NAB Morning Call

Wednesday 4th November 2020The RBA announced cuts to interest rates and a step up in bond buying yesterday. NAB’s Tapas Strickland says, as other banks follow, there won’t be any influence in the strength of the Aussie dollar. Americans are voting right now, with record numbers of postal and early votes, which could delay the outcome, or speed it up. Although there’s a clear expectation than Biden will win, and the Democrats regain control of the Senate, nobody is entirely sure what will happen over the next 24 hours. Meanwhile the expected mega-listing of the Ant Group has been delayed and Brexit talks have left both sides exhausted. Aside from the US election, payrolls for Australia will be the numbers to watch today. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 3rd November 2020Markets flipped from Friday’s share and bond sell-off, with more optimism a day or two out from what is expected to be a Biden victory. NAB’s Ray Attrill also points to very strong manufacturing numbers published for the US, which will have been an encouraging sign for investors too. Ahead of the US election though, there’s a Melbourne Cup to be won, and a decision to be made by the RBA, which will include rate cuts and more bond buying. Phil Dobbie asks Ray why the RBA needs to be taking such a strong stance when Australia is faring better than most places when it comes to tackling the pandemic. Hosted on Acast. See acast.com/privacy for more information.

Monday 2nd November 2020After the markets finished with a strong equities and bond sell-off on Friday, expect a busy week, with the RBA, the Fed and Bank of England all meeting, with the difficult job of determining how to see the economy through rising infection numbers. Then there’s the non-trivial matter of the US election tomorrow. Will we hear the results by Wednesday? NAB’s Rodrigo Catril says there’s a very strong chance that we won’t. The big question for the RBA tomorrow, will be whether they announce an increase to QE at the longer end of the curve. Hosted on Acast. See acast.com/privacy for more information.

Friday 30th October 2020Markets turned around again, with equities rising sharply. How much of it is the anticipation of Q3 tech company earnings results after the US close, how much of it is the strong bounce back in US GDP and how much is the anticipation of a clear outcome in next week’s US election? Phil Dobbie asks NAB’s Gavin Friend how he reads the market right now, and what are his thoughts on the ECB meeting which did little, but promised a lot more next time. Meanwhile virus numbers rise, there are more restraints on the economy in France and Germany – and could the UK be forced to go further next week too? Next week will be quite a week. Hosted on Acast. See acast.com/privacy for more information.

Thursday 29th October 2020US equities have been hit hard today, the third day of losses, with the US dollar rising. NAB’s David de Garis said the markets hit the decks running as they opened in Europe, running away from risk. There’s growing concerns about the rising COVID infection rates, and, more significantly, rises in death rates in Europe and the US. Macron could be about to announce a significant lockdown of the French economy soon. Meanwhile, although Biden is still expected to win the US election next week, there are growing concerns about how clear the win will be, and whether President Trump will contest the result. If central banks have run as far as they can, the only injection for COVID-hit economies will come from fiscal measures. That was the gist of the message from the Bank of Canada, and is likely to be echoed by the ECB today. This morning the NAB business survey will give an invaluable read on expectations for Q3, whilst the US GDP numbers later on will show the extent of the country’s bo

Wednesday 28th October 2020There’s a risk that next week’s US election is more contestable than we might have considered a week ago. NAB’s Tapas Strickland says late surge polling could fall in the President’s favour. A poll in the US has also demonstrated just how many American’s would take to the streets if their preferred candidate didn’t win. Through rising COVID numbers into the mix, and it’s not surprising that the markets continue to struggle to find certainty right now. On the data front, US durable goods orders looked strong, as did industrial profits in China. And newspapers are reporting that Australia is heading out of recession on the back of the RBA’s Guy Debelle’s comments to Senate Estimates yesterday, but in reality his comments were more guarded than that. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 27th October 2020Markets are displaying classic risk-off moves today – with equities down, bond prices up and the US dollar the safe haven currency of choice. The reasons are clear – COVID cases continue to rise, a US stimulus won’t happen in a hurry and although the expectation of a Biden victory is clear there’s still the uncertainty of an election in a week’s time. NAB’s Rodrigo Catril talks through the moves, with the bad news overshadowing the good news – like Melbourne’s economy reopening tomorrow, and Astra Zeneca’s latest vaccine trial news. Hosted on Acast. See acast.com/privacy for more information.

Monday 26th October 2020Last week finished with US stocks down, the US dollar down and the price of bonds down. Normally, if the sentiment is risk off and equities are down, you’d see the US dollar rise. The fact that didn’t happen demonstrates the US dollar is in a down trend, says NAB’s Ray Attrill on today’s Morning Call. Short term we can expect markets to continue to be influenced by election polls, Brexit hopes and COVID-19 statistics. The idea of a stimulus deal in the US remains a tiny glimmer of hope, but Nancy Pelosi might be the only person left hoping. Hosted on Acast. See acast.com/privacy for more information.

Friday 23rd October 2020In a few hours Joe Biden and Donald Trump go head to head in the last election debate. NAB's Gavin Friend says equities have picked up some momentum later in the session, possibly not because of lingering hopes of a pre-election stimulus deal, but more on a Biden victory that could secure a more sizeable deal than would ever be agreeable to fiscally conservative Republicans. The UK has added more support payments for workers as COVID cases continue to rise, there and across Europe. A newspaper report claims Michel Barnier sees fish as the only sticking point for Brexit, which suggests a deal is closer than ever. And PMIs for Europe, the UK and the US will give an indication on to what extent the service sector has stalled in its recovery. Hosted on Acast. See acast.com/privacy for more information.

Monday 22nd October 2020Talks are back on. Safter setting a deadline of Tuesday, Nancy Pelosi is continuing talks with the Republicans with a view to getting a stimulus package agreed for the US by the weekend. And after giving each other the cold shoulder for the first half of the week, the UK and EU are back to talking about a Brexit deal, meeting every day now until the issue is resolved. “This is the final run in”, says NAB’s David de Garis on today’s Morning Call podcast. If successful it could boost the pound, but the risk goes both ways. Meanwhile rising COVID numbers continue to cause concern and oil prices have taken a hit after a surprise rise in gasoline inventories in the US. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 21st October 2020Equities are higher in the US again today. NAB’s Tapas Strickland says it is largely on the back of continued hope that a stimulus deal will be struck. If not now, perhaps after the election with the possibility that the Democrats also win control of the senate. There’s also optimism around a vaccine and US housing data bounced back, showing more underlying strength in the US economy. Tapas is asked why US equites continue to significantly outperform those in Europe, Australia and other parts of the world. There’s also talk about the RBA minutes and yesterday’s Australian jobs data, plus the high demand for the ERU’s first ’social bonds’. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 20th October 2020Markets are waiting to see the outcome of two on again off again decisions, both with sizeable economic consequences. Boris Johnson declared that Brexit talks were over, but NAB’s Ray Attrill says the markets clearly don’t believe him, with the pound one of the strongest currencies today. Stateside, equities are subdued as the deadline for a pre-election stimulus deal draws closer. Meanwhile the Aussie, which should be benefiting from a falling US dollar and a stronger Yuan, refuses to budge as markets come to terms with the next moves from the RBA. Hosted on Acast. See acast.com/privacy for more information.

Monday 19th October 2020After a fairly volatile week markets were calmer on Friday on the back of positive retail numbers from the US. NAB’s Rodrigo Catril says Republicans could use it as an excuse not to support further stimulus measures. There was little market reaction to Boris Johnson’s threats to walk away from Brexit negotiations, perhaps because ‘walking away’ has been shown to mean ‘keep talking’. Jacinda Ardern’s election victory is unlikely to see a market response because it too was entirely expected. Today’s GDP numbers from China will show how their economic recovery continues, whilst any volatility this week is likely to be driven by rising COVID-19 numbers, news of related government restrictions, Brexit talks and the US election circus. Hosted on Acast. See acast.com/privacy for more information.

Friday 16th October 2020There’s a strong risk off mood in the air, which has pushed the US dollar higher and hit stocks. Phil Dobbie asks NAB’s Gavin Friend whether markets are now accepting that COVID-19 cases are rising and that will stall attempts at an economic recovery. It certainly seems to be the case in Europe, with more stringent controls being introduced in Paris and London and cases rising in Germany too. Weekly jobless numbers pointed to a further slowdown in the US. At home, a very dovish Philip Lowe signalled where the RBA is heading in November – lower rates and more bond buying seems likely. NZ goes to the polls at the weekend, but it’s unlikely Jacinda Ardern has called the removalists. Hosted on Acast. See acast.com/privacy for more information.

Thursday 15th October 2020Philip Lowe, the Governor of the RBA, is talking this morning. NAB’s David de Garis tells us what to expect in terms of signalling for future stimulus measures. Stimulus is off the cards for now in the US, but listening to President Trump speaking at the Economic Society of new York you’d have to wonder why they need it. They’ve had the smallest economic contraction and fastest recovery of any major western nation, he said. He left out China, of course, because their economy really has had a V-shaped recovery, demonstrated further by increased loans reported yesterday and, hence, a larger money supply, that should boost their GDP further. In Europe, rising infection rates and lockdown fears continue to cause uncertainty, whilst Brexit talks will continue beyond the EU meeting this week. The pound continues to be highly volatile to it all, choosing today to rise in the side of optimism. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 14th October 2020The Aussie dollar has taken a hit twice in the last twenty-four hours. NAB’s Rodrigo Catril says the first hit came on reports that China was to stop importing Australian coal, a significant worsening of trade relations. The second hit came as the US dollar rose and equities fell as the last vestiges of hope for a stimulus deal seemed to disappear. There’s also caution around earnings results, with banks so far producing good results but not much optimism looking ahead. The pound has had a worse night though, as Brexit talks continue to produce no results, unemployment numbers were worse than expected, COVID cases have risen further and the opposition leader is calling for another full national lockdown. Hosted on Acast. See acast.com/privacy for more information.

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 mean more regulation for tech companies, and they’ve been leading the charge overnight. Equally as curious, the pound has risen despite rising COVID cases, more lockdown measures and no Brexit progress. It’s perhaps easier to explain the fall in the Aussie and NZ dollars, pulled down with the PBoC’s measures to reduce the value of the Renminbi. Hosted on Acast. See acast.com/privacy for more information.

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 deal would finally be agreed, but why rush into these things? Talks are likely to continue into November. This week Australian investors will be looking to RBA’s Philip Lowe’s speech on Thursday for suggestions about the easing policy that is likely to be introduced in the November meeting. Hosted on Acast. See acast.com/privacy for more information.

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 growth and inflation”. Today’s GDP numbers for the UK are likely to show some growth in August as the hospitality industry kicked back into gear, but pubs and restaurants are facing more closures now as infection numbers rise. And the NZ dollar has been losing ground as the RBNZ Assistant Governor raised expectations for negative interest rates next year. Hosted on Acast. See acast.com/privacy for more information.

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 also discussion in today’s podcast on last night’s Australian Federal Budget. There’s plenty of stimulus, but has the government got it right on growth forecasts? Hosted on Acast. See acast.com/privacy for more information.