Markets uncertain despite strong Services ISM
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Why are US equities falling and what role do trade‑deal uncertainties play?
So could a trade deal happen this week? Well, President Trump has suggested that it could happen, but he is pretty noncommittal, so the uncertainty of all of that is probably what's bringing shares down today in the United States. But will deals in Asia require movements in currencies? That's the fear that's on the cards, which has seen big moves in the Taiwanese dollar. And oil, well down because OPEC Plus are pushing ahead with production increases in an economy that could. well be slowing. And US services holding up so far. Will China do the same? We'll find out today. It's Tuesday the sixth of May twenty twenty five. It's the morning call from Nab. Good morning. A mixed but not totally good day for US equities today.
The Dow was doing okay until the last hour of trade. Now the Dow, S P and Nasdaq all finishing in the red. So the Dow down a quarter percent. The S P lost naught point six percent, three quarters of one percent down for the Nasdaq, naught point eight percent lower for the Russell two thousand. Bond yields are higher in the US, up three basis points for ten year treasuries ahead of the Fed meeting this week, but yields are lower in Europe down. Basis points for ten year bunds, for example. Aussie ten years up five basis points yesterday to four point two seven percent.
How is OPEC+ increasing output affecting oil prices and energy stocks?
Now on futures a couple of basis points higher than that. We've got a small fall in the US dollar now at ninety nine point nine on the DXY. The Aussie is up half a percent to sixty four point six US cents. Not much going on with the pound or the euro again. The yen though is up naught point six percent today, and oil down again, another two point. per cent off WTI and one point seven percent lower for Brent, which is uh close to sixty dollars a barrel now. Actually it got down to fifty eight fifty at the start of the session, which is the lowest price since February twenty twenty one. So NABS Taylor Nugent joins me today. Uh we didn't get around to talking about oil yesterday, perhaps we should have done, because that fall in oil prices from the decision over the weekend by OPEC Plus to uh raise uh output
by four hundred and eleven thousand barrels a day this month, rising to an extra nine hundred and fifty seven thousand barrels in June. Uh I mean all of this happening just as we have concerns about an economic slowdown, uh and all of a sudden we're also seeing uh further increases, yet more increases in oil production. So what is to stop prices going lower still, I wonder?
Yeah, good good morning, Phil. Um so yeah, oil prices really, you know, under pressure from both the the demand side and the supply side at the moment against that backdrop of, you know, um downward revisions to to the global growth outlook and and that concern about about the extent of demand we got further increases in in output coming from from OPEC plus. So, you know, this was the second consecutive monthly in increase in output. We already saw a a slightly larger number. an expected increase uh in the announced a a month ago and then that was followed up with you know a bit of a bit of a surprise in the extent of of further increases this month. Um you know and then adding to that as well it also came with with some warnings from from Saudi Arabia particularly that you know potentially there could be could be more coming.
So it does look like some of those that strategy that we've seen from OPEC plus for you know a couple of years now to try and cons um constrain supply to to support oil prices that has been at the cost of of share for for a lot of those producers.
What does the latest US Services ISM data reveal about economic momentum?
And so you know it does seem like the the the patience is is wearing a little bit thin and we have seen um a bit of a a move to uh reduce some of that some of that supply constraint and as you say kind of you know supporting a bit of a further move lower in in oil prices. prices and I mean, you know, it is in an environment certainly for those central banks like the like the Federal Reserve that are facing into um you know some upward pressure on inflation or or at least the price level across across the kind of tradable goods complex as a result of tariffs, nice to have something uh in pointing in the other direction there, maybe, you know, going some way to to partially offset the worst of those impacts on the overall inflation rate.
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Chapters
8 chapters
1
Why are US equities falling and what role do trade‑deal uncertainties play?
0:01–1:11
2
How is OPEC+ increasing output affecting oil prices and energy stocks?
1:11–3:13
3
What does the latest US Services ISM data reveal about economic momentum?
3:13–5:32
4
How are rising Taiwanese dollar levels linked to possible US‑Taiwan trade talks?
5:32–7:03
5
What are the implications of proposed US tariff changes for Japan and the film industry?
7:03–9:50
6
How are US trade‑balance deficits shaping President Trump’s agenda?
9:50–11:39
7
What can we expect from upcoming China and European Services PMI releases?
11:39–13:42
8
How might upcoming Fed and Bank of England decisions influence market direction?
13:42–14:37