Trump strikes a blow with copper

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NAB Morning Call 18 min 2 speakers 8 chapters transcribed 19 days ago
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What impact does Trump’s 50% copper tariff have on global markets?

Phil Dobbie 0:01
Donald Trump has struck the global export markets a blow with copper. Ow, that hurts. More specifically, 50% tariff on copper exports to the United States. And the EU may be close to a deal, but no new letters today. Nothing for Australia. Maybe it's got lost to the post. And the RBA, yesterday, we'll look at what a surprise that was. And the NAB Business Survey and the RBNZ today. Plus sky's on today, so lots of bond tour. It's Wednesday, it's the ninth of july twenty twenty five. It's the morning call from NAP. Good morning. So after the RBA meeting, Aussie bond yields up per eight basis points yesterday to four point two six percent on futures now, more like four point three five. So another eight or nine basis points on top of where we were yesterday.
Phil Dobbie 0:44
That compares to rises in yields of just four basis points for ten year treasuries and German bundles and across much of Europe as well, actually. A lacklustre day on equity markets, the SP has barely moved ever so slightly in the red. The Nasdaq is flat as well, the down. Now is down naught point four percent, all at the close in the US, but the Russell two thousand, which took a hit yesterday, in this session, closing up naught point seven percent, buying the dip maybe, because there's not a lot to be enthusiastic about, it's fair to say. Uh shares doing better in Europe, the Eurostocks fifty, the DAX, the CACCurrant, the FTSE one hundred all closed up just short of naught point six percent up.
Phil Dobbie 1:20
Uh a tiny bit of movement in the US dollar, but it's pretty much where it was twenty four. Hours ago. The Aussie though, 0.6% stronger. The yen is up half a percent, but just 0.1% for the euro and 0.1% lower for the pound. And oil today, higher again, despite the best efforts of OPEC Plus. So WTI is up 0.6%. Brent is up 0.8%, getting over $70 a barrel. Sky Masters is with me today from NAB in Sydney. First of all. Uh we can't ignore it, can we? That decision yesterday from the RBA

How did Aussie bond yields react after the RBA’s surprise decision?

Phil Dobbie 1:54
It was a surprise. A hold. So uh what is your take and it's only one meeting. I mean uh but you know, but I mean everyone it was fully priced. So what's your take on the reasoning?
Skye Masters 2:05
Yeah, Phil i it was it was a big surprise for um for the market, for for participants. Um and you did see that that reaction in um bonds and the currency, bond yields spiking higher and the Aussie dollar. pushing higher against against the US dollar. Look, um yeah I guess a lot of people scratching their heads, uh, maybe a little bit annoyed that um given that the market was so well priced for the cut that The RBA didn't find some way of directing the market off that that pricing. Um Yeah, my my view there is is it's not up to their it's not up to them to direct um traders in terms of what their expectations are going into into the meeting. But if if you look at their their commentary or their assessment yesterday, um, you know, the the view was that
Skye Masters 2:54
Recent data is that, you know, labour market can you know, outcomes have been a little bit stronger than they had expected. Um, although there there's a bit of a concern around the consumption pickup which is a little bit slower. um than expected, while inflation at the margin they think might be a little bit stronger than expected and I can dig into that in a in a second. But You know, those assessments actually are in line with what Nab is looking it's how Nab is looking at the data as well. Um, but you know, it's just it's just a difference in timing. Um the RBA obviously wants to be a little bit more cautious, wait till uh the August meeting where potentially they they could cut and that that's where
Skye Masters 3:33
That's where the difference is and and Michelle Bullock did did really point that out. It it's it's not what it it's the timing that's different, not the direction. So so she she said that a couple of times in terms of sort of directing the market that they are still in an um an easing policy stance. Um they just wanted to wait for a little bit more data and and she noted that by the August um meeting, which is in five weeks time, the board's gonna have an update on inflation, so you'll have your quarterly your Q to inflation print.

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