Tariffs are back. How hard will Trump go?
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What are the new US tariff letters and when will they take effect?
Well it's rather quaint that in this electronic age the US is supposedly sending out letters to trading partners to let them know what their tariff will be, the supplied to goods that they ship to the United States. For some that will mean going back to the high rate applied on Liberation Day three months ago. That is going to be the big news along with locally the RBA and the RBNZ. And OPEG Plus pushes up oil supplies from next month too. That was announced over the weekend. Plus whatever. Elon Musk does with his new political party. It's Monday, it's the seventh of July, twenty twenty five. It's the morning call from Nab. Good morning. Well, last week was a short one for US equities, of course, just three and a half days really because of the Fourth of July holiday.
But enough time for the Russell two thousand to gain three and a half percent, the Dow to climb two and two point three percent, one point seven percent for the SP, one point six percent for the Nasdaq, all beating equities in all the other major economies. The ASX two hundred, for example, only rose one percent last week, with the full five days to work at that. The Eurostox six hundred was down half a percent. The US dollar uh fell further last week, down a quarter percent on the DXY, uh but worse for the pound, it fell half a percent last week. Uh strongest of the majors was the Canadian dollar and the Swiss franc, both at naught point six percent, with the Euro not far behind. The Aussie up just naught point four percent.
That's uh including a quarter percent fall on Friday finishing at sixty five point six US cents and ten year Treasury Yields rose almost seven basis points last week, compared to six for Aussie ten years, five in the UK, just one and a half percent for ten year bund yields and a fall of three percent, uh three basis points I should say in Italy. Uh and then there's oil. WTI climbed two point three percent last week, Brent up naught point eight per cent to sixty-eight thirty a barrel. But we've got some oil news that might change all of that. But uh it's um quite Right a week ahead if Donald Trump is gonna stick to his deadline uh for tariffs. Hey, it's also RBA week as well, so a lot going on. Here's an abstraatrol to help us get ready for it all.
Uh first of all though, before we talk tariffs, let's look at um just non farm payrolls. Uh I mean we've talked about it already on Friday. They were stronger than expected, but also driven by government jobs more than private jobs.
How did US equity markets perform after the July 4th holiday and what does it mean for global indices?
And obviously the market's closed on Friday and Uh for much of Thursday actually as well. So could we actually see a delayed response from from those numbers today as well, do you think, or is it all been done and dusted?
Uh morning Phil. Well, I mean the futures market was open on Friday, so just looking at how um, you know, ten year Treasury note futures traded, actually they were up um a a couple of thirty seconds of just the way that they're priced. Um you know, which is about one basis point decline in yields. So, you know, if you recall on on Thursday, you know, we did see, you know, bond yields did rise, particularly led by the short end. So we did have some scaling back of expectations for um the magnitude at least of of Fed rate cuts this year, although when it came to currencies the knee jerk US dollar positive response uh pretty much evaporated as we went through the remainder of the session. So um you know if there had been a second take, then it might have shown up in in in futures markets.
But um you know, there's no sign of that at least anyway. And uh you know, I do think that um you know, the sort of reflected view on the payrolls number was that, you know, partly for the reasons that you say, in terms of the dominance of of government jobs in driving the headline rise in payrolls and, you know, lots of talk that, you know, it was sort of the size of the labour force, if you like, that um, you know, helped explain why the unemployment rate fell when it was expected to increase. I think under the hood the view is that um you know it's nothing to really detract from the view that there is some
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Chapters
8 chapters
1
What are the new US tariff letters and when will they take effect?
0:01–2:12
2
How did US equity markets perform after the July 4th holiday and what does it mean for global indices?
2:12–4:27
3
What did the latest US non‑farm payroll numbers reveal about the labour market?
4:27–7:05
4
Will the “Big Beautiful Bill” signed by Trump impact US debt and market sentiment?
7:05–9:43
5
How will OPEC+’s decision to increase output affect oil prices and US drilling?
9:43–13:02
6
What are the expected tariff rates for the EU and Japan and how might negotiations unfold?
13:02–16:21
7
What does Australia’s household‑spending data suggest for the upcoming RBA decision?
16:21–16:46
8
How is the Bank of England’s rate‑cut outlook shaping up and what are the implications for the UK?
16:46–16:46