NAB Morning Call

Monday 5th December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe US non-farms payrolls numbers on Friday were an upside surprise for the number of jobs created and the increase in wages – both factors the Fed has been trying to control. Is the policy working? NAB’s Taylor Nugent says markets have responded with the expectation of a deepening recession as the Fed pushes harder.Canadian employment numbers were also stronger than expected on Friday, so how does that impact the Bank of Canada’s rate decision this week? And, before that, the RBA – what’s their plan? Just because you’ve started opening your advent calendar don’t assume the action is slowing down for Christmas. Hosted on Acast. See acast.com/privacy for more information.

Friday 2nd December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets have not significantly retraced their moves after Jerome Powell’s speech yesterday. Equities have rebounded only slightly and bond yields have continued to fall. On today’s podcast NAB’s Tapas Strickland outlines why his speech created a more positive risk outlook. There was good news in amongst the data released overnight too, with ISM manufacturing showing a fall in prices paid. Abd China’s lockdowns could be easing further, with home detention now replacing quarantine centres for low-risk cases in Beijing. The focus tonight, of course, will be on US non-farm payrolls, in particular the average hourly earnings.  Hosted on Acast. See acast.com/privacy for more information.

Thursday 1st December 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt’s been a busy session, with NAB’s Taylor Nugent claiming Jerome Powell’s speech this morning was slightly less hawkish than markets were expecting. But the Fed chair still talked about there being a way to go to fight inflation and the need for sustained evidence of falling inflation before the battle is won. Signs of easing inflation in Australia should also be treated with caution, with yesterday’s new monthly data susceptible to the volatility we don’t see in the quarterly numbers. In Europe though markets have reacted favourably to falling inflation with the expectation that a 75 bps hike at the next ECB is now much less likely. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 30th November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe Aussie dollar has benefited from a reversal in concerns over China. NAB’s Ray Attrill says an announcement of a more intense vaccination program for older people has markets assuming a recovery in the Chinese economy early next year. Germany’s inflation numbers came out lower than anticipated with the assumption that we will see a Europe-wide slowdown in data released data. It’s a different story for Australia though (although obviously from a lower base) with inflation expected to rise today, with NAB forecasting a greater rise than the consensus. Then the focus is on US jobs, with job openings and ADP employment numbers today, ahead of non-farm payrolls on Friday. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 29th November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABChina is losing out on two fronts. It can’t keep its COVID numbers down and now its facing protests in major cities, which could add to the slowdown in the Chinese economy and, as JBWere’s Sally Auld suggests, it could delay the speed of the global recovery. We’ve already had two Fed speakers overnight suggesting rates might be higher for longer than markets are expecting. In Europe Christine Lagarde continues to take a hawkish stance (just ahead of Euro area inflation numbers), whilst the RBA’s Philip Lowe has been forced to apologise for misleading Australians on the speed and size of rate hikes from the central bank. It’s unlikely yesterday’s drop in retail sales will have any impact on the current path from the RBA – after all, it’s just one month and there are several factors influencing that number.  Hosted on Acast. See acast.com/privacy for more information.

Monday 28th November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUnrest is growing in China over the zero COVID policy, with protests over the weekend in Shanghai following deaths from an apartment fire, supposedly locked down. NAB’s Rodrigo Catril says we’ve already seen a response to this news with a fall in the Australian dollar as the market opened. Friday saw a sell-off in European bonds as the ECB sounded ever hawkish, and an increase in the pricing of a 75bps hike at the next meeting. And the numbers are in for Black Friday sales – they are at record levels but given the current inflation levels that’s not really saying much. Hosted on Acast. See acast.com/privacy for more information.

Friday 25th November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABAs you might expect, with Thanksgiving still going on in the US and everyone else watching the world cup it’s been a quiet session overnight. Still. NAB’s David de Garis joins in today to talk through the ECB minutes, Germany’s IFO numbers, the Riksbank’s interest rate decision and China’s likely response to record COVID numbers. There’s also a no-spoiler guarantee, for those recording the soccer to watch later.  Hosted on Acast. See acast.com/privacy for more information.

Thursday 24th November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere’s a higher risk appetite again this morning, driven by the release of the FOMC minutes which NAB’s Gavin Friend says more or less confirmed that the Fed will lift rates by 50 bps at the December meeting. Before that, the response was to mixed data, with PMIs weaker than anticipated but strong US durable goods orders. There’s also an expectation that Russian supplies of oil might be higher than anticipated as the G7 and EU seem set to set the cap around $65-70, well above the cost of production. That might be good for inflation but a disaster in tackling Russia’s war effort, which has seen a barrage of cruise missile on Kiev overnight.  Hosted on Acast. See acast.com/privacy for more information.

Wednesday 23rd November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABAmerica will be sitting down to a Turkey dinner tomorrow, but before that markets seem to be determined to spread hope of a pivot from the Fed – or at the very least a slowdown in rates. That’s helped equities overnight and whilst treasury yields are falling. NAB’s Skye Masters says it’s unlikely the Fed will be happy to see this sort of price action, it isn’t the message they are trying to send to markets. Less attention sems to be given to rising COVID numbers in China, which are now close to their all-time high in April and are resulting n more lockdowns in major industrial areas. And the RBA’s Philip Lowe warned about the danger of rising wages yesterday, whilst also suggesting interest rates may not return to the lows we saw before the pandemic. Hosted on Acast. See acast.com/privacy for more information.

Markets are still concerned about lockdowns in China, evidenced by the fall in US equities and a 2% drop in Apple’s share price. Oil has also been falling, but NAB’s Ray Attrill says the prospect of an increase in production by OPEC+ next month pushed prices lower for a while before people started asking, ‘why would they do that?’. The argument was it was to compensate for lost Russian oil as sanctions hit, with news reports that G7 and the EU might this week agree on the price cap beyond which they will not ship or insure Russian oil, irrespective of the destination. There’s also discussion today on the fall in German producer prices, what the RBNZ will do tomorrow and what the RBA’s Philip Lowe will say over dinner tonight.Incidentally, today NAB trade donate the proceeds of today’s trading revenue to First Nations Foundation, to support the financial literacy of Indigenous communities. Or you can make a donation. Go to www.nabtrade.com.au/charityday for more information. Hosted on Acast. See acast.com/privacy for more information.