Brassed off after a Golden Week
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Why did China's National Development and Reform Commission stimulus fall short after Golden Week?
In China, the announcement about stimulus measures was underwhelming to say the least. It left markets a little brassed off after their golden week. There is our headline right there. Elsewhere, no surprises locally in the RBA minutes. It's a bit of a rise back in the NAB business survey, but nothing big. And today, the RBNZ expected to go big, but then what? We'll look for the indications today. Plus the FOMC minutes as well. It's Wednesday. Today's the ninth of october twenty twenty four. It's the morning call from NAB. Well, not much going on with the US dollar, but the Aussie dollar down another quarter percent this morning at sixty seven point four US cents. The Canadian dollar down a similar amount.
A naught point four percent falling the Swiss franc. We've got bond movements been being pretty constrained. The yield on ten year treasury is up just one basis point to four point oh three percent. Ten year yields are down one, two or three basis points across all of Europe. Aussie ten year yields were up eight. Basis points yesterday to 4.16%. Now on futures up another three basis points to 4.19%. US equities have kicked back in so have got a 1.5% rise in the Nasdaq at the close 1% for the SP and 0.3% for the DADRussell 2000, 0.1% higher. In Europe, the FTSE fell 1.4%, the Cat Carat down 0.7%, the DAX down 0.2%, and the Hang Seng yesterday. Down 9.4% in a day. And oil is back down as well. We've got a 4.3% drop in Brent and WTI this morning.
Brent back down to 77.40 a barrel. Almost like whatever happened yesterday. Expect the opposite this morning. Nabs Ken Crompton joins me this morning. And let's start with that big fall in the Hang Seng and uh other indices in China. Uh, now some of us were looking for this. three trillion won fiscal package in China. The National Development and Reform Commission announced yesterday, well, two hundred billion won spending. Quite a shortfall, and that's just money advanced from next year. So it's fair to say this was a massive disappointment on the markets.
Yeah, good morning, Phil. Certainly that ten percent drop in the in the Hangsang yesterday and then a really broad base decline across pretty much any equity in any market that has a meaningful exposure to to China, whether via, you know, revenue or or or whatever means, get getting hit pretty hard. And that um yeah, that two hundred billion one pull forward of expenditure from next year, which was you know I think that top that comes out to around uh twenty eight billion US. Dollars um absolutely small change compared to what the market had been building up to based on the rounds of monetary stimulus that had been announced a couple of weeks ago and then the few teasers on fiscal stimulus that had come out just prior to the Golden Week.
And we've ended up with this being the being the initial the the initial announcement. I mean, look, maybe it's the first tranche of things, or maybe policymakers are testing the water a little bit, but um if it is the latter, then Then certainly they will um they're presumably gonna come away from um feeling marked disappointment in uh
In
what they've done.
Yeah. Well, I mean there there are expectations aren't there that there is more to come. But I mean we've s Beijing's still saying, hey look, we're gonna hit our five percent target or they say about five percent. So what the World Bank is saying four point three percent. Is that about five percent? Well, you know, if I'm about fifty years old, uh I guess you could say that, you know, but I'm sixty, so uh you know, it's it looks like a bit of a misfire to me.
Yeah, certainly that seems to be the uh that's clear the market's initial take on it. Um as as we said, look there could be more details coming, but um yeah the I guess the thing to take some encouragement from if you are uh a a buyer of the story is is that re reaffirmment to the to the to the development goal but beyond that yeah. There's been no specifics of of exactly what might still be in the pipeline either.
What details are still missing from China's upcoming fiscal stimulus plans?
So it's just sort of very Very vague at this point.
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Chapters
8 chapters
1
Why did China's National Development and Reform Commission stimulus fall short after Golden Week?
0:01–3:51
2
What details are still missing from China's upcoming fiscal stimulus plans?
3:51–5:51
3
How is Australia's output gap shaping expectations for RBA policy?
5:51–8:14
4
What does the latest Australian labour‑market data suggest about future growth?
8:14–10:25
5
What key points emerged from the House speech on inflation and the economy?
10:25–12:55
6
Why are German industrial production figures showing contradictory movements?
12:55–15:16
7
What are the expectations for New Zealand CPI and the upcoming RBNZ rate cut?
15:16–16:39
8
How might the next US non‑farm payroll report influence the Fed’s rate outlook?
16:39–16:50