Risk on switched off, whilst Riksbank gets on with it
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Why did the early‑week risk‑on mood disappear after hopes of Chinese stimulus?
Well, that risk on mood earlier in the week on the back of hopes of more stimulus for China. That's all gone today. And why has that risk on been switched off? And why is the Rix Bank getting on with it and cutting rates and signalling that they're gonna cut every meeting from now on till they get to their neutral rate, which could happen very quickly? We'll look at what's affecting the mood today and look ahead at Aussie job vacancies and US jobless claims as well, given that it's all about the labour. market these days and we'll look at yesterday's CPI numbers for Australia as well. It's Thursday, it's the twenty fifth of September 2024. It's the morning call from NAB. Good morning. Well the US Euphoria didn't last that long really, did it?
Stocks are well down today, particularly the Dow, which closed down naught point seven percent, the S P is down naught point two percent. The Nasdaq is flat, just managing to get into the green at the market close, the Russell two thousand down one point two percent, and we are clearly off rotation because Nvidia has managed to climb again. It's up another two point one percent today. Intel is up three and a half percent. Ford shares, however, down over four percent. And European stocks are generally lower as well. The Euro stocks fifty is down half a percent, so is the Cat Caron, the FTSE one hundred down just naught point two percent. Bond yields are quite a bit higher, ten year treasuries are up four basis points, German bunds are up three in France, ten year yields are up five, the same in the UK.
Aussie ten years were up two basis points yesterday to three point nine percent, six basis Points higher on futures this morning. And the US dollar has bounced back up. It's 0.4% higher this morning with a big fall in the Aussie dollar. It's down 0.9% to below 68.3 US cents. The yen has fallen almost as much. The euro is down 0.4%.
What is driving today’s equity market weakness in the US and Europe?
The pound down 0.7%. And oil is higher again, a 2.5% rise in WTI, getting close to $70 a barrel now. Brent is up 2.5%. quarter percent almost to seventy four a barrel, uh whilst gold continues to rise another naught point two percent today, uh so it's hit another high. So why is confidence flagging? All of a sudden, here's Nab's Ken Compton in Sydney. Uh I mean we haven't had a lot of data have we and what we have had hasn't been that good and then you know we've got uh geopolitics in the background as well. So is that what's playing on the markets or is it just the fact that there hasn't been a lot of data, it's just a time to reassess and uh it's just one of those days where that reassessment goes on.
I think that's my summation of it, Phil, and and good morning, by the way. That you know, af after a couple of days of good um of a fairly supportive risk appetite, you've had a fair bit of good news out of China over the weekend that extended i over the first couple of days of the week. Um but I think it's just it's just time for a bit of reassessment. As you've noted, nothing too material out overnight in terms of data. And even on the China front, I mean y we're still seeing drips and drips. of monetary policy response. Yesterday we did get a a cut in the the one year um main m main financing rate that that goes to the banks. But that's just sort of another another catch-up step in some of the other policy changes.
So nothing new there, still nothing super conclusive on what is going to be a potential uh sort of big fiscal stimulus package that's still sort of mooted out there from other from other sectors. So with without too much news there it's just a bit of um a a bit of recognition that um there not not much is happening at the moment and just a bit of a rethink I think as well as you there's a bit of a geo geopolitical stuff happening in the background as well too, which is which is ramping up.
Yeah, well I mean that could be part of it as well, couldn't it? Well just on that, you know, for China, uh I mean the Hang Seng and the C S I three hundred did very well yesterday. So, you know, out of all the share indices in the world that seem to be struggling and there's struggling less in China.
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Chapters
8 chapters
1
Why did the early‑week risk‑on mood disappear after hopes of Chinese stimulus?
0:01–1:44
2
What is driving today’s equity market weakness in the US and Europe?
1:44–3:53
3
How are bond yields and currency moves reflecting the latest data?
3:53–6:18
4
What are the implications of higher oil prices and falling US inventories?
6:18–8:57
5
Why is the Riksbank cutting rates aggressively and what is its neutral‑rate target?
8:57–10:44
6
What does the latest Australian CPI tell us about inflation and RBA policy?
10:44–12:50
7
How are Australian job vacancies and US jobless claims shaping labour‑market outlooks?
12:50–14:31
8
Which central‑bank speakers are expected today and how might they move markets?
14:31–15:59