Minutes, Tariffs and a Ceasefire
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What is the main topic discussed in this episode?
Tariffs, the Fed minutes, maybe a ceasefire. Sadly a lot of this is happening as we record this podcast. But it does look like an Israel Hezbollah ceasefire is gonna happen. But how long will it last? That is the question. Donald Trump has posted on his social media platform that there will be 25% tariffs on Mexico and Canada from day one of his presidency. And the Fed minutes out this morning, but not as we record this. So a bit going on. We can tell you what we do know about. It's Wednesday, it's the 27th of November 2024. Well we know that. We know a bit more besides. It's the morning call from Nab.
What are the key market moves triggered by Trump’s announced 25% tariffs on Mexico and Canada?
Good morning. Well, the US dollar is back on the rise. It's up a quarter percent today. Uh the pound is down a quarter percent, the euro down slightly more than that, but the Aussie dollar down three quarters of one per cent, down almost to sixty four point five US cents. Uh we've got a two point five percent drop in the Mexican peso as well, a naught point six percent drop in the Canadian dollar. It's actually the lowest it's been against the US dollar now for four years. Bond yields are rising again for ten year treasuries, though up three basis points to 4.3% today, uh down two basis points in Germany though for ten year bunds, yields higher uh in the UK and France, and shares are a bit mixed. The Dow is down 0.2%, the Russell 2000 is down half a percent, but uh up 0.3% for the SP, 0.6% for the Nasdaq, uh shares down almost 0.6% in Mexico today.
With a lot of attention to Mexico today. Uh shares Down in Europe as well, 0.8% off the Eurostocks fifty and 0.4% off the FTSE one hundred, an oil lower today, about half percent down for WTI and Brent. Brent below seventy-two seventy now. So let's see if we can explain some of those moves uh with JBS Sally Ald, who joins me now from Sydney. So uh first off Tariffs. Uh we talked about whether Bessant uh would be a safe pair of hands in the uh Trump administration. Well That was a day ago. Uh since then Donald Trump posting on Truth Social, his uh media platform, that he's going to introduce a twenty-five percent tariff on all products entering the country from Canada and Mexico, plus an extra ten percent from China, right from the very beginning.
Uh so there's been a bit of a reaction, well not a huge reaction, except I d I did mention, you know, a bit of a reaction in Mexico and the Canadian dollar uh obviously reacting as well. Well, yeah. But broadly not a massive response.
Morning, Phil. Yes. So I think um I think you you set it up pretty nicely. It was really just the contrast to the way markets uh had befav behaved, you know, twenty four hours prior, where they seemed to settle a little bit and took comfort from the fact that Uh Trump's you know proposal for Treasury Secretary was, as you said, a safe pair of hands, very experienced person, understands financial markets, so sort of has Wall Street's back, uh, you know, an economist, so sort of understands the way um you know economics works. Uh and then you know, just as markets had had sort of settled into that. Um, as you said, a couple of um posts on Truth Social with uh Trump threatening um meaningful tariffs particularly for Canada and Mexico, but then also China as well.
Um, now some some people are sort of saying, Look, d don't get too excited about these because this is a typical Trump negotiating tactic and it so seemed to work because Canada's Prime Minister Justin Trudeau was on the phone. pretty much straight away to the president elect. Um but you know the way Trump couched these tariffs was you know th th these are the countries China, Canada, Mexico, who uh are allowing, you know, illegal im immigrants into the US, um you know And drugs. And drugs. Fentanyl, I think, being the the the the the particular drug uh that that he noted and so um you know the the tariffs are I guess tied to broader objec objectives which is you know which are not necessarily um economic but think possibly drawing some of these countries to the negotiating table to to drive some outcomes that you know Trump would say is favorable to the to the US.
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