NAB Morning Call

Tuesday 18th June 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABFrench politics still has a long way to run, but markets have calmed down a bit on the hope that a LePen government might not be so radical. NAB’s Taylor Nugent says ECB chief economist calmed markets by suggesting there was nothing disorderly in bond markets that would see the need for the central bank to intervene. It’s going to be an uneventful RBA meeting today, with rates on hold and no new forecasts to map out the path of cuts for this year and next. All in all, a fairly quiet session. Except US equities, of course, that broke records, again.

Monday 17th June 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABLast week was dominated by two big stories. First ,the dichotomy between US inflation data and the downgrade of rate cuts predicted by the Fed. Secondly, the snap French election , which could turn about to be very bad news for President Macron. NAB’s Ray Attrill talks through the market reaction to both by the end of the week, along with a sprinkling of data from Friday, the BoJ meeting and loan data from China. This week we hear rate decisions for the RBA, the BoE, the Swiss National Bank and the Norge’s Bank. Ray explains which one might cut.

Friday 14th June 2024Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.There’s been growing interest in private credit markets lately. So, what exactly is it? Phil talks to Gillian Gordon, Head of Alternative Investments and Responsible Investing at JB Were, who says it’s basically non-bank lending. So why would businesses choose to borrow directly from investors rather than issuing bonds, and what’s in it for the lender? Take twenty minutes to get across the ins and outs of private credit, and why there’s been so much interest in it lately.

Friday 14th June 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABYou might have expected that bond yields would start creeping back up again after the Fed’s hawkish ‘one dot plot’ meeting yesterday. Instead yields fell, as the latest producer prices echoed the softness in the CPI read before the Fed. JBWere’s Sally Auld says it feels like price pressures, after a hot start to the year, are starting to cool a bit. So, does that mean the Fed’s predictions of just one rate cut this year are already out of date, just one day later? There’s also a discussion about share, currency and bond movements in Europe, the take-outs from yesterday’s Australian labour market data and what to expect from the Bank of Japan today.

Thursday 13th June 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt's been a fascinating session overnight. Early Wednesday US markets responded positively to weaker CPI numbers. Bond yields fell sharply, alongside a dip in the US dollar and more enthusiasm for equities. There must have been an expectation that the numbers would be reflected in a more dovish approach by the Fed, but the dot plot from FOMC members told a very different story, with the median expectation for just one cut this year. NAB’s Gavin Friend talks through the response, highlighted that the plot is a set of opinions, not a forecast and its he hard numbers that count. The next of those will be US producer prices out today, which fed into the PCE, the Fed’s preferred inflation measure. So, markets haven’t fully pulled back to their pre-CPI positions, but can we expect that if the producer prices aren’t as encouraging?

Wednesday 12th June 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABA mixed set of numbers overnight. The UK’s employment numbers showed wage pressures remain, whilst the NAB business survey also demonstrated inflation stickiness. NAB’s Ray Attrill says wages are a lagging indicator, and you can’t jump to conclusions that any of these numbers will change the central banks’ current trajectory. The path of cuts expected by the Fed becomes clearer with the release of their dot plot tomorrow morning. Meanwhile, bond yields fell overnight, helped by a positive auction result, and shares have been helped by Apple announcing the new AI iPhone. Economies and households might be struggling but we’ll always get excited by a new gadget.

Tuesday 11th June 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABNon-farm payrolls came in a lot higher than expected in the US on Friday. Not only were there more people in jobs, but wages are also rising faster than expected. Phil asks NAB’s Taylor Nugent how uncomfortable this will be for the Fed and what it’s done to market expectations There will be a lot of focus on the FOMC meeting this week, with the dot plot telling us when the Fed thinks we’ll see rate cuts. Whilst the ECB has been working hard to reel back expectations for rate cuts in Europe, President Macron has thrown the cat amongst the pigeons by calling a snap election in France, in response to a lurch right in the weekend European Parliamentary elections. It’s not going to be a dull week.

Friday 7th June 2024Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.On 18th June Daniel Mookhey, the NSW Treasurer, presents his second budget to the state parliament. This week he talks to Phil about the challenges he faces, starting with house prices. They continue to rise, despite repeated efforts by governments over the years to bring them under control. How much of it is down to supply and what can the government do to increase it? Infrastructure building is part of the solution, says Mookhey. But that costs money and, if the NSW government increases spending couldn’t it add to the inflation problem? Is that something he worries about? In this half hour discussion Phil talks to the Treasurer about how he balances government spending against the drive to build the foundations for future growth, whilst facing the challenges of a less egalitarian society and a hefty state debt.

Friday 7th June 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe ECB cut interest rates as expected, but there’s no clear indication of when the next cut will come. NAB’s Gavin Friend says staff forecasts have pushed inflation higher. Hence, a hawkish cut. So much so, you wonder whether they would have carried through if it hadn’t been so clearly signalled beforehand. Now the focus is on the US labour market and what it means for the Fed. The ADP jobs number came in soft earlier in the week and the jobless claims number rose last night, with a softer read is expected tonight. Just as important ifs the question of wages. Q1 labour costs were downgraded yesterday, so will the fall carry through to the May number tonight?