NAB Morning Call

Tuesday 8th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9Day 12 of the war in the Ukraine brought more violence and uncertainty. Russia’s offer of a temporary ceasefire so residents could escape was given short shrift when it was clear the escape route was to Russia or Belarus. It was a strong risk-off session across all asset classes, with Brent getting over $139 for the first time since 2007. The Aussie dollar has lost a lot of ground, with NAB’s Ray Attrill saying the US dollar is now the pre-eminent safe-haven currency. Even the Yen has failed to perform its traditional safe-haven role, demonstrating how far and wide the impact of the oil price shock is having on global markets, with no signs of a way out anytime soon. Hosted on Acast. See acast.com/privacy for more information.

Monday 7th March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9For a while over the weekend it seemed like Vladimir Putin was suggesting the west had already declared war with it imposition of sanctions, but, in context, he was really saying it was like a declaration of war, but a no fly zone would be a declaration of war. Whilst that’s a relief, we can all do without that sort of escalation, the uncertainty of the future outcome remains and we can expect more volatility this week as the fighting continues. Today Tapas Strickland talks about the impact of rising commodity prices and the response from central banks, including the ECB that meets this week. Australia meanwhile, seems to be enjoying the benefits of distance from the trouble in eastern Europe, with the Aussie dollar almost 5 percent up on the Euro over the last week. How long will this last? Hosted on Acast. See acast.com/privacy for more information.

Friday4th March 2022The Aussie dollar was one of the winners today, even as the US dollar lurches to highs not seen since the early days of pandemic. It’s been driven by demand for coal and iron ore, as almost all commodities respond to the shock of supply cuts from Russia and Ukraine. Jerome Powell was back on Capitol Hill today, again reiterating the need to control rising inflation. Jobs continue to be part of the problem (with the ISM read overnight showing a fall in services employment) along with rising commodity prices. NAB’s Gavin Friend points to studies from the NY Fed, one noting that the global supply chain pressure index eased in February , a sign, he says, that global supply chains will repair. The question is, how quickly? The ISM numbers overnight didn’t show any improvement. Hosted on Acast. See acast.com/privacy for more information.

Thursday 3rd March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9It almost seemed like business as usual for markets overnight. Equities rebounded strongly and demand dipped for bonds, pushing yields higher. As NAB’s David de Garis remarks, it all seems a little topsy-turvey. Investing in shares doesn’t seem a logical choice as the Fed chairman indicated that the path of rate rises in the US will continue unabated, just as the Bank of Canada lifted its rates for the first time since the pandemic. But away from equities, there are still clear signs of disruption from Ukraine, with oil prices continuing to increase, coal rising higher and wheat prices soaring. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 2nd March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9'What a night for market moves', says NAB’s Tapas Strickland, on today’s Morning Call. With no sign of an easing of the conflict in Eastern Europe, risk sentiment has risen sharply in the last 24 hours, with bond yields way down, oil peaking higher, the US dollar gaining strength and huge volatility on equity markets. Oil prices are rising even without export bans because trade houses are reluctant to touch Russian cargo. Today we look at how the uncertainty will translate to central banks. NAB’s Ivan Colhoun says the RBA continues to be patient, given that inflation is not as strong as elsewhere. Like all other central banks they will be factoring in the uncertainty from the war. The Bank of Canada might moderate their plans tonight on that basis, and Jerome Powell will be asked for his approach when he fronts up to the House Committee in the US later today. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 1st March 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9The sanctions against Russia are taking their toll on Russia, with moderate contagion to the rest of the world, but its early days. NAB’s Rodrigo Catril says the reaction in markets highlights how much more Europe is exposed, with increasing demand for US dollars. On today’s podcast there’s discussion about the impact on markets, who is exposed to risk, whether prices reflect an event which could rapidly escalate, the role China will play and the fate of the Aussie dollar in the midst of all this. Hosted on Acast. See acast.com/privacy for more information.

Monday 28th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9There will be a shift back from the optimism of Friday, when markets were responding to the weaker-than expected sanctions being imposed on Russia. That’ll change today as access to the Swift system is denied to most Russian banks. NAB’s Ray Attrill says this, and the limitations on Russia’s central bank to make use of its foreign reserves, will have a profound effect on their economy. In today’s podcast he talks through the flow-on effects for other economies, including Australia and emerging markets. Can we expect a stronger US dollar for longer? And how will it impact the roadmap for central banks? And should we be seriously contemplating the risk of stagflation in the global economy? Hosted on Acast. See acast.com/privacy for more information.

Friday 25th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9The Russian President surprised many with his broader attack on Ukraine yesterday. The UK Prime Minister called it Putin’s ‘squalid venture’, before announcing further sanctions, repeated by Joe Biden, including freezing more bank assets, stopping Russian trades in pounds and dollars, and ending a dependency on Russian oil and gas. The aim is to squeeze Russia out of the global economy, but that’s a long-term game in what could be a very short war. Today NAB’s Gavin Friend talks through the market impact, the influence of China, the inflation concerns and the likely response by central banks. Hosted on Acast. See acast.com/privacy for more information.

Thursday 24th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9The Hitchhikers Guide to the Galaxy has the words ‘Don’t Panic’ emblazoned on the front. NAB’s David de Garis is more familiar with the words of Lance Corporal Jones, who frequently offered the same advice. It seems markets have taken that advice for now, perhaps because there’s been no significant deterioration in the Ukraine crisis. Still, oil prices are up, and equities are down, but the focus has, by and large, switched back to concerns about inflation. The RBNZ only lifted rates 25 basis points, but they have raised the terminal rate and expectations for a faster track this year. Australia's slower wage inflation came in as expected, supporting the RBA’s more patient approach, whilst more ECB members are getting nervous about inflation growth in Europe. Rising prices are hitting consumer confidence there. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 23rd February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9The news over Ukraine overnight is confirmation from Putin that he supports separatists who want to take control over the wider Donbass region, which could see Russia invading further into Ukrainian territory. The market response so far has been fairly measured, but an escalation could see the West move beyond the current sanctions. One of those sanctions is shelving approval for the Nord stream 2 pipeline, which arguably hurts western Europe more than anyone. NAB’s Ray Attrill says the geopolitical uncertainty could dissuade the RBNZ from contemplating a half percent rate hike today. Australia’s wages data is out later today. Whatever the final number it will be well below the rises seen elsewhere, perhaps justifying the RBA’s more patient stance. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 22nd February 2022Will Putin’s declared support for separatists in the Donbass region be the false flag event the West has been concerned about? Does that mean an invasion is imminent? Market reaction hasn’t been strong so far, except for a rise in oil prices, but maybe that’ll change as the US returns from the President’s Day holiday. NAB’s Tapas Strickland says the actions overnight has certainly reversed the optimism yesterday, when a diplomatic solution looked more hopeful. Meanwhile, PMIs in Europe were really strong, which will add to the inflation pressures and could lead to a more hawkish ECB. US PMIs are out later on, and we’ll Christopher Kent from the RBA later today. What’s he going to say about QE and interest rates? Hosted on Acast. See acast.com/privacy for more information.

Monday 21st February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9There’s more uncertainty in the markets as tensions mount still further over Ukraine. Words from Biden and Johnson won’t help for the start of this week, alongside news that Russian troops on military exercises in Belarus are not going home anytime soon. NAB’s Rodrigo Catril says conflicts often have a short-lived impact on markets, but wonders whether this will be different, given the scale of it and the inflationary impacts it would have on Europe. Meanwhile, words from the Fed’s John Williams over the weekend have reduced the likelihood of a 50 basis point rate hike in the US next month. And for those looking of hard numbers there’s a plethora of PMIs, except the US, where it's President’s Day today. Plus why NZ bonds could be in demand. Hosted on Acast. See acast.com/privacy for more information.

Friday 18th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9There are mixed signals in the markets today. Equities have taken a hit from continued uncertainty over Ukraine, but oil prices are down, perhaps because negotiators are close to agreeing a deal over Iranian oil. NAB’s David de Garis says many traders will also be assessing their positions ahead of a long weekend in the US. Yesterday’s FOMC meeting seems to have shortened the odds for a half percent rate hike from the Fed, although there’s been a lot of strong US data since that meeting. Words from the ECB’s Philip Lane have reinforced the idea that the bank is rethinking its position on holding off on rate rises. Today’s main stats are the retail numbers for the UK, which are unlikely to bounce back as quickly as we saw in the US yesterday. Hosted on Acast. See acast.com/privacy for more information.

Thursday 17th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9There are no signs of inflation abating just yet, or of Vladimir Putin pulling his troops from the Ukraine border. That means there’s more caution in the markets. On today’s Morning Call NAB’s David de Garis talks through the likely market response if Russia does invade and Biden responds with sanctions. Meanwhile, inflation is creating enough of a concern for everyone, with CPI up in the UK, South Africa and Canada, with rising US retail sales adding to the pressure in the US. In Europe a couple of ECB members are starting to get nervous about house prices. Only in China do they seem to have inflation under control, and the potential for more easing by the central bank. Whilst in Australia the Labour Market data will be the main focus this morning. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 16th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9There’s a bit more positivity in the markets today, certainly since yesterday morning, because Russia hasn’t invaded Ukraine, and talks continue. But NAB’s Rodrigo Catril says there is still plenty to be cautious about. NATO can’t confirm Russian troops have moved from the border, as Putin had claimed, and the central issue of Ukraine’s right to NATO membership remains unresolved. Still, markets have taken it as good news, offsetting any inflation concerns that should have arisen from US PPI numbers yesterday. UK jobs numbers also showed wage pressures and today, loads more, inflation and producer prices for many parts of the world. We also get to see the RBA’s Debelle and Bullock in front of the senate tonight. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 15th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9The rhetoric is still that Russia is on the brink of war with Ukraine, although, as NAB’s Ray Attrill points out, markets took some comfort from a television event that saw Putin saying he supported continued diplomat efforts with the west, but have since repsnded to military movements that suggest something is about to happen. For a while, the talk of more talks allowed a little more focus to return to central banks, with the Fed’s James Bullard again calling for a front loading of hikes because the policy is out of sync with the economy. Today, with inflation still on the rise just about everywhere, including New Zealand, US producer prices will be watched keenly later today, along with UK wages. Hosted on Acast. See acast.com/privacy for more information.

Monday 14th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9There was a swift response on Friday to speculation that Putin would launch an attack on Ukraine as soon as this week. The US dollar gained ground at the expense of the Euro, whilst bond yields, which had risen on the upside inflation surprise on Thursday, came falling down again. NAB’s Tapas Strickland says more negative new over Ukraine will add to the strength of the US dollar, but similarly, markets could slowly reverse their positions if weeks go by without any resolution. Meanwhile, second guessing the actions of central banks remains a focus on markets, with Aussie bond yields shooting up on Friday as Philip Lowe suggested a rate rise this year was “consistent with their central scenario”. Hosted on Acast. See acast.com/privacy for more information.

Friday 11th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9Markets reacted swiftly to a higher-than-expected rise in the US CPI. NAB’s Gavin Friend says its unlikely that the Fed will raise rates by half a percent in March, even though many now expect it and the Fed’s Bullard has said he isn’t opposed to the idea. Gavin’s point, if they were to do that, why haven’t they stopped QE dead in its tracks? Today’s podcast looks at the market reaction in the US and yield movements in Europe. There’s been more discussion about Ukraine, but one British former diplomat has described the whole thing as a Russian fishing trip. And new Yuan loans have seen a heap of extra money piled into the Chinese economy. Hosted on Acast. See acast.com/privacy for more information.

Thursday 10th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9Bond yields have fallen back a bit a little ahead of US CPI numbers later on today. Phil Dobbie asks NAB’s David de Garis what he will be looking for in the data, to give a clearer picture of where inflation is heading. In particular, are we seeing signs that supply chain difficulties are easing? Central bank speakers are out in force, but its pretty clear now that few have a clear picture about the path beyond the next hike. Equities are up for a second day, driven by positive earnings, but with uncertainty over forward guidance they too will be susceptible to a move in tonight’s CPI. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 9th February 2022View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9In the absence of any big statistical releases markets are treading water ahead of US CPI numbers later in the week. US 10-year Treasury yields hit a two-year high for a short while, whilst equities have been choppy in face of all the uncertainty. How much will the Fed lift rates in March? What will be the end rate? NAB’s Ray Attrill says focus is now also shifting to the actions of the ECB. Even though Christine Lagarde is still talking about a gradual shift in policy, other ECB members are not so sure and European bond yields have been rising accordingly. Much of the focus today will continue to be on inflation prospects, in the NAB Business Survey and in the NFIB small business survey. Hosted on Acast. See acast.com/privacy for more information.

View our disclaimer and terms of use: nab.co/3shJyypView our NAB Financial Services Guide: nab.co/3rvJtI9In the absence of any big statistical releases markets are treading water ahead of US CPI numbers later in the week. US 10-year Treasury yields hit a two-year high for a short while, whilst equities have been choppy in face of all the uncertainty. How much will the Fed lift rates in March? What will be the end rate? NAB’s Ray Attrill says focus is now also shifting to the actions of the ECB. Even though Christine Lagarde is still talking about a gradual shift in policy, other ECB members are not so sure and European bond yields have been rising accordingly. Much of the focus today will continue to be on inflation prospects, in the NAB Business Survey and in the NFIB small business survey. Hosted on Acast. See acast.com/privacy for more information.

Monday 7th February 2021Friday’s non-farm payrolls data showed how more people returned to work in the US whilst Omicron saw the highest wave of COVID-19 infections across the country. Over the border Canada saw a fall in jobs in the face of continuing lockdowns. Phil Dobbie asks NAB’s Rodrigo Catril whether this means US jobs will bounce back further next month, and what does this mean for inflation, with the US data showing another increase in hourly wages. China is back at work today, with the possibility that they will add to the rising cost of oil as they seek to replenish dwindling reserves.View our disclaimer and terms of use: https://nab.co/3shJyypView our NAB Financial Services Guide): https://nab.co/3rvJtI9 Hosted on Acast. See acast.com/privacy for more information.

Friday 4th February 2022The Bank of England is certainly all out to stop any risk of wages pushing inflation out of control. The decision was one vote away from a half percent rate rise, with NAB’s Gavin Friend saying the bank is trying to send a firm signal, even though the eventual number of rises this year might fall below current market expectations. The rise comes at a time of strong headwinds for UK households and the broader economy. Meanwhile, a strong reaction on bond markets to the ECB meeting. The announcement itself wasn’t a surprise, but some ground was given during the press conference suggesting the ECB might move faster than they have been letting on. Tonight, of course, non-farm payrolls. Before that, the RBA Statement of Monetary Policy. Hosted on Acast. See acast.com/privacy for more information.

Thursday 2rd February 2022You could say its the best of times and the worst of times, with a rampant jobs recovery tempered by high inflation. Certainly, two central banks have a different perspective on the underlying economic strength. As NAB’s David de Garis discusses on today’s podcast, the Bank of England are expected to raise rates today, whilst the ECB will continue to sit on its hands with Christine Lagarde, only yesterday, continuing to argue that inflation is temporary. Meanwhile, yesterday the RBA’s Philip Lowe finally admitted that a rate rise this year was plausible. Overnight we saw staggering earnings results from Google and disappointing jobs data in the US. Omicron almost certainly contributed to both of those outcomes. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 2nd February 2022The RBA is still reticent to signal a rate rise this year, even as they lift their inflation forecasts. NAB’s Ivan Colhoun says a lot rests on what Governor Lowe has to say today. The ECB is also playing it cool, but with 2-year German Bund yields climbing higher than the loan rate its clear the markets don’t agree with them either. NAB’s Rodrigo Catril talks through the latest data from Europe and the US, and reasons why equities are so much calmer and why the Aussie dollar has bounced back today. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 1st February 2022It seems more likely than not that the RBA will announce an end to QEW today. NAB’s Tapas Strickland says core timed mean inflation is running two years ahead of the RBA’s forecasts which suggests a rate rise this year is also likely. The front end of the yield yield curve rose a little in the US after Raphael Bostic argued for a 50 basis point rate rise in March, although he retreated a little form those remarks today. Inflation is rising in Europe, with figures out just in time for the ECB this week, and the BoE will almost certainly raise rates too. So is inflation the only driver now? What if the rates push major economies into a downturn? Hosted on Acast. See acast.com/privacy for more information.

Monday 31st January 2021Whilst it was quite a night for Rafael Nadal, Friday had a less positive ending for the Aussie dollar, falling below 70 US cents to its lowest level since mid-2020, despite rising commodity prices. NAB’s Ray Attrill says the sharp fall could be the result of portfolio rebalancing by Aussie investors, which means it could stay low today but recover after month-end. We’ll see. Meanwhile equities bounced back in the US on Friday but markets are still choppy. Wages grew slightly less than expected in the US in Q4 and consumption has slowed, which makes the path for interest hikes a little murkier. All eyes will be on the RBA tomorrow, with markets still expecting rate rises this year. Will the RBA join the group-think? And China takes a holiday this week, we look at the impact that could have on the Aussie dollar, as we welcome in the Year of the Tiger. Hosted on Acast. See acast.com/privacy for more information.

Friday 28th January 2022There has been quite a turnaround after the sharp falls in share prices and the rise in bond yields that we saw kicking off during the Jerome Powell press conference after the FOMC yesterday. Today, bond yields have been falling and shares attempted a climb back. So, given the Fed delivered exactly what was expected, why the strong market reaction. NAB’s Gavin Friend says markets were surprised by the hawkishness of the conference, but have perhaps since evaluated the vagueness of what was said. There was no timeline or detail on the number of rate hikes, for example. Today’s GDP numbers for Europe will provide evidence of the sharp contrast with the US, but that is expected to narrow as the year progresses. Hosted on Acast. See acast.com/privacy for more information.

Thursday 27th January 2022The FOMC has met and reaffirmed that rates will rise from March. NAB’s David de Garis says it was exactly what the markets were expecting, although the response has been a rise in yields and a fall in equities. Jerome Powell was more reticent to talk about the speed of tightening beyond the next meeting, given the uncertainties that remain. The Bank of Canada will also hike rates soon. Also on today’s podcast, what does the US widening trade deficit mean for their GDP numbers out later today, how will The RBNZ react to today’s inflation numbers, and Brent oil hits $90. Where to from here? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 25th January 2022Markets have been gearing up for the FOMC meeting this week, but for a while at least tensions over Ukraine seem to have driven a strong risk-off push, with significant falls in share prices, a fall in bond yields and, to an extent, the US dollar seen as a safe-haven. But as the session progressed there was some re-evaluation of the risk, with shares and bond yields regaining some of the lost ground. As to the Fed, NAB’s Ray Attrill says the rising inflation is a major political headache for the Biden administration, so he’ll be eager to see the FDOMC do what it has to do to keep price sunder control. The question is, what will it do to the growth of the economy in the process? Hosted on Acast. See acast.com/privacy for more information.

Monday 24th January 2022On today's podcast:Curiously bond yields retreated at the end of last week even though the assumption remains that the Fed will signal a March hike. NAB’s Tapas Strickland says the fall in yields is a response to the sharp sell-off in equities at the end of the week which is, itself, a response to the rising interest rate environment. Locally, the CPI numbers for Australia tomorrow will put the RBA’s timeline for rate rises into sharp focus. Global PMIs today might have less influence given they are influenced by transitory factors, such as lockdowns, and the focus on the Fed. Hosted on Acast. See acast.com/privacy for more information.

Friday 21st January 2022Australia’s job numbers were well above expectations yesterday. NAB’s Ivan Colhoun talks about what this means for the RBA, who are still at odds with the market on their timetable for rate hikes. NAB’s David de Garis in London talks about the move up in equities and bond prices this session, suggesting it is likely to be nothing more than a bounce. The expectation is still that the Fed will end QE and move to rate hikes swiftly this year. It’s a less definitive picture in Europe, with the ECB minutes highlighting the divided opinions of the board. UK and Canadian retail numbers are out later today. Hosted on Acast. See acast.com/privacy for more information.

Thursday 20th January 2021The sell-off of US bonds has halted, temporarily, but it continues in Europe, particularly in the UK where high inflation numbers will heighten the Bank of England’s resolve to raise rates next month. Canada also reported a higher-than-expected level of CPI, increasing the expectation for a rate rise there next week. In Germany, 10-year bund yields moved into positive territory for the first time since 2019. As NAB’s Gavin Friend says, it’s not just a US dynamic, as central banks attempt to grapple with inflation. But what of Australia? Labour numbers today are expected to show the unemployment rate fall to 4.2%. Given many parts of the world are seeing wage-push inflation, could we see prices rise faster than anticipated? Hosted on Acast. See acast.com/privacy for more information.

Wednesday 19th January 2021US bond yields are now at their highest levels for two years, with equities now joining the sell-off, particularly for tech stocks on expectations of rising bank rates. NAB’s Rodrigo Catril says markets oil is also rising sharply on the expected rise in demand in a post-COVID area, or at least a time when we learn to live with the virus. The UK has shown how that can be done, with better-than-expected employment numbers, despite the rising number of cases in late 2021. So, how prepared is Australia to live with COVID? Today’s monthly consumer confidence numbers will give us an indication. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 18th January 2022Bond yields continue to rise as expectations heighten for faster central bank tightening. As NAB’s Tapas Strickland discusses on today’s Morning Call, the exception is the People’s Bank of China, which lowered rates yesterday on concerns about the spread of Omicron. President Xi has asked other central banks to sit tight, but that seems unlikely. Even the RBA is likely to bring forward its end to QE to next month. Whilst China faces more lockdowns, the rest of the world seems to be opening up The UK seems likely to end its Plan-B restrictions as soon as next week. The Empire Fed Manufacturing survey will be worth looking out for today, particularly after a sharp fall in the ISM Manufacturing Prices Paid Index. Could the supply chain disruption be easing – and maybe inflation was transitory after all? Perhaps. Hosted on Acast. See acast.com/privacy for more information.

Monday 17th January 2022The Fed kicks of its schedule of FOMC meetings next week. We know tackling inflation will be front and centre, but as NAB’s Ray Attrill points out, rate hikes are not the only tool they will be using. The minutes from the last meeting also suggest reducing their balance sheet will be part of the plan. Meanwhile, we’ve seen a significant sell-off in bonds, as investors expect a strong economic recovery this year, as Omicron’s impact wanes. Except in China, of course, which continues to pursue a zero-COVID policy, meaning supply chain disruption could remain, adding to inflation. China’s Q4 GDP is the data to look out for today. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 22nd December 2021There was a lot more positive sentiment in the markets overnight. NAB’s Rodrigo Catril says it’s all down to Omicron news, with infection rates falling in South Africa and hopes that a pill can stave off the worst for people who catch it. If the news remains as positive as all that, how will markets fare in 2022? How quickly will China bounce back, given their zero-COVID policy will still force shutdowns? What will happen to inflation is consumer demand improves but supply chain bottlenecks remain? What actions will central banks take and will any step too far when it comes to balance sheet reductions? And what will happen with the Great Resignation, if there continue to be many more jobs than people to fill them? One thing we can be certain of, even if COVID dies down next year, uncertainty remains. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 21st December 2021Energy markets are dominating market moves in the run up to Christmas. Oil prices have fallen significantly on fears that travel demand will fall as Omicron gains strength, whilst gas prices in Europe continue to rise on supply constraints from Russia. Equiites have also been hit hard by the virus uncertainty, on thinner holiday trading. NAB’s Ray Attrill says US numbers are just a couple of weeks behind the UK. And geopolitics is also at play, particularly in Chile and Turkey. Even in the UK Boris Johnson can’t be assured he won’t make it through Christmas without a roasting from his backbenchers. Hosted on Acast. See acast.com/privacy for more information.

Monday 20th December 2021Markets are very cautious ahead of the Christmas break, with concerns about the impact of the Omicron strain. The Netherlands has gone into another lockdown and restrictions are being introduced in many other parts of Europe. But that’s not stopping a more hawkish attitude from the FOMC. NAB’s Tapas Strickland says a March hike in the US is a real possibility, with Fed Governor Waller flagging concerns about an “alarmingly high” inflation rate. More discontinuity in supply chains from Omicron could add to inflation concerns, of course. Today, we also discuss rate hikes whilst winding down balance sheets. Could central banks go too far too quickly? Hosted on Acast. See acast.com/privacy for more information.

Friday 17th December 2021A rate rise by the Bank of England has surprised many, particularly in an environment of record COVID infections, and a hospitality industry calling for government support as pre-Christmas demand collapses. NAB’s Gavin Friend says it had been clear since August that they wanted to lift rates, the only reason for the delay was a question mark over whether employment numbers would fall after furlough ended, which it didn’t. The ECB gave clearer indications of how they would manage their asset purchase post March. The RBA’s Philip Lowe remains cautionary despite an outstanding set of employment numbers for Australia yesterday. In data releases, PMIs showed a significant fall in services for Europe that is not being seen in the US. A pick-up in housing starts I the US could be taken as a sign that supply chain concerns are easing. Hosted on Acast. See acast.com/privacy for more information.

Thursday 16th December 2021The Fed, not surprisingly, are tapering faster as the race is on to lift rates next year. NAB’s David de Garis says the QE ending by March clears the decks, with a revised inflation forecast speeding up the expectations of rises. Markets were expecting a hawkish tilt, so they haven’t been surprised. The Bank of England decision is less easy to read later on, with Britain’s high inflation number overnight offset by the highest number of daily COVID infections since the pandemic began. The ECB follows shortly after that, in a busy day which also sees PMIs across the globe and Aussie employment numbers. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 15th December 2021Markets are still pulled in two directions. First there’s the continued uncertainty of the new COVID variant, which might be mild (or not), but is spreading like wildfire in the UK right now and the race is on to have booster jabs across the globe. Then there’s the inflation question and how quickly central banks will respond to it. A sharp increase in producer prices in the US has added to the ammunition for the Fed to move faster, with the next FOMC meeting tomorrow. It is assumed QE will end in March, the question is how many dot points for rate rises are expected next year. Whilst the Fed might predict two, markets are pricing for three. NAB’s Rodrigo Catril says if the FOMC suggests three, the markets might move their expectations to four. It seems whatever the Fed chooses, markets expect more! Hosted on Acast. See acast.com/privacy for more information.

Tuesday 14th December 2021There’s a little more caution this morning, with equities down, driven by banks, travel and energy, with stay at home stocks doing better. But NAB’s Tapas Strickland points out, the fall in the S&P is on the back of the 67th record high of 2021 on Friday night. He says we shouldn’t expect too many significant moves ahead of the FOMC, ECB and Bank of England later in the week, and little significant news expected before then. Turkey’s central bank has already met, responding to sky high inflation by lowering interest rates. An interesting approach. Whilst rising Omicron cases are adding to the cautious tone. Numbers in the UK have risen sharply again, with the first recorded fatality. Hosted on Acast. See acast.com/privacy for more information.

Monday 13th December 2021Markets were trading last week on the basis that the Omicron variant was not as lethal as the Delta strain, even though infections were spreading rapidly. NAB’s Ray Attrill says that’s been the view with central banks too, who are more concerned about inflation than and further impacts from COVID. That said, rising cases in the UK will almost certainly stop the Bank of England from raising rates this week, whilst the FOMC is expected to shorten its taper timeline, finishing in March. It’s a busy week for central banks and more data on Omicron will influence the direction too. Starting with a press conference from the UK’s Prime Minister (for now) shortly after the release of this podcast. Hosted on Acast. See acast.com/privacy for more information.

Friday 10th December 2021Things were definitely a bit quieter overnight, with markets stepping back a little as they wait to figure out just what impact Omicron is having, and which way inflation is heading. We get the latest indication on the latter with US CPI number out tonight, but NAB’s Ray Attrill says China’s consistently high producer prices don’t bode well. Also today, how China is trying to stop the appreciation in the Yuan and what to expect from the UK’s GDP number tonight. Hosted on Acast. See acast.com/privacy for more information.

Thursday 9th December 2021Even though equity markets have slowed, bond markets are still reflecting positive sentiment around coping with the Omicron strain. NAB’s Gavin Friend says Pfizer has confirmed views that three jabs will guard against serious illness from the new variant, and yet just now the British Prime Minister, where almost a third of the population have had three jabs, has introduced tougher measures to control the spread, including mask wearing at almost all indoor venues, working from home and vaccine passports for larger venues. The Bank of Canada has delayed acting on rising inflation and it seems likely that all central banks will sit on their hands this side of Christmas until more is known about the impacts of Omicron. Yesterday the RBA’s Philip Lowe said he didn’t expect the new strain to delay the recovery, but what makes him think Australia is so unique? Hosted on Acast. See acast.com/privacy for more information.

Wednesday 8th December 2021There’s a lot of positive sentiment around this morning. Equities are rising sharply in the US and Europe, oil is up and bond yields are rising. NAB’s Gavin Friend says it’s been driven by the efficacy numbers of a GlaxoSmithKline vaccine, and circumstantial evidence that the Omicron strain might not be that bad for those who have been jabbed. Data wise there were fairly in strong industrial production numbers in Germany, with Chinese imports picking up and the final GDP numbers showing a rise in European consumer spending. In other news, Janet Yellen has been channelling her inner Donald Trump when it comes to tariffs and tensions brew over Ukraine. And NAB’s Ivan Colhoun deciphers yesterday’s RBA meeting. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 7th December 2021US equites are roaring back, so is oil, with bond yields rising again. This newfound optimism has been driven by policy easing measures from China’s central bank, and less concern about the impact of the Omicron strain. It’s still too early to draw definitive conclusions on the virus, says NAB’s Rodrigo Catril, with reports from South Africa that there is a concerning rise in younger patients. Tougher measures on mandatory vaccines for workers could also ignite more protests that could have the opposite impact on take-ups, which could slow economies, particularly in Europe. Not much is expected from the RBA today, but the build-up of positive data is likely to force a policy change in February. Meanwhile, the jury is still out on the Bank of England next week, but market expectations around a rate rise are falling. Hosted on Acast. See acast.com/privacy for more information.

Monday 6th December 2021Markets were far more cautious on Friday. In part there are still concerns about the new Omicron strain, although circumstantial evidence so far is pointing to it being a milder variant. NAB’s Tapas Strickland says tech stocks were hit the hardest, because there’s growing acceptance that the Fed will push ahead with faster tapering, irrespective of tailwinds. Payrolls numbers were weaker than anticipated, but not enough to stop them, it seems. That raises the question, will central banks push ahead with tightening measures before economies have recovered to the detriment of the longer term outlook? Hosted on Acast. See acast.com/privacy for more information.

Friday 3rd December 2021Markets have displayed much mor epositive sentiment in the last 24 hours, but its not lasting. Gains in US equities have fallen away a little, and oil prices have risen sharply and fallen back again. NAB’s Tapas Strickland says Omicron news is mixed – it’s certainly spreading quickly but symptoms of those who are vaccinated appear to be mild. US Treasury yields have flattened further as more Fed officials pile on with calls for faster tapering. Oil prices fell sharply mid-session on the news that OPEC would lift supplies next month, but rose again on the news that they would pull back if demand falls because of Omicron. In short, another day of uncertainty all round. Hosted on Acast. See acast.com/privacy for more information.