NAB Morning Call

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...

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...

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 o...

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 ha...

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....

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 acc...

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...

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 Gavi...

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 reinfo...

Wednesday 3rd February 2021All eyes and ears will be on Philip Lowe’s speech today, following the very dovish outlook from the RBA yesterday. Despite our expectation on yesterday’s podcast that they would taper their QE program, NAB’s Rodrigo Catril explains how they are extended it by another $100 billion, even though the economy is doing well and the fiscal position is improving. It was a big su...

Tuesday 2nd February 2021In normal times an episode like the Reddit induced short squeeze would eventually see markets return to normal. Normal today, of course, is a market driven by COVID-19 news, whether it’s the valuation of stay-at-home stocks like Amazon and Apple (both due to report tomorrow), or the latest vaccine rollout news. NAB’s David de Garis says the market is also getting more inte...

Monday 1st February 2021Equities were hit hard on Friday as the Reddit warriors made their mark. NAB’s Tapas Strickland says the regulators response is to side with the retail investors, eager to investigate trading freezes by brokerages, like the Robin Hood app. Normally you might have expected Friday to see some positive sentiment in markets, with a strong batch of US data. Two new vaccines have...

Friday 29th January 2021US equities have bounced back after a day influenced by speculative trading on retail platforms, like Robin Hood, with investors spurred on by chatter on Reddit. The app has stopped trading on eight of the stocks today, with prices readjusting themselves. Phil Dobie asks NAB’s David de Garis whether the new administration in the US could see this as an opportunity for more...

Thursday 28th January 2021The markets have so far been unmoved by the DOFMC announcement, perhaps because it said so little. No move in rates or QE and a reliance on vaccine news before taking further steps, but NAB’s Rodrigo Catril suggests the Fed will be on standby to do more if necessary. There has been a bevy of bad news from Europe, with German consumer confidence well down, rising concerns...

Wednesday 27th January 2021The IMF has upped their forecasts for global growth but, as NAB’s Tapas Strickland suggests on this morning’s podcast, markets don’t tend to pay a lot of attention to these numbers. There’s been more interest in the prospect of a stock bubble in China and the question of whether the PBoC will respond. Not too much is expected from the FOMC meeting today, but there is new...

Monday 25th January 2021Markets turned sharply to a risk-off mood at the end of last week, on the realisation that vaccine roll outs will take longer than hoped whilst infections are growing. NAB’s Ray Attrill says there were too many bad news stories on Friday to offset the optimism of those looking forward to the sunny uplands of a post-COVID world. There was also mixed news with PMI reads at th...

Friday 22nd January 2021The ECB changed nothing overnight, with President Lagarde saying risks remained on the downside. NAB’s Gavin Friend says German bond yields rose as she suggested the full extent of the €1.85 trillion Pandemic bond purchase might not be required, although she also said it might, or there might even be a requirement for more. There’s also discussion on the impact of Joe Biden...

Thursday 21st January 2021Former President Donald Trump often remarked about how his administration saw record highs in US equities. If the President has any control over that, Joe Biden can make the same claim, with new highs on the NASDAQ and S&P500 right from his first moment in office. Today we look at the risk-on mood of inauguration day and ask will it last. Could a bad set of weekly employm...

Wednesday 20th January 2021It’s Inauguration Day, or it will be when Wednesday eventually ticks round in the US. Lady Gaga will sing the National Anthem before Biden moves into the Oval Office and works his way through his executive orders. Ahead of that, we’ve heard from Janet Yellen, the nominee to be Treasury Secretary who said the administration needs to act big to help those struggling throug...

Tuesday 19th January 2021Markets are looking through the prospect on any unrest on inauguration day, but the more immediate question is what with the President do today? Reuters is reporting he is withdrawing licences from any companies working with Huawei, is anything else in the offing? NAB’s Tapas Strickland says it doesn’t really matter too much what the President does, because it can always b...

Monday 18th January 2021Markets responded at the end of the week to Joe Biden’s proposals for stimulating the US economy. As NAB’s Rodrigo Catril points out in today’s Morning Call, markets questioned the President-Elect’s ability to implement his pandemic relief spending plan while Biden also noted everyone will have to pay their fair share. Soft US data and US banks underperformance didn’t help...

Friday 15th January 2021Bond yields were already on the rise before Fed chairman Jerome Powell talked down the likelihood of any easing in bond purchases this year. NAB’s Gavin Friend says he indicated the Fed would look through any short-term rise in inflation as a reason to make changes. This has added to a positive market sentiment today, despite a disastrous rise in US jobless claims, up from...

Thursday 14th January 2021An ensuing impeachment of the US President continues to be of little concern to the markets, with more focus on the words coming from central bankers. NAB’s Tapas Strickland talks about the continued fall in bond yields, as Fed speakers downplay the prospect of tapering of bond purchases later this year, aided by subdued US inflation numbers. All eyes will be on Joe Biden...

Wednesday 13th January 2020With yields rising there’s been a question mark over whether the appetite for treasury bonds is falling, ahead of trillions expected in new government debt. On today’s podcast NAB’s Rodrigo Catril says the issuance of Treasuries this morning indicates the opposite may be true, with yields falling – the first decline since the beginning of the year. There’s also discussio...

Tuesday 12th January 2020Bond yields continue to rise In the US as markets prepare for an expected multi-trillion dollar stimulus package from the President-elect. We’ve seen bond yields hit new highs, as equities start to fall. Phil Dobbie asks NAB’s Gavin Friend whether political uncertainty is behind any of these moves, including a fall in equities, admittedly from record highs on Friday. Meanw...