Markets coast as politics turns to peace talks
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What’s the overall market outlook for the day and why are markets staying flat?
Well, no big market movements today, despite some softer data out of the United States. In Germany, the election result was hardly surprising. It seems workable. The question is, how quickly can Germany support an increase in defense spending? Can they do it before the new government is in place? With a question mark about how a peace deal over Ukraine is going to eventuate. unfold. Politics this week will help give us a clearer picture on all of that. It's Tuesday, it's the twenty fifth of february twenty twenty five. It's the morning call from Nab. Good morning. Well the US dollar fell a fair bit in the session today, then it recovered, and it's pretty much where it started the week now, just below 106.7 on the DXY.
The Aussie is marginally down at sixty-three and a half US cents, but a quarter percent lift in the Euro and a similar size fall in the Japanese yen. US stocks well they were mainly higher. Now though, they fell a lot towards the close. We've got a one point two percent fall in the Nasdaq. A half percent fall in the S P and the Dow is flat. The Eurostocks fifty is down naught point four percent, but the DAX closed up 0.6%. And small moves in bonds, uh ten year treasury yields down three basis points to four point four percent. German ten year yields only uh up one basis point, the same in France, down one in the UK. Aussie ten years, well they were down seven basis points yesterday to four point four three percent.
Today on futures, a couple of Basis points back up on that. And oil is higher up, 0.7% for WTI and 0.6% for Brent. Brent at just under 75 a barrel. I suppose really the price of oil is going to be very heavy, heavily influenced this week by how the peace talks for Ukraine go. Uh JB Wears, soon to be nab, Sally Ald is with me this morning. So in the US, the S P, well, it dipped below 6,000 for spell. Getting to just below five thousand nine hundred and seventy eight. Didn't like it there. So then it went back over six thousand. It's back down now, perhaps because President Trump has reminded everyone that the uh delay in the tariffs for Mexico and Canada is just that and they're still going to go ahead in a in a month's time.
So that might have changed things. But it seems like whenever we have a bit of a downturn, we see a fairly rapid recovery lately. So does that suggest, you know, the the talks of a a US sell off in shares are perhaps a bit exaggerated.
Well, I think, you know, investors appear like they're happy to to be dip buyers at the moment.
Why did the US dollar, euro and yen move today and what does it mean for traders?
So like you say, you know, that dip below six thousand was pretty well supported. Um And I guess, you know, we've seen the market at the beginning of the year pretty optimistic about the outlook for growth in the US, pretty optimistic about the outlook for for earnings uh over the course of twenty twenty five. Um, and, you know, that was really based on this idea that, you know, while there was a range of policies that the Trump administration were expected to implement on net that were viewed as good for the US economy and and good for growth. And it feels like, you know, even though we might have had um I guess some evidence that that might not necessarily be the case, at least in the first half of the year, investors still very much want to believe that narrative.
Um and I think are also sort of putting their faith in in earnings. Um, you know, when we're we're going through that fourth quarter earnings um you know, at at the moment. So, um, it does feel like, you know, people want to hang on to that narrative. Um, and that that's interesting, you know, because we did see data towards the end of last week suggesting that, you know, maybe businesses and households are just starting to fret a little bit about what all of this might mean for not just inflation, but also For growth going Yeah, for growth going forward. And so it's interesting that people are, you know, really willing to give the equity market the benefit of the doubt after such a phenomenal run for the last couple of years when you feel, at least from a you know, economic perspective, that the distribution of risk to the growth outlook might be shifting in the wrong direction, like i.
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