NAB Morning Call

Wednesday 15th December 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIs it crisis over. As CPI numbers came out in the US showing the Fed still had more work to do, it seems the focus shifting back onto rate hikes and away from major concerns about bank stability. JBWere’s Sally Auld says it’s not a total retreat. After yesterday’s CPI and last week’s US payrolls there would have been every reason to expect a 50bp hike next week, but markets seem more set on 25bp. Today’s retail numbers will play into that decision. Sally says the RBA is lucky that it’s next meeting is not so imminent, but yesterday’s NAB business survey showed labour costs picking up a little, which is a concern. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 14th March 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABJust after Janet Yellen said there would be no bailout for SVB the US financial regulators stepped in promising that no depositor would be out of pocket. Good news for companies left exposed, but its done little to calm the markets with bond yields falling further and some analysts predicting an end to rises, at least for now, from the Fed. NAB’s Rodrigo Catril says its likely they will push ahead with their fight against inflation, but on a slower path. It’s still possible that the ECB will lift rates by 50bp this week. But what if the US inflation read today comes in stronger than expected? How do markets react then? Hosted on Acast. See acast.com/privacy for more information.

Monday 13th March 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe collapse of SVB on Friday created turmoil in the markets. Bond yields fell across the board, but particularly at the front end of the yield curve. Equities were also hit and the US dollar took a hit, with the uncertainty meaning the Aussie didn’t benefit from the fall. So how does the Fed respond to this shock to the system, which has been facilitated in part by rising bond yields. NAB’S Tapas Strickland reckons the Fed will be more cautious with future hikes and a 50bp hike next week is looking less likely. The collapse overtook any interest in Friday’s non-farm payrolls, which showed an upside surprise in employment numbers but a rise in the unemployment rate. The surprise from the Bank of Japan was no surprise, with Kuroda leaving quietly with no change in policy. Meanwhile, the PBoC is sticking with Governor Yi at the helm, but possibly only fore a few months. There’s a bit of uncertainty to be navigated through, it seems.  Hosted on Acast. See acast.com/privacy for more information.

Friday 10th March 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets are clearly preparing for a fall in payrolls numbers tonight, with bond yields falling markedly in the US and the dollar notably weaker. NAB’s Gavin Friend says markets have been influenced by the weekly jobless claims, which rose a little, and the Challenger jobs report, which showed a high number of layoffs in January and February. They clearly shrugged off the ADP umbers from a day earlier, which came in stronger than expected. Hopes of an end to rising inflation will have been helped by a negative PPI read from China. The Bank of Japan meets today, for the last time for Governor Kuroda. There’s been talk about a last-minute surprise, but could the surprise actually be no surprise at all. Hosted on Acast. See acast.com/privacy for more information.

Thursday 9th March 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere’s a lot of water between where Jerome Powell sees the Fed heading and how Philip Lowe is seeing things from the RBA’s viewpoint. NAB’s Tapas Strickland says there’s been no market retreat from yesterday’s positions, when we saw the US dollar rise, Aussie dollar fall and a divergence in yields, with US treasuries rising and Aussie yields falling. Speeches from Philip Lowe and Jerome Powell have done little to change the mood. Meanwhile the Bank of Canada is on hold, with further rises possible. And US data overnight did nothing to dispel the idea that the labour market there remains tight, suggesting the Fed will stick with the plan to do more, with a rising expectation for a 50bp hike at the next FOMC meeting. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 8th March 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABBig market moves overnight thanks to a slightly less hawkish RBA yesterday and a more hawkish sounding Jerome Powell in front of a US senate committee. NAB’s Rodrigo Catril says the RBA is still committed to further tightening but raised the potential for a pause in hikes, after yesterday’s 25bp lift. The usual caveat – that it’s all data dependent – still applies. It’s the same for the US of course, with payrolls on Friday and CPI next week two very influential data prints to look out for. Meanwhile Jerome Powell started his appearance overnight by saying “the latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.”  Hosted on Acast. See acast.com/privacy for more information.

Tuesday 7th March 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABAustralian bond yields fell sharply yesterday ahead of the RBA meeting today. NAB’s Skye Masters says this shows there’s an expectation that the central bank will pause after today’s rate hike and we can expect some repricing in bonds if they instead signal a series of consecutive hikes. The uncertainty around what central banks do next was demonstrated by the ECB overnight, with speakers still divided between hiking, if so by how much, or pausing. As to the latest Fed thinking, Jerome Powell’s testimony tonight (Australia time) will be particularly important.  Hosted on Acast. See acast.com/privacy for more information.

Monday 6th March 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABAs NAB’s Ray Attrill puts it on this morning’s podcast, three central banks, two days of testimony from Jerome Powell,. Topped off by US payrolls numbers – what’s not to like. Provided you thrive on volatility, of course, because any of those events has the power to change the direction of markets. They finished last week with quiet optimism, with equities pushing higher and bond yields falling. We look at why that might be and suggest one surprise this week could come from the Bank of Japan, the last meeting of Governor Kuroda who might be prepared to spring a surprise, particularly as inflation keeps rising. Hosted on Acast. See acast.com/privacy for more information.

Friday 3rd March 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABHaving pushed above 4 percent, US 10 year Treasury yields lurched higher still overnight, with yields up in Europe too and a sharper rise in Australian 10 year yields. NAB’s Ray Attrill says markets are responding to the revised Q4 numbers of US labour costs and productivity. Meanwhile European inflation was higher than expected yet it curiously wasn’t reflected in equities overnight. US Services ISM will be the key number to watch today. Hosted on Acast. See acast.com/privacy for more information.

Thursday 2nd March 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt’s been a session of mixed news overnight. US 10 year treasury yields have hit 4 percent as expectations continue to mount for higher rates for longer. In China the PMIs came in higher than expected. NAB’s Ken Crompton says we are seeing the same picture we saw in western economies as they came out of lockdown, with a faster bounce back than anticipated. In Australia the GDP data showed a softening of demand, but yields reacted to a rise in the monthly CPI number. In the UK the central bank governor suggested there was not necessarily any need to raise rates, but the mood is very different in Europe with the region’s inflation number expected to kick higher today. Hosted on Acast. See acast.com/privacy for more information.