NAB Morning Call The only way is up
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Dec 8, 2025 In this discussion, Taylor Nugent, a NAB Markets economist, shares insights on bond yields and central bank policies. He explains how rising European bond yields are influenced by a hawkish ECB, while the U.S. grapples with uncertainty on rate cuts. Taylor also highlights China's rebound in exports and its shift towards boosting domestic demand. Further, he analyzes Japan's wage growth and the Bank of Japan's outlook. Lastly, the NAB business survey is poised to provide critical insights into capacity utilization.
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Bond Yields Are Repricing Globally
- Global bond yields are rising as investors shift from easing to possible tightening in 2026.
- NAB's Taylor Nugent links recent moves to changing expectations across major central banks.
ECB Hawk Signals A Policy Shift
- ECB policymaker Schnabel signalled the next move is likely up, citing stalled core inflation and a recovering economy.
- Markets now price a small chance of ECB tightening by end-2026, shifting from prior expectations.
US Yields Signal Fewer Fed Cuts
- US yields rose despite an expected Fed cut this week, reflecting markets trimming the depth of future easing.
- Pricing now implies one immediate cut and fewer total cuts across 2026 than previously expected.