Oil prices rise, gold hits new high, as Middle East war escalates
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Why did oil prices jump 7% and gold hit a new record after the Israel‑Iran strike?
It's not the war anyone wanted to see because it could get so badly out of hand and so it was a real risk-off mood on Friday. And the US dollar was one of the main beneficiaries, just like it used to be a safe haven currency. We'll look at the market response to the start of the war and where it could take the markets this week. Plus, the G7, where the war will dominate discussion, but so will trade. And will some G7 members see it as a chance to go it alone and Slap a lower cap on Russian oil prices. And will Donald Trump stay there this time? He left early last time. It's Monday, the sixteenth of june twenty twenty five. It's the morning call from Nab. Good morning. Well, a massive jump in oil prices on Friday.
There we were, talking them down, but a seven point three percent leap in WTI and s and up seven percent for Brennan, which got up to seventy eight fifty on Friday. Not the highest for the year, but the highest since everyone started talking oil down with concerns of a big global slowdown. Now it's a big global oil shortage that we seem to be worried about. And gold was up one and a half percent on Friday as well, up to three thousand four hundred and thirty two for spot, which is Uh a new record high. Actually, it got over three thousand five hundred. And US equity markets were all down one point eight percent off the Dow, one point one percent off the S P and one point three percent lower for the Nasdaq, plus one point three percent lower for the Eurostocks fifty.
Bond yields are higher, just four basis points for ten year treasuries, but up uh seven basis points in Europe, might almost all of Europe, eight in some countries. Aussie ten years were down to four point. Point one five percent, a loss of eight basis points on Friday, but now up seven basis points on that on futures this morning. Uh but the US dollar up 0.3%, the Aussie down 0.7% to below 64.9 US cents, the yen down 0.4%, 0.3% off the pound, and the euro.
How is the US dollar regaining safe‑haven status and what does that mean for the Aussie and Kiwi currencies?
So risk off the table. A very unstable Middle East is the reason. For three days running, missiles have been fired. over Tehran and Tel Aviv, uh after Israel's strike in Iran on Friday after Friday's podcast. I mean we did talk about it on Thursday morning. Uh and fiery language of course on both sides as well. Nabsrayatal joins me. I mean often conflicts have a cursory response on the markets, don't they? But I sense this might be a bit different because there's quite a bit at stake here.
No, it certainly seems so. Good morning, Phil. But uh yeah, certainly everything I've read over the weekend suggests that uh this is not a one or two day uh phenomenon here. Um certainly indications are from Israel that it intends to maintain its bombardment for several weeks at least. And um you know, G seven are obviously meeting, you know, opportunely I guess, um, in Canada as we speak and there's no uh no prizes for guessing. Well, it's gonna dominate the discussions there, but um Um whether that is going to get any uh any movements towards um a cessation of hostilities there, I think is uh highly questionable, at least anyway. So I think the focus is very much obviously oil was the big mover on Friday, and the genuine concerns that uh you know if there's any um attacks in the Straits of Hormuz or any attempt by Iranian proxies uh to close the States of Hormuz, which remember is suspended.
responsible for what about a quarter of global oil supplies uh pass through there um than the potential for a much bigger spike in in oil prices and all that that entails, both in terms of inflation and uh, you know, global growth, um, fears that are already being racked obviously by uncertainty about the tariff situation. So um yeah, it's a pretty grim um backdrop, I think, to start the week and as very as you say in the intro. I think that uh risk off tone that we see Friday um looks set to persist.
Uh probably throughout the week. And interestingly, the dollar now back to being the safe haven, isn't it? Because, you know, so much of uh oil is traded, is conducted in the in the US dollar.
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Chapters
8 chapters
1
Why did oil prices jump 7% and gold hit a new record after the Israel‑Iran strike?
0:01–1:47
2
How is the US dollar regaining safe‑haven status and what does that mean for the Aussie and Kiwi currencies?
1:47–3:44
3
What are the implications of a possible Hormuz closure for global oil supply and inflation?
3:44–5:37
4
How could higher oil prices affect shale‑oil break‑even points and production incentives?
5:37–7:23
5
Why are the Australian and New Zealand economies hitting the worst‑performing currency and PMI readings?
7:23–9:36
6
What can we expect from this week’s G7 summit on trade, tariffs and the Russian oil price cap?
9:36–11:19
7
How might the Fed’s upcoming dot‑plot revision influence rate‑cut expectations?
11:19–12:58
8
What are the key risks and outlook for markets as the Middle‑East conflict escalates this week?
12:58–14:24