NAB Morning Call

Thursday 7th November 2019

Market sentiment has done a complete U-turn on yesterday, as hopes around that phase one trade deal have been put on hold, with a meeting this month seeming unlikely. NAB’s Gavin Friend talks about the impact the likely delay is having on markets. Phil Dobbie asks about the NZ labour numbers yesterday – with unemployment rising is a rate cut from the RBNZ next week now more likely? In Germany, meanwhile, data prints weren’t as bad as expected, so there’s room for optimism, even if the IMF urged Europe to have an emergency plan in case monetary policy fails to correct the downturn. The Bank of England is unlikely to move rates today, but they will issue a revised inflation forecast – plus trade numbers for Australia and China today.

Wednesday 6th November 2019

With nothing concrete to go on, markets continue to factor-in optimism over the US-China trade talks. NAB’s David de Garis talks through the reaction to reports that the US might actually wind-back on some of it’s earlier tariffs although, as he is keen to point out, the one man we haven’t heard from on this is the President himself. Favourable non-manufacturing ISM’s provided further encouraging news from the US, whilst the Aussie dollar lost some of the ground it gained after the RBA’s Philip Lowe spoke of a gentle turning point in the economy.

Tuesday 5th November 2019

Yesterday’s retail numbers showed Australians are cutting back on their shopping habits. Phil Dobbie asks NAB’s Ray Attrill if it’s enough of a concern to influence the RBA later in the year, assuming today’s decision will see no move in rates. Plus, why NAB has revised its AUD forecasts. And all eyes today will be on non-manufacturing PMIs in the US and China. To what extent is the downturn from the trade war turning to the services sector? And will the much talked of truce ever happen? Despite the positive vibes, there’s still no date or place set to sign the phase-one agreement. How much have the markets priced in a favourable outcome?

Monday 4th November 2019

US equities hit new highs again on Friday. NAB’s Rodrigo Catril says the optimism follows the release of better than expected non-farm payrolls data on Friday. But Phil Dobbie asks whether the numbers are that good, when compared with the long term trend. Perhaps they’ll improve if a US China trade resolution is found. The best we can hope for us a cessation of rising tariff rates, but that could happen with word of a ‘consensus in principle’ over the weekend. Also, what to expect from the RBA tomorrow, with suggestions of a revised Policy Targets Agreement. Plus, the NAB expectation for Australia’s retail numbers today.

Friday 1st November 2019

There’s a bit of risk aversion today, as China indicates a phase two trade resolution will be difficult to reach, as impeachment proceedings start against the US President and the markets take stock of Jerome Powell’s press conference yesterday, plus weaker than expected trade data from Chicago. Phil Dobbie talks through it all with NAB’s Ray Attrill – as well as discussion on Ian Harper’s ascertain that lower rates from the Fed are pushing the Aussie dollar higher. Plus, what to expect from US payrolls and ISM data tonight.

Thursday 31st October 2019

The US Federal Reserve has cut interest rates as expected. Phil Dobbie asks NAB’s David de Garis what happens next. The expectation is that they will hold, but that depends on your interpretation of how the economy is fairing and the likely progress on key risks, such as the trade talks and Brexit. The Bank of Canada talk a more dovish approach – even though they kept rates on hold their stance has sent the Canadian dollar lower today. They also discuss US GDP numbers, the latest data from Europe and look ahead to private sector credit numbers in Australia today.

Wednesday October 30th 2019

Right now the UK government is deciding whether to hold an election in early December. Phil Dobbie asks NAB’s Gavin Friend whether it will do anything to unlock the Brexit deadlock. The pound has responded little to the news so there’s little optimism that the end is nigh. Meanwhile, RBA Governor Philip Lowe has accentuated the positive of low interest rates, and ruled out the negative – rates will never get that low he said. There’s also discussion about the Bank of Canada rate decision tonight, Australia’s CPI read today and US GDP numbers tonight. And the latest on the US China trade war.

Tuesday 29th October 2019

US stocks are on the rise as optimism for a trade deal intensifies, but Phil Dobbie asks NAB’s Rodrigo Catril how much we really know about the deal? Could it be much ado about nothing? Ther EU has granted an extension for Brexit to the end of January, but the UK Prime Minister has failed in his attempt to call a December election. Not to worry, they’ll be another motion tomorrow, but none of this takes Brexit any closer to a resolution. And Philip Lower speaks tonight, but he is a long way from the views of Mario Draghi, who once again claimed that monetary policy has gone as far as it can go for Europe. But the central bank cab off the rank is Japan, with Tokyo CPI numbers out today, ahead of the BoJ decision later in the week.

Monday 28th October 2019

Stand by, its going to be a busy week. As NAB’s Ray Attrill explains, there’s a lot of data releases to help gauge the shape of the world economy. On top of that a rate cut is anticipated by the Fed and there’s further hope that a phase one deal will be signed by the US and China. Then there’s Brexit. Thursday was supposed to be the day Britain left the EU – but now delays seem likely, but we might not find what the extension is, or what it’ll be used for, until later in the week. But as to what happens next, who knows!

Friday 25th October 2019

Mario Draghi has painted a grim picture as he steps away from the ECB. Phil Dobbie asks NAB’s Alex Stanley whether he has done a good job, and what will be the next move as Christine Lagarde takes charge. PMI readings in various parts of the world have been very weak, heightening the need for a trade resolution. But has Vice President Mike Pence delayed progress with his outspoken comments on China overnight. And in the latest Brexit twist, the pound has weakened as Boris Johnson calls for an election on December 5th, but there’s no guarantee it will happen because of, well, politics!