Wafer thin difference

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NAB Morning Call 16 min 2 speakers 8 chapters transcribed 22 days ago
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What are the key U.S. market moves and commodity trends this morning?

Phil Dobbie 0:01
So the time has come. America will be going to the polls soon. It will take a while to get the answers, no doubt. But we'll look at how the markets have moved, particularly after a weekend poll that showed in Iowa at least Kamala Harris has a stronger lead. Plus the RBA today. Will they try and push back the expected timing of a rate cut? And oil as well, much higher today. What's going on there? It's Tuesday. It's the 5th of November, 2024. It's the Morning Call from now. Good morning. Well, energy markets today lower in the United States, down 0.6% for the Dow at close. Maybe a NVIDIA can help them out of that soon. The S&P down 0.25% at close as well. The Nasdaq has lost 0.3%. But the Russell 2000 today is up 0.4%.
Phil Dobbie 0:44
In Europe, the Euro stocks 50 closed down 0.5%. The same ballpark for the DAX and the CatCo aren't. But the FTSE 100 up ever so slightly. Big falls in Japan yesterday. The Nikkei was down 2.6%. The US dollar has slipped 0.4% on the DXY. The Aussie is up 0.4%, up over 65.8 US cents now. The euro also up 0.4%, just 0.2% up for the pound, though. The yen is up 0.6%. And bond yields are falling, down nine basis points for 10-year treasuries in the United States, down four in Canada, but much less in Europe, down just one basis point for 10 years in Germany, down two in France, Italy and Spain, and up one basis point for 10-year gilt yields in the UK. And just like the US, 10-year yields in the UK are up 33 basis points in the last month.

How did the weekend Iowa poll swing toward Kamala Harris and why does it matter?

Phil Dobbie 1:35
Despite all the protestations over their budget, they're up just as much as the United States. But Aussie 10 years over that period, up 47 basis points up two basis points yesterday to 4.56 percent on futures overnight a few basis points higher than that actually so that's not been factored into that 47 over the month so maybe that should be 50 in a month and oil is bouncing back up a three percent rise in WTI 2.9 percent for Brent up over 75 a barrel now energy stocks in the US are up 1.9 percent today as well So Tapa Strickland is with me today. I'm from NAB in Sydney. So it's the big day, of course, in the United States when they get around to it. The big election day, although we won't know the outcome until much later than this time tomorrow.
Phil Dobbie 2:18
In fact, the polls won't even have closed this time tomorrow. So there's a bit of a waiting game. But there was a poll over the weekend. An opinion poll showing a strong swing to Kamala Harris in Iowa with a three point lead over Trump, 47 percent to 44 percent. That is a swing that's been driven largely by older women voters. And, you know, perhaps there's a question mark over the same thing, whether that could happen elsewhere in the United States. Markets have responded to that anyway, haven't they?
Tapas Strickland 2:48
Good morning, Phil. Yes, some pretty interesting results in polling coming out of the weekend. And the first thing to note is Iowa isn't considered a swing state traditionally. So if you're seeing a swing there, then maybe that does portend a bigger swing nationwide. And so that's what markets, I think, were reacting to. But when you actually look at the market reaction, what you got? US 10-year yields moving by about 8 to 9 basis points. You've got the US dollar down by 0.4%. Relatively Relatively mild moves, you'd have to say, if people were starting to unwind some of their positioning trades in terms of the possibility of a Trump presidency. And I think when you go back down to the polling averages, most of the nationwide polling averages are pretty much a tie.
Tapas Strickland 3:28
And the nationwide polling averages from, say, polling... Aggregators such as Real Clear Politics puts it at pretty much a tie. And in the battleground states, Trump leading just marginally by 0.7.

What does the Iowa poll reveal about potential national swing dynamics and older‑women voters?

Tapas Strickland 3:40
So despite that poll in Iowa, it's still broadly seen as a toss up. And 538's Nate Silver, who does some election modelling. he currently puts a Trump victory at a 50.4% chance versus 49.2% for Harris. So pretty much a dead heat still. So still very unclear exactly who will be the winner coming out of the US presidential race. And I guess for markets, the three key points is who actually controls the House and the Senate.

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