NAB Morning Call

Monday 19th December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere wasn’t much risk appetite at the end of the week, after a hawkish Fed and the same from the ECB. It still seems markets doubt the Fed will go all the way to 5.1% and are looking for reasons to assume they will relent earlier. NAB’s Skye Masters says the inversion in the Treasury yield curve will remain for some time, but wonders how much of this is being drive by the after effects of QE. Meanwhile China is planning a major comeback next year, with one official at their Central Economic Work Conference last week describing a J-curve recovery. Hosted on Acast. See acast.com/privacy for more information.

Friday 16th December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABAs the UK and Europe weather a cold snap, central banks are heating up their rhetoric as the fight to cool inflation. On today’s podcast JBWere’s Sally Auld discusses the unexpectedly hawkish stance taken by the ECB, suggesting it was possibly a trade-off from pushing rates higher this time round. The Bank of England was split three ways on what to do, but ultimately lifted rates by the same amount – 50 basis points. We also look at moves by the Norges Bank and the Swiss National Bank. Meanwhile, Australia’s strong employment numbers add further pressure on the RBA , whilst the RBNZ next year has to tackle inflation in an economy that refuses to slow down. And lots of PMI numbers today, just to add to the information overload a week out from Christmas. Hosted on Acast. See acast.com/privacy for more information.

Thursday 15th December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets weren’t surprised by the FOMC raising rates by 50 basis points this morning – a unanimous decision by the board. But members are more divided on where to go next, with the Fed now predicting a median rate of 5.1 percent by the end of next year, even with talk of inflation having peaked. NAB’s Gavin Friend says this rise in the dot plot is based on continued labour market tightness. It could be a different picture for the Bank of England later today, and the ECB where wage inflation is not such a concern. In a feverishly busy day we also get Australian employment numbers, NZ GDP, China’s retail sales, industrial production and capex investment, and the Philly Fed’s business outlook. It’s the last gasp before Christmas! Hosted on Acast. See acast.com/privacy for more information.

Wednesday 14th December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS CPI numbers came in lower than anticipated, leading to the inevitable question about whether inflation has peaked, just in time for tomorrow’s FOMC meeting? The market response was swift fall in two-year Treasury yields and a rise in equities, although much of those gains has been pared back since. NAB’s Taylor Nugent says it creates a challenge for Jerome Powell, who will want to acknowledge the good news but remind markets there is still a long way to go. So, perhaps, tomorrow, he will be the Grinch who stole Christmas. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 13th December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS equities have bounced back, but the rise in the VIX index, which measures market volatility, is perhaps a better measure of where we are ahead of the FOMC meeting this week. It’s risen, highlighting uncertainty about how far the US central bank will go. Nick Timiraos describes a very divided Fed in the Wall Street Journal this morning. Also today, NAB’s Ray Attrill takes us through yesterday’s UK GDP numbers, with employment data out later ahead of the BoE meeting later in the week. Plus, the NAB Business Survey out later today. Hosted on Acast. See acast.com/privacy for more information.

Monday 12th December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt’s a big week for central banks – the Fed, the BoE and the ECB amongst them. Plus US inflation numbers. There’s some hope that the US will head off a hard landing, with inflation expectations falling in the Michigan Consumer Sentiment survey on Friday, although producer prices showed a different story, adding to the US risk-off sentiment at the end of the week. So we can expect another volatile few days, but who will be the winners and the losers? NAB’s Tapas Strickland provides valuable insights to guide you into this busy week. Hosted on Acast. See acast.com/privacy for more information.

Friday 9th December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere was a bit more of a risk-on attitude in the US overnight, with equities rising for the first time in five days. Part of the reason could be a rise in jobless claims. But NAB’s David de Garis says you’d be clutching at straws to assume that means lower inflation and a less aggressive Fed. It’s just part and parcel of the volatility ahead of a bumper week next week, with US CPI, the FOMC meeting and the ECB. The last blast before Christmas. Equally as unexplained is the slow glide down in oil, when there’s every reason for it to be heading the other way. An oil leak on the Keystone pipeline saw WTI prices rise for a while, but they didn’t hold for long.  Hosted on Acast. See acast.com/privacy for more information.

Thursday 8th December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS bond yields fell further overnight as US wages data showed slower growth than anticipated, adding to hopes that the Fed won’t be as aggressive as they’ve been letting on when it comes to future hikes. NAB’s Gavin Friend says that does seem to be the mood of the moment. Whilst the Bank of Canada raised rates by 50 basis points – when many had considered 25 was likely – it was a dovish rise, with suggestions that they won’t be doing too much more. The RBA is moving in smaller increments, and whilst a pause is not on the cards for the next few months, it could be that they too won’t move far beyond March, with Australia potentially leading the way in bounceback-ability, says Gavin. Further reopening news from China helped with this sentiment.  Hosted on Acast. See acast.com/privacy for more information.

Wednesday 7th December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS and European equities have taken another hit. NAB’s Ken Crompton says markets continue to respond to the strong jobs data from the US on Friday and what that means for terminal Fed rates. There were no surprises from the RBA yesterday, with NAB’s Ivan Colhoun saying the central bank is very cognisant of lags in monetary policy, so it’s too early to expect any pause in the first part of next year. It’s a different story for the Bank of Canada tonight – who front-loaded hikes and the question is how close are they to reaching the end of their tightening cycle? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 6th December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIf you believe the ISM numbers this morning, the US services sector is growing faster than anticipated. Yet the PMI measure, supposedly monitoring exactly the same activity, showed the sector is slowing. So, who do you believe? NAB’s Tapas Strickland says markets were taking a more cautious approach before the ISM number after a WSJ article suggested the Fed might indicate a higher terminal rate at their meeting next week. A 25bps rise is expected from the RBA today even as indicators suggest private sector labour costs are rising. Hosted on Acast. See acast.com/privacy for more information.