Friday 16th February 2024

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In the consumer space there are only really two ways tech firms make money. They either sell stuff – usually subscriptions – or they offer free content supported by advertising. Advertising is as old as the hills so you might be mistaken for thinking that its days are numbered. But Debra Aho Williamson, an independent tech analyst from Seattle, says online will continue to grow its share of an expanding global advertising market, and AI will help improve the efficacy of the budget of advertisers. But advertising isn’t the only way forward and each of the major tech firms has their own approach. Listen in to the discussion to help gather your own thoughts on who is in the strongest position right now. 

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Thursday 15th February 2024

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There have been some surprises in the last 24 hours but it seems none of it will change the dial for central banks. Australia’s unemployment ticked above 4% yesterday, but JBWere’s Sally Auld explains why you have to be cautious about January numbers and why it doesn’t really add to the pressure for the RBA to cut sooner. The latest GDP numbers in the UK, which showed the country has been in recession for the last two quarters, but the BoE was quick to respond on the need to see inflation falling more consistently before they act. Japan also moved into a recession which surely challenges the notion that the BoJ will lift rates. And US retail sales showed the biggest fall in almost a year. So, lots of data, but nothing to change central bank thinking.

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Thursday 15th February 2024

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Central banks seem to be sounding a little more dovish, with the exception of the RBA and RBNZ of course. NAB’s Ray Attrill says market expectations are driving away from the higher-than-expected US CPI read, like a speeding car. Hence, bond yields have bounced back today. They rose even further in the UK where inflation came in lower than expected. With GDP numbers later likely to show an economy in recession, can the BoE really hold out much longer? It’s a movable feast, and in the midst of that movement NAB has released the latest FX forecasts, which effectively pushes the growth in the Aussie dollar back a quarter, against a stronger US dollar. But there are a few significant caveats, discussed on today’s podcast.

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Wednesday 14th February 2024

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US CPI numbers showed that inflation isn’t coming down as fast as expected. The market reaction was swift as markets repriced their expectations for the timing of rate cuts. Equites fell sharply, bond yields rose as the US dollar gained ground.. NAB’s Taylor Nugent says there are good reasons not to take too much signal from the January data alone. Perhaps the exercise will be repeated with UK inflation numbers later today although there a small rise is already expected. Today New Zealand’s price indices will give an early indication of inflation, as the market pares back rate hike expectations after the surprising call by (another) major bank this week.

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Tuesday 13th February 2024

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Maybe not as exciting as the Super Bowl, but the CPI numbers out in the US early tomorrow morning (Australia time) could have a more significant impact on the US economy and the speed of cuts from the Fed. NAB’s Rodrigo Catril says the headline rate is expected to start with a 2, instead of a 3, but will it fall faster than expected putting pressure on the Fed to move more quickly. Ahead of all that, we get the NAB Business Survey, the ZEW survey results for Germany and the Eurozone, and employment numbers for the UK. At last, the data calendar is hotting up.

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Monday 12th February 2024

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Talk about an anti-climax! Markets were on tenterhooks ahead of the revision to US CPI on Friday but, it turns out, there was nothing to see. NAB’s Tapas Strickland points out that the revision was one basis point higher for the three-month average. Now markets can focus on the next CPI print, which is out this week. Friday’s excitement in our region came from one bank’s call for the RBNZ to raise rates in February and April. Michelle Bullock didn’t rule out a rate rise for the RBA when she fronted up to parliament on Friday, but it seems unlikely. It’s a quiet start to the week, with China on holiday for the New Year, but Tapas takes us through some of the data highlights for later in the week. 

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Friday 9th February 2024

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Australian tourism was enjoying record highs for visitor numbers before the pandemic. Then we closed the borders. Visitor arrivals are picking up again, but are still not back to 2019 levels. But Samantha Palmer, general manager of Austrade’s visitor economy and client programs division, says we’ll break that record for visitor numbers in 2025 and exceed the spend record this year. That makes tourism infrastructure a solid investment promotion. But what sort of product is required and how can you finance all that upfront investment when a brand-new offering could take a while to provide cash returns? 

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Friday 9th February 2024

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The Fed and several other central banks are united in their message that there’s no rush to cut rates. Thomas Barkin was the latest to deliver the message from the FOMC, suggesting they won’t ‘toggle’ rates until they’ve had a few more months of data. Meanwhile, NAB’s Skye masters says as we await more data bonds are drifting, looking for direction. There will be some trepidation about the possibility of a revision to US CPI numbers later and there are more solid numbers to help support whatever side of the timing of the toggle you sit on.

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Thursday 8th February 2024

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Once again central bankers have been out pushing the message that rates will not be coming down quickly. What’s more, the neutral rate is likely to be higher than before. There was a lacklustre response from bond markets, which managed to absorb $2 billon worth of new issuance. The market moves have been in equities, with the S&P close to, but not quite hitting - 5,000. Phil asks NAB’s Tapas Strickland whether this is misplaced optimism. 

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Wednesday 7th February 2024

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It was a busy day for Australia yesterday, with the RBA announcement, the statement of monetary policy, and the press conference. For all of that there wasn’t any wild fluctuations in markets, despite the hawkish tilt and the spectre of a rate rise given as one possible course of action if services inflation remains too resilient. But, as NAB’s Gavin Friend points out, most of the market action was in US bond markets, where yields fell significantly overnight. It’s the lack of tier one data, says \gavin, driving speculation. 

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