Taking stock of AI, central banks, tariffs and Aussie inflation
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Did China's AI developments trigger a market panic and how did stocks react?
So China's AI solution put the fear of living God into US stocks yesterday. Today, it's as though nothing had ever happened. We have to ask why. And whether earnings this week will see some of those fears return. Meanwhile, it's Central Bank Day today. The Fed, the Bank of Canada, the RICS Bank, with more to come this week. Busy, busy, busy. It's Wednesday, it's the twenty-ninth of January, twenty twenty five. It's the morning call from NAB. Good morning. Well, a bit of a roll reversal going on. So the US dollar has climbed back up. It's up naught point five percent on the DXY. The Aussie is down naught point six percent to sixty two and a half US cents. The pound is down half a percent, not point six percent lower for the euro.
On the safe haven currencies, the yen is down naught point seven per cent, the Swiss franc down a quarter per cent, uh both reversing the story from yesterday. And bond yields are back up today. Uh well they were actually uh a few basis points higher for ten year treasuries, but that's all gone now. Uh back to zero. But up three basis points for UK and German bonds. Uh Aussie ten years finished at four point four two percent yesterday. Now on futures they're about four basis points higher than that. And shares have bounced back big time.
Why did US equities and oil prices rebound after yesterday’s sell‑off?
So the Nasdaq up over two percent at the close in New York, not point nine percent higher for the S P and not point three percent for the Dow. The Russell two thousand up naught point two per cent at close as well. Europe also high, naught point seven per cent for the DAX, naught point four per cent for the FTSE one hundred, and oil now bouncing back. It's been quiet most of the session, but uh late in the session up one point one percent for WTI, three quarters of one percent for Brent, Brent up around seventy seven sixty a barrel now. So was Deep Seek overblown? Uh let's talk to Nabs Taylor Newton in Melbourne. I mean Nvidia uh was down a lot, but today it's back up six point three percent. I mean still down uh for the week, of course.
So has Deep Seek been forgotten about or is it uh seen as a bit of a storm in a teacup or why all of a sudden this uh you know, yesterday it was tragic news, today it seems to have blown over a bit. Yeah, so you know, a a bit of a rebound.
I think forgotten about is is a little bit too strong, as you say. You know, a bit of a rebound in um certainly Navideo led the declines uh the the prior day. We've seen a rebound, but you know, still down over over the past couple of days, even with that six percent um increase we've seen today. Um I think you know when you look across uh the the price action overnight, there is just you know a rebound from some of that sell-off that we saw with equities high. I think that's played through in uh in yield movements as well, with US Treasury yields slightly higher as some of those um some of that safe haven uh demand maybe waned a a little bit. This the story there we saw yesterday, um it was a fairly concentrated sell-off as well, kind of, you know, much more focused on kind of that uh AI related.
It certainly wasn't wasn't broad based even even through US equities. Um And we've seen that uh that kind of continue uh today as well, with kind of, you know, certainly mixed um with um with IT and communications leading the gains this time. Um when and you know, a lot of the industries in the S P five hundred actually in the rent today after we had a bit of a reversal yesterday. So certainly just can easily see this as a the flip side of the same coin, but but on net certainly anything with that kind of AI exposure is still still
So swings and roundabouts a bit, isn't it? And I guess, you know, there's everyone is going to be holding off to see what is said uh with the earnings results. So big earnings around this time tomorrow, after the close in the United States, Microsoft Meta, Tesla, IBM, if we remember them, and then a day later on on Thursday, uh US time Apple report as well.
What impact will tomorrow’s big tech earnings have on AI‑related stock valuations?
So they will no doubt be quizzed about why their AI costs are so much compared to what's being done.
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Chapters
8 chapters
1
Did China's AI developments trigger a market panic and how did stocks react?
0:01–1:13
2
Why did US equities and oil prices rebound after yesterday’s sell‑off?
1:13–3:38
3
What impact will tomorrow’s big tech earnings have on AI‑related stock valuations?
3:38–6:01
4
Are new US tariff proposals set to increase by 2.5% each month?
6:01–8:33
5
What does the quiet U.S. data day mean for Australian markets?
8:33–10:10
6
What are the expectations for Australia’s Q4 CPI and trim‑mean inflation?
10:10–12:19
7
How are housing costs influencing the Australian CPI reading?
12:19–13:50
8
Which central banks are expected to hold or cut rates today?
13:50–15:10