NAB Morning Call

Wednesday 30th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets responded to a larger than expected fall in US GDP reported this morning. But, as NAB’s Skye Masters suggests, equity markets clawed their way back in late trade. Perhaps its because the fall was largely driven by short term factors, in particular a much higher than expected level of imports, cars in particular, ahead of the imposition of tariffs. Canada saw a similar impact on their GDP read, whilst the European economy was exempt from such impacts. Yesterday’s Aussie CPI print gives no reason for the RBA to avoid a rate cut this month. They have been overly cautious on their outlook for inflation, says Skye. The focus now switches to US jobs, with non-farm payrolls tomorrow night, the weekly jobless claims tonight, and a weaker than expected growth number in the ADP figures last night. Plus the earnings or Meta and Microsoft.

Wednesday 30th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABWe are in the thick of economic data today - Aussie CPI, European and US GDP, US wages and the core PCE deflator. We’ve just seen weaking confidence in the Conference Board’s latest survey. Yet equity markets continue to rise. In fact, the S&P has had its biggest six day rise since March 2022. NAB’s Taylor Nugent says some the optimism is the hope that tariffs will be wound back, with U.S. Commerce Secretary Howard Lutnick saying a trade deal has been reached, but he’s not going to say who with just yet. President Trump gives his big 100-day rally in a few hours’ time. It will be a beautiful thing.

Tuesday 29th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets were more subdued for most of the session overnight, with shares in the US down until a reversal in the last hour of trade. The hopes of a quick resolution to US-China is seeming less likely. For a start, are the two sides talking? NAB’s Tapas Strickland says President Trump claimed he had spoken to President Xi, but China denies any negotiations are taking place. Meanwhile shipments from China are well down and will be felt in retail stores in a week or so. The Dallas Fed manufacturing general business activity index fell 20 points to -35.8, its lowest reading since May 2020, during COVID. UK economist Paul Krugman overnight likened it all to COVID, without a vaccine.

Monday 28th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets stayed positive through most of last week on the hope that trade deals will be done, and tariffs are being used as leverage rather than being a permanent fixture. But Phil asks NAB’s Ray Attrill what if deals aren’t done. A source report in the Wall Street Journal outlined the extensive topics to be covered in these deals. If solutions aren’t reached, does the US President reimpose his April 2 tariffs? He gives a big address of Tuesday, his 100th day in office, when that might be made clearer. Locally, CPI for Australia will be the key data point and will be highly influential on what the RBA does next.

Thursday 24th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe US dollar will continue to slide, come what May. And probably come what June and July. Whilst he’s reluctant to be drawn too closely on timing, NAB’s Ray Attrill, head of FX strategy, says we can expect to see the US dollar fall another 10 percent, at least, with the Aussie returning about the 70 cent mark. Phil asks if that’s the best-case scenario; one where trade deals are agreed and tariffs minimised. What if the hefty tariffs return? Or Trump deposes Jerome Powell? Or the US heads into a recession? Whichever way you spin it, Ray says the US dollar is getting weaker and it’s not a short-term change. The weaker dollar could be around for a long time.

Thursday 24th April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS equities rose again this session, and te US dollar strengthened for the second session, as the Trump administration talked up the possibility of cuts to China’s tariffs. The Wall Street Journal reports the levies could be cut by more than half in some cases, although there’s declaration from Trump himself, or any indication of when  this might happen. But as NAB’s Taylor Nugent explains, that’s not stopped markets seeing the positive side of it all. PMIs came in a little weaker than expected across Europe and the US, although manufacturing did somewhat better than services. It’s mainly second tier data today and tomorrow, and a ceasefire deal between Ukraine and Russia is looking less likely – if it’s accepted it’s a win for Russia.

Wednesday 23rd April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets are behaving very differently today. US equities are rising, bond movement is subdued, and oil prices are back on the rise. NAB’s Sally Auld says sentiment is being driven by talk from the US administration about trade deals getting closer with India and Japan, and how he current impasse with China is unsustainable. So, does that mean tariffs won’t bounce back up after their 90day pause? That seems to be how markets are taking it, but Sally says the sentiment could change when we start  to get real data on how badly the US economy (and others) have been impacted.  

Tuesday 22nd April 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe 'sell America' trade continued on Monday, with equities and bond prices both falling. NAB’s Tapas Strickland says it’s uncertainty over the independence of the Fed that is playing on market concerns this time. The US President has made no secret of his desire to replace Jerome Powell as Fed chair, although there’s a question of how far Presidential authority can stretch. This compounds other concerns. For example, how likely are trade agreements? It’s becoming apparent that a deal with Japan hasn’t progressed far, whilst animosity between China and the US ramping up further. Both countries are now threatening their trading partners to pick sides in the trade war. Tapas says we are now starting to see hard data showing us what’s really going on. 

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.