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NAB Morning Call

Fanatical confusion

Season 8, Ep. 114

Monday 27th May 2024


NAB Markets Research Disclaimer 

Financial Services Guide | Information on our services - NAB


Friday was a quiet end to the week, but the NSDAQ still managed to touch a new high. Bond markets closed early in the US, though, in readiness for a long weekend, that will see a slow start to this week. NAB’s Taylor Nugent says trade was light so we can’t draw any definitive conclusions about too much. Even Nobel economist Paul Krugman is unsure where things are heading. He said he could argue either way as to whether or not interest rates will remain higher for longer, and whether R* rate should return to 2019 benchmark levels, or has it moved higher. Does anyone know? After a quiet start, this week picks up with the US PCE deflator on Friday, and Australian retail sales and CPI prints before that.

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  • 146. Weekend Edition: France’s shift right – a challenge for Europe?

    21:54
    Friday 21st June 2024Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.Markets reacted rather swiftly to the news that President Macron had called a snap election for France, just after his own party had been heavily beaten in the European elections by Marine Le Pen’s Front National. This week Phil talks to Anne Bucher, from Bruegel, an independent European economic think tank. Anne is a former Director-General in the European Commission until October 2020 – in fact, she joined the commission in 1983 working across a wide variety of policy areas over may years. She has an innate knowledge of European politics.So, how does she see the French situation play out? Can we expect the more extreme elements of the Front National agenda to be watered down? Has the UK’s Liz Truss moment served as a warning bell for any party promoting higher debt?Whilst we can expect some compromise, Anne says the big casualty will be progress. As the EU fights battles with the right it’ll struggle to develop a cohesive plan for growth and climate change.
  • 145. A Swiss Lead in the Central Bank Euros

    16:35
    Friday 21st June 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABEurope is in the midst of the group rounds of the Euros, but when it comes to central bank cuts Switzerland is already the champion, with Britain the favourite to cut next. JBWere’s Sally Auld talks through yesterday’s decisions by the Bank of England, the Swiss National Bank and the Norge’s Bank. In the US markets seemed unfazed by Neel Kashkari’s claims that hitting the Fed’s inflation target might take a year or two. Perhaps his views were surpassed by more soft data overnight, including another rise in jobless claims. New Zealand’s GDP was a little higher than expected, but it won’t last, says Sally. And tonight the PMI data-dump for Germany, France, the Euro area, the UK and the US.
  • 144. UK on target, markets take aim at France

    14:16
    Thursday 20th June 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe UK, which has seen inflation rise to one of the highest levels, is also one of the first to get it down to target, with the headline rate down at 2% yesterday. Even so, the Bank of England won’t cut rates when they meet today, although perhaps three members of the panel might call for it. Het markets are now fully pricing the first cut at the back end of the year. NAB is expecting August. NAB’s Gavin Friend explains why the variety of opinions and expectations. He also talks about the EU’s plans to implement penalties for the large number of member states who are holding too much debt. Meanwhile, the Norges Bank and Swiss National bank meet today. He Swiss re expected to cut rates and win a football match.
  • 133. Hawkish RBA, NVIDIA number one

    16:50
    Wednesday 19th June 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe most valuable company in the world is not Apple or Microsoft. It's NVIDIA. Can anyone stop them? Meanwhile, the RBA kept rates on hold but in a way that was more hawkish that expected. NAB’s Rodrigo Catril says the committee even discussed the potential for rate hikes. NAB still expects a cut in November, nonetheless. In the US retail sales were weaker whilst government spending rose. Could all this extra government spending delay the fall in US inflation? Today UK CPI numbers are released and the US takes the day off, keeping NVIDIA on top for another 24 hours.
  • 132. France settles down, US equities hit new highs again

    15:59
    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.
  • 131. A week big on banks and politics

    14:02
    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.
  • 130. Weekend Edition: Private credit markets – what to know

    22:56
    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.
  • 129. One dot already beaten by the data

    16:48
    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.
  • 128. Just one dot, even as US inflation dips

    15:54
    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?