NAB Morning Call

Friday 19th April 2024Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.This week we saw the divide between European despondency and American exceptionalism widen a little further. The IMF upgraded their US growth forecasts, whilst nudging Europe’s a little lower. But it’s not all doom and gloom. Melanie de Bono, senior Europe economist at Pantheon Macroeconomics in London, says the economy is already benefiting from real wages growth which should accelerate domestic demand, whilst a June cut by the ECB seems likely, with Pantheon predicting four cuts in total this year. That’ll free up even more household spending whilst boosting the investment opportunities for business. But is there the confidence in the economy to support that shift in demand and production? And what of a likely trade dispute with China and the potential of increased geopolitical volatility in the Middle East? Could they impact inflation and hinder Europe’s relatively lacklustre growth opportunity?

Wednesday 17th April 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABFed speakers are increasingly pushing expectations for cuts further back in the year. John Williams even suggested he’d entertain the idea of a rate rise if it was warranted. That’s coming from one of the more dovish members of the FOMC says NAB’s Ken Crompton. Ken also takes us through yesterday’s employment numbers for Australia and looks ahead to Japan’s CPI and UK retail numbers today. And we give you the latest Netflix earnings – a knockout for new subscribers. Plus a taste of what’s to come on the Weekend Edition.

Wednesday 17th April 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets were mixed overnight. The dollar lost a bit of ground, AUD and NZD outperformed, bond yields fell, while US equities have continued to struggle. The only geopolitics to speak of came from Joe Biden talking upping  the need to impose hefty tariffs on Chinese steel and aluminium imports. NAB’s Rodrigo Catril says it as a bit of electioneering and pacifying the US steel industry. Today Australia’s employment numbers will be the focus. The unemployment rate rose considerably in February but as Rodrigo points out, these numbers can be very volatile.

Wednesday 17th April 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere’s been a significant shift in sentiment from central bankers at the IMF meeting in Washington. Jerome Powell, who had previously seemed happy to accept rate cuts relatively soon, is now signalling it will take longer. IMF forecasts that significantly upgraded US growth for this year might have added to the pressure to cool things a little. Meanwhile, Andrew Bailey from the Bank of England, who it was assumed was prepared to wait till after the Fed, is now talking about inflation coming down, suggesting a cut sooner might be possible. Perhaps a sharp rise in unemployment influenced his thinking. NAB’s Rodrigo Catril joins Phil to talk through the latest data and words from the mouths of central bank speakers.

Tuesday 16th April 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe latest retail numbers showed the resilience in the US economy. NAB’s Ray Attrill says its surprising given the fall in household savings, but there are more people in work feeding the spending habit. These stronger than expected numbers haven’t changed expectations for the timing of rate cuts by much, but bond yields have pushed higher and lifted the US dollar a little further too. A weaker Yen and Aussie dollar have been two of the consequences. Today employment data for the UK, CPI for Canada and GDP for China. Plus the latest forecasts from the IMF.

Monday 15th April 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABHow markets respond to the Middle East situation this week really depends on whether Israel retaliates. The expectation of the weekend’s drone attack on Israel by Iran pushed the US dollar higher, bond yields lower and caused some damage to equities. NAB’s Taylor Nugent says there hasn’t been much response in early trade today, but Bloomberg Economics is predicting a sizeable spike in oil prices if this broadens to a regional war, with the subsequent impact on global GDP and inflation. There’s also discussion on China’s trade numbers from Friday, the weakening Michigan Consumer Sentiment survey and what to look out for today, besides the latest geopolitics.

Friday 12th April 2024Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.Financial advisors could be missing a trick. So many of them are men, used to dealing with men, yet the customer base is shifting. High net worth women are accumulating their own assets, from their own lucrative careers, from intergenerational wealth passed to them, from managing their parents asets or as proceeds from a divorce. Data from last year showed that male millionaires were growing at a rate of 3.6% per year, whereas female millionaires were growing at 5.7% per year. So, is this industry geared up for this?JBWere CEO Maria Lykouras doesn’t think the industry is adapting fast enough, which is why she commissioned research, summarised in a new report on the Growth of Women and Wealth (pdf). On the Weekend Edition she explains where the industry is falling short and how it can adapt, and what she is doing to get JBWere up to speed on the opportunity.

Friday 12th April 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABChristine Lagarde said a few members of the ECB were ready to cut rates now, even as the ECB President announced that, for now, rates will stay on hold. Was this the strongest suggestion yet that a June cut will happen? Phil asks NAB’s Gavin Fiend what he took from the ECB meeting overnight. Meanwhile, US PMIs didn’t help the case for those looking for signs of US prices falling faster. Quite the reverse. Bad news for the UK too, with one MPC member saying the BoE shouldn’t cut before the Fed, although that simply supports NAB’s base case that the BoE is some way away yet.

Thursday 11th April 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS inflation is not coming down quickly. There’s been a lot of evidence for that lately and the latest CPI numbers can be added to the list. The response from markets have been quite pronounced, with a significant rise in yields, a sharp climb in the US dollar and a fall in equities. NAB’s Sky Masters says the moves reflect markets who have been holding out for a June rate cut – now reality has hit. The Bank of Canada and RBNZ both kept rates on hold, with a similar message that they need more time before considering cuts. It seems the ECB might be the first to cut – we’ll get some fresh insights at their meeting later today.