Market responds to OPEC+ downgrade. US CPI and THAT debate to come.
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Why did OPEC+ cut its oil demand forecast and how did markets react?
Well, big falls in oil prices this morning thanks to a reasonably sized cut in demand forecast Mopec Plus. We'll look at the market reaction to that and the softening demand more generally. China's data supports that theme overnight. Will the Fed revise their forecast downwards next week? We'll see. Will they see a steeper fall in the dog plot next week? Meanwhile, UK employment gives no reason whatsoever for the Bank of England to move. Plus the NAB Business Survey from yesterday will look at that. And today Well, USCPI and that debate is enough to keep us occupied. It's Wednesday, the eleventh of September, 2024. It's the morning call from NAB. Good morning. Well, a mixed session for stocks in the United States.
The Dow is down a quarter percent at close, the S P up naught point four percent, but the Nasdaq has climbed more than nort point eight percent. The Russell two thousand, well, it was well down and it managed to claw itself back towards the end of the day to flat finish flat, well, ever so slightly in the red. So another unrotation happening there. Uh it's all back on tech, although Apple hasn't really budged to you know, no corkscrew. That's their problem. But lots of trade in NVIDIA, which is up one and a half percent, and Tesla up four and a half percent. Maybe that is a preemptive Trump trade ahead of the debate. Who knows? Falls in bond yields down five basis points for ten year treasuries, down four basis points for ten year yields across much of Europe.
Aussie ten years yesterday, down five basis points to three point nine one percent now on futures a few basis points lower than that. A small move up in the US dollar, it's up naught point one percent on the DXY. The Aussie is flat. Still stuck at sixty-six point six US cents. The yen up naught point seven per cent today. The Canadian dollar is down a third of one percent, and the Swiss franc is up a third of one percent.
How is the recent drop in oil prices affecting US equity and bond markets?
And oil, uh that's probably today's big story, really. It is well down, a three point seven percent drop in WTI, it was down well over four percent earlier, and a three point two percent fall in the price of rent rent, which got down to sixty-eight point seven a barrel this morning. So let's kick off with that oil. News with NAB Sky Masters in Sydney. So Brent, below seventy, this is a three year low in fact today. Uh it was December twenty twenty one, the last time it was this low, and this is clearly a response to OPEC Plus in their latest monthly f uh forecast. They've revised them downwards again for this year and next.
Morning Phil, yeah. If you look at price action uh overnight, as you've highlighted, sort of one of the biggest moves is is the oil price. Um you know I think uh you know, what's i it's just a an extension of of the sort of um declines that we've been seeing over the past few sessions and and I think so weighing on the on the market is that that um outlook for global growth. So y you know, the the um looking at China and the uncertainties around around the outlook for China and now that big focus um on on the US and and the outlook for the US economy. Um and and so expectations of of weaker growth backdrop is is just weighing on on that oil price which just can continues to to head lower. Um and that the sentiment that you're seeing in in the oil price
is is feeding through into into bond markets. Um so, you know, a as you said, f a further rally uh for the rally in bonds overnight with um Treasury's very much leading leading that move.
Yeah. Well on on the China, just quickly, I mean we'll talk more about those those movements. But I mean yeah, China not picking up inflation there year to uh uh on year to August, just naught point six percent, up from naught point five percent uh for the year to July, it was expected to rise more than that. And core inflation for August just naught point three percent, which is actually the lowest it's been for three and a half years. And producer prices well down as well. They're at minus naught point eight percent for the year to August. So
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Chapters
7 chapters
1
Why did OPEC+ cut its oil demand forecast and how did markets react?
0:01–1:36
2
How is the recent drop in oil prices affecting US equity and bond markets?
1:36–3:53
3
What do the latest China inflation and producer‑price figures mean for global growth?
3:53–6:45
4
Why are Fed rate‑cut expectations rising ahead of next week’s meeting?
6:45–9:07
5
How might the US CPI release influence the Fed’s dot‑plot and market pricing?
9:07–12:07
6
What impact could the proposed US bank‑capital rule changes have on Treasury yields?
12:07–14:32
7
How are UK employment data and GDP shaping the Bank of England’s policy outlook?
14:32–15:09