NAB Morning Call

Wednesday 11th September 2019

For listeners of a certain vintage, the title to today’s podcast is a homage to Creedence Clearwater Revival. As Phil Dobbie discusses with NAB’s Rodrigo Catril, globally yields are on the rise again as it seems the ECB will backtrack on the ‘big bazooka’ of measures foreshadowed. Additionally, Germany is unlikely to add stimulus just yet, preferring an expansionary balanced budget, however that’s achieved. Locally, the NAB business survey continues to paint a pessimistic picture for the Australian economy whilst jobs data in the UK shows some resilience, despite Brexit, with unemployment down and wages up. And oil prices are down, perhaps because the departure of John Bolton from the White House helps ease geopolitical pressures a little.

Tuesday 10th September 2019

Bond yields have paved down across the world, driven by a sell-off in German bunds. NAB’s Tapas Strickland says it relates to a growing expectation that the ECB measures later this week will be a little less bazooka-like. Data out in the last 24 hours has been largely positive – UK GDP was better than expected, German exports are up, consumer borrowing is up in the US and home loans rose sharply in Australia. And with the UK parliament now out of action till late October and the law calling for an extension to Brexit it’s hard to see how the government could orchestrate a no-deal by the end of next month.

Monday 9th September 2019

US payrolls numbers disappointed a little on Friday and China’s trade numbers over the weekend demonstrated what impact the trade war was having. Phil Dobbie asks NAB’s Ray Attrill why there’s been little market reaction to the latest data, even as Larry Kudlow intimated that reaching a conclusion could take a decade. Brexit could be over in a month, or four months. However, it gets resolved, today could be an important one in the unfolding farce-cum-tragedy. It’s also the week the ECB meet – will they deliver on the foreshadowed bazooka of policy measures? Plus, are we getting close to QE in Australia?

Friday 6th September 2019

There’s been big moves on equities and bonds today as talks between the US and China appear to be back on. That’s created a slight risk-on mood, helped also by stronger than expected non-manufacturing ISM numbers in the US. Phil Dobbie asks NAB’s David de Garis whether the markets will be as responsive to the release of non-farm payrolls numbers tonight. They also discuss what to expect from Jerome Powell when he talks later, given that central bankers seem to have sounding a little less dovish of late. What stance with the ECB take next week – a bazooka of measures still? Yesterday’s factory orders add to the depressing picture on the state of the German economy. And Phil suggests a new rule for cricket – just to give the poms a chance.

Thursday 5th September 2019

The US dollar is weaker today on the back of positive developments in other parts of the world. As Phil Dobbie discusses with NAB’s Tapas Strickland, the unrest in Hong Kong could be easing, a no-deal Brexit might be avoided, and Italy’s government is settling into place. Add Australia’s GDP numbers yesterday, that weren’t as bad as expected, and you can see why the US dollar is weaker. Equities are much higher too, with one Fed member back to talking-up a half percent rate cut. It sounds like all President Trump’s wishes come true.

Wednesday 4th September 2019

Very soon it’s likely that the UK parliament will take the first step to delaying Brexit, allowing for yet more negotiating time with the EU. Ass Phil Dobbie discusses with NAB’s Gavin Friend, the idea of another election is also likely to be delayed, to the pound could face another month or so of uncertainty. Meanwhile, manufacturing numbers from the US have shown a serious downturn, clearly an impact of the worsening trade war. Could this be enough to spur the US President into fixing a date for further trade talks. And weaker Australian retail numbers, plus an expected downturn in GDP numbers could encourage the RBA to bring forward plans for a further rate cut.

Tuesday 3rd September 2019

Boris Johnson stood outside No. 10 Downing Street earlier, saying he didn’t want an election before the Brexit deadline. But could that be a signal that he’s going to call one anyway. Phil Dobbie discusses the potential with NAB’s Tapas Strickland, on what will be a busy day for British politics. There will be less excitement around the RBA’s meeting today, unless they decide to cut rates, but interest in retail numbers and expectations for tomorrow’s GDP read. And the US China trade talks seem to have stalled, with no date set for the September meeting.

Monday 2nd September 2019

In the US new tariffs on Chinese imports kicked in over the weekend, with the usual accompanying notes from the US President via Twitter. It happens as consumer sentiment falls sharply. Phil Dobbie talks to NAB’s Rodrigo Catril about the impact on US manufacturing and rate cuts by the Fed. Meanwhile, the Europe has been hit by uncertainty (already) from the new Italian coalition government, whilst the pound reflects a shaky week for Brexit. There’s more data contributing to Australia’s GDP numbers today Q2 and the Caixin manufacturing PMI for China, whilst the US takes the day off.

Friday 30th August 2019

In the US, the dollar, equities and bond yields have all risen on the news that China would rather talk than retaliate, as the latest increase in tariffs from the US kicks in this weekend. Phil Dobbie talks to NAB’s David de Garis about the switch in sentiment, which has also been helped by what’s being called the Conte 2.0 government in Italy. The only sore point has been weakening inflation in Germany, ahead of Eurozone CPI later, and the reaction to yesterday’s poor business confidence read from New Zealand.

Thursday 29th August 2019

UK politics has turned even more toxic with Prime Minister Boris Johnson suspending parliament from September 12th, for five weeks. As Phil Dobbie discusses with NAB’s Gavin Friend in London, the pound had a sharp reaction but bounced back half-way, perhaps because of hope that the PM will reach a deal with the EU, or that rebel MPs will move swiftly to stop Boris in his tracks. All this makes Italian politics seem a little more stable, with a government likely to be formed. They also discuss the implications of yesterday’s weak construction data in Australia, the reasons behind the rising oil price, and German unemployment and CPI numbers today.