US dollar stalls, the Tariff drip feed, markets await CPI
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How will Donald Trump's drip‑feed tariff plan affect inflation and the US dollar?
Well, Donald Trump reportedly will drip feed his tariffs so they don't cause sudden inflation, according to Bloomberg this morning. The Wall Street Journal is reporting on Trump's plans for energy dominance from day one and the dollar. Its growth stalls for once and markets holding out for the CPI print today for the United States, also for the UK, which seems to be feeling a whole lot of hurt lately. It's wedding state's the fifteenth of January twenty twenty five. It's the morning call from Nab. Good morning. Well, the rise and rise of the US dollar has stalled. Well, for today at least, it's an actually down naught point seven percent on the DXY, but that's helped the Aussie, which is up but only just uh point two percent this morning.
Uh the euro is up naught point six percent, the pound still in trouble today. It is flat despite the falling dollar. The yen is down by naught point three per cent and a bad Day on the stock market. Well, it was until things turned around a bit in that last hour of trade. Uh the Dow has suddenly turned green and actually finished up half a per cent. The S P also changed colour and ended up naughty one percent higher. The Nasdaq, which was uh three quarters of a percent in the red, uh is now just a quarter percent down, and the Russell two thousand, well that was pretty much flat uh before the hour of power. Then it finished up by one point one per cent. So go figure. Uh the Eurostocks fifty, meanwhile, that closed half a percent up, the FTSE one hundred down by a quarter percent, and bond yields still going up.
Well, ten year treasuries were, but they've uh flattened out now, but yields are up four basis points for ten years in Canada and Germany. Aussie ten year yields yesterday were down two basis points to four point six one percent, now seven basis points up from that on futures. And oil is falling down one point three percent for WTI, down one point one percent for Brent, but it's still over eighty a barrel, but only just. And JB Wears, Sally Old, is with me this morning. So we've had the uh the US PPI numbers uh overnight. Uh it looks like markets have uh eased back a little perhaps ahead of the the CPI print today, uh there's quite a bit resting on this snap, isn't there, this time round. And I'm just wondering how much the PPI gives us a sort of a prelude to what we might see in that CPI print.
Morning, Phil. Yes.
Why has the US dollar’s recent rise stalled and what does it mean for global markets?
So the US PPI, that was actually a bit softer than people expected. So the headline was up two tenths of a percent in December. The core number was flat, and and that was basically, you know, both core goods and core services were flat in the month. But there were some, I think, quite meaningful revisions um to the data. And so the annual rates for both of those series are still hovering, you know, broadly around the mid three. Um You know, while it's a little bit of a a preview to tomorrow's CPI number, I guess, you know, from a forecasting perspective, what what matters is the information that it might give us um about where the core PCE is going to settle for December and that's the measure that, you know, we we know the Fed I guess cares most about in that inflation complex.
And there's a little bit of stuff that you can pull out of the PPI to help you firm up that forecast. Um most of it's gonna come from tomorrow's CPI release. Um but uh the the data that we did see was perhaps just a a little bit stronger than expected and so there have been some forecasters overnight who've just nudged up their estimate per core PC by really small amounts, like four basis points, you know, give or take. So not not a not a huge um game changer. But as you said, the market does appear to be on, I guess, high alert for the next inflation release and, you know, that comes on the on the back of Payrolls numbers, which are stronger than expected, a pretty material repricing um in the US front end as as the market is now less convinced about the prospect of near-term cuts in the US.
And so we go into tomorrow night's number with the market looking for a point four of a percent rise in the headline measure um and a point three percent rise in the core measure.
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Chapters
8 chapters
1
How will Donald Trump's drip‑feed tariff plan affect inflation and the US dollar?
0:01–2:24
2
Why has the US dollar’s recent rise stalled and what does it mean for global markets?
2:24–6:09
3
What does the latest US PPI data tell us about tomorrow’s CPI release?
6:09–10:03
4
How are Fed speakers shaping expectations for near‑term rate cuts?
10:03–12:50
5
What impact could Trump’s gradual tariff rollout and energy‑dominance agenda have on oil and gas prices?
12:50–16:18
6
Why is Australian consumer confidence slipping and how is credit growth influencing the Aussie dollar?
16:18–18:24
7
How will UK CPI data and the Chancellor’s budget affect the Bank of England’s rate path?
18:24–19:09
8
What does the latest New Zealand business confidence survey reveal about hiring and investment trends?
19:09–19:20