NAB Morning Call

Friday 7th July 2017.

A busy night! The selloff in European government bonds picked up from last week, stepping up a notch. At one stage, the yields on German bunds were up 10 basis points. Phil Dobbie talks to NAB economist Tapas Strickland about the ECB minutes, the source of this action, as well as what’s behind falls in the equity markets, ahead of the G20 and Trump’s meetings with various world leaders, Vladimir Putin included. Normally a summit like this is unlikely to have a big impact on markets, but perhaps it will be different this time round. Oh, and US non-farm payrolls tonight.

Thursday July 6th, 2017

Last week’s oil rally came to a screeching halt overnight, with West Texas Intermediate dropping more than 4 percent to just over $45 a barrel. Phil Dobbie talks to NAB’s Ray Attrill about the impact of the fall, what we can read from the FOMC minutes overnight and the continued rise of the European economy with positive PMI figures. A different story, as usual lately, for the UK.

Wednesday 5th July, 2017

If Kim Jong Un hadn’t fired a missile into the Sea of Japan, it would have been a very quiet overnight session. As it was, the reaction was relatively short lived. Phil Dobbie asks NAB’s David de Garis whether we can expect a more sustained market reaction if and when tensions in the region ramp up. Meanwhile, the major currency showing the most movement over the last 24 hours was the Aussie dollar. Find out why in this edition of The Morning Call podcast.

Tuesday 4th July, 2017

The US dollar performed well overnight ahead of the Independence Day holiday, thanks to very positive manufacturing data. NAB’s Rodrigo Catril talks through overnight news with Phil Dobbie, including the rise in the dollar, positive manufacturing PMIs from Europe and less than impressive results from the UK. They also look at the RBA decision today and the surprise results in the election for the Tokyo Metro Assembly.

After a week where markets were driven largely by central bank sentiment, we can at last rely on some hard data this week, leading up to the US non-farms payroll on Friday. Sadly, as Ray Attrill explains to Phil Dobbie on this morning’s Morning Call, any hope of a more stable environment could be obliterated on Friday if the Trump administration imposes a hefty import tariff on Chinese steel – or steel from Europe, Brazil and Canada for that matter. Could this be the trigger for a trade war?

Friday 30th June 2017

Today sees more of what we saw yesterday. The coordinated message from major central banks this week, hinting at rate rises this year, has seen a sell-off in the bond market and equities. As Phil Dobbie discusses with NAB’s David de Garis, the Euro, Sterling and the Canadian dollar have risen to levels they haven’t seen for a while. So where is the US in all this? And why, with the RBA remaining quiet on monetary policy, is the Aussie dollar also on the ascendency? Could a rate hike here by imminent too?

Thursday June 29th, 2017

Central Bankers have agreed to get their story straight during their meeting in Portugal. From many quarters, the talk is now all about lifting rates, even from those who have talked against the idea in the very recent past. Phil Dobbie asks NAB’s Tapas Strickland how this shift in attitude is changing expectations for rate rises over the remainder of the year, in the US, the UK, Europe and Canada. Plus inflation data from Germany tonight. And a big surprise from President Trump – “a great, great surprise”.

European bonds reacted sharply to a rosy picture of the Eurozone economy painted by Mario Draghi this morning. Whilst in London Janet Yellen was doing a similar sell job on the US economy. As NAB’s Rodrigo Catril discusses with Phil Dobbie, it seems in Europe at least we can expect central bank action sooner rather than later. So what about Canada? Maybe we’ll find out tonight. Meanwhile markets have reacted to another spate of cyber-attacks and to Google’s record breaking fine in Europe. And we thought it was going to be a quiet night.

Tuesday 27th June, 2017

ECB Governor Mario Draghi and former Fed Chairman Ben Bernanke both spoke out against inequality at the central banking forum in Portugal (read Bernanke’s speech here). Whilst neither were market moving, it highlights an issue the world faces. Phil Dobbie asks NAB’s Dave de Garis whether this means markets should pay more attention to government policy. Also, a spike in demand for gold, a rise in oil prices and a lot of Fed speak. Plus Theresa May has formed her strong and stable deal with the DUP, and it only cost £1bn.

Monday 26th June 2017

Last week was quiet for data releases and, with no real geopolitical news, there was not much movement in the markets. So, could this week be déjà vu all over again? Phil Dobbie asks NAB’s Ray Attrill. The underlying question is, of course, what’s the best way out of the low growth, low inflation story that remains prevalent in most economies? Aside from tackling that big question, we highlight what to look out for that could drive the markets this week.