NAB Morning Call

Wednesday 9th April 2025

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The full set of US tariffs applies from midnight tonight in the US (2pm Sydney and Melbourne). Including the hefty ones with China. As NAB’s Sally Auld says, the China tariff is so high its basically an acknowledgement that they don’t want to trade with China anymore, unless a deal is done. There has been more talk of potential deals. If any of them come to pass it will be an indication that the Trump administration is willing to negotiate, rather than slavishly sticking to a principal of completely balancing trade with each country. Who knows? Certainly, the optimism in the markets early on in the session quickly diminished and stock markets closed well down in the US.

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Tuesday 8th April 2025

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Markets were momentarily excited earlier when it seemed that the President might be delaying tariffs for 90 days. Up to that point US equities were continuing to spiral lower, but newfound optimism that Trump might moderate his approach saw a swift reversal. When it emerged that the story was nothing but fake news and, if anything, the President was digging his heals in harder, markets didn’t immediately return to their session lows. NAB’s Tapas Strickland says part of that could be because more CEOs are speaking out against the tariffs and that could force the plans to be rolled back. But, Phil asks, does that mean market have further to go if it becomes clear that the tariffs will stick, and go beyond a temporary negotiating tool.

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Monday 7th April 2025

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In a world gone a little bit crazy, the only question is, how much crazier can it get? China has been the first to hit back at the US with retaliatory tariffs applied from April 10th. EU trade ministers are meeting today to discuss the next steps. If compromises aren’t found, what happens next? NAB’s Rodrig Catril says they are not forecasting a US recession just yet, although some are – like JP Morgan, for example. Jerome Powell was reasonably circumspect on Friday, saying the higher tariffs could prolong inflation w which could delay the Fed’s response to an economic downturn. Ironically, non-farm payrolls showed a US economy strengthening, but it seems the President is prepared to jeopardise short term economic stability in exchange for a significant change in the pattern of international trade. If that’s’ the case, negotiated deals this week seem unlikely.

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Friday 4th April 2025

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This week TCorp, the NSW Treasury Corporation, put out a report on the evolving financial landscape. They certainly picked an interesting week to launch it. Phil talks to TCorp’s chief economist Brian Redican about how Trump’s approach to trade has created uncertainty and how Australia, like other nations, will be looking for trade partners with the same attitude to free trade. And how, with less trade exposure to the US than the likes of Europe and Canada, and a rich seam of rare earth minerals, could this new trade environment could be beneficial for Australia?

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Friday 4th April 2025

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You’ll know by now that President Trump’s tariff regime was worse than many had expected, even though Australia got off relatively lightly. You might also be aware that, despite the Presidential claims, the numbers were not based on the tariffs charged by supplier nations, but on a relatively crude formula based on the value of exports to the US against the US balance of trade deficit with that country. That makes it rather problematic for countries to fix-lowering tariffs that might not exist in the first place. But could all this be good for Australia. Phil asks NAB’s Ken Crompton, might we be one part of the world where inflation is contained, and interest rates continue their expected downward trajectory? They also talk about non-farm payrolls, because that’s happening today as well.

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Thursday 3rd April 2025

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President Trump’s announcement in the Rose Garden is bad news for us. For the podcast, that is. It’s just after we publish the final edition at the US market close. So, there’s every chance you’ll know what’s happened before you listen. But what happens next? And, as NAB’s Rodrigo Catril points out, there’s more to come from President Trump, plus any retaliatory moves by other nations. Rodrigo and Phil talk about how the markets reacted in the build up to the US close. Larry Summers says the real unknown is how much damage it will do to the US economy and the difficult position it places the Fed in.

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Wednesday 2nd April 2025

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Markets continue to dance around the uncertainty of Donld Trump’s Liberation Day tariffs tomorrow. There was a suggestion in the Wall Street Journal that the President might impose a 20%traiff on all imports, from everywhere, with the White House Press Secretary saying it was her understanding that the tariffs would be applied immediately. The truth is, nobody knows until Donald Trump says it, and even t hen it could change.

Data wise we saw a slightly weaker than expected ISM Manufacturing number overnight, with a surprisingly high prices paid component. The JOLTS job openings data also came in weaker than expected. NAB’s Taylor Nugent talks through the numbers, as well as reviewing the RBA decision, statement and press conference yesterday. Eurozone inflation also came down a little.

Today, tariffs aside, we get Australian building approvals, and the ADP payrolls numbers for the US, ahead of non-farm payrolls at the end of the week.

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Tuesday 1st April 2025

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Gold hit another new high overnight on the back of the continued uncertainty about the shape and extent of President Trump’s Liberation Day tariffs tomorrow. He has suggested that it will include all countries, in some form or other. NAB’s Skye Masters says US shares did regain some ground during the session, having fallen sharply after Friday’s weaker than expected US data. Oil is also higher, with the US President threatening secondary tariffs on any country buying oil from Russia. The RBA will keep rates on hold today, and Skye says it’ll be interesting to see if the governor pushes back on current market pricing for another 70bp of cuts this year.

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Monday 31st March 2025

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This week will almost certainly be dominated by the implementation  of auto tariffs into the US and the announcement of further tariffs on ‘Liberation Day’ on Wednesday. Whether it’s the impact of tariffs or not, consumer spending has slowed and inflation expectations rising in data that was out for the US on Friday. Yet labour data has been holding up so far - not what you would see in a stagflation economy. NAB’s Ray Attrill says we could see a delay in cuts from the Fed. Certainly Mary Daly from the San Francisco Fed was saying on Friday that she’s not comfortable starting any kind of rate path declines right now. The RBA will also stay on hold on Tuesday as they wait for signs that inflation is contained in an increasingly uncertain global economy.

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Friday 28th March 2025

Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.

New aged care legislation, which becomes law on July 1st, goes somewhere to fixing the funding crisis that has plagued the aged care industry over recent decades. Residents will need to pay more from their assets and super funds.   Russell Bricknell is CEO of Juniper Aged Care in Western Australia and says it provides a path for future investment, but there’s a large amount of catching up to do. Many facilities have fallen into states of disrepair as operators struggled to remain solvent. But the bigger issue, says Russell, is how future aged care homes win planning consent, and how a workforce is found to staff these new in-demand facilities: two issues that weren’t addressed in the Aged Care Taskforce.

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