Dollar not so mighty, job claims rising, Trump has envelopes ready.
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Why are US producer prices and CPI showing little impact from tariffs?
Producer prices in the US, just like CPI earlier, seem to have had very little impact from tariffs so far. But we are seeing a trend up in jobless claims in the United States, so it's not all rosy. Even so, a strong 30-year bond auction and equities back up a little, but the dollar will now are one of its lowest levels of the last few years, plus a slowdown in the UK. And the G7 kicks off at the weekend, where tariff talk might be on the agenda. What do you reckon? It's Friday, it's the thirteenth of june twenty twenty five. It's the morning call from NAB. Good morning. Yep, quite a fall in the US dollar. It's down three quarters of one percent on the DXY, down to uh its one year low of ninety seven point six, uh up to ninety seven point nine now.
Actually, that's not just a one year low. I it's uh you have to go back to March twenty twenty-two to see it this low. Uh the Aussie dollar is up naught point four percent to sixty five point three US cents, the euro up naught point eight percent, the pound up naught point four percent as well, ten year treasury yields are down seven basis. Basis points to four point three five percent, down six in Germany, down eight for ten year guilt yields in the UK. Aussie ten years were down five basis points yesterday to four point two three percent, now down another six basis points on futures, and US equities are higher, up a quarter percent, that's all for the Dow and the Nasdaq at the close, not point four percent for the S P.
In Europe the DAX is down three quarters. For one percent at the close there, uh but the FTSE one hundred is up a quarter percent, and oil falling back down again, but nowhere near enough to wipe out those substantial gains that we saw yesterday. So WTI down naught point one percent, Brent down a third of one percent to sixty nine fifty a barrel. So on days like this, when you look at what's happening in India, uh talking about money seems to be a little bit inconsequential, doesn't it really? But that's what we're paid to talk about. And now Atrol joins me today. So data wise, PPI for the United States, well up slightly year on year to two point six percent, just naught point one percent month on month for the core for May.
I think 0.2% was expected. So certainly we are not seeing runaway costs, sorry, little tariff impact it seems, and these are figures for May, so perhaps you might have been expecting to see something.
Yeah, good morning, Phil. Yeah, certainly we were on the look after those uh very benign CPI numbers that we had the day before. Um you know, analysts were keenly wading the PPI before um running the slide rule over their uh PCE numbers and uh and yet again a downside surprise. Um as you say, um you know point one versus point uh three on the uh on the core measures there.
What does the rise in weekly jobless claims indicate about the labour market?
So um and adding those two numbers together. Together and and what we know about PC, we're probably going to get a a point one PCE, um although there was a I think there was a fall in PCE this time last year. So we might get a slight uptick in the annual rate. But uh it's pretty clear that uh there's scant evidence to date at least that the imposition of tariffs is yet having an impact, even though some of the you know some of the variables, uh particularly on the goods prices side, you know, are showing some signs of a pickup. We've also got offsets on the other side, things like sort of airfares and accommodation, which as we know partly reflects um, you know, the uh the the fall off in travel from overseas into the US.
Although actually I think there was a slight pick up in uh air travel costs last month after a couple of months of extreme weakness. But um You know, overall any sort of you know um arguably the Fed was you know but US officials, Mr Trump in particular, was saying, look, there is no inflation. He's pretty much been saying that overnight. You know, get on with the job of uh of cutting interest rates. I did note that J D Vance um twenty four hours ago accused the Fed of monetary malpractice in uh not lowering interest rates.
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Chapters
7 chapters
1
Why are US producer prices and CPI showing little impact from tariffs?
0:01–2:37
2
What does the rise in weekly jobless claims indicate about the labour market?
2:37–5:27
3
How is the US dollar’s two‑year low affecting global currency markets?
5:27–8:34
4
What are the implications of the latest PPI and core PCE data for Fed policy?
8:34–10:43
5
Why might the Fed consider cutting rates despite Trump’s 2% target?
10:43–13:18
6
How could Trump’s bespoke tariff envelopes influence trade talks at the G7?
13:18–15:27
7
What do the UK GDP and industrial production numbers mean for future rate cuts?
15:27–16:24