NAB Morning Call

Tuesday 27th August 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere hasn’t been a lot of market movement overnight. What there was saw a slight reversal on positions taken after Powell’s talk at Jackson Hole. Hence, the dollar is back up a little, shares have fallen, and bond yields are up slightly too. It’s lighter trading, of course, at the height of the northern summer and only second tier data to keep us occupied. That’s why NVIDIA’s earnings results on Wednesday (US time) could have an outsized influence on shares. Oil is sharply higher today, because of Libyan politics rather than tensions between Hezbollah and israel. NAB’s Ray Attrill joins Phil to discuss the day’s market news. Hosted on Acast. See acast.com/privacy for more information.

Monday 26th August 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABEven though Fed speakers positioned markets to expect gradual and methodical cuts late last week, it was a very different language used by Jerome Powell at Jackson Hole on Friday. NAB’s Tapas Strickland joins Phil to discuss what was said and how market reacted. It’s clear a September cut is coming, with the Fed chair declaring that “the time has come for policy to adjust”, with a focus more on easing in the jobs market than the fears of a reprise in inflation. They also look ahead to a fairly busy week for data, including CPI and retail sales in Australia.  Hosted on Acast. See acast.com/privacy for more information.

Friday 16th August 2024Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.On the face of it you’d wonder why central banks in New Zealand and Australia have taken such different paths when it comes to fighting inflation. They are both western economies that were growing reasonably well before the pandemic. Their response in 2020 was similar, with massive fiscal injections and quite severe lockdowns. So, why such a radical difference in the response to inflation post-pandemic? The RBNZ is rapidly cutting rates, whilst the RBA is unlikely to start until next year. Stephen Toplis, Head of research at BNZ Markets in Wellington, says the economies are not the same. Even before the pandemic New Zealand was suffering with labour shortages, pushing wages higher. Now the economy has seen a more significant slowing, in part due to their higher level of rates. As Gareth Spence points out, NAB’s Head of Australian Economics, there is certainly an adjustment going on in Australia, but overall the economy and labour market have been resilient. Hosted on Acast. See acast.com/privacy for more information.

Friday 23rd August 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABBond yields are higher, the dollar has fallen and US equities are lower. Markets have switched direction over the last 24 hours. NAB’s Ray Attrill says there are three reasons for the reversal – the latest PMI data, central bank speak and expectations for the outcome of the US election. The rhetoric from Fed speakers has been around a more gradual approach to rate cuts.  It’s also the start of the Jackson Hole Symposium. It’s just like the Oscars for central bankers, without the awards, the glamour or the popular appeal. But, for all the speeches and panel discussions, will anything be said that’s not already known or assumed? Hosted on Acast. See acast.com/privacy for more information.

Thursday 22nd August 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABToday as the US dollar weakens again, against a rising Yen, Phil asks JBWere’s Sally Auld to explain the impact rates differentials are having on the Japanese carry trade. The FOMC minutes this morning came as close as they possibly could to saying a rate cut will happen in September. That’s added to the weakness in the US dollar, and helped equities recover.  They also look at the price of oil, which Sally says is reaching a point where it represents better value for investors. Global PMIs are the focus, along with th weekly jobless claims. A downward revision to the non-farm payrolls overnight was quite marked, but Sally explains why markets didn’t react toit as much as you might expect. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 21st August 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt’s been another quiet session, with stocks taking a breather after an 8-day rally, with volumes for the S&P 25% below its 20-day average. Bond yields have pushed lower, which NAB’s Ken Crompton says is largely a response to Canada’s CPI numbers, which presented the evidence needed for the Bank of Canada to continue with its rate cuts. The US dollar ticked lower again, thanks to a sharp rise in the Yen, which was a response to a Bank of Japan report suggesting inflation was rising from wage pressures and corporate behaviour (presumably, claiming bigger margins). That seems to have been taken as the case for further rate hikes by the bank, and Friday’s inflation number might seal the deal.  Hosted on Acast. See acast.com/privacy for more information.

Gavin Friend, a market expert, shares his insights on recent rally trends in US shares amidst mixed economic news. He discusses the crucial link between market optimism and potential Fed rate cuts, emphasizing the risks if no cuts are indicated. Gavin also examines the weak performance of the US dollar, the impact on oil prices, and how political uncertainties shape currency trades. Additionally, he highlights key upcoming data like Canada's CPI and its implications for global markets and interest rates.

Rodrigo Catril joins to share his expertise on central banking and financial markets. He discusses the imminent Jackson Hole Symposium and speculates on whether Jerome Powell will hint at rate cuts. Markets are showing optimism with consecutive growth in the S&P index. The conversation also touches on the Riksbank potentially making significant rate changes and how recent data from Canada could influence its decisions. Consumer sentiment improvement amidst volatility and the challenges in the U.S. housing market also make for compelling insights.

Friday 16th August 2024Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.A report last week from S&P Global highlights that the debt held by Australian states could exceed $600 billion later this year. Rebecca Hrvatin joins Phil to discuss this rise in debt and what it’s doing to credit ratings. Overspend on infrastructure projects seem to be one of the major concerns.But there’s no shortage of buyers according to Ken Crompton. Ken is senior fixed income strategist at NAB and a regular on The Morning Call. He says, ironically, greater debt will be attractive to overseas investors who might previously have been put off by the limited availability of Australian state debt.The issue going forward is not how much debt is being carried, but how effectively it’s being managed. Massive project overspends are part of the problem and interest payments are becoming an increasing proportion of state governments’ expenditure.Phil asks whether green bonds could restore some balance and attract even more foreign buyers. Hosted on Acast. See acast.com/privacy for more information.

Rodrigo Catril, a market research expert, shares insights on the unexpectedly strong US retail sales and their impact on equities and bond yields. He discusses how this signals resilience against recession fears, affecting Federal Reserve policies. The conversation highlights the UK’s modest GDP growth and the challenges facing Europe amidst rising yields. Catril also explores the relationship between weather patterns and retail trends, as well as the paradox of rising employment but increasing unemployment in Australia.