NAB Morning Call

Friday 15th December 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABWhilst the FOMC signalled the likelihood of several rate cuts next year, NAB’s Gavin Friend says the Bank of England and ECB are giving nothing away, with both saying there is more to e done to bring inflation under control. One European bank even managed to slip in a rate rise ahead of Christmas – the Norges Bank pushed rates up to 4.5%, concerned about a rebound in inflation. Markets continue to respond to the dovish FOMC meeting yesterday, even with jobless claims and retail numbers both showing surprising resilience in the US economy. There’s lots more economic data today, including the December flash PMIs for Europe, the UK and US. Hosted on Acast. See acast.com/privacy for more information.

Thursday 14th Decenber 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABA Fed that is happy to hold, and is expecting to cut three times next year. That’s the takeout from the FOMC meeting this morning. Markets have responded swiftly, with sharp moves down in the US dollar and bond yields, with the Aussie dollar making the biggest gains this morning. NAB’s Taylor Nugent says yields were already falling on the back of slower rises in producer prices, adding to the evidence that inflation is easing in the US. The Bank of England meets later today, along with the ECB. Both are expected to stay put, with the UK having much lower than expected GDP growth in October. Australia’s employment numbers are released today, after yesterday’s Seek job ads show more labour market easing. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 13th December 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIn numbers out overnight the headline US CPI rate fell a little, but no more than expected, whilst core inflation remained stuck at 4%. JBWere’s Sally Auld says it again showed the dichotomy between core goods, which fell 0.3% in the month, and services which rose 0.5% in the month. It’s not expected to change the Fed’s decision tomorrow, or the outlook for cuts in the first half of 2024, but that could change with the dots plot from the FOMC. Elsewhere, the latest ZEW survey from Europe showed a surprise lift, whilst oil continues to slide lower. In short, not a huge reaction to an unsurprising CPI, and all now rests on what’s said and forecast tomorrow. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 12th December 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe Yen is the biggest currency move overnight, losing some of the recent gains. NAB’s Ray Attril says it comes from a Bloomberg story overnight which doused expectations that there will be a ‘surprise’ policy change next week. Otherwise, markets are largely treading water ahead of the US CPI number later today, followed quickly by the Fed later in the week, along with four other central banks.Also on today’s podcast we look at four decades of a free floating Aussie dollar. It’s 40 years ago today that the AUD floated freely for the first time. Ray takes us through some of the highs and lows. Hosted on Acast. See acast.com/privacy for more information.

Monday 11th December 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe US non-farm payrolls data came in a lot higher than expected on Friday, with 200k extra jobs added last month. Wages grew a little more than expected. Not what you’d expect for an economy that is supposedly cooling. So, were the numbers too hot? Phil asks NAB’s Rodrigo Catril whether this changes assumptions around the timing of rate cuts by the Fed. He says some of the new jobs were one-offs, and the trend is still downwards, but markets have repriced their expectation for cuts in the early part of next year. There’s also discussion on Europe’s new AI laws and China’s worse than anticipation deflation. Hosted on Acast. See acast.com/privacy for more information.

Friday 8th December 2023Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.It’s been fifty years since the UK signed an agreement with the European Economic Community. That had a profound impact on Australian exports. We’ve built a far more diverse export base since then, of course, but now, since Brexit, with a new free trade agreement (FTA) in place, there’s a chance to redevelop our trading relationship with the UK. Elisabeth Bowes, Australia’s Deputy High Commissioner to the UK, was deeply involved in negotiating the UK Australia FTA. She said, it made her proud as a Queenslander to see, back in September, the first tariff free shipment of sugar in fifty years to arrive in the UK. On this edition of The Weekend Edition Elisabeth outlines how Australian businesses can benefit from the agreement, whether its exporting goods, procuring UK government business, establishing a foothold within Europe, or recruiting expertise from Britain. Hosted on Acast. See acast.com/privacy for more information.

Friday 8th December 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABProbably not, is the answer to our headline, but NAB’s Ken Crompton says markets are pricing in a heightened expectation of the BoJ moving from negative rates sometime soon. The sharp rise in Japanese government bond yields yesterday and overnight almost wiped out the falls over the last month, but yields remain well below early November, when they almost touched 1%. Elsewhere, Australia’s trade surplus increased but it was largely due to a fall in capital goods imports, reversing the recent rise. Europe showed more signs of a slowdown, with German industrial production down and Q3 GDP revised lower. The focus now is now on non-farm payrolls. Ken says there’s more upside potential for bond yields if we assume markets have been too optimistic in their pricing of rate cuts next year. Hosted on Acast. See acast.com/privacy for more information.

Thursday 7th December 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABFalling inflation and lowering interest rates is definitely the consensus view now. It comes at the cost of weaker demand, evidenced by the continued drop in oil prices. NAB’s Ray Attrill says falling fuel costs are no doubt helping European equities, which finished higher today whilst US share indices struggled to get traction. Markets are now pricing in 150bp in cuts from the ECB next year, although Ray suggests that’s overly optimistic. Australia’s GDP growth was much slower than expected last quarter, but there’s not been a strong response to it on currency and bond markets. The consumer is still finding money to keep spending and productivity isn’t making the gains the RBA would like to see. Now the focus is on jobs, with the weekly US jobless claims tonight ahead of the monthly non-farm payrolls tomorrow. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 6th December 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe RBA kept rates on hold, didn’t change too much in their statement, but Australian bonds still rallied. JBWere’s Sally Auld says it was a curious reaction, but just about every market wants to avoid contemplating that rates could go higher even if that might still be the case here. Globally the mood is being driven by weaker CPI data. The OECD revealed that it has fallen to the slowest pace since October 2021 in its member countries. And ECB hawk Isabel Schnabel has completely changed direction, suggesting rates there will fall next year. In the US the Services ISM rose a little and the jobs market eased a bit, helping contain wage price concerns. In short, it was generally a good news day. Although equities are still mixed and oil continues to head south. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 5th December 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABWith shares falling and bond yields rising, markets might have taken a step too far when it comes to anticipating the timing of rate cuts next year, but NAB’s Tapas Strickland says cuts are still expected. They have just priced in a little more risk ahead of a series of key data releases this week, including payrolls (Friday) and services ISM (today). The RBA meets today and the accompanying statement could be a little dovish, given weaker inflation data, but there’s resilience in consumer and housing data that makes NAB believe a February hike is still likely. As well as the US Services ISM tonight, there’s also the JOLTs numbers (job openings and quits) which has had the power to move markets recently. Hosted on Acast. See acast.com/privacy for more information.