Not so big in Japan.
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What did Japan’s prime minister lose and how might it affect trade negotiations?
Japan's PM has lost control but says he's gonna stay on. But will he have the power to negotiate a trade deal with the US as that August the first deadline looms? The EU might be closer to a deal, but the US President is suggesting the baseline should be 15 to 20 percent, even if a deal is reached. And earnings, we've got some big results this week, but even if they are strong, will they be able to meet the expectations of a share market? That keeps breaking records. It's Monday, it's the twenty first of July 2025. It's the morning call from NAB. Well, after the excitement of the S P hitting a new record on Thursday, US stocks were very restrained on Friday, the Nasdaq and the SP finishing flat, a 0.3% fall in the Dow.
But we did have a 1.3% rise in the ASX 200 on Friday, getting to its highest level. And the US dollar finished last week a quarter percent down on Friday on the DXY, just uh below ninety-eight point five, but that's up two-thirds of one percent Over the week. The Aussie gained some grand on Friday, a third of 1% to finish just over 65 US cents. The euro was up a similar amount, the pound flat, and a four basis point fall in 10-year treasury yields on Friday, down to 4.42%, the lowest for the week. Aussie 10 years finished at 4.33%. Yields rose a couple of basis points on Friday across much of uh, in fact, just about all of Europe, the UK included. An oil fell about a third of one percent uh for Brent and WTI Brent down to around 69.30 a barrel now.
So there we are. That was Friday. Here we are on Monday morning. First of all, the good news though, going back to Friday, uh I should say NAB Sky Masters joins me from Sydney. Welcome, Sky. Um so the good news is uh more positive sentiment from the US, uh, the Michigan one-year inflation expectation. has fallen a lot, from five percent to four point four percent in one month and five years has gone from four percent to three point six percent, both much bigger falls than expected. So that is good news.
Yeah, Phil, you you you are correct. Did you say uh the inflation expectations are heading in the the right direction and uh you know quite a quite a a a big surprise as you said in terms of in terms of the drop. Um expectations were actually for um inflation expectations to be pretty much unchanged, but as you said, you know, we had a drop in the the one year. The one year fell from five percent to four point four and the five to ten year inflation expectations fell from three point nine to three point six. So all heading in the right direction.
How did US equity markets and the Australian dollar perform over the last week?
That sort of gave a little bit of a a boost to treasury yields, as you said in your introduction, treasury yields um closed, closed lower on the day. I mean ultimately really it was a pretty quiet session in terms of um movements in fin financial markets on on Friday. um bond bonds were really very much range bound, but um treasuries did um po uh post a small outperformance against against the majors and that that Michigan survey was one thing that was supporting um supporting the market. Having said that, the um on the opposing side, you did see a lift in um in consumer sentiment um in in that in that um in that survey. Uh you had uh sort of the bigger lift in um conditions um but also a small lift in expectations and and sentiment.
But you've discussed in previous podcast the uncertainty around this survey and the biases towards your political um whichever political party you you follow and also the way the survey is now is now conducted. So I th I think um the sentiment results didn't get as much attention as as the inflation expectations.
Expectations. Yeah, yeah, for sure. And and I guess also there's the you know, the whole question about looking in the future depends on whether you believe those tariffs that are coming up are gonna be applied or not, because that will change your perspective on everything. But also, uh the other thing that was a concern last week, uh obviously was whether Donald Trump was gonna do s anything about Jerome Powell, but the Wall Street Journal reporting today that Scott Bessant
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Chapters
7 chapters
1
What did Japan’s prime minister lose and how might it affect trade negotiations?
0:01–2:36
2
How did US equity markets and the Australian dollar perform over the last week?
2:36–5:27
3
What recent changes in US inflation expectations are influencing Treasury yields?
5:27–8:23
4
Why is Fed Governor Christopher Waller signaling a possible rate cut at the next meeting?
8:23–11:08
5
What are the looming US‑EU tariff negotiations and the August 1 deadline?
11:08–13:45
6
How is Japan’s coalition crisis impacting 30‑year JGB yields?
13:45–16:33
7
What does the New Zealand CPI data suggest about the RBNZ’s next move?
16:33–17:27