NAB Morning Call

Wednesday 27th September 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets are still a little directionless, with no substantial or surprising data to evoke any substantial moves in any asset classes. The only real movement is in equities, which continue to fall now the higher for longer message has sunk in. NAB’s Gavin Friend describes it as a wall of worry. But will we see a shift in direction from today through, as the rest of the week is filled with inflation data, starting with Australia. Could the services CPI be enough to force the RBA to make a move? Not just yet, reckons Gavin. Later in the week European CPI will add to the global picture about whether or not we are over the worst of it, before the US core-PCE, the Fed’s preferred measure of inflation.  Hosted on Acast. See acast.com/privacy for more information.

Tuesday 26th September 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere were big moves higher in bond yields overnight, particularly at the long end. It’s been significant bear steepening, says NAB’s Skye Masters, pointing to the hawkish statements from central banks indicating rates will remain at restrictive levels for quite some time.  That’s happening despite more indicators suggesting there is growing weakness in the global economy, but bank boards will want to see reductions in inflation before they change that stance. If the bond markets seem a little directionless right now, maybe inflation numbers later this week will help them see the light.  Hosted on Acast. See acast.com/privacy for more information.

Monday 25th September 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe path of central banks does seem to be having as many twists and turns as a Dickensian novel. NAB’s Ray Attrill says the path of bond yields at the end of the week showed how the UK is taking a divergent path from the US, where central bank speakers are still suggesting there will be more hike(s) to come. PMIs on Friday continued to show that the US economy seems to be faring better than Europe. But the US soft landing rhetoric is being challenged, with equity markets taking a hit, the automotive workers strike likely to have more impact and the prospect of a government shutdown at the end of the week all the more likely. This week the data in Europe, the US and Australia will be focused on inflation, naturally. Hosted on Acast. See acast.com/privacy for more information.

Friday 22nd September 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 a tough time for small businesses in Australia and the road back from COVID seems to be a lot longer one that most expected. In this episode of The Weekend Edition Phil talks to Ana Marinkovic, NAB’s executive general manager of the Small Business Bank, who describes a two-speed recovery, between those who have been able to cut costs and embrace online, and those who haven’t. Those unable to find cost effective labour are being hit particularly hard. But many businesses hit with rising costs are reluctant to push their prices up, taking a margin hit instead. So, looking closely at your operating costs and not being afraid to reprice are some of the key takeouts from Ana on this week’s podcast. Hosted on Acast. See acast.com/privacy for more information.

Friday 22nd September 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe Bank of England has kept rates on hold for now. Many other central banks have met over the last 24 hours – some have been on hold, some continue to raise rates, one has even cut rates. But bond yields continue to rise and equity markets have taken a hit. JBWere’s Sally Auld says it’s a sign that investors aren’t convinced that the tightening cycle is over just yet. US continues to display resilience that could suggest the Fed will do more. Even New Zealand, where the RBNZ has pushed rates have gone further than many, GDP has shown a strong comeback. So, the future is still uncertain. The Bank of Japan is next to meet. It’s safe to assume they’ll be on hold but, again, for how much longer?  Hosted on Acast. See acast.com/privacy for more information.

Thursday 21st September 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe response to the FOMC announcement this morning was swift, with 2-year Treasury yields hitting a 17 year high. The equity markets switched into negative territory too. Why? NAB’s Gavin Friend says the fact that rates are on hold wasn’t a surprise, it was the rise in the median rate forecasts for next year and the year after. Higher for longer is slowly sinking in, but now, perhaps, it's even longer than many had imagined. Gilt yields took a hit as UK CPI came in much lower than anticipated. Could this mean the BoE will keep rates on hold? And a swag of other central banks today, plus New Zealand’s GDP. They are expected to claw out of recession, but for how long? Hosted on Acast. See acast.com/privacy for more information.

Wednesday 20th September 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThis time tomorrow the Fed will have decided, and the assumption is that they will keep rates on hold. But for how long? NAB’s Taylor Nugent says there’s an assumption of at least one more hike, which is being strengthened by further signs of persistent inflation. Oil nearing $100 isn’t helping and neither is higher than expected inflation numbers from Canada. But the soft-landing story remains, demonstrated further by revisions to the OCED’s GDP forecasts, which has upped growth for the US and downgraded Europe. We also delve into the RBA minutes from yesterday, looking for clues about the direction from here. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 19th September 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABAs we wait for the barrage of central banks in the second half of the week, starting with the Fed, a Reuters report suggests the ECB is looking at reducing the high level of excess reserves which could be impacting the effectiveness of monetary policy. NAB’s Skye Masters says it’s only natural for them to consider reducing their balance sheet once they near the end of the rate cycle. In the US, meanwhile, the BIS has warned of too much leverage in short positions on US Treasury Futures. Nothing that the Fed hasn’t previously warned about, says Skye. A bigger concern is the rise in oil, with some commentators suggesting it could peak at $100 this week. How does that play in the strategy for central banks? And, locally, RBA minutes. Surprises are unlikely this time round, but you never know! Hosted on Acast. See acast.com/privacy for more information.

Monday 18th September 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe Fed isn’t the only central bank making a call this week. There’s also that expected hike from the Bank of England, plus the central banks of Japan, Switzerland, Sweden and Norway. Plus, the RBA minutes and day one in the new job for Michelle Bullock. NAB’s Tapas Strickland says opinions are still very divided, even within central banks, about whether they need to continue lifting rates to beat inflation. Hence yields lifted further on Friday.  Hosted on Acast. See acast.com/privacy for more information.

Friday 15th September 2023Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.The BoE’s Huw Pill recently likened the path of interest rates to Table Mountain, as he gazed out the window of a conference in Jo’burg. The FT’s Markets Editor Katie Martin says markets have finally accepted the high for longer mantra from central banks, but says it’s not been an easy time for analysts in financial markets, particularly those who had been telling clients to prepare for the US recession that never came. Does that mean it won’t come? And if it doesn’t, what’s the impact of prolonged strength in the US dollar which could add to inflation pressures elsewhere? Then there’s the question of politics. Will interest rates start to come down – like they have in Poland – because of political pressures. The Morning Call’s Phil Dobbie talks to Katie about the unchartered waters that lie below the smooth surface of central banks’ Table Mountain trajectory.  Hosted on Acast. See acast.com/privacy for more information.