NAB Morning Call

Tuesday 4th May 2021Demand is outstripping supply on both sides of the Atlantic. That fact shone through in today’s US manufacturing ISM, which, whilst still well over 509, at 60.7 it is quite a bit down on March, with a rising number of backorders and increasing material costs. It’s a similar story in Europe, where manufacturing PMIs for April have been revised down a little. NAB’s Rodrigo Catril says there is little doubt that inflation is coming, the question is, for how long and how deep? The RBA meets today, their statement will foreshadow the forecasts in Friday’s Statement on Monetary Policy. Hosted on Acast. See acast.com/privacy for more information.

Monday 3rd May 2021What data there was on Friday was largely good news, apart from the horrific turn of events in India. In the US, though, reads on consumer sentiment and Chicago’s PMI came out stronger than expected. Yet markets turned a little sour at the end of the week, with equities sharply down, and commodity prices falling. NAB’s Tapas Strickland says month-end positioning will be partially to blame, along with concerns about market valuations. Another positive indicator for the US was a 21 percent surge in personal income in the US. Will this flow through to stellar GDP growth in Q2, and if so, what does this do t the prospects for Biden’s next stimulus package or for the Fed’s resistance to tapering? Hosted on Acast. See acast.com/privacy for more information.

Friday 30th April 2021It’s been a choppy session for US stocks, even though the news on the economy was largely positive and earnings results have been strong. Still, equities generally pushed higher, with the S&P500 getting over the 42,000 level. Commodities have also been rising sharply, with copper breaking $10,000 momentarily. NAB’s David de Garis talks about how supply chain issues are pushing prices higher, particularly the supply of chips which is slowing car production in the US AND Japan. Commodities generally are impacting the prices paid for producers the world over. The big questions is, how long will this go on for? Hosted on Acast. See acast.com/privacy for more information.

Thursday 29th April 2021Excuse the American pluralisation, but “long ways to go” is the Fed’s Jerome Powell’s take on the path to recovery for the American economy, and the reason that rates won’t be lifting anytime soon, and the easing of bond purchases are, supposedly, also some way off. There were small movements in the market, says NAB’s Ray Attrill, mostly from the press conference rather than the FOMC statement. Also today, why housing subsidies partially account for Australia’s lower than anticipated CPI numbers yesterday. Plus, the problem with the US’s rising trade deficit, and how we can expect Australia’s terms of trade to rise even more later today. And the first look at earnings results for Apple and Facebook. Spoiler alert, both very strong. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 28th April 2021Markets are treading water ahead of the FDOMC meeting tomorrow morning, but there’s been a sudden rise in bond yields in the US which, NBA’s Rodrigo Catril, suggests inflation is still a concern, as optimism around a vaccine driven recovery escalates. But inflation is less of a concern in Australia - we get the CPI numbers today, Rodrigo tells us what to expect. There’s also discussion around what the Fed will say tomorrow morning, and why share prices aren’t always responding to earnings results which are generally beating expectations. Tesla, Microsoft and Alhabet are the latest to outperform. Has the market reached a peak for now? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 27th April 2021Equities are on the rise again as risk sentiment rises following largely positive data, including the PMIs talked about in yesterday’s Morning Call. Data over the last 24 hour shas been a little more subdued, with Germany’s IFO survey pulled down by lower expectations, and the US durable goods orders softer after the cancellation of Boeing aircraft orders. Nonetheless, the mood is generally positive, says NAB’s Gavin Friend, with Europe now getting into gear on vaccination rollouts and most S&P companies I the US have beaten their earnings estimate and copper – which is tied to the global reflation trade – is now at a decade high. The stars are aligned, for now, but the situation in developing nations – and in particularly in India – are a stark reminder that the problem won’t go away until the disease is tackled everywhere. Hosted on Acast. See acast.com/privacy for more information.

Monday 26th April 2021Markets were on a positive frame of mind at the end of the week, with a strong set of PMIs in the US and Europe, which helped push equities still higher in America. But how much is too much? Phil Dobbie asks NAB’s Tapas Strickland whether some of this is being driven by a fear of missing out. Meanwhile, with all the positive news, how long can the Fed continue to argue the need for such high levels of bond purchases and years of low interest rates? Will there be any hint that a change in direction is even being considered, when the Fed meet this week? Hosted on Acast. See acast.com/privacy for more information.

Friday 23rd April 2021Shares in the US have fallen this morning on news of a sizeable hike in capital gains for wealthy Americans. Although not officially released, NAB’s Gavin Friend explains how the rumour was enough to send shares falling, after a fairly positive start to the session. The ECB was asked whether they would follow Canada’s lead in tapering bond purchases sooner, but there won’t be anyu change until the June 10th meeting. Then the ECB might change its approach, depending on progress on containing the virus. Todays, it’s a day for PMIs, with the flash numbers for April for the Eurozone, Germany, the UK and the US. Hosted on Acast. See acast.com/privacy for more information.

Thursday 22nd April 2021The Canadian dollar has been boosted by the Bank of Canada markedly increasing their growth forecasts for this year, bringing forward the expected date of rate rises and introducing tapering from next week. NAB’s David de Garis says markets were expecting a tapering announcement, but were taken by surprise by the size of the growth revision, with the country in the midst of the third wave of the pandemic. On the podcast today we also look at New Zealand’s CPI read and what it can tell us about Australia’s inflation numbers next week, plus we look ahead to the ECB meeting tonight. And yesterday’s Australian retail numbers was largely a rebound in growth for WA and Victoria, but it seems cafes and restaurants may have led the charge. Is Australia heading for an avocado on toast led recovery? Hosted on Acast. See acast.com/privacy for more information.

Wednesday 21st April 2021There’s a cautious mood in the markets right now, with US stocks down, with smaller caps hit particularly hard. NAB’s Ray Attrill discusses whether this is all down to a revaluation of the speed of the economic recovery. Could the tightening of credit be responsible for this? It’s hard for businesses to recover without borrowing. There’s also discussion of yesterday’s RBA minutes and the expectations for Australia’s retail numbers out this morning. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 20th April 2021US equities dipped a little overnight, pulling back from record highs. NAB’s Tapas Strickland says there does seem to be a habit for a selloff whenever equities climb above the S&P500 200-day moving average. Will it all bounce back? Well, the vaccine news remains positive, with big reductions on cases in countries where vaccines have been rolled out extensively. That’s why we’re seeing strength in the Euro and Sterling today. But what about the Aussie dollar? Is it losing its momentum? It’s another quiet day ahead, with the RBA minutes not expected to reveal much, and earnings results for United airlines and IBM. Plus Apple are announcing something new. Hosted on Acast. See acast.com/privacy for more information.

Monday 19th April 2021There’s still plenty of positive sentiment around as the US, UK and Europe continue to vaccinate at pace. Europe has picked up pace and now jabbed 20 percent of its adult population. The Fed’s Christopher Waller said the economy is “set to rip”, with 6.5 percent growth this year. Yet, despite all the positive news, we have been seeing a decline in bond yields. In today’s Morning Call NAB’s Rodrigo Catril suggests it might be because concerns over inflation have been overdone and the market is coming round to the message that the Fed is trying to deliver that any rises will be transitory. Bitcoin dropped 15 percent in value on Friday, with unsubstantiated reports that the US might be clamping down on money laundering. Today is fairly quiet for data releases, with US earnings reports the only numbers of any consequence. Hosted on Acast. See acast.com/privacy for more information.

Friday 16th April 2021The news was largely positive overnight. Retail sales in the US were better than expected, initial jobless claims were down, the Philly Fed and Empire Manufacturing Surveys were strong – yet bond yields fell sharply in the US, spreading across much of Europe. It’s not the response you’d expect. NAB’s Ray Attrill says bond analysts had been expecting a period of consolidation, but perhaps not quite so much in one day, particularly surrounded by such positive economic data. The Aussie dollar has been one beneficiary of the positive sentiment surrounding that data, and there could be more to come if the numbers out of China are strong, including Q1 GDP, March Industrial Production, Retail Sales and Fixed Asset Investment, all out later on today. Hosted on Acast. See acast.com/privacy for more information.

Thursday 15th April 2021Equities came back off the highs we saw on Tuesday/Wednesday, but their decline didn’t reflect the sentiment in the market. In fact, a four percent rise in oil has been a better indicator, along with the strength of the Aussie dollar. NAB’s David de Garis says we have sen a rotation out of the tech stocks, but the banks have generally been doing well, helped by better than expected earnings results. Our local currency has been bolstered by yesterday’s consumer confidence read, with high hopes for today’s employment data for Australia. Today there will be a lot of attention paid to US retail sales – will they add to the positive vibes? Hosted on Acast. See acast.com/privacy for more information.

Wednesday 14th April 2021It’s been a session with mixed messages. Inflation is showing up in data, including higher than expected CPI in the US yesterday. We’re seeing it in input prices in the NAB Business Survey too, Of course central banks continue to say that any rise will be transitory, but are the markets convinced? Meanwhile, the global recovery that will give rise to that inflation could be temporarily stalled as the Johnson and Johnson vaccine deployment has been halted in the US and in Europe, where it was is expected to inoculate a quarter of all adults. Phil Dobbie talks to NAB’s Rodrigo Catril about the day’s market action. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 13th April 2021It’s been a fairly quiet session overnight, with bond auctions garnering a little less interest than last time, and more to come today. We also get CPI numbers for the US today. NAB’s Ray Attrill says the market is well prepared for a big jump in the yearly reading, but a significant upside surprise could raise questions about how transitory the rises are. Fed’s Bullard spoke about the potential to look at tapering of asset purchases when the US vaccine rate reaches 75% of the population. That’s assuming having the jab results in lower infection rates – Brazil is struggling to contain an outbreak after rolling out a vaccine with a low efficacy rate. NAB’s Business Survey is out today as well. Hosted on Acast. See acast.com/privacy for more information.

Monday 12th April 2021Equities in the US finished Friday on new highs, ahead of corporate earning this week and despite a rise in bond yields. NAB’s Tapas Strickland says a lot of the optimism is being driven by vaccine optimism, as President Biden once again brings the dates of his vaccine targets forward. The spectre of rising inflation continues to hang over markets, particularly as PPI prices rose last week. But Jerome Powell sued his 60 minutes appearance on US TV to again make the point that any rise in inflation would be transitory. Nonetheless, a poll of economists are expecting a rate rise at least a year ahead of the Fed’s schedule. Aussie jobs data will be a focus this week, along with China’s aggregate financing data. Hosted on Acast. See acast.com/privacy for more information.

Friday 9th April 2021Australia has become the latest nation to express concern about the use of the Astra Zeneca vaccines on young people, except here young is anyone under 50. N AB’s Tapas Strickland says it’s unlikely to slow down the speed of the vaccine rollout, but it could have consequences in Europe. Jerome Powell offered little new when he spoke on an IMF panel overnight, talking down the prospect of sustainable inflation. But the ANZ business survey for New Zealand showed rising inflation expectations. Phil Dobbie asks, what does the RBNZ do if inflation is maintained above its target rate, whilst the rest of the world doesn’t? And CPI numbers of China will be worth looking out for later today. Hosted on Acast. See acast.com/privacy for more information.

Thursday 8th April 2021It’s been one of the quietest sessions for some time. The FOMC said nothing that surprised markets, and Janet Yellen detailing how they would pay for the $2.25 trillion infrastructure package was met with a similar muted response. NAB’s Gavin Friend suggests the markets are considering a bit of rebalancing, particularly when it comes to Europe. Even if they are slower to recover the difference between the US and Europe will only be a few months. The destination is the same. The pound struggled today as an announcement was made about limiting use of the Astra Zeneca vaccine for the under thirties. Generally, though, the word ‘lacklustre’ sums up market action overnight. Sadly, the only currency to see significant losses was the Aussie dollar. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 7th April 2021There were no significant market moves overnight. The US dollar has fallen a little further, bond yields are down and equities have cooled somewhat. NAB’s David de Garis says, maybe markets are taking Jerome Powell’s words to heart that it’s a long road ahead and the Fed is going to stay the course. That’s certainly the line echoed by the RBA yesterday even though, like the US, the news is largely positive. Vaccination rates continue to be a determinant of economic recovery, with Canada’s President Trudeau announcing a third wave on his home soil, where the number of people having the jab remains very low. FOMC minutes are out tomorrow; we’ll talk about those, hot off the press, tomorrow morning. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 6th April 2021US equities have been boosted by a string of positive data. The ISM manufacturing read at the end of last week bounced back sharply, and the services number reached a new record high this morning. Plus, non-farm payrolls on Friday also punched the lights out. NAB’s Ray Attrill says even though shares responded, Treasury yields are actually lower than they were before this swathe of positive numbers and the US dollar has fallen, indicating it is responding negatively to risk sentiment at the moment. Today the RBA meets, job vacancy numbers are out for Australia and the Caixin Services PMI is out in China. Hosted on Acast. See acast.com/privacy for more information.

Thursday 1st April 2021Joe Biden and Treasury Secretary Yellen are about to give the details of their long-awaited infrastructure spending plan, but NAB’s Tapas Strickland tells Phil Dobbie that most of the detail has already been released. And the response to the markets has clearly been favourable, with share prices reaching new highs overnight. Bond yields have also been rising. They also discuss Australia’s residential building approvals, US jobs data and China’s rising PMIs. Tapas explains how a slower recovery in Europe could actual be good for the Chinese economy. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 31st March 2021US 10 year Treasury yields hit a 14 month high overnight, as the US dollar rose higher. Phil Dobbie asks NAB’s Ray Attrill how much of today’s movement can be attributed to end of month and end of quarter rebalancing? And how much of a reaction can we expect after Joe Biden announces his infrastructure plan later tonight – which could cost anything from US$2.2 to 4 trillion. There are plenty of moving parts to influence markets, from the total size of the package to how it will be funded – government debt or taxation. There could also be a response to jobs numbers from the US today and on Friday. The Fed’s Raphael Bostic has predicted a million jobs a month over summer, if that happens sooner it could put pressure on bond yields over the long weekend. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 30th March 2021NAB’s Gavin Friend says, early in the session the fire-sale of $20 billion of stocks held by Archegos Capital was all everyone was talking about. But, as it became clear there was little further contagion, attention shifted to the floating of the Ever Given and the easing of lockdowns. The focus now, he says, is on price pressures, starting today as German reports preliminary inflation numbers for March. There will be a lot of attention focused on Joe Biden’s infrastructure proposal, with reports that the total spend could be as much as $4 trillion. Weekly Australian payrolls numbers are out today, but Thursday’s job vacancies data will garner much more interest. Hosted on Acast. See acast.com/privacy for more information.

Monday 29th March 2021There was quite a bit of optimism in the air on Friday as we career towards the end of the month and the end of the quarter this week. NAB’s David de Garis says this could account for some of the volatility we saw at the end of the week, with Goldman Sachs selling off $10.5 billion in stocks. Nonetheless, shares were up after a late in the session rally, which carried through to Asia. So, could there be more volatility in this shortened week? There will be a lot of attention on jobs numbers (in Australia and the US), whilst the blockage in the Suez will cause supply concerns. An attempt late Sunday to float the stranded vessel failed and now it seems the only way forward is to start removing containers, which will take time. Hosted on Acast. See acast.com/privacy for more information.

Friday 26th March 2021It’s been another mixed session. NAB’s Gavin Friend says, on the one side there’s the tantalising prospect of an economic reopening in the northern hemisphere that is almost touchable, but there’s also the issues around vaccine production and, in Europe, concerns about how many people are prepared to take it. Equity markets are subdued, with another move away from tech stocks. Interest in the 7 year bond auction in the US was better than last time, but still cautious. Whilst most Fed speakers reiterate that, even though economic growth might be higher than expected by the year end, interest rates won’t budge till 2024, although Bostick predicts a much shorter timescale. Jo Biden, meanwhile, has doubled his forecast for the number of jabs in American arms in his first 100 days in office. And oil prices rose again as the Suez Canal remains closed, possibly for days, maybe even weeks. Hosted on Acast. See acast.com/privacy for more information.

Thursday 25th March 2021There’s a realisation emerging, says NAB’s Gavin Friend, that even though countries are pressing ahead with vaccine role outs, the speed of recovery might be slower than envisaged. The political wrangles over vaccines supplies from the EU have added to this feeling, with a risk-off mood returning slowly to markets. Oil rose sharply as an oversized ship has blocked the Suez Canal – expectations that it might quickly be moved have gone because, well, it’s still there. There’s a lot of bonds being auctioned in the US in the next 24 hours to keep a watchful eye on, and Joe Biden gives his first press conference, focusing on geopolitics and the Build Back Better infrastructure plans. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 24th March 2021Market sentiment has switched in the last 24 hours, with concerns that the economic recovery from COVID-19 might be slower than anticipated. The airline industry will feel some of the hurt, with European summer holidays likely to be off the agenda for most Brits. Janet Yellen and Jerome Powell were also guarded in their comments about the pace of recovery in the US, when they spoke to the House Financial Services Committee. The New Zealand dollar was the currency hit the hardest. NAB’s David de Garis says much of the fall is to do with government measures to try and restrict house price inflation, moving demand from investors to home buyers. Watch the PMIs tonight for signs of a widening gap between the European and UK economies, as Britain takes the jab many times faster than their cousins over the channel. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 23rd March 2021There were big rises in US shares overnight, with the NASDAQ rising 1.7% in this session, helped by a moderate fall in Treasury yields. NAB’s Tapas Strickland says news of a higher than expected infrastructure spending plan also helped boost equities. Reports suggest as much as $3 trillion will be spent, a mere $1 trillion more than had been anticipated. Trials of the Astra Zeneca vaccine in the US also came up with very positive results, which could lead to approval, with the bonus of perhaps encouraging more Europeans to take the vaccine. The slow rollout is adding to the number of new cases in Europe and in parts of the US, which could slow the speed of economic recovery. Hosted on Acast. See acast.com/privacy for more information.

Monday 22nd March 2021The Fed will push on with ending its lower capital requirements held against Treasurys, sticking with a schedule that will see the so-called supplementary-leverage ratio (SLR) ending on 31st March. Although not unexpected, NAB’S Rodrigo Catril says it risks weakening the appetite for bonds at a time when there is a much higher issuance doing down the pipeline. He explains why markets calmed down a little later I the Friday session. Today we can expect some response to President Erdogan’s decision to sack Turkey’s central bank governor for having the temerity to raise interest rates. Otherwise, it could be a fairly quiet start to the week. Hosted on Acast. See acast.com/privacy for more information.

Friday 19th March 2021There was more reaction to the FOMC meeting today, with bond yields rising sharply. Oil has also risen a lot as tensions mount between the US and Russia. Biden referring to Putin as a “killer” doesn’t seem to have gone down too well, and now with the threat of sanctions from the US there are fears Russia will up oil production in response to impact the US shale oil industry. The Bank of England followed the same script as the FOMC overnight, expecting a faster recovery but, just like the Fed, they are going to let the economy run hot before they contemplate a rate rise. As NAB’s David de Garis points out, the UK would relish the idea of the economy running hot anytime soon. In Australia labour market data was a big upside surprise, with unemployment down to levels not forecast to be reached for a year. Perhaps today’s retail numbers will also be welcome news. Hosted on Acast. See acast.com/privacy for more information.

Thursday March 18th 2021The Fed has upped its growth expectations for the US economy, driven by the fiscal support and the vaccine rollout. But Fed Chair Powell says they are still expecting to keep interest rates low through to 2023, and they are not even talking about starting to talk of tapering of their QE activity anytime soon. He also said inflation was expected to pick up in the shorter term, but this would be transitory. Phil Dobbie asks NAB’s Gavin Friend whether the markets are convinced on this. Plus, what to except from NZ GDP this morning, and Australia’s labour market data from the ABS today. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 17th March 2021There wasn’t much movement in shares, bond yields or currencies overnight, despite weaker retail numbers out of the US. It’s a different story for Australia with strong jobs data yesterday ahead of the official ABS Labour market data later in the week. NAB’s David de Garis says the RBA has suggested that many big companies have already made their adjustments on employment levels ahead of the end of JobKeeper, so there is a reduced risk of any sort of shock as the scheme closes. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 16th March 2021The fear of blood clots from injections means use of the Astra Zeneca vaccine has been suspended in an increasing number of European countries, slowing down the rollout, whilst the UK pushes ahead, reaching almost 40 percent of the population so far. This issue of lagging behind is not just impacting the economy, but is also playing into the strength of the Euro, says NAB’s Rodrigo Catril. Generally though it’s been a quiet session, with minimal movement sin bond yields, shares and currencies, ahead of the FOMC meeting later in the week. Hosted on Acast. See acast.com/privacy for more information.

Monday 15th March 2021Bonds yields rose sharply again on Friday, with 10 year Treasuries reaching their highest level since February last year. NAB’s Tapas Strickland says the inflation break-even component actually fell slightly, as the Michigan Consumer Sentiment survey showed inflation expectations had fallen slightly. Meanwhile the cyclical rotation theme continues as the vaccination rollout accelerates in the US and UK. It’s a different story in Europe, of course, with Italy returning to lockdown today as infection numbers rise sharply, with Germany heading in the same direction. The FOMC will be the main focus this week, along with Aussie retail sales and employment numbers. Hosted on Acast. See acast.com/privacy for more information.

Friday 12th March 2021Asset markets continue to be drawn by bond markets, says NAB’s David de Garis, on today’s podcast. With stimulus coming down the line, and jobs data showing further signs of recovery, you might have expected increased inflation concerns, but yesterday’s CPI figures seem to have calmed those concerns for now. But the ECB is still kicking into action, promising a faster bond buying spree under its pandemic emergency purchase programme, with Christine Lagarde concerned about the rate of recovery. Europe, of course, continues to suffer from a slow vaccine rollout – reaching 10% of the population in France so far, compare to 36 percent in the UK. Britain’s trade numbers will be interesting today, not because of COVID, but to se the impacts of Brexit on trade with Germany and the rest of Europe. Hosted on Acast. See acast.com/privacy for more information.

Thursday 11th March 2021The US 10 years notes auction this morning was a little softer than anticipated, but saw yields higher than last time. But NAB’s Gavin Friend says the story of the day was really the softer US inflation numbers, which saw yields pull back and helped stocks rise, with more rotation away from tech stocks. Meanwhile Philip Lowe from the RBA has been pushing back on market pricing, suggesting rates won’t rise until 2024, saying they would need to see wage gains sustainably above three percent. Whilst the RBA concerns are growing pains, the ECB has a different issue, says Gavin, because of their delayed response to the vaccine. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 10th March 2021Shares have reverted to a focus on tech in the US with a sharp rise in tech stocks. In fact, almost everything is a reversal on yesterday, with the US dollar weakening, the Aussie dollar strengthening, and bond yields falling. Chinese shares have stopped their decent, perhaps the alleged injection of cash from the government worked, for now. The expectation that the global recovery will be strong was reinforced by revised OECD forecasts and a record high for business confidence in yesterday’s NAB Business Survey. The inflation fixation right now means all eyes will be on the US and China CPI numbers tonight, as well as listening in to see what the RBA’s Philip Lowe has say on rising bond yields. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 9th March 2021Us Treasury yields pushed steadily higher overnight, reaching 1.6 percent for 10 year Treasuries. These higher rates have loosened the appetite for tech stocks in the US and Europe, with the NASDAQ falling further. NAB’s Rodrigo Catril says the speed of the rise in bond yields has taken markets by surprise, and a period of consolidation seems reasonable, particularly as the injection of the $1.9 trillion stimulus, which has prompted the rise, has been expected for some time. The Aussie dollar has been impacted, along with EM currencies. The Bank of England’s Andrew Bailey is perhaps the first central bank governor to highlight that an inflation fuelled rate rise is as much a risk as having to lower rates if the recovery is slower than anticipated. Talk about an each way bet! Hosted on Acast. See acast.com/privacy for more information.

Monday 8th March 2021The US senate has passed the $1.9 trillion stimulus package, so it will almost certainly become law this week. Phil Dobbie asks NAB’s Ray Attrill whether this will add to inflation concerns, particularly as oil is also racing ahead thanks to the OPEC+ decision last week to hold off on easing supply cuts. China’s trade figures over the weekend are another sign that the global economy is quickly getting back up to speed, as where US jobs numbers on Friday, although Janet Yellen has been quick to point out you shouldn’t jump to conclusions over the lower unemployment rate. Hosted on Acast. See acast.com/privacy for more information.

Friday 5th March 2021Bond yields are on the rise, in the US and in Australia – for very similiar reasons. Jerome Powell failed to reassure markets that the Fed had a plan to cope with rising yields. As NAB’s David de Garis explains, the Fed governor was saying the Fed had the tools to use if conditionals materially changed, just as conditions were materially changing! In Australia markets were clearly hoping for more bond buying from the RBA, so when they went returned to their previous buying level, markets were disappointed and bond yields rose again. All of this, of course, driven by inflation fears, for which a spike in oil prices hasn’t helped help. The timing couldn’t have been worse from OPEC+, who failed to agree on easing production cuts. Tonight we get non-farm payrolls numbers in the US and China’s National People’s Congress is on over the weekend. There’s a bit going on. Hosted on Acast. See acast.com/privacy for more information.

Thursday 4th March 2021Bond yield have been rising sharply overnight. This time it’s being driven not just by optimism about the speed of the global recovery, but also by the likelihood that the UK government will be issuing around £50b higher than the market expected. Chancellor Rishi Sunak has extended the furlough program through to September, along with other assistance measures. This latest jump in yields couldn’t be timelier with Jerome Powell speaking later today, no doubt reiterating the point that the Fed sees no reason to be concerned about inflation. US jobless claims will also be of interest later on – they were down last week, but the ADP employment numbers told a different story last night, with fewer jobs around. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 3rd March 2021All eyes will be on Australia’s GDP read this morning, which NAB’s Ray Attrill says is expected to be close to 3% growth QoQ, driven by consumer spending. The warnings yesterday from China’s banking regulator, Mr Guo Shuqing, that the US and Europe face bubbles from excessive leverage haven’t had any lasting impact. The RBA continued to provide guidance that rate rises weren’t likely until 2024 and made it clear that the $4 billion purchases announced on Monday were simply a bring forward, so we can assume they will be compensated by lesser purchases to keep the schedule on-track. Tonight the US ADP employment numbers will be a focal point ahead of non-farm payrolls at the end of the week. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 2nd March 2021The RBA might have left itself with very little to say today, having upped their bond buying in response to the sharp rise in yields last week. With bond yields still significantly higher than they were at the beginning of the year Phil Dobbie asks NAB’s Tapas Strickland what else the RBA can do as the Aussie economy finds itself in a better position than most developed nations. The return to normal overnight, with equities back on the rise, has been partially fuelled by stronger than anticipated ISM manufacturing numbers for the US. In fact, most data lately has been on the upside. The Euro is one of the weaker currencies today, perhaps because of an expectation that the ECB too will increase their bond-buying. Hosted on Acast. See acast.com/privacy for more information.

Monday 1st March 2021Friday saw a reversal in the bond sell-offs earlier in the week, seeing 10 year yields in the US falling back top 1.4%. Phil Dobbie asks NAB’s Rodrigo Catril whether the RBA can ignore this volatility this morning, particularly as they were arguably slow to respond last week, eventually buying up $7 billion of bonds. What impact will Biden’s $1.9 trillion stimulus package have, even if it does get whittled down by $400 million or so this week? And there’s rising concerns about inflation, particularly in Europe. If we are to keep volatility under control we really need to see data which shows a gradual economic improvement, without upside surprises. Hosted on Acast. See acast.com/privacy for more information.

Friday 26th February 2021Despite the increasing dovishness of central bankers the markets have been selling government bonds like they are going out of fashion. That’s resulting in huge increases in bond yields in around the world, but particularly in the US and Australia. It’s the pace of the move in yields that’s grabbing attention, says NAB’s Gavin Friend in London. Some are also expecting inflation sooner rather than later, evidenced by a rise in yields on shorter term US treasury notes. Spending data tonight could add fuel to this burst of optimism if it suggests there’s more pent-up demand in the US economy. Hosted on Acast. See acast.com/privacy for more information.

Thursday 25th February 2021As the reflation trade continues to push bond prices lower and commodities higher, central bankers are fighting amongst themselves as to who can sound the most dovish. That’s helping push equities a little higher this morning. The Fed’s Jerome Powell and BoE’s Andrew Bailey were both in front of parliamentary committees overnight, each suggesting rates would stay low and any rising inflation was transitory for now. NAB’s David de Garis says the RBNZ was toeing the same party line, suggesting the outlook remains highly uncertain. Today the weekly claims numbers for the US will highlight the strength (or otherwise) of the jobs recovery. By the way, for those who think this is ridiculous title for an episode, doves do fight each other, sometimes to the death, but normally when they are trying to impress hens, not water down inflationary fears. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 24th February 2021Many believe the RBA didn’t go far enough on Monday, buying up a $1 billion of bond purchases in the face of sharply rising bond yields. NAB’s Tapas Strickland points to speculation in the AFR today that the RBA will come out swinging today and tomorrow, buying up more state and federal government debt to make up for the shortfall. Elsewhere, US equities are generally down, driven largely by tech stocks and other rotational shares. They did get a bounce, however, when Jerome Powell gave his testimony to the senate, reiterating that the Fed was still a long way from its targets. It was a similar party line from the Bank of Canada overnight. Today, the RBNZ is the next central bank of the marks, and they’ll be treading a careful line, trying not to inflate the Kiwi dollar, but with the global reflation trade there’s not much they can do to stop it. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 23rd February 2021Australian 10 year bond yields have nudged 1.65 percent for the first time since May 2019. NAB’s Rodrigo Catril says the market was clearly disappointed by the RBA’s resolve to deal with the sharp rise in yields. Meanwhile, US Treasury yields have also been on a roller coaster. It’s been the same situation in Europe, although the yields have dropped back now. The COVID bounce back story continues to push commodities higher too, which is why we’re seeing the Aussie dollar edging even closer to the 80 US cent mark. The pound has also had a strong session, in part perhaps because of Boris Johnson’s lockdown escape route, although his chosen path is very slow and cautious. Hosted on Acast. See acast.com/privacy for more information.

Monday 22nd February 2021There was a big rise in the Aussie dollar and the pound on Friday, both reaching multi-year highs. NAB’s Ray Attrill says rising commodity prices are the single biggest influence on the Australian dollar and the prediction that it could reach 80 US cents by midways through the year could be realised before the end of the first quarter. The pound meanwhile is going strong on an expedited vaccine rollout program, which offset the poor retail sales numbers last week. In the US yields rose sharply. Inflation continues to be a concern, although the technical indicators are that this concern is easing. Hosted on Acast. See acast.com/privacy for more information.