Jobs take back seat as election drives the markets
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How are the US election and Australian election expected to influence global markets today?
Well, it's just a day away. Two big races are on. One is slightly more important than the other. Well, depends on your perspective, I suppose. So what is it gonna be? Seeking or fancy man? For America, yeah, yeah, yeah. It's probably gonna be Trump, isn't it? So our market's really ready for what comes next. And is that why we didn't see a lasting response to very weak jobs data in the US on Friday? And it really is central. bank week this week and is NVIDIA about to become the most valuable listed company in the world. It's Mondays the fourth of November 2024. It's the morning call from NAB. Good morning. Well, last week wasn't great for equities anywhere really. Friday was okay with a naught point eight percent lift in the Nasdaq.
But over the week, even with that lift, the Nasdaq was down one and a half percent, the S P lost one point four percent. The ASX two hundred was down one point one percent over the week as well. Bonds were also down, pushing yields higher, but the really big moves weren't in America.
What did the latest US non‑farm payrolls and manufacturing data reveal about the labour market?
In fact, ten year treasuries were up fourteen basis points last week. But Aussie ten years were up twenty one, and the same for ten year guilt yields in the UK as well. In fact, Aussie ten years we were up eleven basis points on Friday alone. Also on Friday we saw all the major currencies except the pound down against the US dollar, which climbed 0.3% on the DXY. The Aussie was down a third of one percent. Over the week the Aussie lost almost three quarters of one percent, even though the US dollar was pretty flat week on week, and the Aussie finished at just below sixty five point eight US cents. And oil was Was down a lot last week. Over the week it was down three point nine percent for Brent, down three point two percent for WTI.
Brent now uh just over seventy three a barrel. And here's Nabs Ray Atrill in Sydney this morning. I mean you'd be thinking, Ray, with yields pushing higher, as I say, up ten basis points for ten year treasuries on Friday, that central banks were looking to keep rates higher for longer, yet non farm payrolls on Friday. Friday which showed the job market was a a lot weaker than expected, you'd be thinking, wouldn't you, that the Fed would be worried that they have engineered too much of a slowdown, or is that reading too much into those numbers? Quite possibly.
I think there were a lot of moving parts to um to Friday's um bond price action. And although um markets did actually tighten up slightly their expectations for back to back twenty-five point cuts out of both the November and December meetings. If I look further out along the US money market curve into twenty twenty five, um I as you see that pricing's come back a little bit. So I think before payrolls there was something like a hundred and twenty three basis points of cuts priced through the end of next year.
Why are Fed rate‑cut expectations being revised after Friday’s bond‑price action?
Uh and that's actually scaled back a little bit to um to one hundred and eighteen basis points. So that uh process, if you like, of markets getting uh a little bit more sceptical of the extent of uh Fed easing cycle extending well into twenty twenty five is uh is arguably evident in Friday's price action.
Yeah, and yet these numbers I mean it was a double whammy wasn't it? 'Cause we had low n low numbers, just twelve thousand jobs. There was a hundred thousand expected, but we also had a big uh downgrade to uh to the previous month as well. Uh d wouldn't that be sending alarm bells to the Fed? Well, uh remember
we we knew ahead of time that the headline payroll number was going to be impacted both by Boeing strikes. Um and the Bureau of Labour Statistics did provide a little bit of colour in that on their report on Friday, noting that I think there was a forty six thousand decline in manufacturing employment and they said that forty four thousand of that was largely due to strike activity. Um they haven't given any specific indication of how much those two major storms or hurricanes uh had an impact. Remember we had Governor Waller reporting uh or saying in mid October he thought the combined effect of the strikes and
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Chapters
8 chapters
1
How are the US election and Australian election expected to influence global markets today?
0:00–0:56
2
What did the latest US non‑farm payrolls and manufacturing data reveal about the labour market?
0:56–2:34
3
Why are Fed rate‑cut expectations being revised after Friday’s bond‑price action?
2:34–4:25
4
How are strikes, hurricanes and other disruptions affecting the US payroll numbers?
4:25–6:47
5
What does the October ISM manufacturing index tell us about US economic contraction?
6:47–8:27
6
Is Nvidia poised to overtake Apple as the world’s most valuable listed company?
8:27–9:57
7
Which central banks are expected to cut rates this week and by how much?
9:57–11:39
8
What are the key swing‑state poll trends and how might they shape market sentiment?
11:39–13:35