No end in sight
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Why are markets in a risk‑off mode amid US‑Israel‑Iran tensions?
Well, it's not over till it's over, and it's looking increasingly like that could take a long time. So unsurprisingly, the US and Israel versus Iran, and Iran versus almost everybody else, is dominating market action overnight. And the longer it goes on, the more likely it is to impact inflation and central bank policy. Plus US jobs today. It's non farm payrolls tonight after some early indications that employment numbers are looking strong in the US. It's Friday. It's the sixth of March twenty six, it's the morning call from Nab. Good morning. No surprise, perhaps, that we are back to a risk-off mood in the markets. The US dollar is higher. It's up half a percent to ninety-nine point two on the DXY index.
The Aussie has lost one point three percent down to sixty-nine point eight US cents. The South Korean one down again, losing uh another one point four percent. Bond yields are higher, particularly in Europe, up ten basis points for 10-year gilts in the UK, up 12 in France, 13 in Italy, 9 in Germany, uh, compared to the US, where they are Up but just four basis points for 10-year treasuries. Aussie 10 years were up five basis points yesterday. This morning, add another six basis points on futures up to four point eight five percent, and Bitcoin is down almost three percent today. Small bickies when you consider it's down thirty-seven percent over the last six months, and Asian equities. Well, they recovered yesterday.
Uh Korea's uh Cosby was up nearly ten percent, for example, but maybe it's gonna be different today because Equities close much lower in Europe.
How are global equity indices reacting to rising oil prices and higher bond yields?
1.5% off the uh Eurostocks 50, 1.6% lower for the DAX in the US, 1% off the NASDAQ as we record this, 0.9% off the SP. Industrials hit the hardest, they're down almost 3%. But everything is down, basically, except for energy. Speaking of which, WTI up 6.8%, Brent up another 4%, close to 85% a barrel now. So higher oil prices, lower share prices. Very simple formula, isn't it? And uh for the last podcast of the week here's Nab Sky Masters in Sydney. And this uh this big move in uh in bond yields as well. So clearly Yeah people are starting to look at the long game in this and wondering whether it's going to impact uh the decisions made by central banks further down the track.
Yeah, good morning, Phil. Um, you know, as you've highlighted in your int introduction, some sort of relatively big moves in financial markets overnight. And, you know, I think what stands out for me is the fact that, you know, that stock bond correlation uh you know remains broken um as the tensions in the in the Middle East continue. So you know big, big swings in in um in bonds overnight. And this has really been led led by Europe. Um and there's no surprise there given, you know Europe's sort of exposure to to the energy's energy sector. Um and so what what you're sort of starting to see is this this um, you know, investors are repricing the outlook for central banks as it becomes sort of apparent, at least for now, that this tensions in the Middle East aren't aren't any ending
And so
ending any time any time soon and so that repricing on central banks is is being is feeding through into into into bond markets, but we can dig into that in a in
Yeah, well the the European situation, Vladimir Putin hasn't helped either, because he's come out and said that uh those remaining gas supplies to Europe, which is supposed to end next year anyway, he said he might cut those off quicker, uh, not out of spite, just because of all the circumstances.
What impact could reduced Russian gas supplies have on European inflation?
He reckons he can get a better price selling it elsewhere. So, I mean, all of that's just gonna add to European inflation, isn't it? You know, oil and gas.
Yeah, no, it de definitely it is. It is. And you know, it's interesting you've had a couple of central bankers out overnight talking and and their focus has really been on um on the impact on in inflation. So, you know, you've had E C B Nagle, who who is on the hawkish end of the spectrum? But, you know, um he's saying, you know, the the Iran impacting, you know, what's going on, the conflict and how it's impacting Euro area inflation is is the focus now rather than what it will do to growth.
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Chapters
8 chapters
1
Why are markets in a risk‑off mode amid US‑Israel‑Iran tensions?
0:01–1:25
2
How are global equity indices reacting to rising oil prices and higher bond yields?
1:25–3:26
3
What impact could reduced Russian gas supplies have on European inflation?
3:26–5:35
4
How are central banks’ inflation concerns reshaping US Treasury yield expectations?
5:35–7:38
5
What are the implications of recent oil tanker attacks on global energy markets?
7:38–9:54
6
Why is Australian household spending softening and what does it mean for the economy?
9:54–11:37
7
What can we expect from today’s US non‑farm payroll report?
11:37–13:42
8
How might the latest US payroll and unemployment data influence market outlook?
13:42–14:55