NAB Morning Call

Thursday 17th April 2025Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.IATA is predicting the airline industry will break through the $1 trillion revenue mark, but with margins averaging up 3.6 percent. Phil suggests to airline industry analyst John Strickland that it’s not much of a return for such a capital-intensive industry subject to so much geopolitical risk. But, John argues, if you take the long-term perspective, and look for airlines with strong, proven management that have shown they can deliver margins and cope with crises, you can still enjoy healthy dividends. When it comes to the challenges of tariffs, the manufacturers face the biggest problem, with components sourced all over the globe. There’s also the rise of China’s aircraft manufacturing that is likely to break the Boeing-Airbus duopoly.  

Thursday 17th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThings are getting uglier in the trade war between the US and China. Equity markets have been hit by new limits on the export of NVIDIA’s critical AI chip to China, and threats of secondary tariffs on US trade partners who trade significantly with China. NAB’s Gavin Friend also talks through Jerome Powell’s speech and fireside chat at the Economics Club of China. He basically said, that with all the uncertainty, there’s a chance the Fed could hold back on any further cuts this year. That all depends on whether tariffs are eased. It’ll be a question the ECB will have been pondering ahead of today’s rate decision. There’s also Australian employment data to talk about.

Wednesday 16th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABTariff and trade news continues to dominate and drive markets in all directions. Sentiment surveys are now showing a serious downturn, with the Bank of America claiming investors are ayt their most bearish in 30 years. NAB’s Rodrigo Catril says we are still waiting to see the hard data from April. The difference in FX moves for the pound and the Euro has been interesting, with a deal with the EU seeming a long way off, with JD Vance suggesting a deal with the UK could be closer, because of Trump’s love of the royal family. Meanwhile China has reportedly stopped their airlines from buying or leasing aircraft or parts from Boeing. It’s another day of information overload, which makes it a tough call for the Bank of Canada later today.

Tuesday 15th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS equities kicked off Monday’s session sharply higher on Friday's news of tariff exemptions for certain electronics items. Apple was one of the big beneficiaries. But as the session progressed most of those gains diminished, perhaps as President Trump’s weekend social media post sank in, suggesting nobody was exempt, they were just being moved to a different tariff bucket. Then, news circulated that car parts may also be exempt, pushing up the share price of auto manufacturers. NAB’s Ray Attrill joins Phil to make sense of the latest moves and to pick through the data that is still helping to guide investors.

Monday 14th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere was very little market reaction to the increase in tariffs from China on Friday. Could equities respond, though, to the news of exemptions announced by President Trump for certain electronics goods. Could this mean, as CEOs queue up for meetings at the White House, more exemptions will follow, including country-specific trade deals. NAB’s Skye Masters says all of that could be good for equity markets, but the damage has already been done for bond markets, with the sell off indebt likely to continue, pushing the US dollar lower.

Friday 11th April 2025Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.Economists these days tend not to treat the supply of money as a major determinant of economic growth. That’s because a downturn in the supply of money can be counteracted by the speed at which money changes hands. This week Steve Hanke, a Professor of Applied Economics at Johns Hopkins University in Baltimore, argues against that belief. The velocity of money is relatively constant, he says, but the supply of money is the major determinant of economic output, driven primarily by loans from commercial banks. Listen to his reasoning on this week’s podcast and why he thinks the RBA is doing a good job for Australia, but the US could be heading for a recession, even before Trump’s tariff adventure.

Friday 11th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABYesterday’s rebound in US equities has proven to be very short-lived, with equities well down at the close in New York. NAB’s Gavin Friend says it’s a reality check, with the tariff war continuing between the US and China, and the question of whether Trump will be realistic in the deals he seeks with other countries over the next 90 days. We are getting close to the end of the week with an immense amount of uncertainty, although the Aussie dollar has managed to gain ground in the midst of it all. NAB, meanwhile, has revised its outlook for the RBA, expected a more aggressive path of rate cuts. Listen in for more on that.

Thursday 10th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABA roller coaster session on the markets. It started yesterday during the day in Australia with massive selloffs in US bonds on the news of rising tariffs from China and the US. The US is now up to 125%, with China imposing 84% from tomorrow. NAB’s Ken Crompton says if there was a Laffer Curve for tariffs we are well beyond the point where revenue keeps rising. But late in the session President Trump announced a 90-day delay on some of the heftier tariffs – China excepted. Elsewhere a 10% tariff will apply, and world leaders have three months to negotiate. That’s resulted in a record turnaround in US equity markets, although bond markets are a little less convinced. 

Wednesday 9th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe full set of US tariffs applies from midnight tonight in the US (2pm Sydney and Melbourne). Including the hefty ones with China. As NAB’s Sally Auld says, the China tariff is so high its basically an acknowledgement that they don’t want to trade with China anymore, unless a deal is done. There has been more talk of potential deals. If any of them come to pass it will be an indication that the Trump administration is willing to negotiate, rather than slavishly sticking to a principal of completely balancing trade with each country. Who knows? Certainly, the optimism in the markets early on in the session quickly diminished and stock markets closed well down in the US.