War escalates, and Japan’s PM surprise
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How are the latest Middle‑East attacks affecting global markets?
So what impact, if any, will the Middle East have on markets now with increased tax on Lebanon and now Yemen this morning? A surprise choice for the LDP leader in Japan. The impact has been felt on currency markets. It'll no doubt be felt on Japanese equity markets this morning. We'll look at what it means for the Bank of Japan and why are the markets now even more optimistic than the Fed about the speed of cuts for the remainder of this year in the US? And it's Jobs Week, non-farm payrolls on Friday. It's Monday, it's the thirtieth of september twenty twenty four. It's the morning call from NAP. Good morning. Well, there was a slight fall in the US dollar on Friday. It finished the week about 0.3% down.
So that will uh a large part of that, or some of that, will be the rise in the yen. It shot up one point eight percent on Friday, most of that on the announcement of the new Prime Minister. The Aussie marginally up on Friday at just over sixty-nine US cents. Over the week it rose almost one and a half percent. It finished the week actually the highest it's been since February last year. Shares were mixed at the end of the week. The down Was up, but the SP fell from its record high. The Nasdaq fell 0.4% on Friday, but it's still up almost 1% over the week. Locally, the ASX was pretty flat over the week. It fell but came back again in the second half of the week. And there's uh a bit of action in bond markets.
Ten year treasuries down five basis points on Friday, down the same for 10 year bunds in Germany, yields falling even further in France. But let's remember, of course, those yields have been rising since the middle of The month they were at 3.62% for 10-year treasuries. They rose to 3.8% before Friday's fall. And oil rising, WTI is up three quarters of percent on Friday, Brent up half a percent to seventy-two a barrel. So I wonder how much of that is the influence of the Middle East and what that's doing to markets.
What did the US PCE data and bond‑yield moves signal for the Fed?
Here's Nabs Tappa Strickland in Sydney. So we had a late rally in oil prices on Friday. Energy stocks are at before. Performing the rest of the share market. The VIX index rose quite a bit on Friday as well, up uh to seventeen from fifteen and a half. Uh so how much of that is down to what's been happening uh with attacks on Lebanon and uh now over the weekend we've also heard that the IDF has been striking targets uh in Yemen as well. So, I mean this war it clearly is escalating. So is that what's doing it for for oil?
Good morning, Phil. Yes, later in the session in the on Friday definitely was those headlines coming in of those uh Israeli attacks in Lebanon. Uh and that did see uh oil lift, uh gold also uh staged a late rally and as you're noting energy stocks rallied. And I think the energy sub index was up two point one percent, even though the overall S and P five hundred was down zero point one percent. And that was also part of the moves in yields as well. So when you look at the intraday uh charted the US tenure yield. Um you can see clearly that the US tenure yield started falling when those headlines came through about those um about the Israeli attacks on the Middle East. Again, still very uncertain here and have been very uncertain for the past couple of months really, but what we do know is that um the head of Hezbollah um looks like he was um killed in those attacks.
Um clear exactly. And
and his deputy by the sounds of it as well. Yes, and it but
it's still very unclear exactly uh to what extent uh does the remnants of Hezbollah retaliate, uh to what extent does Iran uh retaliate in that situation. And that's where the key uncertainties are. Um at least part
of that is their ability to, you know, if all their proxies are being taken out one by one, perhaps they, you know, ev even if they wanted to, perhaps they don't have that capability.
And their uh missile strikes back in I think it was April of this year, uh proved pretty ineffective against Israel when when when they did them. So it's it's still unclear exactly what what a uh Iran can do, but the potential for this to escalate is definitely there.
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Chapters
8 chapters
1
How are the latest Middle‑East attacks affecting global markets?
0:01–1:44
2
What did the US PCE data and bond‑yield moves signal for the Fed?
1:44–4:18
3
Why is Shigeru Ishiba’s surprise election as Japan’s PM significant for equities?
4:18–6:37
4
How might the new Japanese leader influence the Bank of Japan’s policy direction?
6:37–9:12
5
What impact could China’s latest stimulus announcements have on global demand?
9:12–11:54
6
Why are market participants pricing faster Fed rate cuts than the Fed’s own outlook?
11:54–13:46
7
How does weaker‑than‑expected European inflation shape expectations for an ECB rate cut?
13:46–15:43
8
What are the key takeaways to watch for in this week’s US payrolls and employment data?
15:43–17:18