Does China have a workable plan?
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Why are US Fed members split on inflation versus employment risks?
Well, still some uncertainty around the future for the United States. There's one Fed member still worried about inflation, but most are worried about a slowdown. The conference board survey might be a sign of that. But non-farm payrolls next week will be a better indicator. And on the inflation side, for that one board member, well, we get the core PCE to come this week. Meanwhile, no change at the RBA and changes in China. Uh it is starting to create a bit of excitement. We'll look at the reaction to that and why more is expected. Possibly very soon. It is Wednesdays the twenty-fifth of September 2024. It's the morning call from NAB. Good morning. Well, let's start with shares. A nort point six percent rise in the Nasdaq app close in the US, not point three percent higher for the S P, so another record close there.
The Dow is up naught point two percent, the same for the Russell two thousand, IT shares generally up 0.8%, Nvidia shares up four percent today, Visa down five percent over antitrust moves there, and in Europe a one point one percent rise in the Eurostox fifty and more for the CAC. Carrant. Bond yields are generally lower. Ten year treasury is down two basis points. The same for France, down just one basis point for Germany. UK ten year guilt, though, they've risen two basis points. Australian ten year yields fell seven basis points yesterday to three point eight nine percent. Today on futures just one basis point higher than that. And the US dollar down a third of one percent. The Aussie is up two thirds of one percent to sixty-eight point eight US cents.
How did the Conference Board consumer confidence drop affect market sentiment?
The euro is up. Up half a percent, the pound up naught point four percent. Oil is quite a bit higher, up one point three percent for WTI and Brent, which is now edging close to seventy five a barrel. Gold is up another one percent today as well to another record high and getting close to a thirty percent return year to date. So uh from all of that, well it seems fairly optimistic if you look at the uh the equities, doesn't it? But the conference board consumer confidence report for the US isn't echoing that sentiment. Here's NAB Skymasters in Sydney. So the survey has dropped six point nine points in September. This is the biggest fall since August 2021. Why? Well, because people are worried about jobs.
That seems to be the message. So thirty point nine percent of consumers said jobs were plentiful, which was down from thirty-two point seven in August. Eighteen point three percent of consumers said jobs were hard to get, which is up from from sixteen point eight percent. So we are seeing a bit of a cooling in the labour market according to these numbers.
It's a surprising um numbers which came out overnight. Um, you know, a as you said, uh a a sort of significant um drop in in US consumer confidence out of the conference board. um indicator. But it you know, it i it is in contrast to what we've seen in the U University of Michigan report, which actually, you know, that recent report showed it showed a peak up in consumer confidence. So Um, you know, how much do you want to read into this one versus the other one? I'm not I'm I'm not a hundred percent sure. You know, it is it it is it is somewhat odd.
What does the latest US labor‑market data indicate for Fed policy?
You know, it's at odds given the, you know, p um pickup inequities that you've seen. Um recently given uh the the fall in in the oil price, um, you know, some some reports I'm reading are suggesting that some of the weakness in in um the confidence in this measure is is sort of r reflective of the political backdrop in the US. Um so, yeah, while while um, you know, I d I don't think you can read too much into one print. Um as you said, the um The Labour um component in that report was was quite soft and it is it is now at the lowest level seen since early two thousand twenty one. And I think given you know, given the Fed commentary last week where they are focused on the labour market and what's going on in the labour market, that just fueled expectations of um of further Fed easing.
So in terms of bond market reaction, um yields were heading
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Chapters
8 chapters
1
Why are US Fed members split on inflation versus employment risks?
0:01–1:24
2
How did the Conference Board consumer confidence drop affect market sentiment?
1:24–2:53
3
What does the latest US labor‑market data indicate for Fed policy?
2:53–5:15
4
Why is the RBA keeping rates on hold and what does it mean for Australia?
5:15–7:11
5
What are the key components of China’s new stimulus package and why is it seen as risk‑on?
7:11–9:08
6
How might the Chinese stimulus influence the CNY and global equity markets?
9:08–11:16
7
What are the expectations for ECB rate cuts after the recent German IFO and PMI data?
11:16–13:35
8
Which upcoming US data releases could shift the market’s view on inflation and Fed cuts?
13:35–15:01