Cautious markets a day out from the Fed
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Why are markets more cautious a day before the Fed meeting?
Markets are a little more cautious today. A day out from the Fed. Maybe it's been compounded by stronger than expected data out of the United States, particularly retail sales. Maybe less cuts are going to be needed. It all rests on the dots plot from the Fed tomorrow morning. And the Euro hit a four-year high. And it's not just the Fed in the next 24 hours. There's also the Bank of Canada after a stronger-than-expected CPI read overnight. It's the morning call for Wednesday, the 17th of September. 2025. I'm Phil Dobby. Welcome along. Well, quite a fall in the US dollar today. It's down 0.7% to 96.6% on the DXY, which I think is the lowest it's been this year, but just a quarter percent rise in the Aussie dollar, just below 66.9 US cents.
The growth has been in the Euro, which is up over 0.9% and reaching a four-year high, and the pound up half a percent. Very small moves in bond yields, scarcely worth mentioning, except Australia, where yields fell five basis points. Yesterday, along with the market generally globally, down to 4.22%, but back up today, up three basis points on futures this morning. And if you must know, ten-year treasury is down one basis point, German bunds flat, UK ten-year guilt's up one basis point. And small moves in shares. The Dow is down 0.3% at the close in the US, a 0.1% drop in the SP, and even less for the Nasdaq. In Europe, though, the Eurostocks 50 is down one. A 1.8% drop for the DAX and oil much higher.
1.9% added to d uh WTI and 1.5% for Brent, taking Brent over 6840, and gold up another quarter percent, getting over three thousand seven hundred an ounce. So another record high. And here's Nabs Rodrigo Catrill. So uh your take on those market moves, first of all. I mean clearly there's quite a bit of caution over the Fed. Maybe they've been listening. you know, it's not a feta complete that this is the start of a comprehensive easing cycle. It might be a little less than expected.
How did the US dollar, Euro and Aussie dollar move this morning?
And I guess we'll find out in the dots plots, won't we?
Yes, no, we definitely found out uh early tomorrow morning. Um I I think what what is interesting is that this uh or the particularly the last twenty four hours has been really a um uh mostly kind of an effects move, uh other than uh as you mentioned, we've seen yields in the US uh you know, just a little bit lower, but not not not significantly. Um and then some I would I would suggest some repercussions because of the moves in effects, um particularly in terms of European equity markets that have underperformed. So um um so the I mean we c we still we obviously there's been data that we need to discuss us. Um but in terms of the effects move, um I'm still kind of I would suggest that there's a little bit of that sense that um we we are if you like selling the rumor in terms of dollar weakness and then there's the risk that we might see very reversal in terms of what happens tomorrow morning.
But it's it's some of the moves have been quite impressive and and and aided by the break off um of of ranges. So in particular when you think about the euro, the euro breaking uh above eighteen is a significant move. Um and uh it it it has a little bit of momentum in terms of how it's broken. So so that's definitely a a nice uh thing to to keep an eye on in terms of whether it can extend from here. Uh, but there's nothing driving
just before we get on to the other thing, there was nothing driving the the strength in the euro. There it was apart from speculation. I mean we there wasn't anything in the way of data apart from the the zoo survey, which actually was quite strong. There's an analyst telling us that they're feeling a little bit more bullish than they were a month ago. So that that went up. But there was nothing else. There's no big data coming out of uh out of Europe.
Yeah, no, no, that's what I mean. That i it gives us this sense that You know, there's a bit of sort of speculation in terms of what the Fed's gonna do and how it's gonna deliver and what it's actually gonna mean for the for the US dollar, uh, rather than um data releases telling us that all of a sudden the outlook for for Europe is is improved in the last twenty four hours.
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Chapters
8 chapters
1
Why are markets more cautious a day before the Fed meeting?
0:01–1:54
2
How did the US dollar, Euro and Aussie dollar move this morning?
1:54–4:30
3
What does the recent US retail‑sales surprise mean for Fed policy?
4:30–7:26
4
Will the Fed’s dot‑plot tomorrow trigger a market repricing?
7:26–10:00
5
Why is the Euro breaking above 1.80 and what could it mean for Europe?
10:00–12:15
6
How does Canada’s softer‑than‑expected CPI affect the upcoming rate cut?
12:15–15:28
7
What are the RBA’s latest signals on inflation and employment?
15:28–17:05
8
What are the key takeaways and what should listeners watch for next?
17:05–17:14