NAB Morning Call

Wednesday 9th NovemberNAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS equity markets have switched from being upbeat about the prospect of an end to China’s zero COVID to being upbeat about the outcome from today’s mid-term elections. NAB’s Ray Attrill also talks about the differences between Australian consumer and business sentiment and why the business outlook always seems a little rosier. He also discusses how one central banker at least reckons a recession will increase inflation, whilst there’s some hope that falling producer prices from China today might dampen inflation expectations a little, as more cheaper goods are shipped around the world. And Donald Trump has announced he will be announcing something important. Any idea what that might be? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 8th November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABWe didn’t see the expected turnaround in markets on Monday. Yesterday on the Morning Call we talked about how Chinese officials had denounced speculation that they were heading away from the Zero COVID road soon, so we expected a reversal to some of the optimism in markets at the end of last week. On Monday though, as NAB’s Taylor Nugent discusses, US equities continued to rise, with the Wall Street Journal reporting again that a turnaround in China’s policy could still be on the cards. Perhaps. Well, the Chinese trade numbers yesterday were a clear demonstration of the damage being done to the economy. Today eyes will be on the US mid-term elections and, if there’s strong support for the Republicans, whether one Mr Donald John Trump will stand for the Presidency. In the more immediate future, markets are preparing for the US inflation numbers later in the week. Hosted on Acast. See acast.com/privacy for more information.

Monday 7th November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt seems likely we’ll see a reversal to some of the positive sentiment on Friday that saw equities and commodity prices rise, driven by the renewed hope that China was moving towards an end to their zero COVID approach. The official word over the weekend was that that was not the case. NAB’s Skye Masters says there was also a positive response to non-farm payrolls in the US on Friday, with a rising unemployment rate suggesting the labour market was easing and there would be less pressure on the Fed, supporting the case for a 50pc rise at the next FOMC meeting. But in Canada the labour market is as tight as ever, it seems, evidenced by rising employment numbers on Friday.  Hosted on Acast. See acast.com/privacy for more information.

Friday 4th November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt could be the worst of times, or something even worse than that. The Bank of England painted two possible scenarios overnight, after raising rates by the expected 75 basis points. In scenario one, the bulk of their work is done and rates don’t move much higher. In scenario two, rates rise to 5.25% and the country faces a two-year recession. Talk about hedging your bets. NAB’s Ken Crompton says it shows the difficulties faced in the UK and Europe, in comparison with the US, where the Fed is fighting continued high consumption levels - evidenced by high imports in the Balance of Trade overnight – and resilience in the employment market. On that point, tonight’s non-farm payrolls will be eagerly watched. We also look at what to expect in today’s Statement of Monetary Policy from the RBA. Hosted on Acast. See acast.com/privacy for more information.

Thursday 3rd November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABWho’d have thought that a fourth 75 basis point hike by the Fed would see equity markets rally and bond yields down? As NAB’s Gavin Friend explains, the bounce didn’t last long, and it was driven by the term ‘cumulative tightening’, which markets took to mean the FOMC committee believed they could slow down while they assess the aggregate impact of the hikes so far. But in the press conference that followed Jerome Powell made it clear any slow down wouldn’t imply the terminal rate will be any lower, in fact it is likely to be higher than they’d been thinking in previous meetings. Where does the Bank of England go today? The expectation is a 75 basis point hike there too, but in very different economic circumstances. If they do go lighter touch they’ll be keen to emphasise this is not a dovish pivot, simply taking stock of where they are now. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 2nd November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe RBA has taken a slow and steady approach to interest rate hikes, so we can expect many more to come. Sally Auld says Governor Lowe said last night that the risks are more two-sided than they were a few months ago, and the bank needs to factor in the risk of the lag. It’s a very different approach being taken by the Fed, with a strong expectation that they will announce a 75bp hike tomorrow morning, reinforced by data showing a rise in job openings in the US. The optimism in markets yesterday afternoon that perhaps China was heading out of its zero COVID approach have been reversed, with newspaper reports suggested the opposite is the case and we can expect more lockdowns and the like. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 1st November 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABToday is the day of the race that stops the nation, but before the champagne flows there’s an RBA meeting to get through. NAB’s Tapas Strickland says the odds are on a 25bp hike today, but the board will be considering last week’s inflation surprise and yesterday’s retail numbers. So there’s an outside chance they will go higher. The FOMC meets later this week, and tonight’s JOLTs job openings numbers will be given some consideration. It’s a while till the next ECB meeting, but an inflation shock justifies last week’s 75 basis point hike and could justify a third such rise next time. And a soggy track – good news for a British horse this afternoon?  Hosted on Acast. See acast.com/privacy for more information.

Monday 31st October 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NAB US equity markets rose sharply on Friday, even though there’s little evidence that inflation is easing or that the Fed will slow down their pace of hikes, despite all the pivot-talk of the last week. This morning NAB’s Rodrigo Catril is asked whether they are too optimistic, given the data and geopolitics we are experiencing right now. Could the fear of persistent inflation but the frighteners on them this Halloween? The US employment cost index might have moved down slightly, but the rate of wage growth is still way higher than the Fed would like to see. In Europe equities were still rising on Friday even as inflation numbers for Germany, France and Italy were way-higher than expected. With the BoE, RBA and Fed all meeting this week will reality come back to bite? Will the word ‘Pivot’ be consigned to history, at least for a week or two? Hosted on Acast. See acast.com/privacy for more information.

Friday 28th October 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe ECB raised rates by 75 basis points as expected, but NAB’s Rodrigo Catril says a widespread expectation that central banks will ‘pivot’, and switch away from a path of higher rate rises. We don’ have long to wait to find out with the BoE, RBA and Fed all meeting next week. But is all this pivot talk misplaced? If it’s because of softening data, the Fed has made it clear that inflation will be tackled at whatever cost. For that reason, the employment cost index will be a key number to look out for from the US today. It’s a different story for the ECB, which faces bigger recessionary fears and a mixed inflationary picture across the Euro area. Meanwhile, expect little from the Bank of Japan today, but they will have to make moves to tackle rising inflation at some point. Hosted on Acast. See acast.com/privacy for more information.

Thursday 27th October 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe Bank of Canada lifted rates by 50 basis points this morning, against expectations of a 75 bp hike. David de Garis says there were cries of ‘Pivot’ amongst the traders at NAB in London, but how far will it stretch. Does it follow that the Fed will follow in Canada’s footsteps? It’s unlikely the ECB will, when they meet later today. Or the RBA when they meet next week, given the stronger than anticipated inflation numbers yesterday. And a sign that the confidence crisis in the UK is over, the new PM announced a delay to the issuance of their new budget without the pound tanking and a massive spike in Gilt yields. Besides the ECB, all eyes today will be on US GDP. Hosted on Acast. See acast.com/privacy for more information.