Highs and lows from Middle East peace hopes
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What’s driving the recent drop in oil prices and the dollar?
Well, after a bit of a false start, the ceasefire between Iran and Israel has held and markets are behaving like it's all over with big falls in oil again today. And Jerome Powell joining the Dove Club. Well, sort of. At least that's the way it's been seen by the markets with the dollar and the uh bond yields down today. But maybe that is more to do with more signs of a slowing US economy. And locally today, Aussie CPI for May. It's Wednesday, it's the 25th of June 2025. It's the morning call from NAB. Good morning. Well, big falls in oil again, five point two percent off WTI falling below sixty five a barrel, five point three percent off Brint, uh, which is just over sixty seven seventy a barrel now, getting back to being close to multi year lows.
Uh, I can tell you what else is close to multi year lows. The US dollar falling again down naught point six percent, getting down to ninety seven point seven on the DXY overnight. Uh but the Aussie is up naught point six percent to sixty five US. The yen is up 1%, the Swiss franc up 0.9%, the pound is up three quarters of 1%, the Euro up a third of 1%, and US equities doing incredibly well. 1.2% up for the Dow, 1.1% for the SP, 1.4% for the Nasdaq, Microsoft, IBM, and Netflix hitting record highs during the session, although there is a slight pullback towards the close. In Europe, the DAC's closed. 1.6% higher, 1.4% for the Eurostocks fifty, ten year treasury yields down six basis points to four point two nine percent.
Yields pretty mixed in Europe, so ten years in Germany up four basis points, up two in France, but down two basis points for ten year guilt yields in the UK. Aussie ten year yields fell six basis points yesterday to four point one five percent. Now on futures up four basis points to around four point one nine percent. But let's start with oil, uh with Nab Saliol joining me today from Sydney. So does that oil price make sense to you? I mean basically it's just about lost all the gains in the run up to the Israel Iran conflict, as though the truce that we are seeing now um is gonna stick. I mean, but you know, twelve hours ago it didn't look that way, did it? But that seems to be the way the markets are reacting.
Yeah, good morning, Phil. Yes, it's quite remarkable. Um, you know, if you'd sort of just missed the last week's price action in oil, um you would have felt like not that much had happened. So I guess at the peak it Brent was up uh basically about twenty five percent so far this month. Um and now we're only up a little bit over seven percent.
How is the cease‑fire between Iran and Israel influencing market sentiment?
So it's been quite a dramatic fall. Um and I guess that's just the market. Probably uh reflecting, you know, maybe some some meaningful shifts in positioning, um as, you know, a fair bit of risk premia got built into the oil price in in the last week or so. Uh but also I suspect, you know, people thinking that um actually, you know, the US intervention was genuinely a one off and the Iranians got to uh sort of do something that looked like a a little bit of a retaliation and then after that we've we've had a ceasefire which as you said twelve hours ago looked a little bit wobbly but uh you know
sitting Well it did, didn't he? 'Cause the US President was getting so frustrated by it all he uh used the F word or on live T V, which I think shocked everybody. But maybe it's calmed down. Although I have to say there's an article in the sm this morning's New York Times which actually might explain why equity's tailed off a bit towards the close, uh saying that actually the damage done uh only sets back Iran's nuclear programme by a few months. Uh that's the headline just out uh on the New York Times. But aside from that, it feels as though everyone is now going, well, let's get round to where we were, which is a situation where we had uh too much oil, uh chasing too little demand 'cause there's a global slowdown happening and uh hence we're seeing this th this fall in oil prices.
Yeah, it does feel like that's that tha that's sort of the fundamental setup. I mean I guess the market's always gonna have half an eye on what's going on in the Middle East because history probably tells us that
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Chapters
8 chapters
1
What’s driving the recent drop in oil prices and the dollar?
0:01–2:29
2
How is the cease‑fire between Iran and Israel influencing market sentiment?
2:29–5:43
3
What did Jerome Powell say about a potential July rate cut and why does it matter?
5:43–7:49
4
Why did US consumer confidence fall in June and what does it signal for the economy?
7:49–10:41
5
How are US house‑price trends affecting the wealth effect and consumption outlook?
10:41–13:04
6
What do Canada’s CPI and tariff data tell us about inflation pressures?
13:04–16:07
7
How are ECB policy expectations shaping the euro and euro‑dollar dynamics?
16:07–17:59
8
What are the key takeaways from today’s Australian CPI release and upcoming data?
17:59–18:01