Big Bill, Low Dollar
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How is President Trump's “big beautiful bill” affecting the US dollar and markets?
The big beautiful bill has passed through the Senate. Now it's back for the House vote. So if it sells through there, then it could all be done and dusted by the Fourth of July. No big news on job openings or the latest ISM for the United States. But Jerome Powell has suggested at Sintra that they would have cut rates already this year if it hadn't been for the tariff uncertainty. We knew that of course, but nice to hear it said out loud. And the dollar, a multi-year Hello today it's Wednesday, it's the second of July 2025. It's the morning call from Nab. Good morning. Well, US stocks have a mix today at the close of 0.9% rise in the Dow, the S P just in the red, the Nasdaq down by naught point eight percent.
In Europe, well the FTSE one hundred rose naught point three percent, but everything else in continental Europe was down. Uh we've got one percent off the DAX, not point four percent off the Eurostocks fifty. The US dollar got down below ninety-six point eight. That is the lowest it's been for more than two years on the uh DXY. Uh and now down almost 11% for the year so far. Uh the Aussie is also slightly down. Uh so is the euro, uh, but a 0.2% rise in the yen and the Canadian dollar is down a third of one percent this morning. Ten year treasury yields are up two basis points to four point two five percent, but down three basis points across much of Europe, uh, the UK included. Aussie ten years yesterday, down five basis points to four point one.
one percent. Complete reversal of that now on futures. They're up five basis points. And oil today is higher, about naught point eight percent higher for WTI and Brent. Brent now just over sixty seven thirty a barrel. So let's go over what's been going on with NAB's Rodrigo Catrill in Sydney. So Rodrigo, the one big beautiful bill is closer to being passed. It's made it through the Senate.
What does the latest US dollar index level tell us about the multi‑year low?
It was fifty fifty until JD Evans cast it cast the deciding vote. So now it goes back to the House. Uh so it can either move swiftly through to that final stage if the if the and you know, it'll meet that Fourth of July deadline if the House just accepts it. Uh but if they want a lot of amendments, that'll mean going back to the Senate for another vote, so it won't get done this week. So this week either it'll get done or it won't. It's that sort of insight that is why people keep on coming back to this podcast every week. But who knows? But uh it's looking m uh I would imagine less likely than likely, isn't it? Yes. Uh Morningfield,
it it is a significant step towards uh passing. Uh but yeah, but can but can it go through the house without amendment? That is the question, isn't it? 'Cause there's a lot of
it.
Yes. Uh and and then the question is whether um as you say um the Senate can quickly approve those amendments or whether you know you have to go back and forth. But that's the process of reconciliation. It's worth emphasizing as well is that in terms of the field sorry the the bill um we have at the moment a combine of four and a half trillion in tax cuts. Obviously the extension of the twenty seventeen tax cuts are are a big part of that. And then on the spending we have one point two trillion in spending cut. So overall there's an there's that's the net increase of three point three. Um Now the sort of the supporters of the bill, like Bissent and others, will will also highlight that uh this doesn't include, for instance, the revenues that should come from from tariffs.
Um so uh it's not as bad as you think. Uh but certainly the the the critics will say, Well, um President Trump um you know was elected on this idea of reducing uh expenditure and here we have uh a bill that is actually you know increasing expenditure over the next uh ten years by quite a significant margin. So um it it remains to be seen how these things will play out in terms of uh the market reaction. Uh but at the moment, given the numbers and magnitude of the numbers, um it plays to the idea that it shouldn't be very supportive for you know treasury yields.
Why are tariffs and the bill’s spending cuts driving the dollar’s decline?
You should see uh an increase in terms of that term premium if you like.
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Chapters
8 chapters
1
How is President Trump's “big beautiful bill” affecting the US dollar and markets?
0:00–1:45
2
What does the latest US dollar index level tell us about the multi‑year low?
1:45–3:49
3
Why are tariffs and the bill’s spending cuts driving the dollar’s decline?
3:49–6:05
4
Will the bill pass the House without amendments, or will it stall?
6:05–8:20
5
What are the implications of the US manufacturing ISM reading for inflation?
8:20–10:30
6
How could the Fed’s July rate‑cut outlook change after the tariff discussion?
10:30–13:25
7
What does New Zealand’s business‑opinion survey reveal about activity and confidence?
13:25–16:01
8
How are European CPI, UK Bank of England cuts, and Japanese inflation shaping global markets?
16:01–17:11