NAB Morning Call

Thursday 25th May 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMcCarthy and Biden finished their four hour talks on Wednesday with no resolution on the debt ceiling. Their division over spending continues to concern markets. NAB’s Ray Attrill looks at the market response, with a deal needed by the end of the week to allow time for the legislative process to run its course. There’s division within the FOMC too, evidenced by the latest minutes. There;’s also been a couple of surprises in the last 24 hours – the RBNZ indication that they may have stopped lifted rates, and the UK’s worrying inflation numbers now raising the possibility of a 50bp rate hike next time by the Bank of England. And rate hikes from the RBA might still have a way to go after Philip Lowe’s meeting with legislators.  Hosted on Acast. See acast.com/privacy for more information.

Monday 24th May 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere’s still no resolution on the USD Debt Ceiling. NAB’s Taylor Nugent says expectations are that a deal will be found in time, but markets are getting nervous, with falls in equities across the board (except energy). Inflation concerns continue to mount up, with the latest PMI data in the US and Europe showing that, in general, the service sector continues to expand whilst manufacturing falls further. The UK’s headline inflation rate will fall markedly, but it’s the core number that counts. And we see what the RBNZ is planning to attack persistent inflation – a 25bp is expected but there is an outside chance they will go harder today.  Hosted on Acast. See acast.com/privacy for more information.

Tuesday 23rd May 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIf you look at Kevin McCarthy’s twitter feed you’d assume he is taking a very defiant stand against the Biden administration when it comes to movement on the US debt ceiling. But JBWere’s Sally Auld says that reflects the stakeholders he has to pacify, and you’d hope he’d be more conciliatory in the negotiations underway. But they’ll have to be quick if they want to reach a resolution and pass any necessary legislation before the default, yet markets remain clam, presumably assuming a compromise will be reached in the nick of time. Meanwhile the Fed remains divided too, although the general direction of travel seems to be more, not less, hikes. The same applies for the RBNMZ, with tomorrow’s expected rise unlikely to be the last. Today global PMIs will be keenly watched. Hosted on Acast. See acast.com/privacy for more information.

Monday 22nd May 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets are distinctly uneasy at the start of the week, as the Republicans and Democrats are sticking to their entrenched position in US debt ceiling talks. NAB’s Rodrigo Catril says it’s a sharp contrast to the upbeat tone on Thursday, so we can expect a large amount of volatility unless they pull something out of the hat on Monday. Meanwhile Jerome Powell hinted over the weekend that the Fed could pause in June, despite the rhetoric from other board members last week. Whilst Christine Lagarde says the ECB needs to buckle up’ to fight inflation. Also today, what impact in inflation and the RBAS will a rise in Australian minimum wages that’s in-line with inflation? Plus, the PBOC’s concerns about currency fluctuation, what to expect from the RBNZ this week and is Japan the new un-China? Hosted on Acast. See acast.com/privacy for more information.

Friday 19th May 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets are buoyed this morning by comments from US Republican House Speaker Kevin McCarthy that he sees a path towards a deal with the Democrats over the US debt ceiling. That’s pushed equities and bond yields higher. NAB’s Ken Crompton says it would be premature to suggest that yesterday’s weaker employment numbers would impact the path of future hikes from the RBA, just as the latest data from the US is too choppy to draw any conclusions on what it means for the Fed. But it seems the increased spending by the NZ government in yesterday’s budget could contribute to an extra rate hike by the RBNZ. Hosted on Acast. See acast.com/privacy for more information.

Thursday 18th may 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets have chosen to be optimistic over the US debt ceiling today, with US House Speaker Kevin McCarthy, saying a compromise was “doable”, maybe as soon as this week. And, as NAB’s Rodrigo Catril points out, Joe Biden is also positive, and the negotiating team has been reduced in size to nut out a solution. Japan’s GDP surprised on the upside yesterday and Australian wage growth came in as expected, but there’s still potential for them to rise further. Australia’s employment numbers are out this morning. All are discussed in today’s podcast. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 17th May 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt was a finely balanced decision by the RBA to lift rates at the last meeting, with the bank now saying they are focusing on productivity and wages. As JBWere’s Sally Auld discusses today, they don’t have to wait long for the next set of quarterly wages data out today – but the next productivity data comes a day after their next meeting. So, will they pause? We talk through a lot of data releases today, with the tone a little downbeat, pushing equities lower. And uncertainty grows about the debt ceiling, with the clock ticking and no sign of a resolution. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 16th May 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIs the US careering towards a debt default? There’s only a couple of weeks until the point at which Janet Yellen has warned the US government could run out of money. But Biden and McCarthy are talking, so there is hope of a resolution. But NAB’s Skye Masters says its drawing a long bow to assume the slight increase in confidence in markets today is being driven by hopes on those talks.  It was simply a session light on significant data to drive markets in any particular direction. It’s a different picture in the next 24 hours though, with a swathe of data, and growing uncertainty as each day passes without a debt ceiling resolution. In amongst the releases today, the RBA minutes, which will help explain the surprise decision to lift rates at the last meeting, with NAB now forecasting one more hike this year. Hosted on Acast. See acast.com/privacy for more information.

Monday 15th May 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere was further nervousness in the markets at the end of last week. NAB’s Ray Attrill says a chunk of it came from the University of Michigan’s survey, which saw consumers raising the level they expected inflation to be at in five years’ time. It seemed an oversized response to a modest increase, but it is a statistic that the Fed likes to keep an eye on. The response could well be overturned by events this week, which include US retail sales, Canada’s CPI, UK labour market data and Australia’s wage price index and employment numbers. A busy week ahead, but a quiet start today. Hosted on Acast. See acast.com/privacy for more information.

Friday 12th May 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe BoE has raised rates (not a unanimous decision), but they are also expecting a bit more growth in the economy. We’ll see how that’s tracking with UK GDP numbers out today. NAB’s Gavin Friend says this could be the last one from the BoE, but it really depends on the UK inflation number later in the month. Meanwhile, further signs of softness in the US – where jobless claims rose more than expected – and China, where loans are well below expectations. Banks continue to add to the uncertainty. Hosted on Acast. See acast.com/privacy for more information.