NAB Morning Call

Tuesday 25th March 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe US dollar climbed a little today as US equities rallied, led by the Magnificent Seven. It’s like the good old days of American exceptionalism, but will it last or is it a brief stint of buying the dip? That’s a question Phil puts to NAB’s Sally Auld. Some of the ‘hope’ might be driven by confusion over tariffs. At a cabinet meeting today President Trump talked about auto and pharma tariffs being imposed soon, without mentioning the broader tariffs expected on April 2nd. Oil prices pushed higher as he announced tariffs on any country buying oil from Venezuela. Also, why has the Yen fallen so far today? Hosted on Acast. See acast.com/privacy for more information.

Monday 24th March 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe clock is ticking close to April 2nd when the Trump administration unleashes its comprehensive tariff program. As Liberation Day nears, NAB’s Rodrigo Catril wonders whether claims of the end to American exceptionalism were premature, with the US dollar manages to climb a little and equities seeing a few positive sessions. Today’s PMIs will be telling – do European purchasing managers have a more positive outlook than their American counterparts? As expected, Mark Carney announced a Canadian election over the weekend and used his speech to deliver a few harsh words against the US President, also as expected. And UK Gilt yields rose on Friday as rising government debt added to the country’s economic woes. Hosted on Acast. See acast.com/privacy for more information.

Friday 21st March 2025Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.APRA plans to phase out bank hybrids (AT1s) by January 2027. So, what exactly are AT1s and why is the regulator so concerned? In short, they are CoCos, contingent convertibles that transfer to equities when a bank capital’s capital falls below a tipping point. But do mum and dad investors understand the complexity of the offering and do the instruments adequately provide for their intended purpose? That’s APRA’s big concern, pointing to the Credit Suisse example where AT1 investors lost a lot of money.Chris Joye from Coolabah Capital has been critical of the APRA decision. While initially he thought AT1s were too complex an instrument and there was an elegant simplicity in choosing between stocks and bonds, his position has changed. He now worries that some of the mum and dad investors could be driven to even riskier assets.Chris is not one to hold back his opinions, which you’ll hear this week, but he also does a great job of explaining how this asset class works. Something you won’t be able to buy after next year. Hosted on Acast. See acast.com/privacy for more information.

Friday 21st March 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABOne of the takeouts from yesterday's FOMC meeting was Jerome Powell's view that the impact of tariffs on inflation is likely to be transitory. NAB’s Rodrigo Catril says markets are still expecting two or more cuts this year as a result. Today he looks at the market reaction to the Fed meeting, what happened at the Bank of England, and why Australian employer numbers yesterday were such a big miss. Hosted on Acast. See acast.com/privacy for more information.

Gavin Friend, NAB’s market economist, breaks down the Federal Reserve's recent decision to hold rates steady amid shifting growth and inflation forecasts. He discusses how the Fed is in a 'wait-and-see' mode, particularly influenced by political factors and trade policies. The impacts of tariffs on inflation are considered transitory, according to Powell's remarks. Additionally, Gavin touches on the cautious approaches of the Bank of Japan and Bank of England. Insights into Australia’s job market also highlight expectations for a slight dip in unemployment.

Geopolitical tensions are causing market turmoil, with tech stocks in the U.S. declining while Europe rallies. The latest ceasefire developments have left investors jittery, especially with the Israel-Hamas situation worsening. Notably, there's a marked shift from U.S. equities to European shares. Germany's ramped-up defense budget is impacting bonds, while Canada's rising CPI raises flags for its central bank. Meanwhile, U.S. economic indicators reveal surprising industrial growth, prompting discussions on inflation's global ripple effects.

Taylor Nugent, an economist at NAB, shares valuable insights on US retail sales and the economic landscape. He discusses February's retail sales, revealing that beneath the surface, consumer spending fears may be overstated. The conversation also covers the volatile Empire State Manufacturing Index and the cautious optimism stemming from housing market indicators. Nugent touches on Australia's stable growth and China's strategies to boost consumer spending, while also hinting at the geopolitical implications of potential talks between Trump and Putin regarding Ukraine.

Delve into China's bold economic strategies aimed at boosting consumption amidst U.S. tariff tensions. Discover the implications of a newly passed U.S. spending bill on market optimism. Explore how rising wages affect consumer sentiment and the broader trends in Europe, including defense spending and its links to climate initiatives. The discussion also highlights complex military tech issues, like the F-35's software challenges, and the anticipation surrounding NVIDIA's groundbreaking AI conference.

Friday 14th March 2025Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.This week we discovered the extent of Australia’s close relationship with the US. Not that close, it seems with the Trump administration happy to apply a 25 percent tariff on our steel and aluminium exports. Next month, maybe our GST charge will be used as an excuse for a 10%tariff on everything we export. In Europe through, it’s not just trade that is testing the US relationship. It’s defence as well. Trump wants EU nations to stand on their own and not rely on the US to provide half the hardware and ammunition.Sam Roggeveen, Director of the Lowy Institute’s International Security Program, says we are entering a different global order. So, what’s Australia’s place in this new world? Do we, for example, need to spend up big, just as Europe is doing, to defend ourselves from China. Sam says not, but we should rethink AUKUS and question why we have the US Airforce operating from our territory.What’s more, he says we should listen to finance markets, which move on news of tariffs, but tend to ignore geopolitics. Hosted on Acast. See acast.com/privacy for more information.

Friday 14th March 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets behaved in a classic risk-off fashion this session, with equities falling and safe-haven currencies rising. Even the US dollar came to the party.   Why? A day of bad news basically. Phil talks through it with NAB’s Rodrigo Catril. First, tariff tensions. President Trump is threatening 200 percent tariffs on alcohol from Europe in response to the EU’s retaliatory strikes.  Secondly, data. Even though the headline PPI read for the US suggested inflation is slowing, Rodrigo says it’s a different picture when you look under the hood. Finally, the ceasefire. The language coming from Putin suggests it is extremely unlikely. Today the Rengo report on Wages data is a key release, and what it will mean for the direction of the Bank of Japan.    Hosted on Acast. See acast.com/privacy for more information.