War escalates further. Stagflation?
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How are oil price spikes and war escalation impacting global markets today?
The war is escalating, oil prices are rising, with two major oil fields in Iran now out of action. The Aussie dollar has taken a hit as globally share prices fall and bond yields rise. And the RBA governor has got more of the market thinking the next great rise could be as soon as this month. It's a live meeting, she reckons. It's Tuesday, it's the fourth of March, 2026. It's the morning call from NAP. Good morning. Well, oil prices have continued to head up north, up another uh six and a half percent or so for Brent and WTI. Brent is below eighty three a barrel now, but it touched eighty five yesterday. Natural gas up six percent. But gold well maybe now the uncertainty is removed, I guess. We know it's bad.
Uh it's down four point seven percent today after a four day rally. The US dollar has strengthened further, it's up another naught point nine percent. It touched uh ninety nine point. Almost on the DXY. The Aussie has lost one percent. Uh it's taking the biggest hit out of the majors, down to seventy and a quarter US cents and dipping below sixty-nine and a half overnight. And shares are low again, another one point four percent off the Nasdaq and the S P this morning. Uh but much bigger falls in Europe where the Eurostocks fifty is down three point six percent, similar for the DAX and the CAC Carrant. Uh in the US uh prices are down across All sectors, but materials has hit the hardest. And bond yields are higher.
Up three basis points for 10-year Treasuries, now 4.07%, up four basis points in Germany, up 10 for UK 10-year GILTs. Aussie 10 years. We're up 14 basis points yesterday to 4.77%, close to 4.8% this morning on futures. And Nabs Reattrel uh joins me today.
Why is the Australian dollar hitting the weakest spot among major currencies?
So um Gold is the only asset I think which has which has turned. Everything else is just heading in the same direction as yesterday, as though this crisis is only going to get worse. And we saw yesterday how it you know, the crisis is now including attacks on Lebanon. Uh the US has hit the building in Tehran where the clerics get together to elect the next supreme leader. I mean the question is still how long is this gonna go on for? But uh it seems like um, you know, it's setting in for a A long battle, doesn't it?
Yeah, good morning, Phil. And um and everything that you know, from coming out of the mouths of officials and central bankers in particular overnight is all, you know, focused very much on, you know, the extent and then longevity of the um of the dispute and and you know and how that's gonna uh impact oil prices. So, you know, central bankers are um, you know, w without actually saying the words, are implicitly muttering the sort of stagflation word. I think. Um I suspect if I have a dollar for every time I hear that word between now and the end of the week, you won't you won't have me on the podcast next week 'cause I won't need to be here. But um but I think the imp important point about overnight price action
Is that the two um the two prices that I'm looking at, um you mentioned gold, but also mentioned the Aussie dollar. Aussie dollar is the weakest performing currency. And given the extent of sell-offs that we're seeing, particularly in European equity markets that you've mentioned, but also um emerging Asian markets. So we had a really bad day on Monday and another bad day Tuesday for for EM risk assets. In particular. And what I think we may be starting to see here is what we call good for bad trades, where you know, if you're a bank or a trader or a hedge fund running risk, um, and a lot of the positions that you have are offside, given the extent of the falls that we've seen, then effectively you have to take profits on the profitable positions that you have been running.
And when it comes to currency markets, the Aussie has been the best performing currency this year and obviously across asset markets globally, gold has still been pretty much the best performing asset. So if you've got profits sitting on those those assets, then the risk manager may be tapping you on the shoulder and say you're in breach of um what we call the VAR or the value at risk limits.
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Chapters
8 chapters
1
How are oil price spikes and war escalation impacting global markets today?
0:01–1:40
2
Why is the Australian dollar hitting the weakest spot among major currencies?
1:40–4:14
3
What does the term “stagflation” mean in the context of today’s data?
4:14–6:54
4
How are central banks in the US, Europe and Australia reacting to rising inflation expectations?
6:54–9:29
5
Could the closure of the Strait of Hormuz trigger a full‑blown energy crisis?
9:29–12:23
6
What do the latest Eurozone CPI numbers suggest about future ECB rate moves?
12:23–14:34
7
How are US Treasury yields and bond markets responding to the geopolitical shock?
14:34–17:11
8
What are the key takeaways from China’s PMI and US ISM data for the coming weeks?
17:11–18:52