NAB Morning Call

Thursday 16th February 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS retail numbers for January were strong yesterday, giving no reason for markets to assume the Fed will move from its expected path of hikes following non-farm payrolls earlier in the month. At the same time industrial production was down, but the Empire State manufacturing number was better than expected. NAB’s Gavin Friend says a lot of these variations are weather related, alongside other factors, such as retail inventories. Hence, markets are struggling to get a coherent picture on the real strength of the economy. Australia meanwhile has seen discretionary spending holding up and an expectation that employment numbers will pick up again in figures out today. So, the message seems to be, resilient economies with inflation perhaps taking a bit longer than expected to slow down. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 15th February 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS inflation was shown to be moving down slower than many had hoped, sending bond yields higher. NAB’s Taylor Nugent says it cements in expectations for two more 25 basis point rate hikes in March and May. NAB has also announced a revised rates call for the RBA, which is discussed on today’s podcast. Plus, employment refusing to move down in the UK or across the OECD. And US retail numbers today are expected to show growth, despite the squeeze from the Fed. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 14th Februarey 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS CPI is released later today and NAB’s Rodrigo Catril says we can expect a market reaction whichever way it comes out. Certainly, markets are divided, with bond yields rising today suggesting rising expectations for central bank hikes, whereas equities are also up suggesting an easier path. That expectation of a path with less rate hikes comes from a New York Fed Inflation Survey which showed that household income is expected to fall this year, which it is assumed will ease price pressures. But we’ve also seen evidence of US retail spending picking up post-Christmas. Clearly opinion is divided on today’s number so, as Rodrigo puts it, ‘expect fireworks’. Hosted on Acast. See acast.com/privacy for more information.

Monday 13th February 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABBond yields continue to rise as expectations heighten just about everywhere that central banks will push faster and further on rates. As NAB’s Skye Masters discusses today on the podcast, this hawkish sentiment wasn’t helped by employment numbers for Canada on Friday which, like the US the week before, came out much higher than expected. Central banks continue to be focused on the data, but there’s not much of that today. Instead markets will be jockeying for position ahead of US CPI tomorrow, the one number that really counts. Hosted on Acast. See acast.com/privacy for more information.

Friday 10th February 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe 2s10s curve inversion increased further today, now the most inverted since 1981. NAB’s Gavin Friend says the blowout jobs numbers and ISM services read were a shot across the bows last week that is still reverberating in the markets. In the UK though, Bank of England members were in front of a parliamentary committee giving mixed messages about their future direction, from inflation concerns to worries about going too far and worsening the cost of living crisis. Today the RBA publishes the Statement of Monetary policy which, Gavin says, should add some colour to this week’s decision and the potential for two further hikes. Hosted on Acast. See acast.com/privacy for more information.

Thursday 9th February 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt’s been quiet overnight news-wise, but a session rich with central bank speakers. NAB’s Ray Attrill says the main news came out of the ECB, where a 50 basis point hike at the next meeting seems nailed on, with talk now of another 50 possible in the May meeting as well. In the US equities have taken a hit, as expectations rise for more hikes from the Fed, with some expecting rates to touch 6% this year, although that’s not suggested by anyone in the central bank just yet. Today Germany’s delayed inflation numbers are out and will undoubtedly impact the Euro area CPI released last week. And the weekly jobless claims numbers tonight will be studied as some start to wonder whether last week’s non-farm payrolls was a bit of an outlier. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 8th February 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere wasn’t too much new from Jerome Powell when he was interviewed by the Wall Street Journal’s David Rubenstein, but that didn’t stop a rally in bonds for a short spell. It was followed by a swift reversal, perhaps on the realisation that he hadn’t actually offered anything new. NAN’s Rodrigo Catril says, nonetheless, it was a refreshingly open discussion reflecting the transparency of the Fed these days. At home a more hawkish RBA has seen bond yields rise sharply, with the expectation of more than one rise still to come. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 7th February 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets have had a chance to digest last Friday’s US jobs numbers and are clearly expecting a more hawkish stance by the Fed. JBWere’s Sally Auld talks about the potential for a higher terminal rate from the Fed and a more aggressive stance by the RBA. The expectation is that today they will lift rates by 25 basis points, but there’s the outside chance they will go further and a reduced chance of them pausing after this meeting. Tomorrow morning the Fed’s Jerome Powell is talking and its unlikely he’ll do much to soften the market’s stance.  Hosted on Acast. See acast.com/privacy for more information.

Monday 6th February 2023NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe US payrolls numbers on Friday showed strong jobs growth, which surprised markets pushing bond yields higher and weakening the US dollar. And NAB’s Tapas Strickland says the ISM Services number adding to the view that the Fed might have to do more to contain US inflation. Could we see two more 25 bp hikes form the Fed before they pause? And does thus change the stance of central banks globally, including the RBA tomorrow. The expectation is there will be a 25-basis point hike tomorrow and again in March, but could the terminal rate be higher given the prospect of global inflation proving harder to contain. Hosted on Acast. See acast.com/privacy for more information.

Friday 3rd February 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThree central banks have tried to sound hawkish this week, as they lift rates at levels already anticipated by the markets. But does the market believe them? That’s a question put to NAB’s Gavin Friend today, as US share prices rise and bond markets rally. It seems, despite central bankers (the Fed the ECB and BoE) continuing to say there’s more work to be done, there has been more focus on Jerome Powell’s line that “the disinflation process has started” and Christine Lagarde declaring “inflation risks in Europe are more balanced”. Where next depends on the data, of course, which will make tonight’s payroll numbers from the US important, along with the US ISM services index. Hosted on Acast. See acast.com/privacy for more information.