NAB Morning Call Deal and no deal
May 19, 2025
In this discussion, economist Taylor Nugent from NAB analyzes the transformative UK-EU deal that eases food export checks while safeguarding fishing waters. He dives into market reactions to international relations, particularly the muted response from the Trump-Putin talks amid rising inflation concerns. The podcast also unpacks the impact of recent U.S. legislation on economic sentiment, alongside predictions about the RBA's interest rate cuts amidst a backdrop of mixed economic signals from China.
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Limited Impact of Moody's Downgrade
- The Moody's downgrade impacted US Treasury yields and equity markets initially but had limited lasting effect.
- The downgrade highlighted fiscal concerns but didn't shift fundamental market trends significantly.
30-Year Treasury Yield Dynamics
- 30-year Treasury yields peaked due to fiscal concerns but then eased as no drastic fiscal policy changes emerged.
- Fiscal deficit trajectory remains unchanged despite monetary movements.
US Fiscal Bill's Debt Impact
- US fiscal bill clears first hurdle, extending tax cuts and increasing spending in areas like defense and farming.
- This legislation will likely add to the US's rising debt trajectory without fiscal constraints.