Faster US growth ahead of PCE data pushes us equities lower
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Why did unexpectedly positive US data push equities lower?
Unexpectedly positive data out of the United States, including an upward revision to GDP, has pushed equities down. So the question is when will a ray cut happen now? It's been another day with mixed views from the Fed. Let's see what the PCE print brings today. It's Friday. It's the 26th of September 2025. It's the morning call from NAB. Good morning. And don't forget to get your questions in for Ask Andrew on the weekend podcast next weekend. Uh if you've got a question you'd like to put to Andrew Irvin, the NAB CEO, then that would be great. You can email it to morningcall at nab.com.au. You can attach a sound file as well if you'd like to read out your question directly. But we do need to get those in as soon as possible.
Now, today, ten year treasuries are up three basis points to four point one eight percent. But a much bigger rise for both the yields in the UK and for Aussie 10 years as well. They were up yesterday and up on futures overnight to 4.42%. Big falls in US equities, down 0.3% for the Nasdaq at the close. It was a lot lower than that earlier. 0.2% for the SP, again picking up in late trade. The Mag 7, amongst those that were hit the hardest in this session, shares down across Europe as well. 0.6% lower for the DAX. For example, Bitcoin is down 3.5% today, and the US dollar is up 0.7% on the DXY, the Aussie down 0.8% to 65.3 US cents, the pound down a bit more than that, the euro down a little bit less. And here's Nab's Gavian friend in London.
So obviously, what is driving a lot of this is the data that we've been seeing from the United States over. The last 24 hours it was all good. Jobless claims were lower, PCE price growth uh slower, uh second quarter GDP was revised up, the durable goods orders way higher than expected after the fall that we saw in July. So we've got growth, we've got slow price rises, we've got employment holdings. So what's not to like? But equities are down. Why?
How does the Q2 GDP revision affect the Fed’s rate‑cut outlook?
Well, I guess you know it's because this is all suggesting that uh the I guess. Fed is gonna move slower.
Mm. You answered your own question there. Morning, Phil. Yeah, I think so. Uh and just uh obviously within that, uh the dollar up as well. Um so to your point, if we look at the data, I think the uh the headline grabber was uh the revision to Q two GDP. I mean it wasn't expected to solicit much change. Second revisions don't normally shift the dollar by more than a tenth or two. But the three point three percent first revision itself up for three was revised to three point eight Q on Q annulize. So that's Q Q and annualize. So think about, you know, one percent Q on Q as a sort of a a European equivalent.
Yeah.
Um I mean that's a decent upgrade. Um but it was the rise in personal consumption that did the revision's sort of heavy lifting, rising from one point six and one point four percent in the uh the first uh the first uh advanced reading to two and a half percent. So that in turn lifts personal consumption's contribution to Q two GDP from a disappointing one point zero seven percentage points to one point seven percent. Points. And within services, household consumption added 1.4% percentage points to GDP. So that's up from point four. So now I know you know it's backward looking, you know, in terms of Q2 GDP, but it points to A a kind of slightly different picture, you know, to a key part of the economy.
We also saw a decent rise in durable goods for August. The headline at 2.99 reverse the July declines.
Versus a zero consensus that plays to a decent bit of capex. Now we we need to recognise that within the the GDP revision just mentioned, business investment actually isn't good overall. And in Q2 it was a a 2.7% uh percentage point drag on on growth through um lower structures and um lower resi investment. But thinking about
What’s driving the mixed views among Fed speakers this week?
Now lastly we had uh jobless claims, just two hundred and eighteen thousand. There were I mean there's been some discussion since that number that could be due to uh f a fewer number of tropical storms this season. Whatever the reason, it plays to this low higher but low fire labour market.
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Chapters
8 chapters
1
Why did unexpectedly positive US data push equities lower?
0:01–1:59
2
How does the Q2 GDP revision affect the Fed’s rate‑cut outlook?
1:59–4:23
3
What’s driving the mixed views among Fed speakers this week?
4:23–6:46
4
Can stronger personal consumption and durable‑goods orders reignite inflation?
6:46–9:06
5
How might tariff‑related headwinds impact US growth and equity markets?
9:06–11:38
6
What are the implications of the upcoming core PCE and non‑farm payroll releases?
11:38–14:06
7
Why are European currencies and Swiss rates under pressure today?
14:06–16:12
8
What are the key risks to US growth and inflation after today’s data?
16:12–17:22