RBA easing slowly. More cuts “no lay-down misère”
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Did the RBA’s latest rate cut signal the start of a pause?
The RBA Cup, but is it the first one in this cycle and the last one for a little while? We'll look at how quickly they move from here. Good news, unemployment in the UK, plus a less than optimistic Andrew Bailey overnight. Perhaps he just had a bad day. Canada's inflation rose a little, uh, but don't get worried about that. The RBNZ today, 50 basis points today, 25 basis points next time. Any questions? Uh, plus Russia, Europe, Trump. We've got all of that sort of stuff as well. Well it's Wednesday, it's the nineteenth of february twenty twenty five. It's the morning call from Nab. Good morning. As we're recording this, Donald Trump about to make an announcement at Mar-a-Lago as well. We can't cover that.
We can tell you the US dollar is uh a bit higher today, up half percent on the DXY with the uh euro down naught point four percent. Same for the yen, but no big moves elsewhere. US stocks were struggling, but the S P did manage to pick up a bit at the close, uh actually just shy of six thousand one hundred and thirty, which I think is a new high for it. It's up to the eight. A quarter percent anyway, with the Nasdaq and the Dow only just managing to stay in the green. But the Eurostocks 50 closed up a quarter percent. The DAC's up 0.2%. The FTSE 100 is flat. Bond yields higher in North America. Ten year treasuries up eight basis points. In Canada, ten year yields were up nine basis points. Not much movement in Europe though, although up three basis points for ten year guilt yields in the UK.
Aussie ten years were up four and a half.
How did global equity markets react to the RBA announcement?
Up yesterday to four point five percent. Uh today up a couple of basis points higher on that on futures. And oil is higher today as well, a one and a half percent lifted WTI and Brent is three quarters of percent higher, heading towards seventy-six a barrel. So Nab's Taylor Nugent is with me today. So let's have a look at those market moves and what's driving them. Interestingly, there's a Bank of America survey that was out uh overnight as well, showing investors are the most risk on they've been since two thousand and ten. If you look at l cash levels anyway, they're the lowest since two thousand and ten. They're going big on stocks, going long on stocks and short on everything else, basically, which is which is interesting, given all of the uncertainty that we have around the world.
Eighty nine percent though said they thought US equities were overvalued somewhat. So presumably they're looking elsewhere. And which maybe we're seeing that today because look at US equities. They are Fairly sluggish. Um you know, n actually not a lot of movement really overnight.
Yeah, good good morning, Phil. Yeah, as as you say, US back from a holiday and fairly directionless in in equities, S P five hundred currently tracking down around point um over b essentially flat. Um actually Nusdap down a little bit, small underperformance in in tech stocks, but yeah, not really too much in terms of um in terms of moves through equities.
Now, on the home front, yesterday the RBA they came, they saw they cut the cash rate, uh and the journey has begun. Uh but I mean we talked about it being a fairly hawkish cut in advance, didn't we? So was it? Well it looks like it, doesn't it? Because there's uh it might almost be a bit of a one off 'cause there's no indication of when there's going to be another one.
Yeah, no, that's that's right. So, you know, cut twenty five basis points as as expected, so no real surprises there and you know, fairly cautious about about the path forward. And so, you know, I think certainly the the post meeting statement wasn't um particularly committal on on the path forward. It said that the board was um going to need to see uh continued evidence of of progress on inflation and that, you know, there were still risks that um that
What did Governor Michele Bullock’s press conference reveal about future RBA cuts?
disinflation could stall. In terms of the market reaction, it was really when um Michelle Bullock started her her press conference that we did see that kind of you know move higher in in Australian yields uh kind of push further.
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Chapters
8 chapters
1
Did the RBA’s latest rate cut signal the start of a pause?
0:01–1:24
2
How did global equity markets react to the RBA announcement?
1:24–3:22
3
What did Governor Michele Bullock’s press conference reveal about future RBA cuts?
3:22–6:01
4
What are NAB’s expectations for additional RBA rate cuts this year?
6:01–7:52
5
Did UK employment data surprise and what does it mean for the pound?
7:52–10:24
6
How is rising Canadian inflation affecting the CAD and market expectations?
10:24–13:15
7
What are US Fed officials saying about the pace of future rate cuts?
13:15–15:33
8
What is the outlook for New Zealand’s RBNZ after today’s rate cut?
15:33–17:23