Housing hotter ahead of RBA forecasts
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Why are Australian house prices and building approvals rising sharply?
House prices are rising in Australia, and so are building approvals. It seems the sector is really picking up, even with rate cuts seemingly a long way away, and we get a feeling of how far away they are when the RBA presents its revised forecast today. Otherwise, a slowdown in the US manufacturing sector again. Same for China, despite tariffs. In fact, a lot of US manufacturers seem to be saying because of tariffs, surely not. It's Tuesday. It's the fourth of November twenty twenty five, it's the morning call from Nab. Good morning. Well, the US dollar almost made it to a hundred on the DXY index, then it fell back again. So flat on the day, so is the Australian dollar sticking around sixty five point four US cents.
But bond yields are higher. Ten years are up three basis points for the US, Canada, and much of Europe. Aussie ten years are up four basis points yesterday to four point three three percent. This morning, they are also up another three basis points, like everybody else. In equities. The Dow might be down, but nothing is stopping the Nasdaq. It's up two thirds of one percent this morning, the S P up a quarter percent as well. And oil is higher. Despite that news of increased production, half a percent added to WTI and Brent, Brent just over sixty five a barrel. But not a lot of market action overnight, it's fair to say. Uh Nab Sallyold is with me this morning. Uh so light on news as well. Although uh another bad ISM
manufacturing PMI for the United States.
What do the latest US ISM and PMI numbers reveal about the manufacturing slowdown?
So the October number, another one in contraction of forty eight point seven percent. As they put it, economic activity in the manufacturing sector contracted in October for the eighth consecutive month following a two-month expansion preceded by twenty-six straight months of contraction. But you know, tariffs are gonna fix all of that, Sally. It's just taking a bit of time, that's all.
Morning Phil. Yeah. So I guess the the broad sort of story from both the ISM and the PMI, uh 'cause we had both of those data releases last night, to sort of continue Signal more of the same basically, so not not sort of a meaningfully different story to what we've seen for the last couple of months. Uh and as you said, uh the ISM a touch weaker, the PMI uh you know marginally stronger. Interestingly, uh new orders were up in both, but employment indices were weak. But what what was quite striking uh in the PMI release at least was that inventory Of finished goods are sitting at a record high. And so this could be a consequence of a lot of the front loading that went on earlier in the year. But in uh the actual commentary it's noted that this is due to weaker than anticipated sales.
So it feels like firms have stocked up but the final demand uh isn't there. And Uh, you know, comments from manufacturers, you know, have have sort of noted some frustration with trade policy just sort of making business difficult. Um, but they've all it's also noted uh decline in consumer demand in the US as well. So, you know, while while we didn't see sort of huge movement in the headline numbers, there are it does seem that there are some interesting dynamics sort of bubbling away under the surface. Understanders.
Well tell me about this one then, because I'm not sure I totally get it, but they say for the manufacturing economy, this is the the ISM number, the percent of GDP in strong contraction, registering a composite PMI of forty five percent or lower, is at forty one percent, up thirteen percent from September. S so I'm not sure I totally get that, but it sounds bad as though things that you know, a certain section where it's getting deeper, it's uh where it's deep, it's getting deeper basically. That's
right, yeah, yeah. So I think what what what that's trying to allude to is, you know, where it was weak it's got worse.
How are record‑high finished‑goods inventories affecting US manufacturers?
Um and and maybe the proportion of uh geographies where that's the case is is starting to creep higher. So you know, that's a really different dynamic to I guess, you know, all the headlines we hear about the US, which is about the strength in uh AI related CapEx and you know the the huge outperformance of you know that part of the equity market.
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Chapters
8 chapters
1
Why are Australian house prices and building approvals rising sharply?
0:01–1:24
2
What do the latest US ISM and PMI numbers reveal about the manufacturing slowdown?
1:24–3:42
3
How are record‑high finished‑goods inventories affecting US manufacturers?
3:42–5:57
4
In what ways are tariffs influencing US agricultural and other export markets?
5:57–7:54
5
What does the latest China PMI tell us about selling‑price trends and deflation risks?
7:54–10:36
6
How significant is the recent surge in Australian dwelling approvals and rent growth?
10:36–13:13
7
Will the RBA consider raising rates in response to the wealth‑effect of rising house prices?
13:13–15:11
8
What key inflation and unemployment forecasts will the RBA release today?
15:11–16:05