NAB Morning Call

Wednesday 22nd November 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe FOMC minutes were cagey when it came to the prospect of rate cuts. The RBA minutes were the same, with Michelle Bullock also reiterating her concerns about persistent wage inflation. And the Bank of England’s Andrew Bailey told UK politicians that markets were getting ahead of themselves when it came to pricing rate drops. Hence the mood is a little more sombre, with falls in equities and little movement in bonds. Oil has also been up and down today ahead of OPEC+ at the weekend. There are geopolitical factors at play too – a budget crisis in Germany and fears Iran is supplying ballistic missiles to Russia. Today it’ll be interesting to see if the inflation expectations from the University of Michigan survey fall back down, after their surprise lift last time. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 21st November 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere was a big 20-year Treasury auction today, which went better than expected. NAB’s Rodrigo Catril says markets had assumed a flood of new issuance in a short week would suppress demand, but that wasn’t the case. Elsewhere, the overseas Yuan hit its highest level since early September. More positive sentiment from China is helping lift iron ore prices further, which is positive for the Australian dollar. Two sets of minutes are out in the next 24 hours – from the RBA and the FOMC. The Fed minutes were quickly outdated by the softer than expected inflation data in the US.  Hosted on Acast. See acast.com/privacy for more information.

Monday 20th November 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt was a quite day on Friday with very little of earth-shattering consequence to report. NAB’s Ken Crompton joins Phil to talk about just how devoid of new sit was. We did see a downside surprise in UK retail numbers but, as flagged on Friday podcast, it was a very wet month. Loil is up on the news that OPEC+ will extend its production cuts into the new year. Today is equally as quiet – if not more so – for data releases, but things do hot up later in the week with the release of PMIs, just as America sits down to its roast turkey dinner. Hosted on Acast. See acast.com/privacy for more information.

Friday 17th November 2023Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.Ethical investment, or ESG; it’s being talked about more and more. It seems more people want to be involved, so long as it provides the returns they expect. This week Phil is joined by Maria Loyez, Chief Customer Officer at Australian Ethical, a fund manager specialising in responsible investments. How does she see the balance between making the right choice for the planet and seeing a worthwhile return for investments by your business, your customers, or your own personal fund? Can you make money and save the planet? Yes, you can, says Maria so long as you recognise that ethical investments do not perform in the same way as an index fund. There’s also discussion on the findings in this week’s ‘2023 Responsible Investing Report’, published jointly with industry research firm Investment Trends.   Hosted on Acast. See acast.com/privacy for more information.

Friday 17th November 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABSo, after the excitement of softening inflation in the US comes concern that its being accompanied by a delayed slowdown in the economy. That was certainly reflected in some of the second tier US data, and could explain a further fall in oil prices. NAB’s Tapas Strickland says Walmart reported weak sales too in October but highlighted an expected period of deflation in the months to come. Put all the pieces together and markets are increasing the expectation for rate cuts next year. It'll be a while before the RBA cuts rates, but at least yesterday’s surprise increase in employment numbers wasn’t enough to raise the likelihood of a December hike. Instead they’ll wait for the next set of inflation numbers. Hosted on Acast. See acast.com/privacy for more information.

Thursdsay 16th November 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABGoldilocks continues to deliver what America wants, with softer producer prices and only a slight move down in retail sales. Equity markets continue to enjoy the party, although bond yields are back on the rise. Hardly surprising given the scale of the moves this week, says NAB’s Tayor Nugent. A fall in oil should also not be over-interpreted, given the recent moves. Has the Goldilocks effect also moved to the UK. Okay, the economy isn’t as strong, but CPI has come down faster than expected, adding to the belief that the BoE has probably done all it need to do. The same isn’t being said about the RBA. Will they be influenced by today’s employment numbers? Hosted on Acast. See acast.com/privacy for more information.

Wednesdsay 15th November 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS inflation fell further than most expected – although NAB had predicted a downward surprise. NAB’s Gavin Friend talks about the market response, which has been felt in equities, bonds and the dollar. It follows two big drops in Eurozone inflation, adding to the view that the worst is over and central banks can start focus on dropping rates rather than lifting. The US CPI comes in the thick of a range of critical data, including UK employment, Australian wages data, UK CPI, Japan’s CPI and a plethora of China numbers too. No wonder the markets are busy, and keen to party. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 14th November 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe NY Fed’s consumer inflation survey overnight had expectations fall a little over last month, in contrast to the University of Michigan survey last week, which had inflation expectations rising. So who do you believe? You believe the hard numbers, says NAB’s Ray Attrill, which are out tonight (Australia time). Market moves have been fairly restrained in the build up to the US CPI release, but the response could be quite marked. Ray says it’s worth looking to the second decimal place to get a real handle of the speed of travel. Locally the NAB Business Survey is out today along with the latest consumer sentiment read. The UK has employment numbers, the NFB small business survey is out and the ZEW survey for Germany. A busy day.  Hosted on Acast. See acast.com/privacy for more information.

Monday 13th November 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt seems the more dovish sentiment in the US has been reversed by Jerome Powell suggesting the Fed might have more to do to keep inflation in check. NAB’s Skye Masters says the weak 30-year auction on Thursday has also seen yields push lower, along with upward pressure on inflation expectations. Moody’s also moved the US outlook from rating from stable to negative, which might have impacted yields at the margin. In Australia the Statement on Monetary Policy provided revised forecasts for Australia, which could be used as an argument for more rate hikes. Yet the language of the Statement was quite dovish. No wonder markets are confused. The key release this week, is US CPI tomorrow. Hosted on Acast. See acast.com/privacy for more information.

Friday November 10th 2023Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.With the risk of interest rates going even higher, and a slug of the Australian population yet to move onto variable loans, are we about to see a sudden change in consumer spending as more households step off the fixed rate cliff. This week Sonia Straumann, NAB’s Executive, Credit Risk, says households have already modified their behaviour in readiness. But how much of their spending now is dependent on eating into cash reserves built up during the pandemic? And how will small businesses cope with a sustained period of lower consumption. Sonia says that’s one of the big risk factors, alongside commercial real estate, construction and farming. What else is keeping her awake at night? Hosted on Acast. See acast.com/privacy for more information.