NAB Morning Call

Thursday 21st November 2019

There’s some concern that a Bill passed by the US Senate could hinder progress of the phase one trade deal with China. With the markets adopting a mild risk-off mood overnight, Phil Dobbie asks NAB’s Ray Attrill whether there’s a growing expectation that a deal won’t be struck before Christmas and uncertainty could become the new normal. Britain, which is no stranger to uncertainty, saw a tie-break in the first election debate – they discuss what that means for the pound. And Canada, despite no surprise in their CPI figures overnight, has seen the fall in their dollar as one of the major currency moves. Plus, what’s in the latest FOMC minutes, released just moments before we recorded today’s podcast.

Wednesday 20th November 2019

The markets are still waiting for developments on the US China trade talks. There are unconfirmed reports that China is pushing harder for tariff rollbacks but NAB’s David de Garis thinks it could be some time before we see any concrete developments. On today’s podcast he talks through the surprisingly dovish stance in yesterday’s RBA minutes, with a short-lived fall in the Aussie dollar. Today the Aussie and NZ dollars are the best performers, with the pound heading south as the first televised debate of the UK election draws near – almost as if the markets aren’t expected a strong performance from Boris Johnson.

Tuesday 19th November 2019

The US China trade talks continue to blow hot and cold, with reports today that China is dubious that they will proceed. NAB’s Rodrigo Catril says the market response has been fairly mooted, to that news and from the absence of any other significant news or data points. On currencies Sterling has been the biggest mover, as Boris Johnson pulls ahead in the polls. It’s a quite data today for data releases, with the RBA minutes the only information of local significance.

Monday 18th November 2019

US equities finished last week on new highs on the hope that the phase one trade deal between the US and China is close. NAB’s Rodrigo Catril says the news continues to blow hot and cold, and currency markets seem to have taken a different interpretation to equities. Meanwhile President Trump has tweeted that China’s tariffs will be used to fund more support for farmers – almost selling the dispute as a benefit for his domestic audience. And the Aussie dollar had a good day on Friday. Phil Dobbie asks what will influence its direction this week?

Friday 15th November 2019

The Aussie dollar fell sharply yesterday on the back of disappointing jobs numbers, followed by weaker than anticipated activity data from China. Phil Dobbie asks NAB’s Ray Attrill what this means for the RBA’s plans to keep rates on hold for a while? The upset continued in Japan and Germany, both reporting weak GDP readings. Even the US is not immune, with higher jobless claims overnight, although Jerome Powell, giving his testimony to the House Budget Panel continued to talk-up the health of the US economy. Today’s retail numbers for the US will help us see if he’s right or not.

Thursday November 14th

The NZ dollar saw the biggest currency move over the last 24 hours, after the RBNZ kept rates on hold. As NAB’s David de Garis points out, two weeks ago that wouldn’t have been unexpected. So what led to yesterday’s decision? Jerome Powell gave his testimony in the US, but said nothing new and the markets responded accordingly. The pound has kept an even keel too, but maybe that’ll change overnight tonight as candidates are announced for the December election – the alliances formed could have some influence on Sterling. Whilst the Aussie dollar could react to a swathe of Chinese data out today, as well as employment numbers this morning.

Wednesday 13th November 2019

It was widely anticipated that President Trump might give away some clues on the progress of trade talks with China today, when he gave an address to the Economic Club of New York. But, as Phil Dobbie discusses with NAB’s Rodrigo Catril, the President offered nothing new and the markets were unmoved. In fact, it’s been a quiet day across all asset classes. Th NFIB survey has shown investment hopes in the US small business sector, whilst the NAB Business Survey and European ZEW survey gave hope that the downturn might be close to bottoming out. Today the RBNZ makes its rate decision, and yesterday’s downgraded inflation expectations have raised the potential for a rate cut.

Tuesday 12th November 2019

Sterling bounced higher today, shortly after GDP figures showed the UK had narrowly missed a recession. But the move in the pound was more to do with the Brexit Party’s decision not to stand against the Conservatives in several hundred seats. Phil Dobbie asks NAB’s Tapas Strickland whether there’s been an overreaction – they could still dilute the vote in marginal Labour constituencies. The US dollar and stocks are lower as markets reacted to doubts on tariff rollbacks, whilst the Kiwi dollar, which was inexplicably lower last week, in inexplicably higher today. Plus, loans are lower than expected in China, the NAB Business Survey is released today and attitudes from Europe and the US with the ZEW survey and NFIB small business report.

Monday 11th November 2019

President Trump finally spoke up after a week of speculation in the markets on which direction the US-China trade talks were heading. As Phil Dobbie discusses with NAB’s Ray Attrill, the fact that he wasn’t entirely keen on giving up existing tariffs hasn’t stopped investors from pushing equity prices higher. Perhaps because he didn’t totally rule out the idea. So, what will be the impact today? Could there be a reversal in the sell-off of government bonds? They also look at the CPI numbers from China over the weekend, and dissect Friday’s Statement on Monetary Policy from the RBA.

Friday 8th November 2019

We know, lousy English, but these are the words of the US President as shares rose higher on further hope that trade talks with China will see a roll back in existing tariffs. As Phil Dobbie discusses with NAB’s Tapas Strickland, despite the positive sentiment, there’s still no official word from the White House. Sterling suffered a little today after the Bank of England failed to reach a unanimous decision to keep rates on hold – two members voted for cuts, perhaps signalling they’ll get their way sometime soon. Today eyes will be on the RBA statement on monetary policy and China’s trade data, for further signs of the impact of the trade war.