NAB Morning Call

Friday 20th May 2022There was no bounce in equities today after the big falls we saw yesterday. NAB’s Taylor Nugent says its growing concerns about the US growth outlook, driven by earnings results and no uptick in economic data. Cisco has been the latest to downgrade their forecasts, blaming supply chains from the war and China’s lockdowns. But equity markets can normally see through short-term impacts, but not right now. Is the concern of over-reach by central banks part of the concern? And what does yesterday’s Australian employment data mean for inflation and the response from the RBA? There’s also a look at the minutes form the latest ECB meeting which ,again, highlighted the divide within the board about the need to act on inflation versus the impact on economic growth. Very much the question of the day. Hosted on Acast. See acast.com/privacy for more information.

Thursday 19th May 2022We’ve seen big falls in US shares as major retailers issue profit warnings, based on inflation and supply chain worries. Investors responded quickly. Had they forgotten that inflation was a thing? It was a timely reminder, says NAB’s Ray Attrill, that headline inflation hits consumer spending, so consumer staples and discretionaries will feel the pinch. The UK’s CPI hit 9 percent, but was in line with expectations. Canada’s inflation number was higher than anticipated, however. Australia’s wage growth remains relatively subdued, but the RBA’s focus will be on today’s labour market data. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 18th May 2022Equity markets have rallied today, buoyed by positive retail numbers for the US. But NAB’s Rodrigo Catril says the sentiment really improved in APAC yesterday on news that Shanghai will reopen after three days of zero COVID infections. Markets turned when the Fed’s Jerome Powell spoke about pushing beyond neutral to curb inflation, but shares rebounded soon after. Britain’s job numbers would look fantastic at any other time but now – instead, lower unemployment and rising vacancies spells out further inflation risks which will encourage the BoE to move faster, perhaps. Even the cautious ECB has one member talking about a 50-basis point rate hike. Today Australia’s wage price index will be watched keenly because it could be influential in the RBA’s next move up in rates. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 17th May 2022There’s been a fair bit of volatility in equity and bond markets overnight. Stocks are generally down after swings back and forth through the session. NAB’s Ken Crompton says there’s a continuing tension between the Fed talking up rate rises and whether that will prompt a recession. The data flow hasn’t offered anything encouraging. China’s retail sales were well down the NY State Manufacturing Index was pulled down by a fall in new orders, and the European Commission, understandably, lowered their growth forecasts and upped their inflation expectations. Meanwhile oil pushed higher and wheat prices ha e been hit by an export ban from India. Today US retail sales will show whether inflation is hitting demand yet and Christine Lagarde will have a chance to talk-up a July rate hike in Europe. Plus the minutes of the last RBA meeting. Hosted on Acast. See acast.com/privacy for more information.

Monday 16th May 2022There was a slight reversal in sentiment on Friday, with the US dollar losing ground, equities climbing and bond yields rising. NAB’s Tapas Strickland says news of the easing of lockdowns in Shanghai this week might have provided an excuse for this switch around, but news over the weekend could make this change in direction very short lived, with China relinquishing its staging of the 2023 Asia Cup (soccer). In Europe, Sweden and Finland have both announced they intend to join NATO. If that wasn’t enough to upset Putin, Ukraine won the Eurovision Song Contest. Today, eye swill be on China’s fixed asset investments, industrial production numbers and retail sales, and on the continuing debate about whether the Fed (or any central bank) can deliver a soft landing from the inflation battle without forcing a recession. Hosted on Acast. See acast.com/privacy for more information.

Friday 13th May 2022US equities continue to take a hit as inflation concerns continue and two of the biggest contributors – the war and China lockdowns – show no signs of abating. The war won’t go away, with Sweden and Norway now pushing for fast-tracked NATO membership. Reports suggest Beijing is now significantly in lockdown, which could further damage the Chinese economy and foreign trade. Here we are, says NAB’s David de Garis, wondering how low shares will go before we see anything like the Greenspan put come into play! A bigger worry for the UK is the cost of living, with March GDP numbers showing the economy retracted, and it will almost certainly be worse in April. Also today, we compare and contrast the direction of house prices in the UK and New Zealand. Hosted on Acast. See acast.com/privacy for more information.

Thursday 12th May 2022US inflation numbers didn’t fall as much as hoped, in fact the core number is up, making the job for the Fed that little but harder. There’s been a sharp response on the share markets, particularly for tech stocks, but less of a reaction in the bond markets. On today’s podcast NAB’s Skye Masters says there’s been a flattening of the yield curve, suggesting that the expectation is that the Fed won’t need to push further in its terminal rate. Meanwhile, Christine Lagarde has finally joined the ECB’s July rate-hike brigade, and the pound has taken a hit as Britain threatens to unilaterally pull out of a key component of the Brexit agreement with the EU, threatening a trade war. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 11th May 2022For a while today US shares were pushing higher, with tech stocks leading the way. Then as market close neared, prices started to fall and gains were effectively halved. NAB’s Rodrigo Catril says he is sceptical about hopes of a rebound, because the headwinds remain, particularly continued lockdowns in China, which will have a lag impact on the rest of the economy. How much of that lag will be reflected in US CPI later today? Meanwhile, the NAB business survey shows Australia is faring rather better than most of the world, right now. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 10th May 2022Markets are clearly concerned that there will be no soft-landing. There’s the big fear that rate rises won’t cut demand enough to compensate for inflation driven by supply chain disruption. The result, we’re seeing inflation expectations remaining high, stocks taking big hits and the US dollar possibly the only safe haven there is. So, what will turn this situation around? NAB’s Taylor Nugent says there has been no major data releases or news items to drive sentiment today, but risk-off uncertainty prevails. We have to wait for signs that inflation is starting to unwind. It might be way too soon, but signs of an easing of inflation in tomorrow’s US CPI would be very welcome. Hosted on Acast. See acast.com/privacy for more information.

Monday 9th May 2022Equity markets continued their falls on Friday, driven by concerns that the FOMC will let the economy slip into recession if it’s needed to keep inflation under control, just as the BoE warned last week. NAB’s Tapas Strickland says some Fed speakers have suggested a faster rate of tightening will be needed if supply chain difficulties aren’t corrected in a hurry. Given the China and Ukraine situations, that seems unlikely. Inflation concerns are rising everywhere. Even the ECB is expected to hike rates soon, and though the RBA’s path is somewhat slower than most there are concerns that they too might be underestimating the hit inflation could make and will need to correct quickly. All in all, a lot of investors will be looking eagerly for any signs that supply chain problems are improving. Hosted on Acast. See acast.com/privacy for more information.

Friday 6th May 2022Yesterday, as Jerome Powell gave the post-FOMC press conference, the US dollar strengthened, equities shot up and front-end bond yields fell sharply. Today, there’s been a swift reverse. The dollar is the highest in years, 10-year Treasuries are well over 3% and the share market has seen one of the biggest turnarounds ever. Does this suggest markets have a growing fear of a hard landing from the hawkish Fed rate path? NAB’s Gavin Friend says it is a challenging pathway for the Fed, but inflation will come down, hopefully, before causing too much turmoil in the economy. The risk to the economy was outlined by the Bank of England Governor Bailey, as they raised interest rates 25 basis points. Their forecasts make grim reading. And the Aussie dollar took a hit as risk sentiment soured. There will be a lot of interest in the projections in today’s Statement of Monetary Policy. Hosted on Acast. See acast.com/privacy for more information.

Thursday 5th May 2022The FOMC announced a 50 basis point rate rise for the US. As NAB’s Skye Masters notes in today’s podcast, the market response was fairly muted until Jerome Powell gave his press conference shortly afterwards. One comment, that they were not contemplating a 75-basis point rise, sent bond yields diving lower and equities shooting higher. Skye says markets had priced well ahead for a hawkish Fed, now they are taking some of that pricing back. But uncertainty hasn’t fallen away, with or inflation signs in New Zealand’s employment data, in Australian retail numbers and with another day of rising oil prices. We can expect a less hawkish Bank of England later, but it’s still likely they will raise rates even with the cost-of-living crisis being faced in the UK. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 4th May 2022On today’s podcast NAB’s Ivan Colhoun talks through the RBA’s higher-than-expected rate hike yesterday. Taylor Nugent adds that it was clearly more than expected, given the rise in front-end bond yields after the meeting, buoyed on by more hawkish rhetoric from the RBA’s Governor Lowe after the meeting. Next it’s the FOMC, early tomorrow morning, with a 50 basis point rise still anticipated. The JOLTs numbers indicated the labour market is still very tight and the challenge will be to restrain wage inflation. Job numbers and wages data tonight and Friday might add fuel to the fire. This morning, lots of focus on wage inflation in New Zealand, with employment data out and a press conference from the RBNZ. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 3rd May 2022US 10-year Treasury yields snuck over three percent overnight, albeit briefly. But NAB’s Ray Attrill says this could be the psychological baseline that sees rates grow higher. The latest ISM showed a slowing growth in US manufacturing, the result of lockdowns in China, but the Fed is still expected to push ahead with a significant rise later this week. Before that, the RBA meets today and the expectation is that they’ll raise rates by 15 basis points, but some see an argument to push them up to 0.5%. Also, today, a flash crash in Swedish equities. Hosted on Acast. See acast.com/privacy for more information.

Monday 2nd May 2022Last week finished with stocks well down in the US, particularly amongst high-growth tech-stocks. The reason, growing inflation concerns. NAB’s Rodrigo Catril says a 50-basis point hike from the Fed is very likely later this week, with growing market expectations that it could be followed by a 75-basis point rise next month. Meanwhile, there were further signs of growing inflation at the end last week that inflation, including a big rise in core inflation for Europe, rising producer prices in Australia and higher than expected wage growth in the US. Hosted on Acast. See acast.com/privacy for more information.

Friday 29th April 2022The US delivered a sharp fall in GDP in the first quarter. It wasn’t expected and could naturally spark fears that recession could be coming to the US sooner rather than later. But NAB’s Tapas Strickland says ‘beneath the hood’ the numbers showed that the US economy was still performing relatively well, with the numbers dragged down by a larger negative trade balance and lower inventories. As a result, equities continued to push higher, along with the US dollar. Inflation fears are rising in Europe though, with a higher-than-expected CPI read for Germany. These concerns pushed front-end yields higher and forced the Riksbank to unexpectedly lift their rates. Hosted on Acast. See acast.com/privacy for more information.

Thursday 28th April 2022Australian inflation rose more than expected yesterday. NAB’s Ivan Colhoun said it didn’t come as a complete surprise. NAB’s Business Survey has been showing rising input costs, and its likely inflation will rise till further in the next quarter. All that points to a high likelihood that the RBA will lift interest rates next week. Elsewhere, markets have had a temporary does of optimism, although NAB’s Rodrigo Catril says a resolution has to be found for Europe’s energy problems. There just aren’t enough global supplies to completely cut out Russia. US GDP and German CPI are two significant data releases today, along with the business activity outlook for New Zealand. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 27th April 2022Big market moves today, with US shares plummeting, bond yields also falling, and commodity prices rising sharply. European gas prices shot up on the news that Russia intends to turn off gas supplies to Poland and Bulgaria almost immediately, for not paying in Roubles. Whilst Europe debates whether they should ban buying Russian gas, perhaps the decision will be made for them. NAB’s Ray Attrill says recession fears on a global scale are also impacting sentiment, particularly as the war in Ukraine is clearly with us for some time, and China’s lockdown fears. Today, Australia’s CPI will be the numbers to watch. Could they rise enough to drive the RBA to a rise as soon as next week? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 26th April 2022There’s been a strong risk-off sentiment to the start of the week. NAB’s Taylor Nugent says equity investors belatedly “got the memo” on the Fed’s front-end loading for rate rises. Fears of more lockdowns in China, including Beijing, have added to the uncertainty, even though the fatality rates are low in comparison to many opened-up western nations. It seems China’s zero-COVID focus and the ongoing impacts of the Ukraine war are two issues that won’t slip away anytime soon. US GDP and Australian CPI will be two of the main focuses data-wise this week. Hosted on Acast. See acast.com/privacy for more information.

Friday 22nd April 2022Markets are a little easier to understand today. Bond yields are back on the rise, given inflation expectations and more hawkish rhetoric from central banks. That’s hit equities. NAB’s Ken Crompton agrees that it’s a more text-book response to what we have been seeing, with equities and yields rising in tandem. There have been particularly strong moves for front end yields of European bonds, with some members giving a more hawkish timetable for rate rises. Today PMIs will be closely scrutinised to get a flavour of growth and conditions across Europe, the UK and USA. Hosted on Acast. See acast.com/privacy for more information.

Thursday 21st April 2022Bond yields have fallen sharply overnight, but that doesn’t mean inflation expectations are going away, or does it? NAB’s Taylor Nugent says the Fed’s Beige Book, out overnight, highlights some examples of how inflation might be nearing its peak, but there are plenty to suggest otherwise. For example, Canada’s CPI and German PPIs, two sets of numbers showing prices are still rising, at quite a rate. NZ CPI numbers are out soon. Also today, a short-term reprieve for the Yen, whilst the Yuan falls to a six-month low. The Zero COVID approach had an impact on Japan’s export numbers, and will add to global inflation worries. And what about their attitude towards Russia? If you want a healthy dose of geopolitics, the French Presidential debate is also on today, ahead of the weekend election, and it’s close. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 20th April 2022It’s not something that will continue for long, but US bind yields have risen sharply today, and so have equities. Which one will give in first? Equities have risen because of strong earnings results but, as NAB’s Ray Attrill observes in today’s podcast, there’s still a long way to go. Bond yields are rising as Fed speakers up the ante on the path of interest rates, with one even raising the prospect of a 75-basis point rise at the next meeting. Meanwhile, oil is down sharply today, with the IMF downgrading global growth forecasts, except in Australia. There’s also discussion on the RBA minutes and the fall in the Japanese Yen. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 19th April 2022There’s a fundamental difference in the approach of the ECB and the Fed, as NAB’s Tapas Strickland explains on today’s podcast. Whereas the Fed is focused on inflation, the ECB is also concerning itself with growth. Could we see rising prices curtail that growth faster than anticipated? What about rising rates. The IMF has warned that rising rates will drive deleveraging that will have a marked impact on GDP growth. We also look at lockdowns in China and whether the rising bond yields in the US will offset any positive news to come from earnings results this week. Hosted on Acast. See acast.com/privacy for more information.

Thursday 14th April 2022Despite 50 basis point hikes by the Bank of Canada and the RBNZ over the last 24 hours, bond yields haven’t moved a great deal. NAB’s Gavin Friend says the market has taken a bit of a breather, which has offered a reprieve for stocks, with the NASDAQ climbing 2 percent at close. The path is certain for Canada and New Zealand, but it’s a less clear direction for the ECB, which meets tonight, with no moves expected as Europe struggles with rising energy prices and the impact of Russian sanctions. Similarly, the UK has just reported the highest CPI read in 30 years and it will only get worse, but the cost-of-living squeeze is making it hard for the Bank of England to look at big moves in a hurry. Today’s employment numbers for Australia will be keenly watched by the RBA, who will be looking at prospects for wage rises driven by an even tighter labour market. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 13th April 2022US inflation rose as expected, but there’s still been a reaction in the bond markets. NAB’s Taylor Nugent says investors latched onto the core CPI read coming in slightly softer than expected or feared. The subtly of the change wasn’t picked up by equity markets which fell, pushed lower by rising oil prices and the realisation that inflation is still here and could get worse. The NAB Business Survey yesterday demonstrated how Australia isn’t exempt, as Ivan Colhoun explains on today’; s podcast. Later on, two central banks who might well lift rates by 50 basis points – the RBNZ and the Bank of Canada. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 12th April 2022US bond yields continue to career higher. ‘IT was another blistering night’ says NAB’s Tapas Strickland, with 10-year Treasury yields reaching a three-year high. With no new news, he says, it’s a continued reaction to the hawkish Fed agenda. But could it all backfire? The Fed has never had successive 50 basis point rises. There are still concerns that they could spark a recession if they move too quickly, particularly as supply chain difficulties won’t be resolved by monetary policy. And the rising COIVD cases in China suggest there will be more supply constraints to come. With inflation front and centre of everyone’s attention right now, US CPI figures are obviously the numbers to watch for. Hosted on Acast. See acast.com/privacy for more information.

Monday 11th April 2022Although there’s clearly volatility in markets, NAB’s Ray Attrill says the common thread is that yields are still rising. Even if the inversion in the curve has dissipated, the fact remains 10-year yields are at multi-year highs as inflation fears grow and central banks respond. Food prices have risen almost 13 percent in one month, even worse if you cook with vegetable oil. This might be reflected in China’s CPI numbers today, and for the US mid-week. The war will have a strong influence on this, and there are no signs it will dissipate anytime soon. Meanwhile several central banks meet this week, including the ECB. Markets are priced for a 50-basis point rate hike by the Bank of Canada. Hosted on Acast. See acast.com/privacy for more information.

Friday 8th April 2022As bond yields continue to rise, particularly in the US, it seems there’s not much impact from all the hike talk on consumer spending just yet. Consumer credit numbers in the US shot up in February, much of it revolving credit. Will that just add to the Fed’s concerns and the accelerated rate of hikes, which has seen bond yields push ever higher. Ken Crompton says NAB’s forecast is for 10 yields to reach 3 percent by the end of the year, but there is still considerable room for movement. Yesterday’s Australian balance of trade numbers were a surprise, with much higher imports pushing February’s surplus down by $4.5 billion from the month before. Whilst the ECB minutes overnight reflect a more hawkish approach, but a bank still heavily divided on the road to take. Hosted on Acast. See acast.com/privacy for more information.

Thursday 7th April 2022Bond markets have reacted sharply and briefly to the FOMC minutes this morning, which suggested the Fed might start slashing its balance sheet sooner rather than later. This added to the sentiment expressed by Lael Brainard earlier in the week, which saw the yield curve steepening a little. Phil Dobbie asks NAB’s Gavin Friend what these moves are telling us, and why the impact has cut short the strengthening of the Aussie dollar. Maybe strong trade numbers today will turn it around again. There’s also discussion about German factory orders and tonight’s ECB minutes. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 6th April 2022The RBA has lost its patience and wants to move fast, but how fast and how far? On today’s podcast NAB’s Ivan Colhoun says it’s unlikely we’ll reach the 3% terminal rate that markets are anticipating, or at least with the expected rapidity. Taylor Nugent – new to the Morning Call – looks at the market response to words from the Fed’s Lael Brainard overnight, who talked about balance sheet reduction, possibly as soon as next month, at a faster pace than before. The Fed minutes today might add more substance to interest rate expectations, whilst two members of the RBA front a senate hearing today, where questions will not doubt be asked about the sudden pivot in policy signalling. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 5th April 2022The hope of peace in Ukraine is slipping away as more evidence of war crimes emerges, suggesting diplomacy could take some time. The Euro fell as expectations rose for more sanctions against Russia, which also pushed oil higher. NAB’s Tapas Strickland says negotiations are continuing though and we shouldn’t underestimate the chance for some sort of truce to be found. Meanwhile, inflation remains a global concern, particularly in the US. The inverted yield curve is also a cause for consternation. Tapas suggests the FOMC should have moved sooner on rates and speculates that the RBA will be watching and learning. Will the word ‘patience’ disappear from today’s RBA statement? Hosted on Acast. See acast.com/privacy for more information.

Monday 4th April 2022Non-farm payrolls gave the hawks at the Fed the ammunition they wanted, and bond yields have responded. NAB’s Rodrigo Catril says the data on Friday has cemented in the expectation of a 50bp rate hike at their next meeting. The ECB is still reticent to talk about bringing their schedule forward, even though Friday’s Eurozone inflation numbers were a lot higher than expectations. Today we get to hear how the BoE’s Andrew Bailey expects to balance rising inflation against an economy that has already slowed (possibly to zero). And what of the RBA? Will tomorrow bring a signalling of a faster path to a rate hike? Also today, has oil fallen too far? The situation in Ukraine looks like it won’t end soon, yet oil is less than 10% higher than before the invasion. Hosted on Acast. See acast.com/privacy for more information.

Friday 1st April 2022There’s a hefty emphasis on oil and gas this morning. Putin is demanding payment in Roubles from today, but there seems to be some caveats and so the impact isn’t as pronounced as you might expect. More significantly, President Biden has announced a six-month commitment to a daily draw down from the US strategic oil reserves. Will it be enough to make a difference? NAB’s Ken Crompton says the markets seem to think so, with a significant fall in the WTI price this morning. Also today, we look at China’s PMIs, which are firmly in contraction territory as they pursue their zero-COVID policy. And tonight, non-farm payrolls, where the focus might be more on wage inflation than the jobs numbers themselves. Hosted on Acast. See acast.com/privacy for more information.

Thursday 31st March 2022There was hope in market pricing earlier in the week that some sort of resolution over Ukraine could be sought soon. But those hopes faded when Russia started bombing regions it had indicated it would pull back from. Today, oil prices are back up and US equities have been hit hard. It’s not all down to Ukraine though. Inflation rates in Germany and Spain are through the roof. As NAB’s David de Garis points out, they have risen more in a month than Australia has seen in a year. That presents a special challenge for the ECB, who have to control inflation in an environment where consumers will be facing a cost-of-living squeeze. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 30th March 2022Markets have responded perhaps a little too favourably to peace negotiations between Russia and Ukraine in Turkey overnight. There wasn’t a concrete outcome, yet the Euro is riding high, stocks have risen sharply and bund yields are up. NAB’s Ray Attrill says even if some sort of resolution is found soon, sanctions will remain for some time to come. Meanwhile, front end yields continue to rise in the US as more Fed speakers talk-up the prospect of a 50 basis point hike at the next FOMC meeting. We saw a brief 5-10 year yield inversion, but blink and you missed it. Also today, NAB’s Ivan Colhoun talks through Josh Frydenberg’s pre-election budget. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 29th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9There’s continued volatility in US bond markets, with significant flattening of the yield curves. Is this flagging a future recession? NAB’s Rodrigo Catril says the direction of travel is looking that way, although it’s too early to tell. But the rise in 2-year yields shows that markets are expecting a more aggressive stance by the Fed, whereas in the UK yields are falling after the Bank of England’s Andrew Bailey indicated a less aggressive stance on rates given the cost of living squeeze the country is facing. Also today, how the Bank of Japan is tackling rising bond yields, the reasons behind today’s sharp fall in oil, what will Australia’s retail numbers show today, and what to expect from today’s budget (beyond what has already been made known). Hosted on Acast. See acast.com/privacy for more information.

Monday 28th March 2022The sell-off of bonds continues, with a further spike in yields at the end of last week. NAB’s Tapas Strickland says it’s because there is heightened expectations that the Fed will lift rates even faster than previously thought, possibly even four 50 basis point rises this year. Yet the share market – in the US and Europe – continues to rise. We look at why in this morning’s podcast, plus Shanghai in lockdown, how the Yen has lost its safe haven status and the ongoing impact of the war in Ukraine. Hosted on Acast. See acast.com/privacy for more information.

Friday 25th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9It's a very mixed and confusing day today. “It’s rare that you see equities and bond yields rise at the same time”, says NAB’s David de Garis, but maybe markets have optimism that the Fed’s aggressive stance will put the inflation genie back in its bottle. Or investors are a little unsure where to park money right now. Or, perhaps, investors see anything in the US to be safer than Europe, where inflation will be driven higher through fuel shortages. Meanwhile, PMIs are a little softer but still in growth territory, most notably for services in UK and the USA, a reflection of a braver stance on post-COVID re-openings. The major currency move has been a fall in the Yen, reflecting the widening gap between yields between Japan and the US. In amongst all the confusion, the Aussie dollar is holding its own. Hosted on Acast. See acast.com/privacy for more information.

Thursday 24th March 2022Bond yields have come back a fair bit today. NAB’s Gavin Friend says it’s just a recalibration after the massive hikes we’ve seen over recent days. The tone from the FOMC certainly hasn’t changed. Meanwhile oil prices have risen sharply, in part because President Putin has threatened that Europe should pay for gas in Rubles, rather than dollars or Euros. If it’s an attempt to get the West to roll back on sanctions he might be disappointed, with Biden meeting with the EC, NATO and G7 over the next day or two, where the one question on everyone’s mind will be, “what do we do next?” And for an early sign of the impact of the war on Europe, the UK and USA, flash PMIs are out later on. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 23rd March 2022Just three weeks into March and US two-year bond yields are up 74 basis points, says NAB’s Tapas Strickland, on today’s Morning Call. Will the Fed be happy to see the market responding in this way, particularly as there’s less growth later in the yield curve? Does that suggest there are some concerns about whether Fed can keep inflation in check, without causing a recession. What does history tell us about the chances of that happening? Meanwhile the Yen is a casualty from all this bond action, with their central bank a long way off any sort of tightening. And the rise in oil prices has stalled today, we look at the reason. Today, UK’s CPI is the main set of numbers. Inflation and more of it. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 22nd March 2022Bond yields have moved sharply higher as markets expect the Fed to move faster on rate rises and, potentially, drawdowns on the balance sheet. After Jerome Powell spoke overnight, NAB’s Ray Attrill says there’s now a much stronger expectation that April’s meeting will see a 50 basis point rate hike and, perhaps, the same again at the next meeting. Could the ECB also be stepping up its plan of action? Christine Lagarde talks later today. Inflation worries won’t be helped by the rise in oil prices, with no obvious short-term solution. An increase in production from Saudi Arabia seems unlikely because they are upset about the US withdrawal of arms sales over the war in Yemen. The Ukraine crisis looks set to continue, and any step up in action by Russia could increase the extent of sanctions including the possibility of an oil ban by the EU. Hosted on Acast. See acast.com/privacy for more information.

Monday 21st March 2022Nobody really knows how the war in Ukraine will play out, but we kick off the week with reports from Turkey that an understanding between Ukraine and Russia might be closer. There’s even speculation that the two leaders will meet face to face – obviously at opposite ends of a very long table. On today’s Morning Call Phil Dobbie talks to NAB’s Ray Attrill about the market optimism right now, with equity markets rising despite the prospect of many rate hikes this year. Supply chain disruption looks set to be with us for longer, with more lockdowns in China over the weekend. But it's the words from Fed speakers that will be the focus of attention at the start of the week – will they support the hawkish stance of the FOMC last week or try to rein back a bit? Hosted on Acast. See acast.com/privacy for more information.

Friday 18th March 2022After a very hawkish Fed yesterday, the Bank of England has presented a much more guarded approach for the rest of the year, whilst delivering the third interest rate in a row. NAB’s Gavin Friend talks about why the central bank has a reluctance to signal too much right now. Meanwhile, are markets concerned that the Fed is moving too fast? There’s discussion about Aussie unemployment numbers too and what the strong numbers mean for the RBA. The Bank of Japan is the next central bank, but inflation driven by a tight labour market is much less of a concern for them. Oil prices are rising as hopes of a rapid end to the war dissipate but there are still irons in the fire, including talks between President Xi and President Biden. Hosted on Acast. See acast.com/privacy for more information.

Thursday 17th March 2022The Fed has met, they’ve lifted rates in the US, and given a hawkish outlook for rate increases this year and next, with a terminal rate of 2.8 percent by the end of next year. The statement and subsequent press conference left some questions unanswered. NAB’s David de Garis points out how they plan to get inflation under control without unemployment rising, even by the end of 2024. Markets reacted swiftly to the announcement, with sharp rises in front end yields. The Bank of England meets later today, and inflation numbers overnight highlight the size of the task ahead for the Bank of Canada. And oil prices are falling as hope remains that a solution can be found to the war in Ukraine. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 16th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9Chinese equities have been hit hard again today, despite data showing very strong retail sales, industrial production and fixed asset investment. NAB’s Ray Attrill says it’s a mix of increasing COVID cases, causing more lockdowns, and China’s position over the Ukraine war. They want to keep the peace with Russia without attracting sanctions from the west. Is it a sign of the shifting balance of influence that China is negotiating with Saudi Arabia to buy oil in Yuan? Besides the war and COVID, inflation is still a major concern, with the FOMC meeting in less than 24 hours. 25 basis points is more or less locked in, but it’s the rate of future rises and the associated commentary that will attract attention in these uncertain times. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 15th March 2022China and the US have been meeting, with the hope that talks can resolve the war in Ukraine. But China is showing little sign of offering total support for the west. NAB’s Tapas Strickland wonders whether they’ll need to, with talks between Russia and Ukraine at least offering the opportunity “for an off-ramp” from the conflict. Oil prices have fallen today, mainly because of further lockdowns in China as the country continues to pursue a zero-COVID strategy. That’ll add to supply chain problems, which will further add to inflation pressures. No surprise then that bond yields have risen sharply ahead of the FOMC later this week. Hosted on Acast. See acast.com/privacy for more information.

Monday 14th March 2022Fighting got very close to the Polish border over the weekend, with Russian attacks on a training base. NAB’s Rodrigo Catril says it’s hard to see the volatility across all asset classes calming down as the uncertainty in Ukraine remains. Although talks are ongoing there has been little grounds for hope so far. This makes it all very tricky for the FOMC, whose members will be submitting their dot point predictions for future rate rises, in an environment where inflation is rising and consumer confidence is falling. Hosted on Acast. See acast.com/privacy for more information.

Friday 11th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9The war isn’t going to end anytime soon. That was clear with the high-level peace talks on Turkey breaking down after just 90 minutes, acting as nothing more than a conduit for untruths. That’s partly why we’ve seen a shift back in sentiment. The risk-on mood yesterday was a one-off. On the podcast today NAB’s David de Garis talks through the other big turnaround – the attitude of the ECB, who have speeded up their tapering schedule and the opened the door to earlier rate hikes. As a result, there have been sharp moves in peripheral European bonds, such as Italy, Greece and Portugal. Hosted on Acast. See acast.com/privacy for more information.

Thursday 10th March 2021Looking at the markets this morning you might be mistaken for thinking Vladmir Putin had resigned, but sadly not. The war is still on, and just as messy as ever, but equities have risen, oil is down and bond yields are rising. NAB’s Gavin Friend talks us through this broad reversal in risk sentiment, which he says is being driven by a number of factors, but nothing concrete. There’s also discussion about the ECB meeting today, and the EU’ s plans to issue bonds to reduce dependency on Russian resources. Plus, did Philip Lowe’s speech yesterday indicate a rate rise from the RBA this year was more likely, or less? And US inflation numbers tonight. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 9th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9Markets have been encouraged by a possible solution to the Ukraine crisis. The Kremlin had suggested a raft of measures, including a ban on NATO membership. Today, Ukraine’s President Zelenskyy suggested NATO wasn’t a priority. NAB’s Rodrigo Catril says the hope that a peaceful solution might be possible saw a strong risk-on mood hitting markets – although the Aussie dollar is down. Commodities continue to rise, of course. And the EU is meeting this week to discuss the issuance of bonds to cover spending on arms and to end a reliance on Russian energy. Also on today’s podcast, NAB’s Ivan Colhoun talks through yesterday’s NAB Business Survey. Hosted on Acast. See acast.com/privacy for more information.