Working through the detox
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Why is the market in a “detox” and how is it affecting US stocks and the dollar?
The US dollar might be weak, shares might be down in the US, but it's all part of the detox, says Scott Besson, as the economy adjusts from government spending to private sector spending. That's the plan. But right now, shares down, the dollar down, bond yields rising, and there does seem to be a shift in spending to Europe, which wasn't exactly the plan for the United States. But maybe that's just going to inspire more tariffs, some of which could come as early as today, if only because it's a Day with why in it. It's Monday, see what I mean? It's the tenth of March twenty twenty five. It's the morning call from Nab. Good morning. So a bit of a rally for stocks in the US on Friday, but not enough to be in positive tier T for the week.
So the Nasdaq up naught point seven percent on Friday, but down three and a half percent over the week. The S P up naught point six percent on Friday, but losing three point one percent, even with that climb on Friday. In Australia the ASX two hundred had a bad day and over the week it lost two point seven percent. So who are the winners? Well there's not many, but the Hang Sang Which lost on Friday, still managed to climb five point six percent over the week last week. US yields were higher over the week. Ten year treasuries up a little over two basis points on Friday and a little over nine across the week, but obviously that is nothing compared to what's happening in Europe. German ten year bunds up forty three basis points last week, up forty two in Italy.
Higher. Aluminium three point eight percent last week. Copper up three point six per cent, even with a two percent fall on Friday. Gold up two point three per cent, but oil much lower, although higher on Friday. Brent was up one point three percent, but still three point nine percent down over the week. Same for WTI and Brent now hovering just over seventy a barrel. And currencies, well another fall for the US dollar on Friday over the week down three and a half percent on the DXY doing the best. The Swedish Krona up six point four percent with naught point eight percent of that on Friday. The Aussie meanwhile down naught point four percent on Friday but up one point six percent over the week. So let's start on currencies today with Nav Dreatural in Sydney.
What are the latest US Treasury and European bond‑yield moves and why do they matter?
So last week the Swiss franc up two point six percent, the yen up one point seven percent, both safe haven currencies, so is the US dollar supposedly. But it was down three and a half percent and the Aussie normally struggles when there's any risk around, but it managed to climb one point six percent. So does this I mean, maybe there's not a big risk, but it feels like there is. So is is the US losing its safe haven status through all of it? This is the U the US dollar?
Uh yeah, good morning, Phil. Uh um it's difficult to say because there's obviously a lot of uh optimism regarding um you know, prospects for you know, an early ceasefire eventually or leading to be uh to a peace agreement. And in that sense, I think, you know, one of the uh the key drivers of market moves has been the loss of the whatever you want to call it, the uh the war premium, if you like. And and that's most evident, I think, in the Swedish crone. So obviously the euro has been a big part of the story there. But as we talked about last week, a lot of that has to do with this massive about flip by the incoming German government and the prospects for substantial increases in defence spending and infrastructure spending, how that's going to be financed through sharply increased bond issuance.
If you look at what's been happening with yield differential And particularly in real terms, it's worth emphasising. So US Treasury yields have been slipping, um, not down as far as four, but but not too far short of it, at the same time as you noted, that forty three basis point increase in bund yields. But then think about it in real or inflation adjusted terms, which what tends to matter for currencies. And obviously you've had higher inflation expectations in the US. So that's making real yields.
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Chapters
7 chapters
1
Why is the market in a “detox” and how is it affecting US stocks and the dollar?
0:01–2:07
2
What are the latest US Treasury and European bond‑yield moves and why do they matter?
2:07–7:02
3
How are major currencies – the Aussie, Euro, Yen and Swiss franc – reacting to the yield shift?
7:02–9:20
4
Is the US losing its safe‑haven status and what does that mean for the DXY?
9:20–11:50
5
What impact could new tariffs on steel, Canada and China have on global markets?
11:50–15:18
6
How are Canada’s employment data and the Australian budget influencing investor sentiment?
15:18–18:39
7
What does China’s recent deflationary CPI signal for the world economy?
18:39–19:00