The Day After, Tariff Doubts
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How are markets reacting to Trump’s first full day in the White House and the expected tariff delays?
It's the first full day for Donald Trump in the White House, and markets are already assuming that tariffs might take a bit of time and perhaps won't be as pervasive as he was initially letting on. Meanwhile, a massive infrastructure announcement is due. We'll look at how the markets have responded after a long weekend. And bad news for New Zealand and the UK. Better news for Canada. It's Wednesday, 22nd of January, 2025. It's the morning call from Nab. Good morning. Well the US dollar has fallen a little further today, but it generally it is in line with the lows that we saw yesterday at a hundred and eight on the DXY, but the Aussie is also down, uh sticking around sixty two point seven US cents. The pound, the Swiss franc and the Euro all marginally up, all around naught point one percent high.
US equities are up. The Dow closed up one and a quarter percent, naught point nine percent for the S P five hundred, not point six percent for the Nasdaq. In Europe, the Eurostocks fifty. is flat, the FTSE one hundred up a third of one percent at close, the DAX up a quarter percent. US ten year treasury yields are down seven basis points to four point five six percent and yields down elsewhere as well, down seven basis points in the UK, down eighteen in Mexico, the Mexico peso, incidentally down naught point six percent today as well, as you might imagine. And oil, well it's well down. Again, two point six percent off W T G.I. 0.9%. That's all off Brent. I don't know. Is this due to the drill baby drill mantra from Donald Trump?
We'll talk about that today, because that obviously is now embedded in an executive order along with a whole lot of other things. Spot gold is up one and a quarter percent as well. So it's day one. Here's uh Nab's Gavin Friend in London. So what is your take on how the markets have responded to this first twenty four hours of the new Trump president?
What does ‘drill‑baby‑drill’ mean for US oil production and global oil prices?
Presidency, the what has been the response to this golden age for America which we are now apparently in, Gavin. Um
yeah, I mean it's a day a week. as well as day devoid of key economic data uh releases. And so we uh you know, to your point when we get chance to reflect on US President Trump's high level policy announcements, uh, twenty four hours ago and obviously that stream of executive orders. Um you know, outside of there being Little for investors to chew on regarding Trump's uh President Trump's recent campaign pledges to end inflation on day
one. Well he said two things, didn't he, in his inaugural speech. One he said there was too much debt. That was creating inflation. Mm-hmm. And the other one on the other one was yes, oil prices. And by creating a lot more oil, drill baby, drill is gonna bring those prices down and that's gonna defeat inflation. Yeah,
debt's obviously a a a a much bigger longer term issue, which, you know, he hasn't got to yet. But um in terms of the the energy thing, I mean the issue, you know, with that idea of maxing out uh oil and gas production, you know, if that is part of the plan, uh, is that the US is already pumping out circa thirteen And a half, thirteen point four million barrels per day of oil, which is a record. It's not clear uh the oil and gas industry will actually respond to the call to drill baby drill. Um, you know, it's because it's found something of a balance in production, you know, supply and demand at the moment that's generating some positive cash flows.
for that industry. Do you think that's why we've seen we've had a couple of days of oil down. Do you think that is on the basis of this, you know, fear that there might be a an increase in supply? Although from what you're saying, well that's probably not going to happen.
Yeah. In in a week where we don't really have anything else to drive prices other than comments and policy announcements, you can understand why the market has done that. Um You know, in terms of the US needs for for for keeping inflation low, I mean they that the interests there will be served best by the Trump administration's, you know, treading a a reasonably steady path on tariffs on on the on the three B policy pronouncements are tariffs, immigration, depri uh di uh deportation and and tax cuts.
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Chapters
8 chapters
1
How are markets reacting to Trump’s first full day in the White House and the expected tariff delays?
0:01–1:46
2
What does ‘drill‑baby‑drill’ mean for US oil production and global oil prices?
1:46–4:19
3
How might the US use tariffs as leverage in trade deals with Europe, especially for energy and defence?
4:19–6:44
4
What are the implications of possible US tariff alternatives like Section 891 tax changes?
6:44–9:18
5
Why is Europe still buying large volumes of Russian gas and how could US LNG affect that balance?
9:18–11:38
6
What is the outlook for New Zealand’s economy after the recent contraction in services?
11:38–14:17
7
How are the UK’s rising wages, unemployment and regulatory costs influencing monetary policy?
14:17–16:08
8
What can we expect from upcoming infrastructure announcements and central‑bank rate moves in the US, Canada and Europe?
16:08–17:11