NAB Morning Call

Wednesday 14th July 2021US inflation has surprised again. It was expected to ease back after the 5% jump last month, but this time its higher still. Phil Dobbie asks NAB’s Tapas Strickland whether this will be enough for the Fed to be forced into tapering sooner than intended, or is it still transitory? As luck would have it, Jerome Powell is talking to Congress later today, so maybe we’ll get an inkling of a change in timelines. Also today, decisions from RBNZ and the Bank of Canada, two central banks in more of a hurry than most. Plus, China’s trade numbers, the NAB business survey and the Bank of England’s stability review. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 13th July 2021US stocks hit new highs as Q2 earnings season kicks off. NAB’s said it also reflects a recovery from Asia emanating from China’s easing of reserve requirements. China will be a focus today, too, with the release of trade data. US CPI is also out today. Could a combination of weaker earnings reports, a fall in trade to and from China and/or a higher-than-expected CPI dampen the mood? The other significant news overnight has been Christine Lagarde’s Bloomberg interview were she spoke about PEPP continuing in some form from 2022. Will we see central banks taking a more dovish stance as COVID numbers continue to raise concern? Hosted on Acast. See acast.com/privacy for more information.

Monday 12th July 2021For most of last week markets grew increasingly cautious about the spread of the Delta variant and fears of further lockdowns in major economies, Australia included. On Friday, though, that all changed, with bond yields rising, equities breaking new highs, the US dollar back on the rise, but the Aussie also doing well along with other commodity currencies. This morning, NAB’s Ray Attrill looks for reasons behind the shift in sentiment, including better credit numbers from China and a more extensive and sharper than expected cut in the reserve requirement ratio for Chinese banks. So, has the mood shifted? It’s a busy week ahead, including US CPI numbers, which markets have been particularly sensitive too recently. Who’s to say caution doesn’t swiftly return on the back of more virus news. Hosted on Acast. See acast.com/privacy for more information.

Friday 9th July 2021Is it below 2 percent or at 2 percent? The ECB has made subtle changes to its inflation target, but has flatly rejected the Fed approach of average inflation targeting. NAB’s David de Garis explains what’s changed in the ECB’s approach. Plus words from Philip Lowe yesterday about the RBA’s reluctance to shift policy until unemployment is (much) lower. Plus, oil up as US supplies fall, and the reflation trade takes a breather as COVID concerns rise. Listen in for the detail. Hosted on Acast. See acast.com/privacy for more information.

Thursday 8th July 2021The FOMC minutes were released this morning, but a more significant central bank release could be out later in the day. Christine Lagarde is said to be released the outcome of the ECB’s extensive strategy review. NAB’s Gavin Friend talks to Phil Dobbie about what’s likely to be in it and how much of it could be market changing. The Fed minutes meanwhile, had little impact on the markets, which continue to exercise caution as further data suggests a slowdown in the speed of the global economic recovery. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 7th July 2021Bond yields have fallen markedly as markets adopt a more cautious air. NAB’s Rodrigo Catril says it’s being driven by a number of factors, including weaker than expected ISM services numbers from the US and factory orders from Germany. The main concern in the ISM was the employment data which dropped below 50, reinforcing the belief that there is a constraint in the availability of labour. A more controlling influence from China, the growth of a more virulent COIVD strain and the uncertainty over an OPEC deal have all added to the caution. So will a strong JOLTs number and the minutes of the last FOMC meeting do anything for turn the sentiment around today? There’s also discussion on yesterday’s RBA meeting, which left the door open to earlier rate rises and tapering of QE, driven by data not dates. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 6th July 2021Boris Johnson has told the UK public that they are just two weeks away from removing their masks, getting back to work and forgetting about social distancing. Within reason. Is this why the pound had such a strong day today, on what’s been a quiet session with the US holiday. Today, we know something will change with the RBA. That’s why Philip Lowe has scheduled a press conference this afternoon. But what exactly will be decided? NAB’s Ray Attrill talks through the possibilities. More importantly, what will cause the market to react? And oil rises sharply as OPEC+ talks fall apart. Hosted on Acast. See acast.com/privacy for more information.

Monday 5th July 2021Not too strong not too light, that seems to be the view of the non-farm payrolls in the US on Friday. It wasn’t strong enough to signal change in the Fed’s direction says NAB’s Tapas Strickland. At the current pace, he said, it would take eight months to get back to the pre-pandemic level for payrolls. There’s also discussion about changes expected from the RBA tomorrow. It’s been well signalled that there will be policy changes. Tapas says, given the improvements in the Australian economy, the need to run QE at $100 billion every six months is not there anymore. Hosted on Acast. See acast.com/privacy for more information.

Friday 2nd July 2021Markets have been treading water all week waiting for the non-farm payrolls data, particularly in bond yields which hardly moved at all in the last 2 4hours. NAB’s Gavin Friend says there’s been a lot of data for markets to chew over too, some of it below expectations, some of it over. Markets are clearly looking for direction and hoping that payrolls will provide it. In the podcast we also look at yesterday’s manufacturing, trade, dwellings and job vacancy numbers from Australia – all good, although the Aussie dollar was one of the weaker currencies overnight. Why? Hosted on Acast. See acast.com/privacy for more information.

Thursday 1st July 2021As we’ve mentioned before, central bank speakers are having little influence on the markets since the sharp response to the last FOMC meeting. As David de Garis says on today’s podcast, investors should wait for the evidence, with the non-farm payrolls on Friday the next significant cab off the rank. The ADP numbers overnight were down on April, and could be revised down further, as is often the case. There’s also discussion about weakness in the Aussie dollar, despite the iron ore price, Andy Haldane’s parting words from the Bank of England and uncertainty over China’s growth. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 30th June 2021Markets have largely moved sideways, pulled between rising confidence numbers in the US and Europe, and concerns about rising cases of the Delta strain. As NAB’s Rodrigo Catril explains, the Conference Board’s labour market differential index, which looks at the ratio between those who see jobs as being plentiful and this finding them hard to get, came in at the highest level since 2000. Also today, discussion on Christine Lagarde’s green plans for Europe, the direction of the Chinese economy and house price concerns. Today, Australian Private Sector Credit will be of interest along with the ADP jobs numbers for the US. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 29th June 2021A little more cautiousness has crept back into the markets says NAB’s Tapas Strickland, although it might be as much to do with the prelude to the non-farm payrolls numbers at the end of the week as it is to do with rising infection rates as lockdowns. On today’s podcast we look at vaccine numbers and what needs to happen to see economies can on full footing. Plus, Tapas’ taker on yesterday’s Intergenerational Report for Australia. Germany’s CPI numbers will be watched closely today, as do all inflation numbers lately. Hosted on Acast. See acast.com/privacy for more information.

Monday 28th June 2021With Sydney suddenly flung into lockdown, Phil Dobbie asks NAB’s Ray Attrill what the market reaction will be today. One immediate repercussion will be we won’t hear anything from the RBA ahead of next week’s meeting. Markets also open today with the weekend news that Joe Biden has backtracked on his latest stimulus bill. It’s not such a done-deal after all. There’s also discussion about the path the markets take having retraced their response to the FOMC meeting the week before last, particularly when there remain so many known unknowns. Hosted on Acast. See acast.com/privacy for more information.

Friday 25th June 2021Joe Biden has struck a deal to push ahead with his infrastructure plan – a much reduced version. That’s helped US equities today. Ahead of that, it was a mixed day on the markets says NAB’s Gavin Friend, as Fed speakers gave mixed views on the duration of inflation and the Fed’s likely response. Data was also mixed, with weekly jobless claims not falling as much as hoped and durable goods orders a little weaker than expected. The Bank of England, who might have been a little more hawkish, actually took a very dovish stance. The data form Europe was largely positive and today the US personal income and spending will be of interest, along with the core PCE deflator, but, there again, we already know prices are rising. Hosted on Acast. See acast.com/privacy for more information.

Thursday 24th April 2021The crawl back from last week’s FOMC surprise is more or less complete. As NAB’s David de Garis points out, Treasury yields are back to where they were just before the Fed met. Equities are back to on the rise and commodities and being driven higher by demand and supply constraints. The reflation trade is back. On today’s podcast we go through the plethora of PMIs from Europe and the US, with more data from Europe today. The Bank of England meets later. The heavily-vaccinated UK population seem to be adapting to life with the virus. Could that influence the outlook for the Bank of England later on? Hosted on Acast. See acast.com/privacy for more information.

Wednesday 23rd June 2021Jerome Powell has been giving is testimony on Capitol Hill and he, like all the Fed speakers over the last 24 hours, has been trying his hardest to calm the markets and reassure them that inflation won’t last, so the Fed won’t be tapering soon or bringing forward rate increases. It seems to be working, with another day of a weakening US dollar and rising equities. This week tentatively suggests that the global reflation trade is not dead, says NAB’s Ray Attrill on today’s podcast. Plus, loads of PMIs today, for Australia, Europe and the US, we look at the winners and losers. And the first words from the RBA since those strong jobs growth numbers last week. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 22nd June 2021Well, we did say it was a rather extreme reaction to the FOMC meeting last week. NAB’s Tapas Strickland says the market moves overnight suggest the response was overdone, as markets partially unwound, with the US dollar falling, the yield curve steepening again, US equities up and the Aussie dollar on the rebound. So, what’s driven this rethink and will it last? Will Jerome Powell have an influence on it all when he speaks in front of a US government committee later? On today’s podcast we also examine yesterday’s Australian retail numbers, dissect what Christine Lagarde had to say from the AECB, and look ahead to what’s on today. Hosted on Acast. See acast.com/privacy for more information.

Monday 21st June 2021The US dollar continued to rise at the end of last week., hitting a two-month high, after the surprisingly bullish outlook from the Fed, but is the Aussie dollar paying too high a price? NAB’s Rodrigo Catril says the Aussie is in the middle of the storm, with the unwinding of the reflation trade pushing US equities and commodities lower. The Aussie dollar broke through a few technical levels at the end of the week, will it pick back up? Today we discuss movements in currencies and bond yields at the end of the week and what the week has in store for us. Hosted on Acast. See acast.com/privacy for more information.

Friday 18th June 2021The US dollar continued to rise yesterday, after the hawkish comments from the Fed. As David de Grais discusses on today's podcast, it’s impetus was enough to squash any positive currency response to Australia’s employment numbers and New Zealand’s GDP read yesterday, both of which were way higher than anticipated. And yet Philip Lowe continued to set the expectation that Australian rates wouldn’t rise until 2024. The road to recovery isn’t straight forward though, with US unemployment claims rising last week and Britain’s infection rate rising sharply, despite the vaccines. UK retail sales will garner a bit of attention today. Hosted on Acast. See acast.com/privacy for more information.

Thursday 17th June 2021At the FOMC meeting this morning the Fed upped their growth and inflation forecasts, twit the dot plots pointing to rate rises as soon as 2023. It’s a much more hawkish meeting than had been anticipated although, NAB’s Gavin Friend wonders whether enough has changed in the Fed’s forecasts to warrant such a shift. UK CPI is another indicator that exceeded expectations. We’re getting that a lot lately. Today’s Australian employment data is also discussed in today’s podcast, along with Philip Lowe’s speech in Toowoomba later on. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 16th June 2021The FOMC meeting is just a day away are markets are being cautious, with little movements in bonds or equities. A weaker than expected set of retail sales numbers has added to the uncertainty. But is there any uncertainty around what the FOMC will say. NAB’s Tapas Strickland says under the hood the retail numbers had some positives, including more evidence of the rotation from goods to services. We also look at the rising price of oil, and the fall in other commodities. Coming up, other than the FOMC meeting, we’ll see China’s retail sales numbers, CPI for the UK and Canada and New Zealand’s balance of payments and current account. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 15th June 2021Oil has hit a two-year high. This morning NAB’s Ray Attrill explains why oil prices could continue to rise. Are we heading for $100 oil? Also, why bond yields are rising again ahead of an FOMC meeting this week where little is expected to happen. And troubling times for Boris Johnson, fighting the EU over the NI protocol, pacifying the US President and announcing a 4 week delay to next week’s planned lifting of all COVID restrictions. On today’s podcast we also look ahead to the RBA minutes, US retail sales and UK employment numbers. Hosted on Acast. See acast.com/privacy for more information.

Friday 11th June 2021US CPI was a higher than expected, but the Market seems to have taken it largely in its stride, although it’s helped push equities higher today. NAB’s David de Garis said the market will be more interested in what the Fed might say next week, after a couple of disappointing payrolls numbers. Meanwhile, the ECB, upped their forecasts but didn’t talk of tapering, except to say they weren’t going to rush into it. And world leaders are in Cornwall to talk about the global approach out of the pandemic, including a belt and road initiative to rival Chinas. Hosted on Acast. See acast.com/privacy for more information.

Thursday 10th June 2021Bond yields have fallen further overnight, in some cases to levels not seen for several months. NAB’s Tapas Strickland says it could be market positioning, although it could also be related to growing acceptance that any inflation that occurs is transitory. That’s not how the Bank of England’s Andy Haldane sees it though, and China’s PPI numbers shows supply costs are rising. Yet the RBA’s Christophe Kent sees any significant rise in inflation, temporary or otherwise, as being some way off for Australia. This mix of views on where inflation is heading globally will be fuelled further by the latest US CPI number out later today. Plus, what to expect from the ECB. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 9th June 2021Inflation fears have eased further, says NAB’s Gavin Friend, with bond yields pushing lower and market volatility easing. That’s despite the JOLTs (job openings) numbers in the US which were high enough for everyone to have a job, but its clear to attract workers companies will have to lift their wages. That was evidenced in the NFIB small business survey overnight too. Meanwhile, in the UK the focus is on rising house prices – BoE chief economist Andy Haldane described the market as “on fire” – and the worsening dispute with the EU on the Northern Ireland border. The Europeans are worried that British sausages could find their way onto the continent, stopping them could also mean the Northern Irish could be sausage-free. This is a story that won’t go away. It’s a slow burner, with lots of sizzle to follow (sorry). Hosted on Acast. See acast.com/privacy for more information.

Tuesday 8th June 2021If the non-farm payrolls gave the markets a Goldilocks moment on Friday – with jobs numbers that weren’t too hot or too cold – then maybe markets are already starting to question whether it was exactly what was needed. As NAB’s Ray Attrill points out, US CPI numbers later in the week, and the expectations of them, could tip the balance a little. But, could the speed of recovery also be a concern? The US is showing growth, and it’s likely the JOLTs numbers today will show there are lots of job openings, but will they be filled? And why are China’s exports down? Could it be to do with supply constraints, or could it be lack of demand, particularly when much of Asia is facing increasing lockdowns and restrictions. Hosted on Acast. See acast.com/privacy for more information.

Monday 7th June 2021Not too good, not too bad, that seems to have been the market response to the non-farm payrolls numbers out of the US on Friday. NAB’s Rodrigo Catril says it reinforced the view that the labour market was recovering in the US, but not so fast that it would prompt tapering discussions. The result has been a sharp fall in Treasury yields and a pick-up in risk assets. It’s a different story in Canada, but as discussed in today’s podcast, it’s all a question of timing and lockdowns. The G7’s agreement in principle to a 15% minimum corporate tax was another highlight at the end of last week, but there’s still a long way to go. Hosted on Acast. See acast.com/privacy for more information.

Friday 4th June 2021On today’s podcast NAB’s Gavin Friend talks through a session that has been in two parts. First off there was the response to a series of strong numbers from the US, including a standout set of employment numbers from the ADP. This positive news added to speculation that the Fed would taper soon rather than later, with the Fed’s Robert Kaplan suggesting they might need to take their foot off the pedal sooner. Stocks regained some of their losses when reports emerged that Joe Biden might compromise on the size of his increase to corporate tax. Tonight the focus will be on the non-farm payrolls numbers out of the US. If they are strong then pressure will mount for a swifter move from the Fed. Or at least that’s what the markets will expect. Hosted on Acast. See acast.com/privacy for more information.

Thursday 3rd June 2021If there’s one takeout from the Fed’s Beige Book overnight, aside from the continued improvement in the US recovery, it was the rising concern about input costs. Even though it’s seems to be accepted wisdom that price pressures from supply chain disruption will be transitory, there’s the question about how that disruption will impact the jobs recovery. NAB’s David de Garis says that makes this week’s non-farm payrolls on Friday particularly important, which explains why markets are lacklustre today, across almost all asset classes. Only oil is showing any significant move forward. Listen in for a description of how markets are travelling, just don’t expect any big numbers. Not today. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 2nd June 2021The RBA didn’t steer from its earlier stance that it was too soon to be looking at any changes in policy right now. Those who were expecting a more hawkish attitude will have been disappointed. The real surprise yesterday was the strength of the GDP partials in Australia, in particular a record current account surplus. NAB’s Rodrigo Catril says that will translate to a higher GDP number today. Elsewhere, Europe posted final PMIs for May, which have been revised upwards, and the US reported a high ISM manufacturing read. Hardly surprising then, that oil is on the rise, with Brent hitting pre-pandemic levels. But with India still in trouble, Iran ready to up their production, and uncertainty over lockdowns the world over, isn’t $71 oil a little premature? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 1st June 2021Markets have been understandably quiet with the US and UK on holiday. China delivered its PMIs, with the manufacturing read a little below expectations, and non-manufacturing a little higher than expected. NABs Tapas Strickland says the new orders component of manufacturing suggests demand might be starting to level off. The rising Yuan is clearly a concern for the PBoC who announced measures to tackle it, whilst Chinese authorities are now permitted families to have three children. Whilst Monday was quiet, there’s a plethora of data today, including pre-GDP partials for Australia, the Eurozone’s CPI, Canada’s GDP, US ISM, and China’s Caixin PMIs. Plus, of course, the RBA. No big announcements are expected but what will be the tone they adopt? Hosted on Acast. See acast.com/privacy for more information.

Monday 31st May 2021It was an early start to month-end on Friday, with the US and UK off on holiday today. NAB’s Ray Attrill says there were a lot of intra-day currency moves late in the day on Friday, some of which will be down to asset managers managing their hedge ratios. There was little movement in other asset classes, even with a higher-than-expected inflation read, mainly because it wasn’t the same scale as the CPI shock earlier in the month. It might be a quiet start to the week, but it’s a busy week, including the RBA tomorrow and non-farm payrolls in the US on Friday. Hosted on Acast. See acast.com/privacy for more information.

Friday 28th May 2021Three central bankers argued for a more rapid tightening of monetary policy overnight. The Bank of England’s Gertjan Vlieghe argued a scenario where rates in the UK could rise as early as Q2 next year, although NAB’s David de Garis says markets might have overreacted to what was a far more nuanced argument. The pound is the big winner in the major currencies overnight. The ECB’s Jens Weidman expressed concerns about monetary policy being pushed too far to tackle income distribution, whilst the Fed’s Robert Kaplan wrote an article outlining how the US labour market might be tighter than many have thought, with people stepping out of the workforce for early retirement, for example. Tonight, the Biden administration releases its budget papers, with forecasts, and the long awaiting PCE deflator – although with so much uncertainty around the transitory nature of inflation, or otherwise, there’s a question mark on just how valuable this read will be. Hosted on Acast. See acast.com/privacy for more information.

Thursday 27th May 2021The RBNZ surprised many yesterday by indicating that there could be an interest rate rise as soon as next year, which bolstered the Kiwi dollar and it hasn’t really come back down to earth. They are a little more guided in Europe, though, where the ECB mentions at every turn that tapering won’rt happen soon, let alone a rate rise. This morning Phil Dobbie asks NAB’s Rodrigo Catril whether two central banks can really pursue such different paths when the push comes to shove, particular as the RBA and RBNZ tend to be aligned? Hosted on Acast. See acast.com/privacy for more information.

Wednesday 26th May 2021Okay, we know The US dollar has fallen again, with rises in the Euro, and a shift up in the Yuan, but will it stick? NAB’s Ray Attrill says there have been conflicting reports from China as to whether the country would benefit from a stronger currency, or not, but the belief is it will continue to rise which could add more strength to the Aussie dollar over time. In the US house sales were well down, but it seems to be a factor of supply shortages mixed with rising construction costs weakening demand. It’s being seen as another temporary inflation measure, with further falls ion bond yields overnight suggesting the transitory inflation story is even more widely accepted. Today the RBNZ policy statement – can they remain so dovish in light of the local data? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 25th May 2021Equities are back on the rise and bond yields are falling, slightly, as investors seem to have accepted the line of most central banks that inflation is only transitory. The Bank of England’s Chief Economist is one of the few dissenters, but as NAB’s Gavi Friend points out, he has always been hawkish, and he is about to walk out the door anyway. Nonetheless, the inflation debate continues and attitudes could quickly switch. Meanwhile, the Aussie dollar hasn’t gained as much as the NZ dollar from the weakening US dollar, in part because of more noises for China on the need to control speculation in commodities. Today Aussie merchandise trade figures, plus the weekly payrolls report, and the German IFO report. Hosted on Acast. See acast.com/privacy for more information.

Monday 24th May 2021There was a strong set of numbers at the end of the week; PMI reads were generally good, UK retail bounced back and vaccines, we’re told, will do a good job against the current mutations of COVID-19. But the Euro lost ground on Friday as Cristine Lagarde refused to commit to any schedule for talking tapering, whilst support for tapering sooner rather than later is gathering some momentum in the US. Inflation continues to be a hot topic, with more evidence of rising costs in the PMIs. NAB’s Tapa Strickland says the survey highlights how many companies are expecting to pass the costs on. What will rising prices and a string economic recovery do for Biden’s hopes for a massive infrastructure spending program? Hosted on Acast. See acast.com/privacy for more information.

Friday 21st May 2021Equities bounced back in the US and Europe as markets re-evaluated the comments about the timing of tapering in this week's FOMC minutes. The US dollar is also lower, along with bond yields. NAB’s Gavin Friend points out that this is the third turnaround Thursday in a row. Will it become habit forming? On today’s podcast more discussion about differing attitudes to inflation, plus a look at yesterday’s job numbers in Australia and a look ahead to today’s flash PMI numbers for many parts of the world. Hosted on Acast. See acast.com/privacy for more information.

Thursday 20th May 2021The FOMC minutes gave away more than expected, with the Fed suggesting it might be appropriate at some point to discuss a plan to adjust the pace of asset purchases, if the economic recovery continues. Lots of caveats there, but markets responding pushing 10 year Treasury yields up 5 basis points quickly afterwards. NAB’s David de Garis says the mere mention of tapering was enough to evoke a response, with inflation also back in full focus. Also today, Bitcoin lost almost a third of its value, before making most of it back again, after China announced a ban on financial institutions facilitating any transactions into or out of the currency. There’s also discussion on today’s Aussie employment numbers – NAB is more bullish than consensus on this, expecting the unemployment rate today. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 19th May 2021It’s been a mixed session for US equities overnight, whilst bonds headed sideways. The main move has been the further decline in the US dollar, falling below 90 on the DXY index for the first time since January and not far from the lows of 2018. NAB’s Gavin Friend says the move down is being driven by the reopening in Europe ,without the US labour market volatility, plus the fall in real yields. Also on today’s podcast, discussion on yesterday’s RBA minutes, tomorrow’s FOMC minutes and whether a US-Iran nuclear will add a sizeable chunk of extra oil on the global markets. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 18th May 2021US shares fell sharply today as investors once again weighed up inflation concerns. The only new data to support rising prices was the Empire State Manufacturing Index, which showed an all-time high for prices paid and future prices. NAB’s Tapas Strickland says it’s the tech sector that has been hit the hardest, perhaps because of overvaluation concerns and the fear of a Fed that has to raise rates aggressively if it’s behind the curve on inflation. Also on today’s podcast discussion of the RBA minutes later today, China’s retail numbers yesterday and the UK’s employment data later on today. Hosted on Acast. See acast.com/privacy for more information.

Monday 17th May 2021Share markets are riding high again in the US despite a triple whammy of disappointing reports. First, retail sales ex-auto fell 0.8 percent in April, secondly consumer sentiment fell from 88.3 to 82.8, and finally inflation expectations have risen to the highest level in a decade. NAB’s Rodrigo Catril says investors are buying the Fed’s line that the recovery will see fluidity in numbers and rises in inflation are transitory. But we should also be looking at vaccination numbers, lockdowns and COVID infection rates to understand which economies will bounce back the fastest. Hosted on Acast. See acast.com/privacy for more information.

Friday 14th May 2021USA equities came bouncing back today after yesterday’s sharp response to the higher than anticipated CPI numbers. Topday, investors clearly decided to look beyond any temporary price rises and look to the great re-opening story. The news that there were less than expected jobless claims last week will have helped to drive the expectation that the worst is over and the US economy is reopening. That was reflected in the rise of cyclical stocks in particular and further evidence was provided in the New York Fed’s Weekly Economic Index. Today, eyes will be on the US retail numbers for April and the Michigan Uni Consumer Sentiment Index. Hosted on Acast. See acast.com/privacy for more information.

Thursday 13th May 2021US CPI numbers came in on the high side today, and markets have reacted swiftly, with equities falling sharply and the bond sell-off pushing Treasury yields up, although not quite as high as late March when inflation fears were at fever pitch. Phil Dobbie asks NAB’s David de Garis whether the market is over-reacting. After all, it’s one month, it includes the base effect of last year’s lockdowns and the core number is not too far from the Fed’s target range. It could easily settle down in a month or two. The UK could be next to see this supply driven inflation ramp up, with the GDP numbers showing a significant rise in March, even before lockdown was fully eased. There’s only one focus for the markets right now and nobody is exactly sure how it will play out. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 12th May 2021Equities have taken a tumble again in the US, with the falls broader than just tech stocks. Europe too has seen sharp falls. This risk off mood is being driven by increasing inflation concerns, as evidence mounts that supply restraints are pushing up producer prices, which will eventually be passed on to the consumer. NAB’s Gavin Friend says vertigo is another factor, shares have risen so much this year that investors are worried. There’s also discussion on the Australian budget, China’s rising PPI numbers and why the rise in European bond yields this morning? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 11th May 2021Inflation expectations continues to influence markets, with NAB’s Rodrigo Catril explaining why it has such a marked impact on tech stocks. Inflation in supply chains is a theme around the world, and tonight’s PPI numbers from China are expected to give another clear indication. The pound has had a string session as Britain prepares for more lockdown easing – and Boris Johnson promising the return of hugging – from next Monday. Locally, the focus will be the Federal Budget, and the implications for the RBA of a smaller deficit and less bond issuance. Hosted on Acast. See acast.com/privacy for more information.

Monday 10th May 2021US non-farm payrolls markedly undershot market expectations on Friday, with just 266 thousand new payrolls, versus the expectation of close to one million. NAB’s Tapas Strickland says some argue that the $300 a week jobless supplement is delaying the return to work. Nonetheless, investors took it as a sign that government stimulus would continue and that the Fed’s program would continue on schedule, with no moves until a string of months with strong recovery in jobs numbers. In Australia all eyes will be on the revised government deficit in the Federal Budget tomorrow. Can the RBA continue with the current scale of bond buying if the government is issuing less of them? Hosted on Acast. See acast.com/privacy for more information.

Friday 7th May 2021The Bank of England has upped its forecasts for the growth of the UK economy this year – from 5 percent a few months ago, up to 7.25 percent. The recovery is booming, it seems, but let’s not get carried away, said BoE Governor Andrew Bailey. NAB’s David de Garis looks at the implications of the new forecast on their policy decisions moving forward. The RBA has also been in the spotlight, with Guy Debelle talking in Perth last night and suggesting that inflation forecasts were of less interest to the bank than the inflation that was actually being experienced. Tonight non-farms payrolls will be the focus in the US, where the economy is also bouncing back and jobs will be part of it, but just how quickly? Hosted on Acast. See acast.com/privacy for more information.

Thursday 6th May 2021The Fed’s board continues to talk down the prospect of tapering, pushing the argument that price rises will be transitory. There was more evidence of prices being hit by supply chain issues in the services ISM numbers in the US this morning. It might be a different story in the UK. NAB’s Gavin Friend says its line ball as to whether the Bank of England will highlight the prospect of tapering this year. Guy Debelle might add some thoughts on the timeline for the RBA’s bond buying when he talks in Perth this afternoon. The UK also goes to the polls today, with the question of whether an increase in the SNP vote could force the case for another Scottish independence referendum. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 5th May 2021Janet Yellen surprised the markets this morning suggesting that it might be necessary to raise interest rates to stop the economy from overheating. A call to be made by the Federal reserve, not the Treasury Secretary. Initial market reaction was paired back as the reading of the intent and timing of the comments was watered down. Meanwhile, shares fell in the UK and Europe, although big -tech fared worse than cyclicals. The RBA has upped their growth forecasts for Australia, and cut their unemployment rate expectations, whilst the RBNZ’s Financial Stability Report will be looked at with keen interest to see the influence of a housing market running hot. Hosted on Acast. See acast.com/privacy for more information.