Slow down and split in two

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NAB Morning Call 17 min 3 speakers 8 chapters transcribed 22 days ago
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Why is the RBA reluctant to rush interest‑rate cuts despite global trends?

Phil Dobbie 0:01
Well, we've heard it all before. The RBA is keen not to rush any further cuts, in part because they have less far to go than other central banks. We have more on that today. Plus, who's going to get to decide what changes next year anyway? Because the RBA board splits in two. Plus, German inflation and France still struggling with budget concerns. Speaking of which, the New South Wales economy, its ratings outlook, not as good as it used to be. It's Friday, it's the 29th of November. November twenty twenty four, it's the morning call from Nab. Good morning. Well, the US dollar tried to climb back a bit today. It's pretty much unchanged on the day. The Aussie is up ever so slightly, up naught point one percent.
Phil Dobbie 0:40
So is the pound. The euro is down naught point one percent, the yen down naught point three percent, the Canadian dollar up naught point two percent. Not a lot of moves, of course, because uh America is on holiday. US equities on holiday, so no moves there. Rises in Europe, they're up naught point nine percent for the DAX, half percent for the Eurostocks fifty, naught point one percent for the FTSE one hundred. five hundred. Bond yields lower in Europe. French ten years are down seven basis points, down three in Germany and uh two in the UK. Eighty two basis points now between French and German ten years. Not quite the eighty six that we saw earlier in the week, but this is the widest since twenty and twelve.
Phil Dobbie 1:17
The biggest spread last year, for example, was uh sixty six basis points, and here we are eighty two. Uh a hundred and eleven basis points for thirty And Aussie ten years yesterday down six basis points to four point three six percent. This morning on futures uh up a few basis points above that to four point four percent, and oil is higher up 0.3% for WTI and 0.4% for Brent. Nabs Tapas Strickland joins me today. So America sitting down to their Thanksgiving dinners, possibly about now.

How much cheaper is the typical Thanksgiving dinner for a family of ten this year?

Phil Dobbie 1:45
And I don't know how scientific this is, uh Tapas, but the cost of that Thanksgiving dinner has come down quite a bit this year. How scientific is this research?
Tapas Strickland 1:54
Good morning, Phil. It's as scientific as you can get. Uh and uh this uh survey by the American Farm Bureau Federation has been going I think since the nineteen forties. And uh they measure a basket of goods uh for a Thanksgiving dinner for ten. And I just note that the price of that basket has actually fallen five percent over the past year. So uh it shows you there has been some considerable disinflation in food in the US, even though you've still got pretty resilient services inflation. But i importantly, from a psychological point of view, when you look at that price of the basket, uh over over five years, uh, that price of that basket is still nineteen percent higher due to all that price increase you did see during the twenty twenty to twenty twenty two period.
Tapas Strickland 2:35
So um I think for American consumers, uh obviously very good that their Thanksgiving uh meal is going to be a little bit cheaper. But it It is still much, much more expensive than it was five.
Phil Dobbie 2:47
But it's still quite cheap. So they're saying fifty eight dollars, just a bit over fifty eight dollars for ten people. That's uh you know, and uh for American prices, that seems very cheap. This is sort of uh turkey, stuffing, sweet potatoes, dinner rolls, frozen peas, fresh cranberries, celery, carrots, pumpkin pie mix uh and crusts, whipped cream, whole milk, all of that for fi uh for ten people for fifty eight dollars. I don't know how you do that. I've been shopping in America. I think you'd struggle. But well, you know. places. Clearly not. Well, look, there's not a lot of news, is it from the United States, because they are too busy eating that fifty eight dollars worth of all of that stuff. But so let's uh turn to what's happened locally.
Phil Dobbie 3:31
And uh Michelle Bullock talking yesterday, uh she really is trying to talk things down a bit, isn't she? Going slower. So this sustained return of inflation within their the two to three percent band

What does a sustained return of inflation within the 2‑3% band mean for the RBA’s policy outlook?

Phil Dobbie 3:44
And a sustained return. Uh and of course, you know, if we look at the headline rate, um, you know, we're w the the trim mean rate, we're we're not there yet, are we?

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