Weaker dollar, rising inflation, falling US shares. Not so rock n’ roll America.
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Why did Donald Trump call for lower rates and higher tariffs on Truth Social?
Donald Trump wants rates lower alongside his higher tariffs so America can rock and roll, he says. So what does Jerome Powell think of that? Because he was giving testimony to the House Committee overnight. He probably thinks a surprise rise in inflation is a bigger concern. And a weaker dollar and falling share prices? Well that's not so rock and roll, is it? It's Thursday, it's the 13th of December, 2025. It's the morning call from NAB. Good morning. Well the US dollar falling again today did fall naught point two percent not so long back. It has picked up from that, so it's only marginally in the red. The Aussie now, though down naught point two percent, sitting a little above sixty two point eight US cents.
The euro is up a third of one percent. The yen uh down one point three percent, and ten year treasury is up ten basis points to four point six three percent. Uh yields are also up in Germany, five basis points, up nine in Canada. Aussie ten years yesterday. We were up seven to four point four six percent, uh just one or two basis points down from that on futures this morning. And US stocks not doing well, half a percent off the Dow, naught point three percent off the S P at six thousand and fifty two. It did get down to six thousand, but has bounced back up from that. And the Nasdaq is flat, only just in the green. The Russell two thousand is down naught point nine percent. Whereas in Europe the Eurostocks fifty is up
Point three percent, uh so is the FTSE one hundred, the DAX is up half per cent, the Hang Seng, incidentally, yesterday, up two point six percent. And big falls in oil this morning, WTI is down two point seven percent, Brent down two point four percent to just around seventy five ten a barrel. So JB Wears Sally Old joins me today. Uh well this is another day of an exceptional uh American exceptionalism, isn't it? I mean the dollar weaker
What is driving the euro’s rise and European equity gains today?
Shares falling. Uh I mean obviously it couldn't go on forever. But I mean we uh have we reached a bit of a reality check, or is all of this just a response to the CPI numbers, which were a surprise. I mean jumping higher up half a percent in January from naught point four percent in December was actually expected to fall a bit from that. So uh so year on year we're up at three percent now.
Yeah, so I think there's there's quite a lot in that question, Phil. So let's let's go to the first part about US exceptionalism. And I think what's been interesting so far this year, and you know, I guess we're we're sort of six or so weeks um into into twenty twenty five and what we've really seen across markets has been quite an interesting reversal of many of those really dominant investment trends that prevailed in twenty twenty four, particularly in the in the back half of the year when That US exceptionalism narrative was really, you know, the very dominant driver of of flows in markets. And so what I mean by all of that is, you know, when we look at equity markets, you know, this year so far, European equities are outperforming US equities, which you know is a is a real turnaround.
If we look at the Magnificent Seven They're not really keeping pace with the broader S and P index, which i again is a little bit of a change. You know, the Yen is rallying against um pretty much all of the the G ten FX complex. And so, you know, Aussie equity is outperforming US equities. And so wherever you look, you know, it feels like there's a bit of a reversal of some of these very prevalent, very uh widely held, I guess, um investment things. So why is that
do you think? Because investors were oversold a promise and now reality's coming to roost?
Yeah, well I guess um you know, we started the year with so much priced in, you know, markets were sort of really convinced that, you know, the it was onwards and upwards for the AI trajectory. You know, even the broader S and P five hundred, you know, pretty expensive valuation metrics, very optimistic earnings growth. You know, the the economic consensus was that growth would be fine and that inflation would kin continue to fall and the Fed would continue to cut.
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Chapters
8 chapters
1
Why did Donald Trump call for lower rates and higher tariffs on Truth Social?
0:01–1:41
2
What is driving the euro’s rise and European equity gains today?
1:41–4:14
3
How did the latest U.S. CPI surprise affect inflation expectations?
4:14–6:48
4
Why are U.S. stock indexes slipping while the dollar weakens?
6:48–8:44
5
What explains the reversal of U.S. exceptionalism and the outperformance of European markets?
8:44–10:59
6
How is Jerome Powell’s testimony shaping the Fed’s rate‑cut timeline?
10:59–13:00
7
What impact could a cease‑fire in Ukraine have on the euro and European growth?
13:00–14:50
8
Which economic releases (NZ retail sales, UK GDP, US jobless claims) are coming up next?
14:50–16:18