NAB Morning Call

Friday 6th September 2024Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.China won’t achieve its 5% growth target this year. Yan Wang, Chief Emerging Markets & China Strategist at Alpine Macro, says the forward indicators show it won’t happen. So, what next for China? Yan says a shift in government policy is needed. Their focus has been on developing new, higher income sectors, such as EV manufacture. That makes perfect sense. But there’s no support on the demand side of the economy, which is languishing under low confidence levels, less spending and a shrinking money supply. All that can be turned around, but that takes a change in thinking from Beijing.

Friday 6th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABWe are less than a day away from the US non-farm payrolls numbers, which are likely to determine whether the Fed cuts interest rates by 25bp or 50bp at this month’s meeting. NAB’s Ray Attrill says if the numbers are in-line with expectations he reckons that’ll solidify pricing for a 25bp cut, but anything weaker would push expectations towards 50bp. It’ll be interesting to see the take of two prominent Fed speakers – Williams and Waller - a couple of hours after the event. Meanwhile Michelle Bullock reiterated the need to keep rates high to fight inflation, arguing that inflation does more damage than higher rates.

Thursday 5th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABShares continue to push lower along with bond yields as markets continue to be concerned about the US jobs market. The JOLTs numbers overnight show the least number of jobs available since April 2021. JBWere’s Sally Auld says markets are vacillating between expected a 25bp and a 50bpcut from the Fed this month and the overnight numbers pushed slightly towards the stronger cut. Meanwhile, Australia’s GDP growth data yesterday showed a slowdown in consumption, but the assumption is this will pick up as real income increases, helped along by tax cuts. And the Bank of Canada cut rates for a third time, with more to follow, amidst talk that inflation might fall too far. Ahead of payrolls on Friday we get ADP jobs numbers today and the weekly jobless claims. Expect markets to react!

Wednesday 4th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere have been some sharp defensive market moves overnight. In currency markets safe havens have done well, whilst shares are well down, the VIX index has risen and bonds have rallied. Phil asks NAB’s Gavin Friend why all this nervousness all of a sudden? The only significant data release has been the US Manufacturing ISM which admittedly, did include rising prices and falls in new orders. Was that what spooked the markets, or is it more a fear of what’s to come, with payrolls at the end of the week? Before that, JOLTs and the Bank of Canada tonight.

Tuesday 3rd September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets were subdued again on Monday with the US on holiday. Today they are back, in time for the ISM manufacturing read. NAB’s Rodrigo Catril says the employment component of the report will get the most focus, as the first of several labour market indicators ahead of non-farm payrolls at the end of the week. He also talks us through yesterday’s Australian business indicators and what they could mean for GDP.

Monday 2nd September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABEuropean inflation is now at its lowest level in three years, whilst shares hit an all-time high. That’s cemented in the probability of a cut by the ECB this month. Expectations for cuts by the Fed haven’t moved any higher, as the Core PCE inflation read on Friday was in-line with expectations. But the fact that other central banks are cutting doesn’t mean the RBA will. NAB’s Taylor Nugent talks about what the RBA’s Andrew Hauser had to say on this during a podcast from Friday. Today is a quiet start to a busy week, with the US on holiday today, leading to non-farm payrolls on Friday.

Friday 16th August 2024Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.Despite all the fears of a major slowdown, Australian shares have continued to rise and the latest results season has provided stronger than expected earnings. nabtrade’s Gemma Dale says the underlying strength in the economy, which is providing the RBA with no motive to drop rates in a hurry, is being reflected in healthy sales revenue and profits. The historic safe choices (ie mining and financials), continue to perform, even though the questions are always asked – have we reached peak iron ore, have we reached peak bank? And what of the growth in ETFs. Are they becoming more dominant and are they being used primarily as a vehicle to invest in overseas assets?

Friday 30th August 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABTwo surprises from the US. First, a 100 percent growth from NVIDIA wasn’t enough for investors, who obviously expected more. So, even though their results were considered a beat, their share price is still well down. The other surprise was the sharp upward revision in US spending. Personal spending was revised up from 2.3% to 2.9%. NAB’s Rodrigo Catril picks through the numbers. And should we be worried about the fall in Australian Capex spending yesterday? It’s a busy day ahead today, with European CPI, Australian retail sales and Canada’s GDP. 

Thursday 29th August 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABEquity markets were preoccupied with NVIDIA earnings for much of the week, finishing the session with unwarranted pessimism. As it turns out, earnings beat expectations and forecasts for the next quarter are also above the street’s estimates. As a result, the share price switched from a 2.5% drop at close to a 0.5% gain immediately after the earnings announcement. We wait to see what the broader ramifications are. NAB’s Taylor Nugent says it’s a bellwether for how well AI is doing. We also look at yesterday’s Australian CPI from yesterday and look ahead to European inflation numbers, out today and tomorrow.