Coming down slowly
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Why did stronger‑than‑expected US jobs numbers raise questions about Fed rate cuts?
Well, we had much better job numbers than expected in the non farm payrolls. Now we've got inflation coming down a little more slowly than expected as well. You'd be wondering what is the rush when it comes to cuts from the Fed. Certainly another fifty basis points is off the table, but some Fed members are now questioning whether they need another cut at all at the next meeting. And the other big news is what comes out of Beijing this weekend. Uh there's good reason to believe they might actually be another Big disappointment. This Friday is the eleventh of October twenty twenty four. It's the morning call from Nab. Good morning. Well the US dollar is a little higher today. It's up naught point one percent on the DXY with a naught point two percent fall in the euro and the pound.
The Aussie is up naught point two percent to sixty-seven point three US cents. Bond yields were on the rise again, with ten year treasuries up two basis points, UK ten-year guilts are up three. Not much movement elsewhere in Europe, though. And in Australia, ten year yields were up to four point two two percent at the close yesterday, a few basis points higher than That this morning on futures. Stock market's still very cautious with the Dow down 0.1%. Things did get a little better towards the close. The SP closed down 0.2% lower. The Nasdaq just in the red, not quite making it into the green, but only 0.05% away from it. The same story in Europe as well. Shares down there with the Eurostocks 50 down a quarter percent.
And it's the same for the DAX and the CAC Caron.
What does the latest US CPI report reveal about inflation trends and core drivers?
And now oil is up, probably for all the reasons that we've been talking about the last few days, with WTI up three point three percent, Brent up three and a half percent. Brent is nudging closer to eighty a barrel now. Gold is up naught point four percent today as well. So let's kick off by talking about US CPI numbers uh with NABS Tappa Strickland in Sydney. So they were higher than expected, up the core, up naught point three percent for the month, which means three point point three percent for the year. The headline CPI has moved down from two and a half to two point four percent, but two point three percent was expected. So I mean we weren't expecting a fifty basis point cut again from the Fed, but I mean uh this would have you wondering whether you know that uh whether there needs to be a cut at all.
What w what's the what's this done to expectations?
Uh good morning Phil. An interesting US CPI report and probably goes to the argument that the road to getting back to two percent inflation is going to be a pretty uneven path. And so for some Fed officials and economists out there, including myself, um y It it just puts a little bit of uncertainty in terms of the degree of confidence you have that uh the potential for inflation to to break back out or even settle a little bit above two percent remains. Uh and uh in that context, I thought the details of the report were interesting. So uh obviously core CPI did beat it, 0.3% month to month versus 0.2% expected. Uh and uh the main driver of that were three. items so one of them was airline fares, which rose three point two percent in the month, auto insurance prices, which rose one point two percent in the month, and apparel prices surprisingly, which rose by one point one
percent. Now uh in terms of mapping that to the Fed's uh preferred core PCE measure of inflation, it's a little bit more difficult because airfares and auto insurance um uh uh mainly come from the PPI in terms of how the PCE is is calculated. So tonight's uh PPI inflation is going to be very important just to exactly get the exact mapping of the Fed's uh preferred core PC measure. But on the positive side, uh the shelter Index increased by 0.2% in September. And there seems to be a bit more moderation in rents and imputed rents coming through in the US. So that has a little bit of positivity.
How are Fed officials interpreting the CPI data when deciding on future rate cuts?
But in terms of the most important implications, this report is the last CPI report before election day and uh before the November FLMC meeting.
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Chapters
8 chapters
1
Why did stronger‑than‑expected US jobs numbers raise questions about Fed rate cuts?
0:01–1:24
2
What does the latest US CPI report reveal about inflation trends and core drivers?
1:24–3:36
3
How are Fed officials interpreting the CPI data when deciding on future rate cuts?
3:36–5:38
4
Will China’s finance minister announcement this weekend disappoint markets?
5:38–7:38
5
How are recent US hurricanes influencing labour data and inflation outlook?
7:38–9:53
6
Why is the upcoming Australian election considered pivotal for the economy?
9:53–11:47
7
Could the Israeli security cabinet’s meeting trigger a retaliatory strike and affect commodities?
11:47–13:37
8
What are the key takeaways from the NZ, UK, and Canada economic updates for global markets?
13:37–15:24