NAB Morning Call

Friday 7th June 2019

The Euro rose today after the ECB spoke little of new measures to combat the economic downturn. In fact, as NAB’s Gavin Friend explains, they consider the economy to be in good health. Really? Meanwhile, President Trump seems unlikely to back away from imposing tariffs on Mexico next week and has said he will decide on whether to extend the reach of tariffs on Chinese imports after the G20 later this month. Tonight it’s non-farm payrolls in the US - will they mirror the shock fall of the ADP job numbers earlier in the week? Plus, what to expect from home loans data in Australia today.

Thursday 6th June 2019

Markets are hopefully that a deal will be reached with Mexico and tariffs will be avoided, but it depends who you believe. Meanwhile, a big fall in new jobs in the latest ADP data. Phil Dobbie asks NAB’s Ray Attrill if this means a rate cut from the Fed is even more likely? Speaking of rate cuts, will the ECB have one today. It seems unlikely, so what will they do to get the economy back on track? Plus, US and Australian trade data is out today.

Wednesday 5th June 2019

There’s been a sharp rise in US equities after comments from the Fed’s Jerome Powell, signalling rate cuts are likely. But, as NAB’s Rodrigo Catril explains, he managed to balance that expectation with enough doubt to see Treasury yields rise. Meanwhile, following yesterday’s rate cut by the RBA, Philip Lowe has hinted at there being at least one more cut before the end of the year, but could it go further than that? The market is also encouraged by hope that tariffs on Mexico won’t happen next week, whilst the pound has risen on talk of a “very, very substantial trade deal for Britain”. Also, what to expect from Aussie GDP numbers out today and the Caixin Services PMI from China.

Tuesday 4th June 2019

The RBA is expected to cut interest rates today, but more interesting will be what Philip Lowe says this evening. Will he signal the extent of further cuts? Phil Dobbie asks NAB’s Tapas Strickland whether QE could even be on the horizon. The probability of imminent rate cuts from the Fed also ratcheted up, as US Treasury yields fell even further. There was also further data showing a global weakness driven by trade uncertainty. To that you can add moves by the Federal Trade Commission in the US likely to commence an antitrust investigation into Facebook. It’s all going on!

Monday 3rd June 2019

The market continues to adjust to the expectation that the US-China trade spat won’t disappear in a hurry. Now the US President has threatened tariffs on Mexico and withdrawn an exemption for India. Phil Dobbie talks to NAB’s Rodrigo Catril about the influence of Trump’s actions, along with the likely reductions in interest rates from the Fed. Could Treasury yields push even lower this week? And what will the Google antitrust investigation do to tech stocks this week? Plus, a day of PMI’s today and Australian manufacturing and inflation data. It’s a busy start to a potentially bumpy week.

Friday 31st May 2019

It’s been a fairly quiet session, with little movement in currencies and an early rebound in equities failing to catch on. But, as Phil Dobbie discusses with NAB’s Gavin Friend, Treasury yields have continued their downward direction, indicating growing expectations for a Fed rate cut – possibly three. They also discuss the impact of yesterday’s Aussie Capex numbers, the revision to the US Q1 GDP number and China’s PMIs that are out this morning.

Thursday 30th May 2019

It’s not a rosy picture that NAB’s Tapas Strickland paints of the global economy on today’s Morning Call. Phil Dobbie asks him how far US stocks would have to fall before the President takes note and tries to resolve the US-China dispute. They also discuss falling bond yields, with 10 year Treasuries hitting the lowest level since September 2017 midway through the session. When will the Fed cut rates? How soon will the RBA and RBNZ? The Bank of Canada held rates overnight, but is it only a matter of time for them? Today the US GDP for Q1 is likely to be revised downwards, but it’ll still be a lot better than Q2.

Wednesday 29th May 2019

Consumer confidence in the US hit a six month high, yet there’s a continued flight to bonds, pushing treasury yields to the lowest level since September 2017. Phil Dobbie asks NAB’s Ray Attrill whether the confidence is misplaced? After all, manufacturing data is showing a slide and forecasts are predicting a cut in growth when more tariffs are added on Chinese imports. They also discuss reports of a housing bounce after the Australian election and what to expect from the RBNZ today, with the Financial Stability Report and a session in front of a parliamentary committee for the Governor. Plus, a Brexit poll shows what markets fear – widening support for Brexit and a Labour win if the UK heads to another general election.

Tuesday 28th May 2019

The EU elections didn’t see a groundswell of support for the far right, but as NAB’s Rodrigo Catril discusses with Phil Dobbie, there are repercussions being felt across the continent. For example, the Greek PM is calling for a general election, and the UK Tory and Labour parties are doing a lot of soul searching on how to recover from an historic defeat. But the shift in the makeup of the EU parliament could see a rethink of how the bloc deals with problem economies, like Italy. They also discuss the latest on the US–China trade dispute, with President Trump saying he is not ready to make a deal. More bravado?

Monday 27th May 2019

Markets calmed a great deal on Friday. Phil Dobbie asks NAB’s Ray Attrill whether there’s renewed hope of a deal between the US and China. Perhaps it would help if President Xi played golf, because there’s been nothing but positive sentiment coming from Trump’s visit to Japan. For the next few hours all eyes will be on the European election results although, except for France and the UK, polls suggest a possible lurch to the far right is unlikely to materialise. Plus, does the bunfight for the UK’s next PM increase the chance of a no-deal Brexit? Otherwise, a quiet day today with the UK and US both on holiday. Possibly playing golf.