NAB Morning Call

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.

Wednesday 26th October 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABEquity markets and bonds have both rallied overnight, pushing yields lower again. NAB’s Skye Masters says investors are still hoping that the Fed will slow down the path of rate hikes, although there’s no data top suggest why they should and some commentators suggesting that rates might go up above 5 percent early next year. Italy’s new PM is opposed to hikes and an end to QE, warning of the impacts it’ll have on high debt economies, like Italy, for example. That’s unlikely to stop the ECB lifting rates by 75 basis points, which is what the Bank of Canada is expected to do tonight. We also take a look at yesterday’s budget and ask will it help combat inflation, or is the expectation that the RBA will do all the heavy lifting? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 25th October 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt's been a very mixed session depending on vaired geographic circumstances, says NAB’s Taylor Nugent. US equities continue to rally on anticipation of positive earnings results and the hope that the Fed will slow down its pace of hikes. Europe has seen modest gains as gas prices fall, offsetting a slightly worse than expected set of PMIs. The UK has seen gilts back in fashion as Rishi Sunak is announced as the new Prime Minister, generally seen as a relatively safe pair of hands. But China has seen the offshore Yuan fall sharply and equities also taking a dive, despite relatively strong economic data, including a better-than-expected GDP read. The concern is the direction President Xi will take as he surrounds himself with allies and prepares for more controls and lockdowns. Tonight we’ll find out what’s in the Australian budget, at least those bits that haven’t already been leaked to the press. Hosted on Acast. See acast.com/privacy for more information.

Monday 24th October 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe US finished the week with equities rising and the dollar falling, with the Fed’s Mary Daly hinting that the path of hikes might slow for fear of an ‘unforced downturn’. NAB’s Ray Attrill notes that the Wall Street Journal’s Nick Timiraos suggesting the Fed might well be signalling a stepping down of rate increases, and that Timiraos rarely gets it wrong. It’s fun and game is the UK today as they fast track the selection process for the next Prime Minister, although since we recorded the podcast it seems an almost certainty that Rishi Sunak will be the UK's next prime MInister, staving off the turmoil that could have ensued from a Boris Johnson win. Plus, lots of PMIs today, and China’s GDP and other data, pushed back from the People’s Congress last week.  Hosted on Acast. See acast.com/privacy for more information.

Friday 21st October 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe UK is on the lookout for another Prime Minister after Liz Truss announced her resignation overnight. Her replacement will be found by Friday next week, at the latest, but NAB’s Gavin Friend says there could be a new PM in place as soon as Monday. There wasn’t a massive market reaction, with the good news offset by the uncertainty of who will replace her. Boris perhaps? Yes, really. Meanwhile Aussie jobs numbers show the labour market remains tight, as did US weekly jobless claims. In short, another day with no signs of inflation easing. Hosted on Acast. See acast.com/privacy for more information.

Thursday 20th October 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt’s a very mixed day, but generally the reverse of yesterday. The US dollar has gained strength, bond yields have pushed higher and equities have fallen, despite some strong corporate earnings. NAB’s Taylor Nugent says we are back to worrying about inflation and central bank’s pursuing elevated interest rate paths. US 10 year yields reached a 14 year high overnight, as the Fed’s Neel Kashkari declared he had not seen any signs yet that inflation had peaked. Higher than expected inflation numbers in the UK and Canada have added to the mood, although gilt yields have fallen as markets assume a more balanced approach by the government, although looking at the political shenanigans overnight the environment is far from stable. And Russia is stepping up action against Ukraine, adding to global uncertainty. Hence, the volatility. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 19th October 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABEquity markets have managed to climb again in the US, supported by earnings results, although NAB’s Ray Attrill describes it as a bear rally. There is still plenty of uncertainty around, evidenced by moves in bonds, in all directions. The BoE drove some of the movement when they announced they would resume bond purchases next month, on schedule, despite the diversion last week. New Zealand’s inflation numbers yesterday surprised on the upside, which begs the question, will we see the same with CPI for the UK and Canada today?  Hosted on Acast. See acast.com/privacy for more information.

Tuesday 18th October 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe UK government decided it couldn’t wait till the end of the month to reverse almost all of their unfunded tax cuts, so they did it yesterday, much to everyone’s surprise. Markets have taken it well, with big falls in bond yields and a rise in Sterling, but as JBWere’s Sally Auld points out, there is still a big budget gap to bridge. The impact has helped buoy US equity markets though – perhaps looking for a buy-the-dip excuse. Today look out for NZ CPI and the minutes of the last RBA meeting, when they surprised with a less than expected 25bp rate hike. Hosted on Acast. See acast.com/privacy for more information.

Monday 17th October 2022NAB Markets Research DisclaimerFinancial Services Guide | Information on our services - NABUS Treasury yields rose higher still on Friday as markets absorbed Thursday’s inflation print and the expectation of faster hikes and a higher terminal rate from the Fed. Despite the hikes so far, there’s few signs of a slowdown, with NAB’s Rodrigo Catril pointing to Friday’s retail numbers which showed yet more resilience in spending from US consumers. We look at how this is all playing into the weakness of the Australian dollar. And then there’s the UK! Will they have a change of Prime Minister, will a complete reversal in policies be enough to stop the BoE picking up its pace of increase, and if it is, what does that mean for the pound. Plus, the China People’s Congress, the fall in oil prices and much more besides. It’s a busy start to the week. Hosted on Acast. See acast.com/privacy for more information.

Friday 14th October 2022NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt’s been a stormy night, with violent swings in bond yields and US equities. As NAB’s Skye Masters explains, shares plummeting as the higher than expected CPI read but then staged a massive rebound later I the session, fishing markedly higher towards the close. Bond markets responded more predictably, pricing in a more aggressive path of rate hikes from the Fed – maybe 150bp before Christmas. Meanwhile, massive swings on UK bonds with reports that the Truss government might be ready to stage another u-turn on their unfunded tax cuts, although the Chancellor Kwasi Kwarteng has denied this. Today, US retail numbers will have less influence than the CPI, but a strong read will indicate a more resilient economy which would suggest rates will stay higher for longer.  Hosted on Acast. See acast.com/privacy for more information.