NAB Morning Call

Tuesday 13th October 2020The US senate is seemingly preoccupied with pushing through Amy Coney Barrett as Supreme Court nominee, casting aside any bandwidth for fiscal stimulus talks. Yet US equities have bounced higher today. NAB’s Ray Attrill says there’s no clear logic for enthusiasm amongst share investors, except for the hopes that a Biden win will see more fiscal stimulus; but it would also...

Monday 12th October 2020The US dollar hit a two and a half year low on Friday, whilst the Chinese Yuan showed big gains. NAB’s Tapas Strickland said the dollar fell on expectations of a Biden victory, which could see increase government spending to tackle the economic impacts of COVIDS-19. The Yuan gained ground as the Caixin Services PMI came in strong. This week was to be the week when a Brexit...

Friday 9th October 2020Donald Trump continues to talk about a stimulus deal, even though he said it had been shelved. But NAB’s David de Garis reckons its highly unlikely anything will be done before the election, an election with Joe Biden stands an increasing chance of winning. The minutes of the September ECB meeting showed concern over the EUR exchange rate, which could present “a risk to both...

Thursday 8th October 2020There’s been a market rebound on the hope that some sort of stimulus deal in the US is still possible before the election, but will it really happen? Phil Dobbie asks NAB’s Tapas Strickland whether the rising likelihood of a Biden victory is also an influence. The FOMC minutes haven’t shifted markets much this morning, so was there anything surprising in there? There’s als...

Wednesday 7th October 2020There’s been a strong reaction in the equity and currency markets to Donald Trump’s sudden decision to stop talks about a fiscal stimulus, even though he tweeted about the need for it whilst in hospital over the weekend. NAB’s Rodrigo Catril wonders whether he’s serious, or is it a last minute bargaining tactic? It comes after the Fed’s Jerome Powell warned that too littl...

Tuesday 6th October 2020As the President prepares to leave for the White House there’s still hope that a deal will be reached to pass version 2 of the Heroes Act, adding more stimulus to the US economy. Phil Dobbie asks NAB’s Gavin Friend if that’s what’s driving the risk-on mood today, or is it the news that the President will be out of hospital soon? Gavin suggests the rising gap in the polls wi...

Monday 5th October 2020Friday was certainly a gamechanger. The US President went into hospital without a clear picture of his condition. Now, it seems he could be returning to the White House as soon as today. So, do the markets take back some of their risk concerns, and focus on the positives of the situation? That’s a question Phil Dobbie puts to Ray Attrill in today’s Morning Call podcast. One...

Friday 2nd October 2020Equities in the US rose overnight despite a stalemate on the fiscal stimulus package. Optimists insist there is some hope that a deal will be reached but, as NAB’s David de Garis puts it, the whole thing is being held back by philosophical differences. The pound has had a choppy day today, with little progress on the Brexit talks. The EC has started legal proceedings against...

Thursday 1st October 2020No sell off in equities after that yelling match that was apparently a presidential election debate. In fact, equities have been helped by some strong data from the US and continued hope on a stimulus deal, although enthusiasm for that waned somewhat later in the session. Elsewhere, the Bank of England’s Andy Haldane criticised the Chicken Licken mentality. NAB’s Gavin Fri...

Wednesday 30th September 2020Despite a big jump in confidence in the Conference Board numbers for the US, there’s not much optimism in the markets today. NAB’s David de Garis says, as the virus refuses to settle down, the lack of a fiscal stimulus deal – the so-called Heroes Act – will be playing on markets (hence the title of today’s podcast, a homage to the 1970’s punk band The Stranglers). Ther...

Tuesday 29th September 2020US and European equities rose sharply, with rising confidence seeing a fall in the US dollar and a rise in the Aussie. The reports that the US President has paid very little in tax might provide some fodder for Joe Biden in the TV debate and NAB’s Tapas Strickland says it could influence undecided voters. Whichever way you look at it, it’s going to be a messy election. M...

Monday 28th September 2020COVID19 cases continue to rise in Europe, with numbers in the UK and France now well above the first wave. Yet, whilst there’s very little in the way of new data to influence the markets this week, there’s plenty of non-COVID politics; the President’s nomination of Amy Comey Barrett for the Supreme Court, the first Presidential election debate mid-week, and the start of a...

Friday 25th September 2020Equities were rising again in the US overnight on the hopes that a stimulus deal would be struck between the GOP and Democrats, but as optimism turned to reality, prices fell, the US dollar regained some of its strength and bond yields weakened. NAB’s Gavin Friend says it demonstrates how markets are clinging to any good news in amongst what’s a pretty bleak picture right...

Thursday 24th September 2020NAB had forecast that the Aussie dollar would reach 74 US cents by the end of the year. It did earlier this month but, as global risk sentiment rises, it is rapidly losing ground. On his first day back from holidays, NAB’s Ray Attrill is asked whether he still thinks the Aussie will regain strength, given the hit it has been taking this week? How much of it is down to t...

Wednesday 23rd September 2020In the US Jerome Powell spelt out very clearly in his testimony before Congress that more fiscal stimulus was needed and had been assumed by many board members in their policy predictions. Meanwhile, in Australia Guy Debelle has hinted that more monetary easing might be round the corner. Tapas Strickland says NAB has revised its rates forecast and explains some of the...

Tuesday 22nd September 2020Concerns over the impact if a second wave in the US and Europe seem to be gathering momentum, driving investors to government bonds and safe-haven currencies. NAB’s Gavin Friend says banking stocks have added to the slide today following an investigation into how some big banks failed to stop money laundering up to three years ago. The US election is adding to uncertaint...

Monday 21st September 2020As COVID-19 cases rise in many parts of the world, and more restrictive measures likely in the UK and Europe, there’s the question of what more central banks can do to help stabilise the global economy? NAB’s Rodrigo Catril says this should be an interesting week in that respect, with central bank speakers out in force, including Jerome Powell facing a two-day grilling by...

Friday 18th September 2020It’s been a topsy turvy session overnight, that’s seen equities slide even though a day ago the FOMC was signalling years of near zero interest rates. NAB’s Gavin Friend says by extending the expected period of low rates investors dwelled more on the negative impacts of the virus. There was some optimism that a deal would be struck to provide more fiscal stimulus in the U...

Thursday 17th September 2020US interest rates will be lower for longer – that’s the takeout from today’s FOMC meeting. So, what are the implications of three, perhaps four years, of near zero rates? A question put to NAB’s Rodrigo Catril in today’s Morning Call podcast. How concerned should we be about deflation, with figures in the UK today showing a 0.4 percent fall in August? There’s also discu...

Wednesday 16th September 2020Equities are on the rise again in the US. NAB’s Gavin Friend says it has been driven by a flurry of M&A activity, alongside vaccine hopes and reasonable activity numbers from China, which showed retail sales turning positive for the first time this year. Compared to that, US data was decidedly mixed, with the pace of recovery seeming to slow. The FOMC meeting tomorrow...

Tuesday 15th September 2020Shares climbed in the US today on the hope that Pfizer will have a vaccine ready by the end of the year. It’s a promise made by their CEO at the weekend and touted by the US President. The US dollar fell, with the NZ dollar the main beneficiary. NAB’s Rodrigo Catril says speculation is mounting that the RBA will buy more government bonds to bring interest rates down, whi...

Monday 14th September 2020It’s just over six months since the COVID-19 pandemic was declared and we’re all still unsure about how it will all end. NAB’s Tapas Strickland said we can expect some optimism today as the Oxford University-Astra Zeneca trials resume, and that could help the Aussie dollar gain some ground? But could it also hit tech stocks, who have been enjoying their moment in the sun...

Friday 11th September 2020The pound lost further ground today as the EU objected to a new government bill that would unilaterally overturn the Withdrawal Agreement. NAB’s Gavin Friend says observers have been aghast at the actions of the UK government and that’s being felt in the pound. But has the weakened pound held back the Euro? The ECB’s Christine Lagarde signalled that the ECB was watching t...

Thursday 10th September 2020There’s been a rebound in risk sentiment which NAB’s Tapas Strickland has been driven by a buy-the-dip mentality, with opinions still divided as to whether tech stocks remain over-valued. Meanwhile the US dollar has fallen again, boosting the Aussie dollar and the Euro. The rising value of the Euro of late will be of particular concern to the ECB which meets later – hig...

Wednesday 9th September 2020US equities have had a third session with substantial falls. NAB’s Gavin Friend says the damage is largely confined to the tech sector but there is evidence that it could be broadening to a fuller risk-off mood. The reasons for the uncertainty are clear, beyond irrational exuberance, we have increasing rhetoric from Donald Trump over China, expanding on his earlier deco...