Happy Friday
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Why did US markets bounce back on Friday and what does it mean for investors?
It was a happy day on Friday in the United States. Shares bounced back up, inflation was out and constrained, albeit still higher than the Fed would like, and personal spending was higher than expected. And that enthusiasm was infectious with shares rising in other places too. Even those countries that are about to be hit with a hundred percent tariff on pharmaceuticals, Australia included. And this week non-farm payrolls and the RBA and a chunk of other Aussie data too. It's Monday, it's the twenty ninth of September twenty twenty five. It's the morning call from Nab. Good morning. Well, US Treasury yields were higher last week, particularly at the front end, up almost nine basis points for five years, for example.
But more than that, Aussie ten years were up almost fourteen basis points last week. US shares lost out over the week, even though they did bounce back a little on Friday. So across the week, the three main USC uh indices were all in the red, doing better. The CSI three hundred up over one percent last week, and European markets managing to make Some headway along with the ASX 200, although in both cases not by very much. And the currency story, the US dollar doing well at almost everyone's expense. Well, that's the way it works, isn't it? So we've got a half percent rise in the DXY, even after quite a fall on Friday. The Aussie lost 0.8% over the week, uh starting this morning just above 65.4 US cents and 1.4% off the value of the Kiwi dollar last week.
last week. And oil much higher. Brent rose five point two percent last week. It's up over seventy dollars a barrel now. And a day of confidence for the US on Friday. Uh the equity market rebounded on the back of some positive data. Here's an absolute all to look at it. A happy Friday, Sally, particularly uh with that personal spending data, which was uh a bit of an upside surprise.
Yeah, good morning, Phil. Yes it was. So uh these these were the numbers for August and what we observed was that real consumer spending was up four tenths of a percent in the month, which was pretty solid. Uh and so what that now means is even if uh consumers spend nothing in real terms in September, for the third quarter it looks like uh real consumer spending is going to be uh running at uh a rate, you know, above three percent quarterly annualized. Which is a pretty decent clip for consumer spending um and actually uh you know quite a bit stronger than where it was at the beginning of the year. I guess there are some question marks around how sustainable this is. Uh we know we've got slowing jobs growth and I think we're no we know that we're coming into a period where we expect more of those uh tariffs to be
passed on in final prices. And you know, with sowing jobs growth will come sowing incomes growth in aggregate. So just sort of thinking about disposable income in real terms, we're probably set for, you know, maybe a quarter or two where that'll probably test the consumer sector. But look for now, uh that was a good outcome um and I think has got uh got forecasters uh, you know, getting their their red pens out and actually maybe even upgrading third quarter GDP forecasts uh on the back of that.
As well. It wasn't just that month, was it actually they revised the previous month as well. So actually even better even better news. Uh that's right. And then the uh the PC deflator, uh naught point two percent for the month, two point nine percent for the year, uh and the July read was revised down from naught point three percent to naught point two percent. So again, mm you know, good news, inflation getting under control.
Yeah, that's right. I mean I guess in an aggregate sense it's still running too high. So, you know, as you said, two point nine on the annual rate and that's that's also actually where we're sitting on a three month annualized rate. So that that is still above where I I guess the Fed would like it to be. But generally speaking, you know, I think what you're what you're saying is that, you know, at least in the last couple of months the internal dynamics around core P C maybe haven't been as bad as as uh
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Chapters
4 chapters
1
Why did US markets bounce back on Friday and what does it mean for investors?
0:01–5:34
2
How strong was the August US personal‑spending surprise and what are the implications for Q3 growth?
5:34–9:58
3
What is the current outlook for US inflation and how close is it to the Fed’s target?
9:58–14:25
4
How might President Trump’s 100 % tariff on pharmaceuticals affect global markets?
14:25–17:07