Deal and no deal
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What is the opening market outlook for the US dollar and major indices?
The UK and the EU have a deal, one that doesn't involve Donald Trump, but the appetite for deals must be a thing today. The big beautiful bill, the tax and spending bill. Let's move forward a little. Uh not much to say though after Trump and Putin met on the phone, except that negotiations will happen without the president it seems. So he's done his bit now. He wants to step away from it all. China's activity data was mixed yesterday, but nothing to show that they are back on track for domestic growth and the RBA today. 50 basis points or 25 basis points? Personally I think it should be somewhere in between. I'll tell you why, but who am I to say? It's Tuesday the 20th of May 2025. It's the morning call from NAB.
Good morning. Well, the US dollar is down half percent today, down to a hundred point four. On the DXY, the Aussie is up naught point seven percent to sixty four point five US cents, the euro also up naught point seven percent, the pound is up naught point six percent. US equities weren't having a great day, but they managed to finish in the green thanks to the last half hour or so of trade. So the Nasdaq just in the green, if you go to the second decimal place percentage wise, uh point one percent up for the S P, not point three percent. for the Dow, whereas in Europe the Eurostocks fifty, well that closed flat, but a naught point two percent rise in the FTSE one hundred and the DAC's up naught point seven percent today.
But the S P was up to five thousand nine hundred and sixty nine earlier in the session. That's about nineteen point eight percent higher than the low on April the eighth. Actually it closed at five thousand nine hundred and sixty three today. So a whisker away from a bull run perhaps although So it did dip a little bit along the way. So perhaps not the full technical definition. Small moves in bond yields, uh ten year treasuries down two basis points at four point four six percent. Very little movement in Europe as well. Aussie ten years, we were up seven basis points yesterday to four point five two percent. Now four basis points lower than that on futures overnight. And oil, well it was up a little, now it's down on yesterday, quarter percent fall in Brent.
Brent Below sixty five thirty a barrel. Gold is up another one percent spot gold almost touching three thousand two hundred and fifty dollars today. So now's Taylor Nugent joins me from Melbourne. Uh doesn't it seem strange that we are so close to a bull run for the S P when there is so much risk around, so much uncertainty? Uh it's hard to fathom market behaviour right now, isn't it? And and um you know movements in bond yield as well. we seeing more response to that Moody's downgrade or is that uh literally yesterday's news now?
Yeah, good good morning, Phil. I think that that kind of the the Moody's downgrade, the the headlines associated with that, you know, played to some of those themes about concerns around US fiscal trajectory and other and other things. And I think that did kind of initially weigh on sentiment and is kind of, you know, but being a bit of a driver in yield movements. But, you know, on net really all we're left with is a a US dollar that's a bit weaker, down around half a percent on on the DXY. But kind of equities, you know, they opened about one percent lower, um, have retraced most of most of those uh declines and you've had yields that have kind of done a little bit of a round trip. And I think you know that's consistent with you know that the kind of Moody's downgrade being certainly a bit of a headline.
But you know, how much real incremental news is is there really in that kind of that kind of change?
Well, thirty year treasuries are really on a round trip, aren't they? They so they reached five point oh four percent, which is the highest since uh late twenty twenty three. So is that because of Moody's or is that because there's um you know, inflation, long longer lasting inflation concerns?
Yeah, I think, you know, we did see an initial jump, you know, late late Friday on on that headline.
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