Is the US heading for a recession?
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Is the US heading for a recession or stagflation?
Is the US heading for a recession or perhaps stagflation? There's more talk of that, but the US president is obviously not too concerned. If it does happen, it's all part of the detox, remember? And there's bound to be a transition period. But markets obviously not entirely convinced about that. Equity's still falling, for example. And Mark Carney in fighting mood. Just how ugly will the North America trade war get this week? And today, well, at home, we get the NAB. Business survey. The China National People's Congress wraps up and talking of China, could Donald Trump and President Xi be readying themselves for a joint birthday party in June? And if so, I think I should be invited to that. It's the morning call from NAB.
It's Tuesday, it's the eleventh of March 2025. Good morning.
Yeah.
Well uh the US uh dollar got down below a hundred and three point six on the DXY. It's back uh almost to a hundred and three point nine now, uh but it's testing lower and lower, obviously. Uh flat on the day though, it's as it turns out. I'll tell you what's not flat though. US stocks, the Nasdaq down four percent at the close, the S P down two point seven percent, two percent off the Dow, so the Nasdaq is down nine percent in a year to date. Shares also down in Europe, but not as much. One point five percent off the Eurostocks fifty, one point seven percent off the DAX, and the FTSE one hundred is down naught point nine percent. Ten year treasury yields are down eight basis points this morning, down to four point two two percent, whereas uh minor movements uh for European bonds today an Aussie ten years, well they were up four basis points yesterday to four point four three.
They haven't really moved very much uh on futures overnight. Um But you know, that's forty six basis points higher over the last year, which is more like Europe than it is the United States, it's fair to say. And bank to currencies was the Aussie uh down a third of one percent to around sixty two point eight US cents. The pound is down a similar amount, the Euro uh is flat, the Japanese yen is up half percent, the Canadian dollar down naught point six percent, and Canadian shares, as you might expect, also down. But so far this year, not down as much. as the Nasdaq. So who's hurting the most at the moment? An oil lower. One and a half percent off WTI and Brent. Brent below uh sixty nine point three a barrel.
So we are in the sixties zone uh for oil. Uh Nabs Tapas Strickland joins me. So uh Tapas US equities lower, they're getting lower and lower. But I wonder, you know, if all this talk about you know this is all just part of the detox. Surely the US, I mean Donald Trump and the rest of his administration won't keep pushing as hard as they can if they see corporate America weakening. So are the markets, you know, there'll be some rollback if they feel as though this period of transition that they clearly think they're going through is hurting too much. And so are the markets being overly pessimistic. In that they, you know, 'cause we've we're going to see tax cuts, we're going to see more deregulation. Maybe there will be tariff exemptions for imports that are, you know, adding to the prices of American made goods.
I mean all of this could change in a day.
What do the latest US equity and bond market numbers reveal?
So I'm just wondering whether markets are being uh you know, overreactionary to all of this.
Good morning, Phil. That is an interesting way to pose that question. And you'd have to say the market moves that we have seen over the past couple of weeks are increasingly pricing in. Or it's still a relatively small pro probability that the US may go into recession due to all the uncertainty that is out there. Until that uncertainty clears, uh you s you likely have pretty jittery markets. But in terms of what the market was really reacting to, it was Trump's Sunday interview with with Fox News and uh he was asked a question about recession risk in twenty twenty five and he said, I hate to predict things like that. There is a period of transition because what we're doing is very big.
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Chapters
4 chapters
1
Is the US heading for a recession or stagflation?
0:02–3:04
2
What do the latest US equity and bond market numbers reveal?
3:04–10:07
3
How does Tapas Strickland explain the market’s reaction to US policy?
10:07–14:34
4
Are markets over‑reacting to the Trump administration’s “detox” narrative?
14:34–15:22