US spends, China stumbles. Consumers worry
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Why are US retail sales staying strong while China’s are falling?
US retail sales remain resilient, but the same can't be said for China. But the worry from Friday in the United States is that inflation expectations are ticking up further. And the Trump Putin summit didn't get a market reaction because, well, basically nothing happened. Next it's Trump and Zelensky and European leaders. Can we assume a similar result? But it is the week of Jackson Hole at the end of this week. An interesting time for central banks. How many times will the word A tariff be mentioned, although the title suggests the focus is more on labour markets. It's Monday, it's the eighteenth of august twenty twenty five. It's the morning call from Nab. Good morning.
What did the Trump‑Putin summit reveal about market expectations?
Well, US shares finished the week in subdued mode. We had a slight rise in the Dow on Friday, but the S P was down naught point three percent. The Nasdaq lost naught point four percent. The Eurostocks fifty, though, climbed naught point three per cent. The FTSE one hundred lost naught point four per cent and the ASX two hundred was up naught point seven percent. Lucky us, uh the US dollar lost naught point four percent on Friday on the DXY, pretty much what it lost over the entire week, finishing at ninety seven point eight five. eight five on the DXY. And the winners on Friday were the Euro up half a percent, the Yen up naught point four percent, the Aussie gained less than naught point two per cent and just over sixty five US cents at the end of the day.
Bond yields on Friday, uh well, we had a bit of a sell off. Yields up three basis points for Tenya Treasuries up to four point three two percent. It climbed only three basis points though over the entire week. But yields much higher in Europe on Friday up eight. basis points for ten year yields, uh for ten year buns, and up uh ten in France and Italy, most of Europe was uh at least eight basis points uh up except for uh UK GILTs, ten year gilts, which rose just six basis points. Aussie ten years finished the week at four point two three percent, and big falls in oil on Friday, WTI down one point eight percent, one and a half percent down for Brent to sixty five eighty five a barrel, actually down only one point.
one percent over the entire week though, last week it's fair to say. And he's back. He is Rodrigo Catrill, uh, from NAB in Sydney. Um, welcome back. It feels like I just finished talking to you. Uh so um let's have a look at uh that Trump Zelensky meeting, first of all. Let's get that out of the way. Because not a lot happened, did there, didn't it? Nothing concrete came out of it. No deal. Um Putin successfully managed to avoid uh any further sanctions, uh which is probably what he went in to achieve. Uh and no reaction from the markets 'cause there wasn't anything to react to.
How are US equity and bond markets reacting to recent data releases?
Well it's yeah, it's it's it's early days I suppose in terms of the market reaction. But um um uh the the interesting dynamic in that is that um you know when you say that, you know, it it's it seems that Russia is the one that got away with it in the sense that they haven't got uh these these sanctions, which was the big threat from President Trump. Um and yet uh President Trump and the Ukraine didn't get a any ceasefire or any any break. So uh but on on the other side it's probably fair to say that you know the fact that they're they're talking it's is positive um and hopefully this leads on to further talks on and some concrete outcomes. Um and from here, um you know there's a meeting now um with European leaders and Zelensky and and and the White House.
Um so maybe that leads on to something a bit clearer and then uh Um and then uh Whitcoff has also made some statements overnight suggesting that there is some sort of agreement close to something like along the lines of the Article five in terms of securities uh that uh the US would guarantee for the Ukraine. Just in the
Yeah,
so the Article five agreement is the NATO agreement. Basically if you attack any NATO country, all other NATO countries would come to their support, which would be like saying, Well, okay, if Russia attracts Ukraine, everyone is is going to go and f and defend Ukraine.
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Chapters
5 chapters
1
Why are US retail sales staying strong while China’s are falling?
0:01–0:38
2
What did the Trump‑Putin summit reveal about market expectations?
0:38–2:25
3
How are US equity and bond markets reacting to recent data releases?
2:25–10:33
4
What does the latest US consumer sentiment say about inflation expectations?
10:33–14:42
5
Why is the spread between corporate bonds and Treasuries narrowing?
14:42–15:09