NAB Morning Call

Tuesday 21st November

The US yield has flattened further with 2 year Treasury yields up almost 3 basis points. Phil Dobbie talks to NAB’s Rodrigo Catril about the swap differential with Australian yields – it’s impact on the Aussie dollar and whether it will influence next year’s timetable for the RBA. Also, trouble in Germany. Can we expect more uncertainty with the collapse of talks for a coalition government?

Monday 20th November 2017

There’s little chance of the US tax reform bill passing through the senate this week, so the arduous task of reconciling the senate and house bills will be pushed into December, possibly next year. Phil Dobbie asks NAB’s Ray Attrill if this is why the US dollar is underperforming? And why has it taken the Aussie dollar down with it. Meanwhile Europe has its own deadlines looming, on Brexit and Germany’s coalition government. The clock is ticking.

Friday November 17th 2017

President Trump has given the pep talk and the House has voted. So the first part of the new tax bill is done, but that was the easy part. Meanwhile, Angela Merkel could be facing the fight of her life, and several bits of key data in the last 24 hours has surprised on the downside. Yet the mood on risk seems to have switched direction today. Phil Dobbie asks NAB's David de Garis, why is that?

Thursday 16th November 2017

The risk off mood has influenced the markets overnight. Phil Dobbie asks NAB’s Tapas Strickland what’s driving this sentiment and is it expected to continue? Solid CPI and retail sales figures from the US don’t seem to have had much impact. Meanwhile, the Aussie dollar hasn’t gained ground since the collapse on the release of weaker than expected CPI figures yesterday. And Britain’s wage growth was weak too, but no worse than expected. So, a morning of falling prices – but, hey, things can only get better, can’t they?

US inflation figures are out tonight – Phil Dobbie asks NAB’s Rodrigo Catril how significant the news will be ahead of the December Federal Reserve meeting. Britain’s inflation remains one percent ahead of the Bank of England target, and wages data today will show how much the UK’s standard of living is getting slugged. Plus, wages data from Australia and analysis of yesterday’s NAB Business Survey. And could Mr New Normal, could he be the next deputy chair of the US federal reserve.

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Tuesday 14th November 2017

The pound was slugged overnight as the UK government tries to pass it’s Withdrawal Bill this week. There’s more posturing stateside, where President Trump says the Tax Reform Bill is getting close, apart from the minor issue of agreeing the detail. Phil Dobbie discusses the day’s key data with NAB’s Ray Attrill, including today’s NAB Business Survey, inflation figures from Britain and industrial production in China. Plus the flattening yield curve in US Treasuries – normally the sign of an imminent recession, so what’s so different this time.

*In an effort to help us improve the value of NAB’s “Markets Today” morning note and “The Morning Call” podcast, we would very much appreciate you taking a minute to complete this short survey: https://www.surveymonkey.com/r/FX6N2GF

Monday 13th November 2017

Friday saw a surprising rise in bond yields in the US and UK. Phil Dobbie asks NAB’s Ray Attrill whether this reflects December’s rate hike expectations, or is some other factor at play? They also discuss the plight of the Australian dollar after Friday’s fall on the back of the RBA’s inflation forecasts. And Brexit – which way it will turn this week is anyone’s guess but the British press seem to be calling for the Prime Minister’s head.

Friday 10th November 2017

The President promised the biggest tax cuts in history, but US corporations might have to wait a couple of years to see them, if one US Senator is to be believed. Phil Dobbie talks to NAB’s Rodrigo Catril about the market reaction to the rising uncertainty about the tax bill, and the looming debt ceiling. Plus, Europe upgrades its economic forecasts, the RBA releases its Statement on Monetary Policy and we get to see just how much is China borrowing.

Thursday 9th November 2017

The amendments to the House version of the US tax plan actually went backwards, adding to the forecast deficit. Phil Dobbie asks NAB’s David de Garis whether we’re seeing a lowering of expectations around the delivery. It wasn’t the only bad news for the Republicans, losing two elections to Democrat Governors. And Theresa May’s government is in turmoil, losing a second cabinet minister in less than a week. Not the best position to restart Brexit negotiations. They also look at China’s latest trade figures, the Trump visit, this morning’s RBNZ rate announcement and Australian housing finance approvals.

Wednesday 8th November 2017

There’s been more uncertainty in Saudi Arabia, where those not being arrested are having assets frozen. Phil Dobbie asks NAB’s David de Garis why this has seen oil prices switch direction, with Brent Crude down 0.8 percent. They also discuss dismal retail figures for the UK, whilst shopping is on the up on the other side of the channel. And has anyone noticed how President Trump shoots from the hip a little less about countries he’s actually in at the time? Locally they discuss yesterday’s announcement from the RBA, and the potential for a change to the RBNZ Act on the other side of the Tasman.