US inflation, jobless claims and equities, all pushing higher.
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What did the latest US CPI numbers reveal about inflation trends?
USCPI has reinforced the thinking that the Fed will cut not just in September but two more times this year and more next year. Still quite a way to go. But not for the ECB. They stayed on hold. And the assumption is their job is done. But what can they do about the low growth in Europe? Speaking of low growth, UK GDP today and unemployment claims in the United States overnight slowly climbing as well. Not fast, but definitely on the Rise. It's Friday, it's the twelfth of September 2025. It's the morning call from Nab. Good morning. So the US dollar was rising until those CPI numbers came out. Now it's down a quarter percent on the DXY for the day. The Aussie is pushing up higher, a naught point seven percent up.
Again, it's a standout against the other major currencies. It's up to sixty-six point six US cents now. The pound and the euro both up about a third of one percent. And US equities are higher. Actually record highs across the board, one point four percent added to the down, not point nine percent for the S. The Nasdaq is up naught point seven percent, one point eight per cent added to the Russell two thousand. Oracle's share price is down today, down six point five per cent. So Larry Ellison is no longer the world's richest man, at least he had a taste of it. And shares are back on the up in Europe, naught point eight per cent higher for the FTSE one hundred and the CAC current, not point five percent for the Eurostocks fifty, and not point three per cent for the DAX and bond yields lower, down three point.
How are US equity markets reacting to the recent CPI and bond‑yield moves?
Basis points for ten year treasuries down to four point zero one percent now, but it did get below four percent earlier in the session. Uh down four basis points for ten year yields in the UK as well. Aussie ten years yesterday were down four basis points to four point two three percent. Uh not much change from that overnight. And oil lower, two percent off WTI, one point seven percent off Brent, which is down to sixty six thirty five a barrel now. Uh This down a bit as well, but earlier in the week, of course, on Tuesday, it did reach another all-time high, and it is up thirty-nine percent year to date in amongst all of this uncertainty. And it's Nab Sally Olds joining me today. So let's start with US inflation.
Not a big surprise, the core rate three point one percent year on year, uh and up naught point three percent for the month in August. If we take it to the second decimal place though, that's naught point three five percent, which is actually the highest it's been since Jan January, isn't it?
Yeah, good morning, Phil. Yes, that's right. So, you know, all things considered, yes, it did come in broadly in line with expectations, but it was really uh, you know, only a whisker away from from being a number that might have uh you know felt a little bit more uncomfortable for markets. But so as you said, you know, the headline uh two point nine percent year on year, that was uh up four tenths of a percent in the month, and it was really food and uh energy prices doing the damage there. The core, uh, you know, up point three five percent and the annual rate there is uh three point one. But what we did see is core services firming again. So this was driven by shelter prices, uh so basically the cost of housing and then also travel.
And uh core goods prices firmed as well. Um, in part that was due to uh vehicle prices, but even if we look beyond that, you can you can still see uh you know some moderate tariff pass through in those numbers. So, you know, when economists um you know take the bits and pieces out of the CPI release that feed into The core PCE deflator, uh which is the one that you know the Fed cares about the most, it looks like that'll be up a little bit over two tenths of a percent in the month of August. Uh and that'll see the annual rate hold at about two point nine percent.
What does the Fed’s projected rate‑cut path look like after the CPI release?
So that's un unchanged from the prior month. But if we look in three month annualized terms, just to sort of try and get a sense of the underlying pulse, uh, that rate will shift up to uh just a little bit over over three.
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Chapters
8 chapters
1
What did the latest US CPI numbers reveal about inflation trends?
0:02–1:25
2
How are US equity markets reacting to the recent CPI and bond‑yield moves?
1:25–3:35
3
What does the Fed’s projected rate‑cut path look like after the CPI release?
3:35–5:25
4
How are weekly US jobless claims indicating labour market weakness?
5:25–7:08
5
Why is the ECB keeping rates on hold and what does its growth forecast imply?
7:08–9:00
6
What impact are tariffs having on current inflation and future expectations?
9:00–11:12
7
How are UK GDP and PMI data shaping expectations for the Bank of England?
11:12–13:09
8
What are the key takeaways for New Zealand’s economy and upcoming data releases?
13:09–15:10