NAB Morning Call

Thursday 2nd December 2021Markets were choppy again overnight, but there is renewed hope with circumstantial evidence that the Omicron variant might be less severe. A WHO press conference suggested that existing vaccines will be enough to prevent many extreme cases, but we’ll still have to wait for the final verdict. NAB’s David de Garis says that was enough for the focus to shift a little to positive data reads out of the US, including a 534k rise in the ADP payrolls number an ISM manufacturing at 61.1 for November. Australia’s better than expected Q3 GDP number has done little to help the Aussie dollar – Dave suggests it has followed the fortunes of the S&P500. Today, the focus will stay with news around the virus and its impact on lockdowns and other contingency measures. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 1st December 2021You might have expected that Jerome Powell would use the uncertainty of the new COVID strain to downplay the need to adjust the speed of tapering by the Federal Reserve, but instead, addressing the Congress, he talked up the need for faster tapering, to be discussed at the next FOMC meeting. So, what’s brought about this character transformation? NAB’s David de Garis says he is clearly now far more worried about inflation. The ECB, meanwhile, is happy to keep using the transitory word and believes inflation has just about peaked. Meanwhile, China’s PMIs and prices paid gave a glint of hope that supply chain issues might be easing, albeit very slowly. But progress could be destroyed by the impact of measures to constrain the new variant. The future is as clear as mud and markets today reflect that uncertainty. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 30th November 2021On today’s Morning Call NAB’s Ray Attrill reminds us that the CSIRO’s Dr Rob Grenfell predicted, back in the middle of the year, that about now we would see a variant of COVID spreading from India or Africa. He now says the situation in South Africa is not a good comparator for Australia, and we should watch how it develops in Europe over the next couple of weeks. In the meantime, markets are playing a waiting game. There was a mild bounce back in equities, bond yields and the US dollar, but volatility will remain, driven by the news cycle. The other unknown is the impact this will have on the speed of a global recovery, with border shutdowns and the like, and the subsequent impact on inflation. Lots of questions for Jerome Powell and Janet Yellen then, in front of a senate hearing today. China’s PMIs will be the numbers to watch today. Hosted on Acast. See acast.com/privacy for more information.

Monday 29th November 2021There was a very strong market response to the news of the Omicron virus strain on Friday. Equities were hit hard, currencies ran for the shelter of safe havens and there was a sharp fall in bond yields. How much of this was a knee-jerk reaction amongst the thin trading on the day after Thanksgiving. NAB’s Rodrigo Catril says we can expect Asian markets to follow the US today, before markets settle down, but we can expect volatility for some time as we wait for news that helps assess the risk posed by this new strain. So, what does this mean for central bank tightening? Where will the Aussie dollar head through this turbulent time? What impact will it have on oil and inflation? Hosted on Acast. See acast.com/privacy for more information.

Friday 26th November 2021As America gobbles up Turkeys NAB’s Gavi Friend talks through the latest positioning on tightening by central banks. The FOMC minutes suggested a more hawkish approach, and the latest data would suggest that view has been reinforced, but there’s still a disconnect between what the markets expect and the messaging from the Fed. The Riksbank has started to talk about rate rises, but not before 2024. The Bank of England looked certainly to raise rates last month, but it didn’t happen and a rise in December is now looking less certainly. The ECB are continuing down a dovish path, reinforced by their latest minutes overnight. Meanwhile, the RBA is holding firm, even though the bounce back in jobs yesterday (with retail sales data today) suggests a recovery that most nations would be envious off. Hosted on Acast. See acast.com/privacy for more information.

Thursday 25th November 2021There were many more positive signs for the US economy overnight, with initial jobless claims at an all-time low. The US dollar remains in favour, with the DXY index reaching a 16-month high. On today’s podcast NAB’s Tapas Strickland says rising inflation concerns are turning even the most dovish FOMC members, with Mary Daly the latest calling for a faster taper to make room for rate rises. Former US Treasury Secretary Larry Summer spoke again about his concerns about the Fed’s delay, worried that they won’t be able to find “a soft landing”. Meanwhile, the Kiwi dollar has been hit hard by the quarter percent rate rise by the RBNZ. Why was there such a sharp response? Plus, the latest on oil, with prices down today, but we can expect more volatility as OPEC takes on their customers. How dare they dip into reserves! Hosted on Acast. See acast.com/privacy for more information.

Wednesday 24th November 2021There was a surprise for those expecting the PMI numbers on Tuesday to confirm the widening gap between US and European economic performance. Let’s be honest, the NAB Morning Call team were amongst those who weren’t expecting to see the narrowing of the divide, with Europe doing somewhat better than expected, and the US a little worse than forecast. But NAB’s David de Garis says the US bond yields are still up, the market still wants to hold US dollars in anticipation of a quickening of the taper and earlier rate rises. The RBNZ rate decision today will be watched closely – there’s still an outside chance the rise will be as much as half a percent. And Joe Biden’s attempts to bring down the cost of oil seems to have gone awry. Confirmation of a plan to dig into reserves, not just in the US, has seen oil prices shoot skywards. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 23rd November 2021The US dollar and bond yields rose on the news that Jerome Powell is to keep the top job at the Fed for another term, with Lael Brainard as deputy. Even though both are doves, NAB’s Ray Attrill says the market still has two or three rate rises priced in for next year. The Aussie dollar has avoided collateral damage from the raising US dollar, helped by the news of border reopenings, that will help foreign workers to return. Today is PMI day, which is expected to give a further clear delineation between the strength of thew US economy versus the woes faced in Europe. The Euro is expected to continue to bear the brunt of any rises in the dollar. Hosted on Acast. See acast.com/privacy for more information.

Monday 22nd November 2021The divide between the US and Europe became more pronounced at the end of last week, as NAB’s Rodrigo Catril explains 0n today’s Morning Call. On the one side of the Atlantic there are increasing infections, more lockdowns and, in Austria, mandatory vaccines, with a central bank pushing the line that tightening will only damage the recovery. On the other side, central bankers are talking up the need for faster tapering, presumably so they can move to raise rates sooner. But hardly anyone is moving as fast as New Zealand, with the RBNZ certain to lift rates this week, but by how much? Hosted on Acast. See acast.com/privacy for more information.

Friday 19th November 2021US equities have bounced back a little today, but, as NAB’s Gavi Friend describes, it’s been a session without significant event risk or data flow. Equities and bond yields have been stable compared to recent volatility, with the tech sector contributing to equity rises, including news of Apple’s self-drive car. Some companies are also reporting easing of supply chain difficulties. Those issues have certainly been holding back the speed of recovery, evidenced again by higher prices in the Philly Fed’s manufacturing index and a slowdown in the reduction of weekly jobless claims. If supply chains recover and jobs growth picks up, will inflation subside. That continues to be the view of the ECB, with Philip Lane reiterating it again overnight. Europe meanwhile has other issues to contend with – energy supplies, rising COVID cases and a likely trade dispute with the UK. Hosted on Acast. See acast.com/privacy for more information.

Thursday 18th November 2021Australian wage growth is in line with expectations, but where to from here? Phil Dobbie asks NAB’s Ivan Colhoun if there’s a chance we’ll see wages escalate in the next few months? The UK’s inflation numbers surprised everyone overnight, reaching 4.2 percent year on year. Does this concrete in a BoE rate rise, or could they do what they did last time and do nothing? David de Garis gives his thoughts. Canada’s inflation is also increasing, but no more than anticipated. US housing starts are down, but there are clear signs they’ll soon pick up. Join us for a Morning Call triple header! Hosted on Acast. See acast.com/privacy for more information.

Wednesday 17th November 2021It’s been a positive session overnight, with US retail sales rising and US jobs bouncing back. NAB’s Tapas Strickland says it’s difficult to tell how much of the 1.7% month on month increase in sales is a result of rising prices and how much is more goods sold, but it shows consumers are prepared to spend even with supply constraints and inflation concerns. The UK jobs numbers are particulartly good because they have grown despite the end of a job furlough scheme with 1.1 million people on it. Mostly retained their jobs and there were many extra jobs besides. Is this the ammunition the Bank of England needs for a rate rise next month? Meanwhile Governor Lowe continues to be cautious about rate hikes for Australia, reiterating nothing is likely to happen until 2024, even though the market has priced in 2022. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 16th November 2021The Euro has lost ground this morning, with concerns over COVID, following lockdowns in Holland and Austria, and rising cases in Germany. There remains a very different attitude between the ECB and the Fed, with Christine Lagarde reiterating that in Europe they are in no rush to tighten policy. China’s activity data provided hope that the country’s economy was stabilising. In the US there will be a lot of focus to see whether tonight’s retail numbers are strong, or will they have been pulled down with falling consumer sentiment? The UK’s employment numbers will be watched keenly by the Bank of England, but NAB’s Rodrigo Catril says it’s too soon to provide the full picture needed to determine rate rises. And President Xi and President Biden meet (virtually) shortly – the start of better relations, perhaps? Hosted on Acast. See acast.com/privacy for more information.

Friday 15th November 2021Hot on the heels of the surprising increase in inflation in the US earlier last week, Friday saw an unexpected fall in consumer sentiment. The Michigan survey hit an 11-year low. NAB’s Ray Attrill says previous low readings had been associated with rising COVID cases, but now, as the US seems to be faring somewhat better than Europe, the concern is all about rising prices. It’s a significant issue for the Fed and the US government, with wages rising significantly below the headline inflation rate. To counter being worse off, over 4 million Americans quit their job in one month. In Europe COVID itself remains a concern with restrictions re-imposed in Holland and Austria. Could other countries follow as winter draws near? Today, activity data from China will be keenly watched, and later in the week the wage price index will highlight whether Australia too could become subject to wage-push inflation. Hosted on Acast. See acast.com/privacy for more information.

Friday 12th November 2021Markets have been a little more positive over the last 24 hours, with the NASDAQ back on the rise, although a rising US dollar continues to hurt the S&P, and the Aussie dollar has taken another hit. Part of the fall in the Aussie can be attributed to the weaker than expected jobs numbers yesterday, but NAB’s David de Garis says when you unpack the numbers there was plenty of ground for optimism. He says one interesting factor has been the gross rise in jobs in NSW – many people were switching jobs as the lockdown eased. Australia could be witnessing the start of the great resignation seen in other developed countries. The UK’s recovery slowed, with GDP lower than expected, but that’s been offset by falling COVID cases and high uptakes of the third jab. So, what does that all mean for the expectation of rate rises form the Bank of England? Hosted on Acast. See acast.com/privacy for more information.

Thursday 11th November 2021The inflation numbers from the US have been eye popping. That’s the description by the Fed’s Mary Daly as US CPI hits 6.2%, a 30 year high. NAB’s Gavin Friend points out that there are still four million people in the US who lost their jobs through COVID who aren’t back in the workforce, and the Fed will continue to use that reasoning for not lifting rates. But markets are likely to revert to their expectations that the bank will be forced to move sooner than it intends. Australia’s labour market data today, for October, will still be held back by lockdowns and the UK’s GDP read for Q3 will provide a useful barometer on an economy whose return is slower than anticipated, and will have taken a knock with increased fuel costs. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 10th November 2021There’s been a move away from risk assets. It could just be equity markets running out of steam after a particularly strong rally, but a Financial Stability Report from the fed warning of “perilous lunges for risky assets” probably didn’t help. NAB’s Ray Attrill says it’s hard to join all the dots right now about why the mood has shifted, but inflation continues to be a concern. It was reflected in the NFIB small business report, along with difficulties in obtaining staff. There’s optimism in Australia though, evidenced by the NAB Business Survey yesterday. Today, US CPI will be the focus, along with producer prices from China. Two key numbers for inflation watchers. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 9th November 2021You’d think markets would be bathed in positivity, particularly in the US, with a string of good news, including infrastructure spending, the COVID pill and the reopening of a lot of international travel. There’s evidence of tiredness in the equity market says NAB’s Rodrigo Catril in today’s podcast, but we’ve been here before and then it takes off again. Bond yields meanwhile are still adjusting to a world in which central banks are not quite so quick to raise rates, whilst coping with a high inflation outlook. On top of all that, Europe has to contend with higher gas prices, rising again, and the danger of a trade war over Brexit. Locally, the NAB business survey is out early this morning (7.30am). Hosted on Acast. See acast.com/privacy for more information.

Monday 8th November 2021You might expect a little more optimism in the markets given Friday’s strong non-farm payrolls data in the US, Pfizer’s news about a pill for COVID sufferers, the passing of Biden’s $1.2 billion infrastructure bill and rising consumer credit in the US. Equity markets are riding high on future hopes, but NAB’s Tapas Strickland says bond markets continue to unwind from expectations on the timing of rate hikes by central banks, in particular the surprise move by the Bank of England last week not to move. Today we also look at Friday’s RBA Statement of Monetary Policy, and look ahead to US CPI and Australian labour market data this week. Hosted on Acast. See acast.com/privacy for more information.

Friday 5th November 2021There has been a sharp response in bond yields and currency markets to the Bank of England’s decision not to lift interest rates. Furthermore, Andrew Bailey is suggesting he doesn’t know where everyone got the idea that they would. NAB’s Gavin Friend says the response has been very marked. The fall in yields is pushing riskier assets, hence new highs for the S&P and NASDAQ. Yields could claw back a little as markets assess the possibility of a December hike. Meanwhile, the focus is on tonight’s non-farm payrolls in the US, with indications that it could be a strong number. Hosted on Acast. See acast.com/privacy for more information.

Thursday 4th November 2021There weren’t any surprises in from the FOMC this morning. The Fed will cut asset purchases by $15 billion this month, with a further $15 billion in December, and an expectation that it will continue until the middle of next year. But Jerome Powell was again quick to point out that the tapering does not imply “any direct signal on interest rate policy”. Phil Dobbie talks to NAB’s David de Garis about the meeting, and looks at the latest US data that shows further signs of recovery. Tonight all eyes are on the Bank of England, where we can expect a small move up in interest rates. They’ve practically said as much. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 3rd November 2021Central banks are still grappling with what to do about inflation. The RBA is reluctant to talk about interest rate hikes anytime soon, because they don’t think inflation will be a big problem. The Fed and the Bank of England take a different view, but how hawkish will they be. Today on the Morning Call NAB’s Tapas Strickland looks back at yesterday’s RBA meeting and looks ahead to the FOMC tomorrow morning, whilst discussing the various attitudes to the dimensions of inflation. Concerns over supply chain disruptions, of won’t be helped by the rise of COVID lockdowns in China , with the Commerce department there asking local authorities to stock up for winter. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 2nd November 2021For once we are going into an RBA meeting unsure of what the outcome will be. NAB’s Ray Attrill says we have as much chance of predicting a winner in the Cup today as we do forecasting what direction the central bank will take. Meanwhile bond yields in Europe are being driven by the next central bank meeting – will the ECB abandon its PEPP program? Plus, more evidence of the great China slowdown. Hosted on Acast. See acast.com/privacy for more information.

Monday 1st November 2021There were more big moves in Australian bond yields on Friday as the RBA failed to buy up the April 2024 bonds that were the focus of its yield curve control (YCC) policy. So does that mean YCC is dead? NAB’s Rodrigo Catril says, yes it is. It has become dysfunctional, given the force we have seen from markets pushing front end yields higher around the globe. It should make for an interesting RBA meeting tomorrow, with more to come from the Bank of England the Fed. All are expected to confirm a policy shift. Meanwhile, evidence of inflationary pressures continue to mount, whilst China’s manufacturing is in contraction. Listen in as Rodrigo explains the rapidly evolving picture, for bonds, economic growth, jobs and inflation. Hosted on Acast. See acast.com/privacy for more information.

Friday 29th October 2021Three year bond yields rose well above the RBA’s target of 0.1 percent yesterday, but the central bank didn’t buy any up as part of its yield control. That pushed yields even higher. So will they react today? NAB’s David de Garis doesn’t think the bank will ditch yield control, but it’ll make next week’s policy meeting that much more interesting. Christine Lagarde said there was a lot of soul searching at yesterday’s ECB meeting, where the discussion was all about "inflation, inflation, inflation". In the end they reaffirmed that inflation was a transitory issue and there was no need for the bank to react. Yet Germany and Spain reported the highest inflation rates in decades. Are they doing the right thing? Meanwhile, equites are existing in a different world, rising still higher on the back of strong earnings results. And Facebook is changing its name. Listen in for more details. Hosted on Acast. See acast.com/privacy for more information.

Thursday 28th October 2021There have been sharp movements in bond yields, with front end yields rising and falls at the back end. NAB’s Gavin Friend says it reflects expectations that rising inflation will force central banks to raise rates sooner. We saw a higher-than-expected rise in Australian inflation yesterday and 2 year yields rose sharply overnight. Guy Debelle is in front of senate estimates this morning – will he still be arguing the transitory line? Bonds were also impacted by the Bank of Canada, who were more hawkish than expected, and by Rishi Sunak’s UK budget, which included forecasts suggesting a £50 billion drop in debt issuance next year. Tonight, the ECB meets and Q3 US GDP numbers are released. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 27th October 2021Former US Treasury Secretary Larry Summers took to Twitter yesterday to challenge Janet Yellen over inflation policy, suggesting the risk of losing control of it is higher than at any time in his career. Today, NAB’s Rodrigo Catril talks more about the rising inflation sentiment, with inflation expectations in the US now at a 13 year high. The expectation of a rate hike is being brought forward around the world, but the RBA (and NAB) are not expecting that to happen in Australia. Will this morning’s CPI numbers change that view? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 26th October 2021The markets continue to be dominated by rising inflation concerns, including the price of oil. WTI got over $85 today, but has fallen back since. NAB’s Tapas Strickland tells how Saudi Prince Abdulaziz bin Salman has said it’s too early to up production whilst uncertainty prevails. There was an example of that uncertainty as another Chinese province went into lockdown. But equity markets aren’t concerned about such things. The S&P500 hit a new high as share rose on the back of strong earnings and higher commodity prices. And Joe Biden could be a step closer to having a scaled back version of his infrastructure package see the light of day. Listen in to find out why. Hosted on Acast. See acast.com/privacy for more information.

Monday 25th October 2021Comments from Jerome Powell added to the volatility in bond markets on Friday. The chair of the Fed reinforced that it was time to taper, but suggested rate rises would have to wait, with more than five million people who were working before the pandemic still unemployed. The labour market needs time to heal, he said. NAB’s Ray Attrill says it shows that he is less inclined to respond to inflation worries until bond purchases are unwound, unlike the Bank of England. Ray also points out how the PMI data for Europe, the UK and US was generally strong, suggesting that stagflation looks like likely. It’s a busy week ahead with the ECB and Bank of Canada meeting, Q3 CPI for Australia and lots of earnings announcements, including Facebook after Monday’s close in the US. Hosted on Acast. See acast.com/privacy for more information.

A sharp fall in commodity prices hasn’t dampening inflation expectations, and with it the assumption that central banks will bring interest rates forward. NAB’s David de Garis says it’s been a day when bond markets in particular have particularly been bitten the inflation bug, with pricing suggesting inflation will average three percent over the next five years, even higher in the UK. Two surveys highlighted that supply chain difficulties continue, the Philly Fed’s Business Outlook, and the CBI Optimism Index. The CBI survey showed that two thirds of UK businesses were complaining of supply shortages, the last time it was that high was in January 1975. Oh dear. Hosted on Acast. See acast.com/privacy for more information.

Thursday 21st October 2021Equities are rising to new highs as risk sentiment improves on the back of strong earnings results in the US, even though inflation remains an ever-present concern. NAB’s David de Garis says the Fed’s Beige Book, out this morning, highlights how many companies are convinced they can pass on their increased costs, with consumers paying through increased wages. If that’s the case has Jerome Powell been right all along, that inflation is transitory? It remains the subject of intense debate. The head of the Bundesbank has announced his resignation, citing personal reasons, but could it also be his objection to ECB’s delay in tackling inflation? And could the Bank of England’s plans by stymied as COVID infection rates start to rise again, quite significantly. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 20th October 2021US equities have had a strong session, although Procter and Gamble weas one of the first major household companies to highlight margin squeeze from supply chain difficulties. Netflix earnings are expected to be strong thanks in part to the success Squid Game. Meanwhile the tentacles of inflation continue to worry policy makers almost the world over – the RBA being one of the few exceptions. The UK CPI numbers are out tonight, but already it seems like a rate rise is (squid) inked in. Phil Dobbie asks NAB’s Ray Attrill whether the Bank of England could regret lifting rates, and whether the lack of movement in longer-dated bond yields suggests investors are thinking the same thing. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 19th October 2021Bond yields are higher globally as inflation concerns mount. New Zealand’s CPI read (2.2% QoQ) sent 10 year yields up 16 basis points, spilling over to Australia. But NAB’s Rodrigo Catril says the inflationary pressures haven’t yet arrived in Australia which means the RBA will lag other central banks when it comes to rate hikes. Meanwhile, China is showing signs of a significant slowdown in output, with GDP growing just 0.2 percent in the last quarter, and with supply chain disruption, COVID lockdowns and energy shortages unlikely to improve that number could go lower. US data also disappointed. Phil Dobbie asks whether these are the signs of emerging stagflation? Or will corporate earnings give the markets some momentum and show there is growth, even with rising prices? Hosted on Acast. See acast.com/privacy for more information.

Monday 18th October 2021Equity markets were buoyed by strong US earnings results and stronger than expected retail sales numbers, but there are many reasons to suggest this confidence might be short-lived, according to NAB’s Tapas Strickland. Corporate earnings have been focused on the finance sector, so results from other sectors will give an indication of the inflation impacts on margins and growth potential. Chinese activity data today and the ongoing Evergrande saga could impact global growth hopes. Then there’s inflation, which continues to grow, with the Fed expected to bring forward its first rate hike and the Bank of England Governor reiterating the need for a rate rise in the UK this year. Paying more for a mortgage is unlikely to boost consumer confidence which is already flagging. Hosted on Acast. See acast.com/privacy for more information.

Friday 15th October 2021Markets have taken a more positive outlook overnight, with sharp rises in equities in the US and Europe. NAB’s Gavin Friend says it’s been helped by falling bond yields, showing that there’s less immediate concern about rising inflation. That doesn’t mean the problem has gone away, but company earning results in the US have been positive, and there will be some solace in the fact that the growth in producer prices (PPI) seem to have stalled, albeit at very high levels. On today’s podcast we look at inflation in China (where PPI growth persists), the commodity and supply chain sagas, US jobless claims and yesterday’s employment data from Australia. Today US retail numbers are the data to watch for. Hosted on Acast. See acast.com/privacy for more information.

Thursday 14th October 2021US CPI numbers were a little higher than anticipated. NAB’s David de Garis says we did see some support for bond yields, but markets slipped back when it was realised the core inflation number was pretty line-ball with expectations. As we’re seeing around the world, prices are being influenced by fuel, supply chains and wages. This morning’s FOMC minutes contained nothing in the way of surprises – it simply cemented-in the belief that the Fed will start tapering this year through to mid- 2022, but the timing of a rate rise seems less certain. UK GDP was also close to expectations, although manufacturing and construction were well down thanks to the ‘pingdemic’. We also look at China’s trade data on the podcast today and discuss Australia’s employment numbers out this morning. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 13th October 2021The IMF released revised forecasts overnight, together with a warning that central banks need to tighten their monetary policy if inflation persists. Inflation concerns are certainly growing, backed with evidence in numerous surveys. 30% of small business owners in the US said they expect to lift wages, according to the latest NFIB survey. The latest jobs data for the US and UK shows how tight the labour market is, adding to fears of an inflation spiral. NAB’s Ray Attrill talks through the numbers and the central bank responses, as well as looking ahead to today’s trade data from China and tonight’s CPI numbers from the US. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 12th October 2021Fuel prices are rising, with the gas crisis now pushing up oil and coal prices. On today’s podcast NAB’s Tapas Strickland says central banks are now worried about inflation getting “permanently embedded” (Andrew Bailey’s words) and are becoming more hawkish in their outlook. The latest is the Bank of England, where markets are already pricing in a 50 percent chance of a small increase as soon as next month. Bond yields continue to rise on this new attitude by central banks. Also today, does Australia need to reopen its borders to get the economy back on track? Can we fully recover without the return of a migrant workforce? Hosted on Acast. See acast.com/privacy for more information.

Monday 11th October 2021Non-farm payrolls numbers from the US on Friday were less than expected, but NAB’s Rodrigo Catril says the numbers weren’t as bad as they seem, because they included an upward revision in the month before. The expectation is that the Fed will push ahead with tapering of bond purchases later in the year, with bond yields rising around the world, to multi-year highs in some cases. Inflation remains a concern, because of supply chain disruption, rising fuel prices and wages. That might be good news for the Aussie dollar iron ore rose 6 percent on Friday – but N AB has downgraded forecasts given the expected strength in the US dollar during this climate of uncertainty. Listen in to find out more. Hosted on Acast. See acast.com/privacy for more information.

Friday 8th October 2021Two cans are being kicked. The US debt ceiling can is being kicked into December, but the issues remain. The gas can has been kicked along by a promise of more fuel from Russia, but isn’t Europe’s dependency on Russia part of the problem? Meanwhile, the Bank of England’s new chief economist is warning of inflation for longer. Is he positioning for a rate rise? NAB’s David de Garis talks through the overnight market news, as well as looking ahead to the Financial Stability Review from the RBA today, and tonight’s non-farm payrolls numbers in the US. There are plenty of reasons why this should be a strong set of numbers. Hosted on Acast. See acast.com/privacy for more information.

Thursday 7th October 2021The fuel crisis in Europe and the UK is impacting global markets, with shares taking a hit. There’s been no rush to bonds given the impending inflation concerns, worsened by fuel prices, and most currencies are losing against the US dollar, which is possibly the only safe-haven left right now. It’s been a rollercoaster day, says NAB’s Gavin Friend, with energy prices in the driving seat and upending all markets. The problem is, there doesn’t seem to be a short-term resolution. Listen in to find out why. Plus, strong jobs numbers in the USD. Does this foreshadow a strong non-farms payroll number for the US on Friday? And a vote on the US debt ceiling possible in the next few hours. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 6th October 2021The currency markets suggest there’s a risk on mood this morning, with the US dollar gaining on the Japanese Yen and Swiss Franc. Strong non-manufacturing ISM numbers in the US have helped with that. But oil prices continue to rise too, adding to inflation concerns. Yet tech stocks have risen as well. NAB’s Rodrigo Catril joins Phil Dobbie to help explain market positions this morning, on the day that the RBNZ is expected to lift interest rates, despite expectations that the country will face many more COVID cases as the policy switches to one of living with the virus. US jobs will be the focus for the second half of the week, starting with ADP employment numbers tonight. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 5th October 2021Oil prices rose quickly this morning after OPEC+ announced they would stick with their earlier plans of rising production in November by 400 thousand barrels a day. At one stage Brent and WTI were both up more than 3 percent. NAB’s Ray Attrill says it was a surprising response, because there wasn’t a particular expectation that they would rise production. Nonetheless it has added to inflation concerns, and raised more talk about stagflation – will the price increases dampen demand and slow the jobs recovery? It’s a dilemma for central banks and governments. So far though, inflation isn’t having a big reaction on production. The manufacturing ISM in the US was strong n Friday, so was consumer spending. Markets will be watching the data today to see whether demand from the services sector is continuing to push ahead. Hosted on Acast. See acast.com/privacy for more information.

Friday 1st October 2021There’s a fair bit to chew on today, with commodity currencies helped by word from China that they must secure enough energy for winter, whatever the cost. The US has managed to agree an interim budget for now, but the debt ceiling remains an issue and will remain so until the very last minute. Jerome Powell pontificated in his congressional hearing about what to do if high inflation persists, but NAB’s Gavin Friend says nothing that was said deflects from the expectation that rate rises in the US are still a long way away. The US dollar has stalled its steady growth for now, in part because of the rise in commodity currencies, but will it resume its steady path? Maybe Europe will come to the fore. After all, they don’t have to debate spending packages, they already have one. Hosted on Acast. See acast.com/privacy for more information.

Thursday 30th September 2021Markets are much calmer this morning. Equities have managed to climb a little, with the biggest moves in currencies and commodities. NAB’s David de Garis says there’s debate about whether we’re heading to reflation, deflation or stagflation, or all of the above. The Aussie dollar lost more ground, but the pound is taking more of a hammering as fuel shortages will almost certainly be hitting the growth outlook there. Over the Atlantic the debt ceiling is looming, but the short-term issue is passing some sort of budget today, so the government can carry on spending tomorrow. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 29th September 2021It seems like it was a fairly heated Senate Banking Committee meeting in the US overnight. Flags were raised about whether Jerome Powell will win another term as Governor of the Fed, given the background of yesterday’s resignations and with one Democrat Senator overnight calling him ‘dangerous’. The US debt ceiling is also causing concern, with it being used as a bargaining chip for the moderation of Biden’s spending plans. NAB’s Tapas Strickland says we have been here before so the market is not overly concerned about the lack of progress, just yet. We also discuss how the Fed are likely to push ahead with tapering even if employment doesn’t pick up, how China’s growth this year is likely to be hit by rolling power outages, signs that Australia will bounce back quickly out of lockdown and the future for Evergrande. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 28th September 2021It seems markets are still trading on the hawkishness of central banks, particularly the Fed, where we’re seeing bond yields significantly higher and tech stocks weakening. Commodity prices are also pushing higher globally, with Brent Crude now close to $80 a barrel. NAB’s Gavin Friend in London says these extra costs, plus supply constraints make it highly unlikely that the Bank of England will lift interest rates next year, no matter what Governor Andrew Bailey suggests. Hosted on Acast. See acast.com/privacy for more information.

Monday 27th September 2021Last week was a very volatile week, driven by the uncertainty over Evergrande, the unexpected hawkishness of central banks, continued concerns over supply chains and the emerging fuel crisis in the UK and Europe. This week you can add the USD debt ceiling to the list of concerns. NAB’s Ray Attrill says without a stop gap funding resolution we could be going into the weekend with government shutdowns. Also today we look at the German election over the weekend, which could see the government split three ways. And will the Aussie dollar gain ground as “freedom day” in NSW approaches? Hosted on Acast. See acast.com/privacy for more information.

Friday 24th September 2021There’s been a big shift to risk-on overnight, with equities rising and bonds falling, pushing yields much higher in the US and across Europe. But why? The risk of Evergrande remains and with the Fed eyeing jobs data, a rise in weekly jobless claims was hardly a good sign this morning. NAB’s Gavin Friend says part of it is a reaction to the clearer roadmap for the Fed, assuming the next payrolls numbers are strong. Markets were also responding to the Bank of England, who expect inflation in the UK to reach 4 percent this year and that could strengthen the case for “modest tightening of monetary policy”. But if prices are rising because of supply constraints, does a rate hike really make sense? Hosted on Acast. See acast.com/privacy for more information.

Thursday 23rd September 2021As expected, the Fed didn’t give a specific date for the start of tapering, but suggested it should all be done by the middle of next year. NAB’s David de Garis says the bank has also moved forward its expectations for rate rises, with the board split on a rise as soon as next year. The Norges Bank is well ahead of them tonight, likely to be the first G20 central bank to lift rates since the pandemic started. The Bank of England meets today too, and inflation concerns will be front and centre, particularly with the crisis in fuel prices. Meanwhile markets were buoyed by the news that Evergrande will pay bondholders, so that can has been kicked down the road for now. Oil has risen as inventors in the US fell faster than expected. And lots of PMI reads today. Hosted on Acast. See acast.com/privacy for more information.