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Why are markets moving despite a lack of new data?
Well, some curious market moves today with very little around in terms of data, so with no hard facts to drive the agenda. What exactly is going on? Gold is up, so is that in readiness for the US election? And at home, the RBA's Andrew Hauser seems happy that markets are pushing back expectations of when the rate cuts are gonna start in Australia. And today, well, if you thought the last 24 hours is quiet, look at today. We get New Zealand trade numbers and the IMF. And World Bank a meeting. And that is just about it, really. It's Tuesday, the 22nd of October 2024. It's the morning call from Nab. Good morning. So big moves up in bond yields today. Ten year treasury is up nine basis points to four point one seven percent, up ten basis points in Canada and Germany, up twelve in France.
You get the idea. Up eight in the UK. Aussie ten years. Well, they were down three basis points yesterday to four point two seven percent. Today on futures, though, they are nine basis points higher than that. And the US dollar continues to strengthen. It's up nort four percent today.
What’s driving the recent surge in bond yields worldwide?
That's three and a half percent up since the end of last month, and the Aussie mean Meanwhile, down 0.7% today, back to the infamous 66.6 US cents. The pound is down half a percent, same for the euro. And stocks are generally down 0.7% off the down, 0.3% off the SP, the Nasdaq is flat, the Russell 2000 is down 1.4%. And it's the same story in Europe where the DAX and the CATCARON both closed down one percent, the FTSE one hundred was down half a percent, and oil is on the rise again. Brent up two percent uh to just over seventy four fifty a barrel, WTI is up two point six percent to seventy one a barrel, uh and gold rising again as well. Another new high there. So a lot of action on a day devoid of much data.
Why? Well, here's now in Sydney to uh try and figure out why. I mean there's arguments, aren't there? Nervousness over earnings perhaps. Uh you know, we've got some big earnings this week with Tesla and Boeing. Is it Trump? Is it the Middle East? What's what's causing all of this?
Uh Money Phil. It's not um Abundantly obvious, is it, what's uh causing some of these moves?
How are equities reacting to the potential ‘Trump trade’ ahead of the US election?
And certainly they're quite pronounced, you know, across the interest rate spectrum, as you know, those eight to nine basis points increases in in yields. If I look at um money market pricing for the Fed, um we have seen a little bit of a a further retracement, I guess, of of confidence that we are going to see two twenty five point back to back FedFence rate cuts in the November And December meetings, we're into about using the futures market as a gauge. I see we're into about 40 basis points, uh, from 44 basis points at the end of last week. So um I certainly think there's um you know that there's something to that at least anyway. Um as far as equities are concerned, um, you know, I can't see any obvious uh Trump trade style activity here.
If I look at financials, I look at healthcare. Um, they're both down. They're two of the sectors that are traditionally regarded as uh, you know, participants in the so called Trump trade. And um so even though the betting market seemed to have been um further tightening the odds on a on a Trump victory, um, I really don't think there's anything substantial to that. Um uh Bitcoin's also down again. I was listening to um Nate Silver, one of the sort of most well regarded um, you know, political polsters in the United States and it podcast on the weekend and he says, look, my my Monte Carlo simulations on however many thousands of iterations of the uh of the election outcome tell me that Trump's got a fifty point five percent probability of winning and Kamala is forty nine point five and uh and that and all the seven so called uh battleground um swing states, I think the polar gap between Harris and Trump is less than one point.
percent. So it's statistically insignificant. So I really think, you know, markets have got to go into uh to the election at this stage with uh saying it really is the proverbial coin slip.
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Chapters
8 chapters
1
Why are markets moving despite a lack of new data?
0:01–0:58
2
What’s driving the recent surge in bond yields worldwide?
0:58–2:05
3
How are equities reacting to the potential ‘Trump trade’ ahead of the US election?
2:05–4:04
4
Why is gold climbing higher and what does it signal for investors?
4:04–5:52
5
What impact are oil price fluctuations having on global yields and markets?
5:52–7:58
6
How could a Trump victory reshape the US dollar and global currency markets?
7:58–9:24
7
What are the latest expectations for RBA rate cuts after Andrew Hauser’s comments?
9:24–11:05
8
Which upcoming earnings (Tesla, Boeing, etc.) could move the market this week?
11:05–11:35