Riding the Retribution Highway
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Why is President Trump targeting Jerome Powell and how is the Fed responding?
President Trump is laying into Jerome Powell and the Fed chair has responded saying legal action against him is political. It's the challenge to the Fed that we've been expecting, yet the market response has been very well contained. There's been a bigger market response to the proposed 10% ceiling on credit card interest rates. But maybe that's something else that will be threatened but never actually sees the light of day. US CPI today, plus Australian consumer confidence numbers and Aussie household spending yesterday. More confirmation if it was needed that the RBA will be lifting rates maybe as soon as next month. It's Tuesday, it's the thirteenth of January 2026. It's the morning call from NAV.
Good morning. Well, the US dollar is down a quarter percent this morning, down below ninety-eight point nine on the DXY. The trend has been up since the start of the year, of course, so it's turned around a little. The Aussie is up 0.4% to 67.1 US cents. The pound and the euro both down, uh both up, I should say, by 0.4%. Equities keep pushing higher, 0.3% for the Nasdaq, but still off its October highs. Most other indices are on the rise as well. The ASX two hundred rose almost half a percent yesterday, for example, and small moves in bond yields yields up slightly in the United States, lower in Europe. Aussie ten years were four point seven percent yesterday, a couple of basis points higher this morning, and oil uh a bit higher, about a quarter percent higher.
Um natural gas uh is up five point seven percent, and silver up to eighty five seventy an ounce. That's uh an eight percent lift, but almost.
What impact could the proposed 10% cap on credit‑card interest rates have on banks and consumers?
Not quite a new all-time high, whereas gold is up 2.4%, and that did reach a new record high overnight. So here's NAB Sky Masters. A lot happening in the US, but um not a lot of data to support it all. Uh a lot of it is geopolitics. But let's look at some of the data locally, first of all. The Australian Household Spending Survey yesterday, I mean that just reaffirmed, didn't it, that the next move by the RBA. is gonna be up because household spending even stronger than expected in the ABS numbers out yesterday.
Yes, good morning. Good morning, Phil. And um, you know, in in our view, um, you know, the Household Spending Survey certainly does sort of provide that that support in the in the the um view that the the RBA you know is is at risk of tightening tightening policy and and maybe as soon as February, which is which is Nab's Nab's call. So the the spending data was for the month of November um and it rose by one per cent, um which was, you know, above above the consensus view, which I think was at around point six percent. And it follows an upli upwardly revised um October gain of that was revised up to one point four from one point three. So, you know, very strong start to um f for the um household consumer for for Q four.
Um there is a little bit of concern around um the seasonal patterns around uh Black Friday. So you know there is maybe Maybe the risk that you get a little bit of a payback in for the month of December, but overall, um, you know, uh we've the household consumer appeared to to finish two thousand twenty five on on a strong note. And if you look at the um if you look across the the spending data it was sort of the gains were were bought broad based with most cat categories recording um gains for for the month.
And we get the consumer confidence survey today, the Westpac Consumer Confidence Survey, the December survey um showed quite a a reversal, a nine percent drop in sentiment, but that was after a big jump in November.
How are Australian household spending and consumer confidence data shaping RBA rate‑rise expectations?
But I c I mean th that's sort of expected, isn't it? Because all of a sudden people realised that interest rates weren't going to go down, they were gonna go up. That's bound to hit consumer confidence.
Yeah, definitely, definitely. So that was around the time that you sort of saw that pivot from from the RBA, um, and that certainly would feed through into into consumer sentiment. So You know, hopefully we see some stabilisation in consentment incentive to um to start to start the year.
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Chapters
8 chapters
1
Why is President Trump targeting Jerome Powell and how is the Fed responding?
0:01–1:34
2
What impact could the proposed 10% cap on credit‑card interest rates have on banks and consumers?
1:34–3:36
3
How are Australian household spending and consumer confidence data shaping RBA rate‑rise expectations?
3:36–5:05
4
Why are precious‑metal prices reacting to Fed‑independence concerns and what does it mean for investors?
5:05–7:20
5
What are the implications of the US CPI release and the upcoming Fed speech for global markets?
7:20–9:08
6
How might geopolitical tensions in Iran affect oil prices and the broader energy market?
9:08–11:00
7
What does the New Zealand business‑opinion survey reveal about regional economic momentum?
11:00–13:33
8
Will Andrew Bailey’s Bank of England outlook signal a shift in UK monetary policy?
13:33–14:45