NAB Morning Call

Thursday 1st August 2019

Jerome Powell said the Fed’s actions today were well telegraphed, yet there was some short-term market reaction during his press conference – equities fell, bond yields rose and the dollar climbed. Phil Dobbie asks NAB’s Gavin Friend why the moves? It’s all to do with Powell’s commentary on future moves. The Aussie dollar gained some ground on the back of better than expected inflation numbers and a slight bounce in Chinese manufacturing activity. And the pound bounced back a little today, but that doesn’t change the fundamental direction of travel on Brexit.

Wednesday 31st July 2019

Get ready for a busy 24 hours, culminating in the Fed rate decision early tomorrow morning (Australia time). Before that we’ll have CPI numbers for Australia and Europe, PMIs from China and employment numbers from the US. Phil Dobbie and NAB’s Rodrigo Catril talk through what’s to come, as well as examining the continued fall in the pound, the weakness in the Aussie dollar and President Trump’s latest twitter spat.

Tuesday 30th July 2019

The pound took another hit today, now at its lowest level since March 2017, as new British PM Boris Johnson ramps up plans for a no-deal Brexit, whilst insisted a deal is still possible if the EU just remove that pesky backstop. On today’s Morning Call Phil Dobbie discusses with NAB’s Ray Attrill the signs that perhaps Johnson is gearing up for a quick election. Either way, it’s bad for the strength of the pound. They also discuss the Bank of Japan rate decision today, trade talks between the US and China and Australia’s housing market and falling bond yields.

The US finished on a high last week. The dollar had risen after higher than expected GDP growth, and the S&P500 and NASDAQ were on record highs after strong earnings results. This week will be one of the busiest of the year, as Phil Dobbie discusses with NAB’s Tapas Strickland. We’ll find the long awaited Fed decision on interest rates (as well as decisions from the Bank of Japan and Bank of England), plus a swag of data releases, the resumption of trade talks between the US and China (with no grand-deal anticipated), and Britain’s new PM turning up the heat on Brexit, promising a no-deal if the EU don’t withdraw the ‘undemocratic’ Irish backstop from the Withdrawal Agreement. Also, why the weakness in the Aussie and Kiwi dollars?

Friday 26th July 2019

The latest IFO readings have shown a sharp downturn – ‘in freefall’ has been one description – yet t the ECB didn’t budge today. Mario Draghi flapped future action, but will it be soon enough. Bond yields have moved up across Europe on the news. Over in America, were a rate cut is imminent, the latest durable goods orders showed a sharp turnaround. But, as NAB’s David de Garis discusses with Phil Dobbie, it’s the US Q2 GDP number today that really counts. And Boris blusters into parliament, promising his no deal Brexit, whilst EU negotiate Mr Barnier agrees it could happen.

Thursday 25th July 2019

Phil Dobbie talks to NAB’s Alex Stanley about another set of disappointing data from Europe. Eurozone manufacturing PMIs are well down, hitting a seven-year low in Germany. With bond yields down across the continent does this raise the impetus for easing action by the ECB, which meets today? Manufacturing numbers were down in the US too, but shares continue to rise on the back of stronger than anticipated earnings results. Whilst closer to home, bond yields are falling in Australia too. Will Philip Lowe give a hint of when the RBA will move rates down? And Boris has talked up the pound, saying, ‘never mind the backstop, the buck stops here’.

Wednesday 24th July 2019

US shares were doing well ahead of the news that trade talks would resume between the US and China next week. That’s pushed equities even higher. It’s that’s the surprising news of the day, the predictable news was that Boris Johnson has been chosen as the UK’s next Prime Minister. But, as NAB’s David de Garis explains to Phil Dobbie, the announcement hasn’t done too much damage to the pound, yet. In fact, the pound wasn’t even hit by the CBI industrial trends survey that paints a bleak outlook for Great Britain. So what will it take for the Aussie dollar to reach the 60 pence mark?

Tuesday 23rd July 2019

The race is on to try and get through stuff before the summer recess in the US and Europe. Phil Dobbie talks to NAB’s Tapas Strickland about the next steps on Brexit, a possible resolution to the US debt ceiling issue and, maybe, a return to trade negotiations between the US and China. Maybe the ECB will squeeze in a rate cut before the week is over, too. There seems less sign of forward movement over tensions with Iran. With little in the way of economic news, presumably it’ll be progress on these stories that will influence markets the most today, before a busy second half to the week.

Monday 22nd July 2019

There was a reversal of fortunes on Friday, as the NY Fed clarified comments from their President John Williams the day before. NAB’s Rodrigo Catril explains to Phil Dobbie how it was all taken out of context. So, does that mean a half percent cut from the Fed next week is now off the table? And what about the ECB – they meet this week and their economy is faring somewhat worse than the US. And it seems the Iran situation can no longer be ignored, with their flag now flying on a UK oil tanker. Can we expect a volatile week for oil prices, or are supply fears less important when demand is expected to fall anyway?

Friday 19th July 2019

Could the Fed be careering to a half percent rate cut at the end of the month? Phil Dobbie asks NAB’s Alex Stanley if that could be the case, with bond yields and the dollar falling. Sentiment has shifted after a speech by the NY Fed’s John Williams saying that it’s better to take preventative measures than to wait for disaster to unfold – he wasn’t talking specifically about the US, but the bond market has taken it that way. In the UK parliament has voted to prevent the proroguing of parliament to avoid a no-deal Brexit – that’s helped the pound, for now. In today’s podcast you’ll also hear about Australia’s employment numbers, why oil prices are falling and how, in the UK, when the going gets tough, the tough go shopping.