NAB Morning Call

Thursday 28th May 2026

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A softer-than-expected Australian headline inflation print sent the Aussie dollar sliding half a percent to 71.4 US cents. NAB’s Gavin Friend cautions that while the headline cooling is welcome, the trimmed mean core rate remains stubbornly high, meaning the RBA cannot yet afford to take its foot off the brake. Meanwhile the RBNZ held rates steady yesterday but strongly signalled that it is itching for another imminent interest rate hike. All eyes now look ahead to the Fed's preferred inflation metric, the core PCE deflator—which will influence the broader transatlantic interest rate path. And oil is lower, but will it last? The oil markets want to believe, says Gavin.

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Wednesday 27th May 2026

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Despite ongoing optimism around a potential peace deal, the U.S. literally "fired up" tensions by launching missile strikes against targets in southern Iran and mine-laying vessels in the Strait of Hormuz. That sent Brent Crude prices highr, back over $100, whilst WTI fell. It was a session filled with divisions: U.S. Treasury yields fell 6 basis points and tech stocks rallied, while European yields climbed and its major indices retreated. NAB’s Taylor Nugent says its more to do with who’s been on holiday on Monday rather than any significant geographic divide. Today the focus will be on Australia’s CPI and a speech by the RBA’s Carolyn Hewson.

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Tuesday 26th May 2026

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Phil is joined by NAB’s Ken Crompton to discuss how global markets are holding onto optimism despite Donald Trump shifting his rhetoric, stating he will only settle for a "great deal or no deal at all" regarding Iran. Despite thin holiday trading with the US and UK closed, equity markets rallied to new records—with Japan's Nikkei jumping 2.9% and the Dax rising 2%—while Brent crude plunged 7% to just over $96 a barrel. Ken explains that while sentiment remains supported by a proposed 60-day ceasefire extension and plans to gradually normalize shipping traffic in the Strait of Hormuz, key hurdles remain; Iran is currently making any final agreement conditional on China taking custody of its nuclear material, all while its central bank governor negotiates in Doha to unfreeze frozen assets. This fragile progress left the Australian dollar as the session's biggest major currency mover, climbing 0.7% to 71.8 US cents as traders await the full return of global desks.

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Monday 25th May 2026

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diplomatic signals from the U.S. and Iran. While Donald Trump and Marco Rubio teased an imminent breakthrough that briefly sent Bitcoin surging 2%, the administration subsequently walked back the timeline, advising negotiators "not to rush". Ray notes that while both sides have reportedly softened their unrealistic demands—such as Iran dropping shipping toll requirements and the U.S. easing off proxy funding restrictions—the immediate reality points toward a mere 60-day ceasefire extension rather than a comprehensive resolution. Meanwhile, a single Iraqi crude supertanker successfully traversed the closed Strait of Hormuz, but with global inflation pressures mounting, new Fed Chair Kevin Warsh faces a tough call on rate paths, keeping the global economy in a state of tentative, risk-sensitive suspense.

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Friday 23rd May 2026

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This week Phil sits down with NAB’s Gareth Spence and JBWere’s Glen Bertram to unpack the ramifications of the federal budget's aggressive pivot away from established property tax incentives. The panel deconstructs how ditching the 50% capital gains tax discount in favour of a cost-base indexation system, paired with a new 30% minimum tax rate, rewrites the wealth creation playbook for Australian property investors. What impact does limiting negative gearing to new builds have on the pricing and rental yields of established dwellings? Will the changes shift investment away from property – even more money going into super, for example? More importantly, will the impacts be as profound as many are making out?

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Friday 22nd May 2026

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NAB’s Ken Crompton discusses the unexpected softening in the Australian labour market, where the unemployment rate climbed to 4.5% alongside a loss of 19,000 jobs. Ken points out that this surprising shift shows firms are pausing hiring plans due to global headwinds and the ongoing disruption in the Strait of Hormuz. While U.S. markets showed some resilience on the back of tech earnings, Europe faces deep contractionary pressures with manufacturing and services data turning weak. This sudden domestic downturn removes the immediate urgency for the RBA to lift interest rates again, pushing market expectations for the next potential hike out to August.

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Thursday 21st May 2026

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There were strong moves in positive sentiment today as several vessels sailed through the Strait of Hormuz, accompanied by hopes of some sort of deal with Iran. Brent Crude dropped in price and bond yields fell, particularly in Europe. NAB’s Gavin Friend says yields had started to fall on the back of weaker than expected CPI data in the UK. The Fed’s minutes this morning showed more members leaning towards rate rises this year. Australian employment data is out today. The unemployment rate is likely to remain at 4.3%, but it was so close to 4.2% last time that’s a possibility too. And NVIDIA earnings beat expectations, but the forecast wasn’t as bullish as some had hoped.

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Wednesday 20th May 2026

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The worry from just about everywhere is that when there’s a supply shock, companies are quicker to pass on the costs to their customers than they would in ordinary times. The RBA said as much in a paper yesterday. NAB’s Ray Attrill says that’s why NAB now expects another rate rise next month. Others are saying the same thing about inflationary worries, including the BoJ’s Gov Ueda yesterday, but is it concerning enough for him to raise rates? Meanwhile, President Trump’s TACO moment over planned attacks on Iran means the world continues to watch oil reserves dwindle and prices steadily rise.

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Tuesday 19th May 2026

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A stark geographic division has opened up in global markets as US and European assets move in entirely opposite directions. Phil talks to NAB's Skye Masters about this pronounced division, noting that while inflation fears have sent US equities tumbling and pushed 10-year Treasury yields above 4.6% to a one-year high, European shares are rallying and bond yields are falling. This market fracture comes as geopolitical tensions reach a boiling point, with Brent crude pushing past $112 a barrel following reports that Donald Trump is convening his top national security team in the Situation Room to discuss military options against Iran. Meanwhile, a sense of political calm has returned to the UK after Labour leadership contender Andy Burnham ruled out altering Rachel Reeves' fiscal rules, a move that lowered gilt yields and sparked a 0.7% climb for the pound. This transatlantic divide completely overshadowed much softer-than-expected economic activity data out of China, leaving investors to brace for a highly volatile week ahead of the Fed minutes and Nvidia's upcoming earnings.

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Monday 17th May 2026

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Just when markets were hoping for a diplomatic breakthrough, it’s clear the Chinese leader sees it as America’s problem. Donald Trump’s blunt dismissal of the latest Iranian proposal has sent global markets into a dramatic tailspin. Phil talks to NAB’s Sally Auld about Friday's sharp risk-off move, which saw equities tumble and Brent crude surge toward $110 a barrel as the Polymarket odds of the Strait of Hormuz reopening this month collapsed to a measly 5%. While U.S. Treasury Secretary Scott Bessent tries to calm nerves by calling the bond sell-off a temporary inflation blip, 10-year Treasury yields have added 11 basis points, and the UK remains in its own self-induced political fix as Andy Burnham’s leadership gamble pushes gilt yields up by a striking 18 basis points. This escalating geopolitical storm completely overshadowed surprisingly resilient U.S. industrial production data, leaving G7 finance ministers meeting in Paris today with a messy combination of a soaring U.S. dollar, collapsing consumer certainty, and the looming reality of a hawkish central bank response.

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