NAB Morning Call

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.

Friday 19th February 2021There have been big falls in US equities overnight after higher than anticipation jobless claims, showing its not a smooth recovery for the US. Bond yields on both sides of the Atlantic suggest there are inflation concerns but, as NAB’s David de Garis suggests, it’s difficult to draw definitive conclusions when most inflation signs have been in the goods sector where there have been significant supply disruptions. Markets seem most enthused about the UK right now, where 16.5 million people have been jabbed and Boris Johnson will be announcing his escape plan from lockdown on Monday. Hosted on Acast. See acast.com/privacy for more information.

Thursday 18th February 2021There was a strong bounce back in US retail sales in January, helped by the arrival of $600 into most people’s bank accounts. NAB’s Gavin Friend says this is a clear sign of the positive impact of the government’s fiscal stimulus, something that won’t be lost in the negotiations for the next round of support measures. Inflation continues to be a debating point in the US, but the UK’s CPI data today shows it’s far from being an issue there just yet. The Bank of England continues to talk up the UK recovery, helped by the high level of personal savings. We also look at the latest FOMC minutes, out only moments ago. And at home, we can expect a strong increase in jobs, helping Australia claw back the losses made last year. Tonight it’s US jobs numbers and housing starts. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 17th February 2021Equities were mixed in the US overnight, but the S&P did manage to claw out a new record high, whilst the NASDAQ fell. The biggest movements, though, have been in treasury yields, particularly in the longer end of the curve. Phil Dobbie asks NAB’s Rodrigo Catril where the money is going, if it is leaving government bonds and not piling into equity markets. The new high for Bitcoin might be part of the answer, as the ECB’s Gabriel Makhlouf likening it to Tulip speculation in Holland 300 years ago. US retail sales and the FOMC minutes are two highlights over the next 24 hours, along with the UK’s inflation numbers. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 16th February 2021America has been off work for Presidents Day, but that hasn’t stopped markets optimistically looking to a world where COVID-19 isn’t centre stage. The reflation trade continues unabated. Overnight we saw the US dollar drift lower, the Aussie climbing and the pound showing strength as the vaccine rollout continues at pace. NAB’s Ray Attrill says the weakness in the Yen was also the result of good news, a higher than anticipated Q4 GDP result for Japan. One downside is the continued rise in oil, which has been accentuated by increased demand from blisteringly cold weather in Texas. Today, Australia’s weekly wages and payrolls data will be the most anticipated numbers locally. Hosted on Acast. See acast.com/privacy for more information.

Monday 15th February 2021There’s absolutely no surprise that Donald Trump has been acquitted in Washington, which means he could stand for office again. It also means a number of Republicans felt their voters are still aligned to the former President, so will that make life harder for Joe Biden to drive the agenda? That’s a question Phil Dobbie puts to NAB’s Tapas Strickland this morning. Plus, a rise in equities and bond yields, driven by strong earnings and stimulus hopes, mixed with inflation concerns. Which will retreat first? It’s gong to be a quiet day today in international markets with the US on holiday, along with China and Hong Kong. Hosted on Acast. See acast.com/privacy for more information.

Friday 12th February 2021It’s been a relatively quiet 24 hours with only slight market moves, with traders absorbing the dovish outlook presented by Jerome Powell at the Economics Club this time yesterday/. NAB’s Gavin Friend says the Euro has held its own despite EU forecasts which have downgraded growth to 3.8 percent, from 4.2 percent. They expect the UK to do somewhat worse, not just because of the virus but also Brexit. Remember that. US China relations won’t immediately return to pre-Trump levels, with Jo Biden hooking up on the phone to President Xi, making it clear that human rights remains a concern and tariffs would remain in place. Hosted on Acast. See acast.com/privacy for more information.

Thursday 11th February 2021Markets have been fairly subdued on the back of soft inflation numbers in the US, and as investors hold off for any revelations from Jerome Powell as he addresses the Economic Club of New York. As it turned out he echoed the words of the Riksbank Governor – central banks, it seems., are in no rush to pull back on purchases or raise interest rates until full employment has returned. They’ll even let the economy run hot for a while to ensure lower paid jobs also return. But, as NAB’s David de Garis explains, inflation seems a way off yet, with soft numbers from the US and China. But metal prices are indicating an expectation that demand will pick up soon, however, with oil adding to its post-pandemic high. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 10th February 2021The Euro gained on two fronts overnight. First, Super Mario Draghi looks set to run the Italian government, and is likely to announce his cabinet today. Secondly, we’ve seen a sharp rise in credit growth in China. NAB’s Ray Attrill says this extra juice to the Chinese economy has helped the Euro, simply because Germany will benefit from export demand fuelled by credit. Meanwhile, inflation numbers are out for the US later today. Phil Dobbie asks whether a higher number could add to the concerns that the stimulus package, it the lands when the economy is recovering, jobs are returning and savings are being spent, could overheat the economy. A nice problem to have, perhaps. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 9th February 2021Janet Yellen shrugged off concerns about the Biden stimulus package unleashing inflation on the US economy. As NAB’s Tapas Strickland discusses on today’s podcast, it continues to be the stumbling block for the deal and inflation talk has influenced markets for another day. As an interesting aside, Elon Musk has announced Tela will buy $1.5 billion in Bitcoin, and will accept Bitcoin payments for cars in the future. Vaccines continue to be rolled out at speed in the US and the UK, and there is positive evidence from Israel that its working, although doubts remain about the efficacy of the Astra Zeneca vaccine against the South African strain. And WA is the envy of the world, heading to an election next month with a budget surplus! Hosted on Acast. See acast.com/privacy for more information.

Monday 8th February 2021Friday’s non-farm payrolls numbers in the US surprised on the downside. NAB’s Rodrigo Catril says a big downward revision to the December numbers also disappointed. The good news is that this softer set of numbers adds impetus to Joe Biden’s drive to push through his $1.9 trillion stimulus package. One sticking point is concerns, even from some Democrats, about whether this extra money injected into the economy will be inflationary. The steepening yield curve is pointing to heightened inflation expectations. In other news over the weekend Mario Draghi has managed to secure support in Italy, whilst news is mixed about the efficacy of some vaccines to the newer strains of the virus. Plus, a look at the data highlights to look out for this week. Hosted on Acast. See acast.com/privacy for more information.

Friday 5th February 2021Today’s moves reinforce the emerging story of two destinies. The UK and the US are well ahead of Europe on vaccine rollouts, and that seems to be the major focus of markets right now. The pound was also helped by a very hawkish stance taken by the Bank of England governor, who is expecting a strong recovery in the second half of the year driven by record savings. NAB’s Gavin Friend says this is all a change in the base case from the beginning of the year when it was assumed the US would be at the back of the recovery queue. Locally there will be a lot of interest in RBA Governor Philip Lowe’s parliamentary testimony, particularly as the AFR today leads on speculation of a raging bull in stocks and housing driven by the expectation of continuing low interest rates. Hosted on Acast. See acast.com/privacy for more information.

Thursday 4th February 2021New Zealand’s labour force data yesterday showed a strong fall in unemployment, possibly down to NAIRU levels. Phil Dobbie asks NAB’s Ray Attrill whether this means inflation could soon emerge and does this mean the RBNZ is the first central bank to seriously think about a post-pandemic rate rise? It’s a very different story in Australia, with Philip Lowe yesterday reinforcing the dovish tone set by the RBA on Tuesday. Strong US data and reflation expectations have pushed oil to the highest level since the pandemic began, even as US reserves fell less than expected. And Mario Draghi is back on the scene. He has accepted an invitation to form government in Italy and there’s been a sharp reaction in local equities and bonds. Hosted on Acast. See acast.com/privacy for more information.