Sounding the TACO bell
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Why did President Trump extend his 48‑hour ultimatum and how did markets react?
Well, a bit of a back down for President Trump. His forty-eight hour ultimatum has been pushed back for another five days because he says talks are going well with Iran about ending the war and markets have responded to that. Only problem is Iran says the talks aren't taking place. So who do you believe in a time of war? And today, global PMIs, which do capture the period since the war began. It's Tuesday, it's the twenty-fourth of March, twenty twenty-six. It's the morning call from NAB. Good morning.
What caused oil prices to tumble 9‑10% and which equity indexes surged?
So oil sharply down nine point four percent off WTI, Brent down ten percent, still over a hundred dollars a barrel, though, it has to be said, and a big jump in shares. 1.3% up for the Nasdaq, 1% for the SP, 1.3% for the Eurostox 50, and 1.2% for the DAX. Uh the UK is the only one backing that trend. The FTSE down a quarter percent. In the US, uh consumer discretionaries are the big winner there, up three percent, IT is up one point six percent. And bond yields are down four basis points off 10-year treasuries, down eight basis points in the UK, down four in Germany. Aussie 10 years. Well, they were up nine basis points yesterday to 5.11%. So given the news of last night, we can expect quite a retracement today, surely.
And the US dollar has fallen 0.4%, but the Aussie also down by 0.2% to 70.1 US cents. The pound is up half a percent. The yen up almost as much, and the euro up a quarter percent. So let's talk through those market moves with Nab Saliol this morning.
How did US and European bond yields move after the Trump‑Iran news?
So these moves all down to President Trump's truth social post last night, uh our time last night, saying that uh the US and Iran had a very good and productive talk over the past two days, uh and that he has ordered a pause on planned US strikes on Iran's power and energy infrastructure. So the 48-hour deadline has passed, and the president has backed down a bit, and the markets have responded. A taco moment.
Yeah, definitely Morning Phil has sh has shades of the taco moment. So as you said, uh, you know, the the deadline that was was clearly rattling markets uh, you know, yesterday in the Asian session uh has been uh postponed for another five days. And then on top of that, we had uh you know reports that the US and Iran were engaged in talks, although uh the Iranians basically said that that's that's not true. But uh it does feel like um, you know, if we take what other countries are saying about this, um uh on board that maybe the talks are actually happening. The UK Prime Minister suggested that he was aware of US Iranian talks and there are you know reports that other countries in the region, so Pakistan and Gulf states are you know wanting to be uh engaged and helpful in that process.
So I guess uh at least in the short term this has given markets some comfort that uh there is something along you know, that resembles possibly an off ramp and as you said, that's boosted US equity markets uh and seen a a a large decline in the oil price overnight.
So uh Iran haven't just said there's no talks, they've also said this is uh the US just trying to manip manipulate energy prices and uh buy a bit of time for military planning. But uh yeah, you know, who who do you believe in a time of war? Uh but let's hope let's hope it is the case and things are happening. Uh there are tankers getting through the strait, by the way, today. I I can always do a quick check before we do the podcast, but the three there's three or four going through right now. But the all Iranian. Uh so you know, perhaps no surprise there. But look the the response in bond markets, um so it it's been quite pronounced, much more pronounced at the front end, which I guess you'd expect.
Yes, that's right. And so, you know, we did we did have uh a couple of pretty vicious sessions on on global bond markets, and as you said, you know, particularly at the front end of the curve, spurred really, I guess, uh, you know, last Thursday by that quite distinct change in shift, uh shift in tone from both the ECB and the Bank of England. That's really I think what the got the ball rolling.
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Chapters
6 chapters
1
Why did President Trump extend his 48‑hour ultimatum and how did markets react?
0:01–0:28
2
What caused oil prices to tumble 9‑10% and which equity indexes surged?
0:28–1:25
3
How did US and European bond yields move after the Trump‑Iran news?
1:25–6:14
4
What did the Fed’s Austin Galli say about short‑term energy‑price resolutions and rate outlooks?
6:14–10:46
5
Why are input‑cost pressures raising anxiety about inflation among businesses?
10:46–12:53
6
How are falling European consumer‑confidence numbers reflecting household stress?
12:53–13:00