields have been pushing higher. Guilt yields. We're up twenty basis points last week in the UK. Aussie ten years climbed fifteen basis points, fourteen basis points for ten year treasuries. And oil, yes, it's up just three point one percent for WTI on Friday, uh, and two point seven percent for Brent. Brent over one hundred and three dollars a barrel now. Uh but Brent was up eleven percent over the week last week. So it seems markets are starting to assume that the war in Iran isn't gonna end soon.
President Trump has said he'll know when it's over because he's gonna feel it in his bones. So that is the criteria that we're working to. And whilst the US President is saying Iran wants a deal, the Iranian foreign minister has been talking on CBS News over the weekend, and he says he sees no reason why they should talk, because they were talking when the US decided to attack them. So uh there's that, and then there's the prospect of troops on the ground as well.
What are the latest equity, bond and currency moves after the war‑driven oil rally?
Uh Ray Achill uh is with me today from Nab. I mean this isn't gonna end in a hurry, is it? Far from it it seems.
I think the markets, uh morning, Phil, uh we're increasingly coming to that view that a lot of the sort of the optimism of a three to four week war that uh was being touted obviously by President Trump at that at the outset of his latest hostilities is um you know, that's uh that's less than two weeks away, isn't it? And at the moment it's it's very hard to uh to conclude that that's uh a a realistic scenario at least anyway, and I think that's obviously Yeah. you know, particularly in the uh in the oil market. So uh really you know in terms of looking at Friday's price action, you know, whether it's in equities, whether it's in bonds or whether it's in currencies, I think it all, you know, comes down to the you know the fact that oil prices have continued to go north and that we've got Brent Crude you know ending the week up above a hundred dollars and um you know we're seeing f reasonably sort of classic uh risk off market.
markets, even though it wasn't a, you know, it wasn't absolute carnage in the equity market, at least on Friday, but uh clearly reasonably sizable falls on the week. And you know, worth pointing out that European and Asian markets are suffering more than the than the US is here. But as you said in your intro, it's really, you know, across the board US dollar strength and the likes of the yen, which you might have expected to be getting, you know, reasonable safe haven support. Sure, it wasn't the uh you know wasn't the the the weakest currency. Um Oh, it's Friday at least, but uh you know, we've got Dolly Yen knocking on the door of that one sixty level. Um, we'll be had back in twenty twenty four, just prior to BOJ intervention.
So I think that's gonna be one of the focal points in the early part of this week.
Yeah, well this week we've got all the central banks just about. So it's gonna be a tough call for all of them. So we've got the FRMC, we've got the Bank of England, we've got the Bosch, we've got the ECB, we've got the Bank of Canada, we've got the RISC bank uh Rix Bank, we've got the Swiss National Bank, all of them making interest rate decisions in in light of a a conflict without uh knowing what the longer term consequences are are out of all all of this.
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Chapters
8 chapters
1
How is the Middle‑East war influencing global market sentiment and oil prices?
0:01–1:48
2
What are the latest equity, bond and currency moves after the war‑driven oil rally?
1:48–4:15
3
Which central banks are meeting this week and why are many expected to hold rates?
4:15–7:10
4
How did weak US GDP and higher core PCE data reshape the Fed’s outlook?
7:10–8:59
5
What are the recent labour‑market signals from Canada, the UK and the US?
8:59–11:21
6
Why is the Australian dollar caught between risk‑off pressure and commodity strength?
11:21–13:19
7
How are China’s iron‑ore demand dynamics affecting global commodity prices?
13:19–15:49
8
What are the estimated war costs and their potential fiscal impact on economies?
15:49–17:20