NAB Morning Call

Wednesday 16th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9There’s a bit more positivity in the markets today, certainly since yesterday morning, because Russia hasn’t invaded Ukraine, and talks continue. But NAB’s Rodrigo Catril says there is still plenty to be cautious about. NATO can’t confirm Russian troops have moved from the border, as Putin had claimed, and the central issue of Ukraine’s right to NATO membership remains unresolved. Still, markets have taken it as good news, offsetting any inflation concerns that should have arisen from US PPI numbers yesterday. UK jobs numbers also showed wage pressures and today, loads more, inflation and producer prices for many parts of the world. We also get to see the RBA’s Debelle and Bullock in front of the senate tonight.

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Tuesday 15th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9The rhetoric is still that Russia is on the brink of war with Ukraine, although, as NAB’s Ray Attrill points out, markets took some comfort from a television event that saw Putin saying he supported continued diplomat efforts with the west, but have since repsnded to military movements that suggest something is about to happen. For a while, the talk of more talks allowed a little more focus to return to central banks, with the Fed’s James Bullard again calling for a front loading of hikes because the policy is out of sync with the economy. Today, with inflation still on the rise just about everywhere, including New Zealand, US producer prices will be watched keenly later today, along with UK wages.

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Monday 14th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9There was a swift response on Friday to speculation that Putin would launch an attack on Ukraine as soon as this week. The US dollar gained ground at the expense of the Euro, whilst bond yields, which had risen on the upside inflation surprise on Thursday, came falling down again. NAB’s Tapas Strickland says more negative new over Ukraine will add to the strength of the US dollar, but similarly, markets could slowly reverse their positions if weeks go by without any resolution. Meanwhile, second guessing the actions of central banks remains a focus on markets, with Aussie bond yields shooting up on Friday as Philip Lowe suggested a rate rise this year was “consistent with their central scenario”.

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Friday 11th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9Markets reacted swiftly to a higher-than-expected rise in the US CPI. NAB’s Gavin Friend says its unlikely that the Fed will raise rates by half a percent in March, even though many now expect it and the Fed’s Bullard has said he isn’t opposed to the idea. Gavin’s point, if they were to do that, why haven’t they stopped QE dead in its tracks? Today’s podcast looks at the market reaction in the US and yield movements in Europe. There’s been more discussion about Ukraine, but one British former diplomat has described the whole thing as a Russian fishing trip. And new Yuan loans have seen a heap of extra money piled into the Chinese economy.

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Thursday 10th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9Bond yields have fallen back a bit a little ahead of US CPI numbers later on today. Phil Dobbie asks NAB’s David de Garis what he will be looking for in the data, to give a clearer picture of where inflation is heading. In particular, are we seeing signs that supply chain difficulties are easing? Central bank speakers are out in force, but its pretty clear now that few have a clear picture about the path beyond the next hike. Equities are up for a second day, driven by positive earnings, but with uncertainty over forward guidance they too will be susceptible to a move in tonight’s CPI.

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Wednesday 9th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9In the absence of any big statistical releases markets are treading water ahead of US CPI numbers later in the week. US 10-year Treasury yields hit a two-year high for a short while, whilst equities have been choppy in face of all the uncertainty. How much will the Fed lift rates in March? What will be the end rate? NAB’s Ray Attrill says focus is now also shifting to the actions of the ECB. Even though Christine Lagarde is still talking about a gradual shift in policy, other ECB members are not so sure and European bond yields have been rising accordingly. Much of the focus today will continue to be on inflation prospects, in the NAB Business Survey and in the NFIB small business survey.

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View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9In the absence of any big statistical releases markets are treading water ahead of US CPI numbers later in the week. US 10-year Treasury yields hit a two-year high for a short while, whilst equities have been choppy in face of all the uncertainty. How much will the Fed lift rates in March? What will be the end rate? NAB’s Ray Attrill says focus is now also shifting to the actions of the ECB. Even though Christine Lagarde is still talking about a gradual shift in policy, other ECB members are not so sure and European bond yields have been rising accordingly. Much of the focus today will continue to be on inflation prospects, in the NAB Business Survey and in the NFIB small business survey.

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Monday 7th February 2021Friday’s non-farm payrolls data showed how more people returned to work in the US whilst Omicron saw the highest wave of COVID-19 infections across the country. Over the border Canada saw a fall in jobs in the face of continuing lockdowns. Phil Dobbie asks NAB’s Rodrigo Catril whether this means US jobs will bounce back further next month, and what does this mean for inflation, with the US data showing another increase in hourly wages. China is back at work today, with the possibility that they will add to the rising cost of oil as they seek to replenish dwindling reserves.View our disclaimer and terms of use: https://nab.co/3shJyypView our NAB Financial Services Guide): https://nab.co/3rvJtI9

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Friday 4th February 2022The Bank of England is certainly all out to stop any risk of wages pushing inflation out of control. The decision was one vote away from a half percent rate rise, with NAB’s Gavin Friend saying the bank is trying to send a firm signal, even though the eventual number of rises this year might fall below current market expectations. The rise comes at a time of strong headwinds for UK households and the broader economy. Meanwhile, a strong reaction on bond markets to the ECB meeting. The announcement itself wasn’t a surprise, but some ground was given during the press conference suggesting the ECB might move faster than they have been letting on. Tonight, of course, non-farm payrolls. Before that, the RBA Statement of Monetary Policy.

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Thursday 2rd February 2022You could say its the best of times and the worst of times, with a rampant jobs recovery tempered by high inflation. Certainly, two central banks have a different perspective on the underlying economic strength. As NAB’s David de Garis discusses on today’s podcast, the Bank of England are expected to raise rates today, whilst the ECB will continue to sit on its hands with Christine Lagarde, only yesterday, continuing to argue that inflation is temporary. Meanwhile, yesterday the RBA’s Philip Lowe finally admitted that a rate rise this year was plausible. Overnight we saw staggering earnings results from Google and disappointing jobs data in the US. Omicron almost certainly contributed to both of those outcomes.

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