NAB Morning Call

Friday 4th July 2025

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Markets responded to what seemed like a strong set of payrolls numbers in the US, although the rate of new private jobs fell. Still, the unemployment rate also nudged lower. Phil asks NAB’s Tapas Strickland what this means for market pricing for Fed cuts this year. The rest of the day’s data from the US were also largely positive, including the ISM Services index, the weekly jobless claims and durable goods orders.  Donald Trump’s Big Beautiful Bill passed the House, meeting the deadline and adding to the positive vibes at the end of a shortened week. 

Today, Australia’s Household Spending Indicator is released. It’ll be interested to compare its figures with the weakness shown in the Retail Spending data published earlier in the week.

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Thursday 3rd July 2025

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The S&P hit a new high, helped by a post from President Trump saying he has tied up a trade deal with Vietnam. The bad news is that the deal still hits them with tariffs of between 20 and 40%, whilst accepting US goods tariff-free. And the President says a deal with Japan is looking unlikely, but that could be simple ‘Art of the Deal’ tactics. NAB’s Skye Masters talks through the market reaction to the watered-down UK’s Welfare Reform Bill that could add significantly to the UK deficit and drove bond yields much higher. The US Big Beautiful Bill, meanwhile, is struggling to get through the House of Reps. All eyes are now on jobs, with non-farm payrolls tonight, along with the weekly jobless claims. Markets reacted briefly to a big downside surprise in the ADP jobs numbers, but they are notoriously unreliable.

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Wednesday 2nd July 2025

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President Trump's big, beautiful bill has passed through the Senate with the narrowest of margins and now goes back to the House with a chance that it will get approval by the 4th of July. NAB’s Rodrigo Catril says the passage of the bill could be partially responsible for the US dollar reaching a multi-year low today given the deficit implications that the bill provides. Rodrigo also discusses with Phil the latest US manufacturing ISM, what's being said at Sintra, New Zealand's latest business opinion survey and looks ahead to today's Australian retail sales numbers.

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Tuesday 1st July 2025

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Canada has caved (the White House’s choice of words) over their digital services tax, so trade talks can resume with the US. Phil asks NAB’s Ray Attrill what this means for other countries with the same tax - many countries in Europe, the UK and, yes, Australia too. President Trump has said he sees no reason to extend the July 9 deadline for reciprocal tariffs, and those countries that have not negotiated in good faith will have their rates set by him next week.

Scott Bessent suggested the government had no need to ramp up long term bond sales, even if the Big Beautiful Bill is likely to result in greater bond issuance. European CPI, the Caixin numbers from China and JOLTs for the US will be a focus today, along with a couple of high-powered panels at Sintra.

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Monday 30th June 2025

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There’s a lot of focus on the US this week. The Big Beautiful Bill could reach it’s finish line before Independence Day on Friday. There are reports of progress towards trade deals with the likes of the India and the EU, even if Canada’s deal talks stalled over US objections to their digital services tax. And US payroll numbers are out on Thursday (a day early this time). There’s also the ECB Central Bankers Forum in Portugal. It’s a lot to take in. NAB’s Taylor Nugent talks us through it all.

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Friday 27th June 2025

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This week Phil looks into the challenge of an ageing population. The most recent edition of the IMF’s World Economic Outlook devoted a chapter to what it calls the ‘Silver Economy’. We tend to see the declining ratio of taxpaying adults as a negative for the economy - fewer people working for the upkeep of a growing number of oldies.

Jessica Geraghty, senior associate for economic prosperity and democracy at the Grattan Institute, says we don’t have to look too far for inspiration on how to tackle the issue. Beyond changes to tax policies, we should also be looking to places like Singapore and Japan, where the focus is on longer healthier lives. Our cognitive abilities are also surviving g further into old age.

So, is a significant part of the solution to see older people continuing to work longer and could the rewards from this work reduce the health demands that older people place on the system. If that is the plan, is government policy reflecting it now?  

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Friday 27th June 2025

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The US dollar has hit a new multi-year low. Phil talks to NAB’s Rodrigo Catril about some of the factors driving the US currency down further. Part of it could be the speculation that President Trump will appoint Jerome Powell’s successor as Fed Chair, in the hope that he can guide markets early. There’s also increasing evidence of foreign investors ditching long end government and corporate bonds and taking their money elsewhere. Soft US data isn’t helping including a sizeable revision to Q1 GDP, driven down by lower consumer spending.

Today Tokyo’s CPI, China’s industrial profits, and US CPE data will also be of interest. And get ready for a week of tax and trade talk next week.

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Thursday 26th June 2025

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It won’t come as a complete surprise that NATO members agreed to up their defence spending to 5 percent on Wednesday. The bigger surprise might be if they keep that commitment once President Trump is no longer in office. We saw a bigger response locally to the softer than expected Australian CPI number for May. NAB’s Ken Crompton joins Phil to talk about the market response and expectations for RBA cuts from now on. They also talk through the surprising drop in US new home sales, Japan’s leading index, Powell’s testimony to the Senate Committee, and what to look out for today.

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Wednesday 25th June 2025

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Oil prices are back down near multi-year lows, so is the US dollar, whilst equities are bouncing higher and getting close to all-time highs. Infact that happened for several well-known tech stocks. NAB’s Sally Auld says it reflects an assumption that the worst of the Iran-Israel conflict is over, although a New York Times report this morning suggests the US bombing only put Iran’s nuclear program back a few months. Meanwhile America saw a collection of softer data prints, which pushed yields lower, but didn’t distract equity markets. Today, Australian CPI for May will be the focus.

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Tuesday 24th June 2025

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An Iranian attack on US air bases in Qatar and Iraq actually forced oil prices lower. Much lower. Why? Well, even before it was confirmed by President Trump, it appears the attacks were orchestrated. That was confirmed when the President posted as much on social media, adding that ‘Perhaps Iran can now proceed to Peace and Harmony in the Region, and I will enthusiastically encourage Israel to do the same’. That message helped push equities higher towards the US close.

The other influence today has been comments from the Fed’s Michelle Bowman, suggesting a July rate cut made sense but, as NAB’s Taylor Nugent outlines, there are a few obstacles to come before that happens.

It’s a busy day for data releases today, as well as the NATO meeting in the Hague. Will they commit to defence spending at 5% of GDP by 2035?

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