NAB Morning Call

Thursday 19th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABPerhaps not surprisingly the Fed opted for the 50bp cut. Markets responded sharply, but then rowed back shortly afterwards as Jerome Powell tried to downplay the significance of the move at the press conference that followed, saying this wasn’t a new pace just a recalibration of policy. NAB’s Gavin Friend joins Phil to decipher the language, the revised forecasts and the market response. Next, it’s the BoE, unlikely to move, particularly after a slightly hotter than expected inflation print. Plus, Australian employment numbers and NZ GDP today. 

Wednesday 18th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere have been no surprises in US economic data overnight. Retail sales, industrial production and manufacturing weren’t far off expectations. So, do they all point to a soft landing? And if that’s the scenario, why would the Fed delay a big rate cut? It’s a question Phil puts to NAB’s Ken Crompton, less than 24 hours from the FOMC decision, which includes revised forecasts and a new dot plot. There’s also the question as to whether the Bank of Canada will move to a faster cutting schedule, given CPI actually showed deflation last month. UK CPI is the main figure today – in particular the sticky services inflation. And, could the ECB be forced to cut rates faster in face of a slowing economy, with the latest ZEW survey for Germany showing confidence has plummeted as hopes of a recovery subside. 

Tuesday 17th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarket pricing moved further in favour of a 50bpcut from the fed this week. Does that mean the Fed, who are expected to make at least one big cut before Christmas, side with the market? It makes it easier for them to walk through an open door, says JBWere’s Sally Auld on this morning’s podcast. There’s also discussion about Paul Krugman’s tweets overnight, suggesting that a data dependent Fed risks becoming Milton Friedman’s fool in the shower — the guy who alternately freezing and scalding himself because he’s too data-dependent. Canada’s CPI print is the only major data release of the day. What does it mean for the BoC, and how long do they stay in the shower for before they leave those taps alone?

Monday 16th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABBig or small, that’s the question this week. Will the Fed go for a 50bp cut? If the plan is to do that at some point this year, why not now? That’s one of the arguments being touted, which Phil discusses with NAB’s Ray Attrill. Certainly, equity markets seem to be expecting a larger cut, with the Russell 2000 showing particularly strong growth on Friday. Meanwhile softer activity data from China suggests they are sliding further away from their 5% growth target, but there’s no indication of when the Politburo will implement new policies beyond the remit of the PBoC.  

Friday 13th September 2024Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.The Labour Market Report is one of the most eagerly awaited monthly releases from the Australian Bureau of Statistics. It’s even more crucial at times like now, when it is so influential on central bank policy. But in many countries gathering this data is proving difficult. People are less prepared to participate, and gathering reliable information is becoming more costly. That’s not been an issue in Australia, according to Bjorn Jarvis, the ABS’s Head of Labour Statistics. He says the Australian population is generally very civic minded. That makes things easier. In this half hour Weekend edition Phil talks to Bjorn about how the data is collected and analysed and what trends have surprised him over recent years.

Friday13th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe ECB cut interest rates by 25bp to 3.5 percent, as expected. The question is, will there be more to come soon. The growth forecast has been downgraded slightly. Mario Draghi’s report is asking for substantial investment to see substantive growth in Europe and last month the ECB’s Ollie Rehn warned of the prospect of negative growth if a re-elected President Trump goes heavy on tariffs. NAB’s Rodrigo Catril gives his take on the ECB’s dilemma. We also look at US PPI and jobless claims overnight, and the rising government deficit. Plus, the impact of Hurricane Francine and what to expect from China’s activity data over the weekend.

Thursday 12th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABKamala Harris “won“ the Presidential debate, by most accounts, and US core GDP showed a slight tick up last month. Neither bit of news really moved the markets. Harris still has to win the election and, although a rise in CPI may be concerning, the headline rate came down for the fifth month in a row. NAB’s Gavin Friend says it hasn’t changed the pricing for cuts by year end, it might just push back a 50bp cut further than next week. The ECB is expected to cut rates today, whilst the BoE will be balancing up higher job numbers this week, with another flat GDP read overnight.

Wednesday 11th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere’s been sizable falls in oil prices overnight, driven by a downward revision to OPEC+ forecasts for this year and next. NAB’s Skye Masters talks about the market response to the oil price and the slowdown more generally. She suggests it’ll make next week’s forecasts and dot plot from the Fed particularly interesting. We shouldn’t expect too much of a reaction to the US CPI numbers today and, unless there’s an overwhelming winner in the TV debate today, it’s probably too early to resume the Trump trade.

Tuesday 10th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS equities rose sharply to the close overnight. Apple shares rose less than most, with prices actually falling during the release of the new iPhone 16, which clearly failed to impress markets. But that wasn’t enough to stop a lot of dip-buying during a session largely devoid of data releases. There’s a bit more today with the latest employment data for the UK, numbers that could definitely influence the direction of the Bank of England next week. Otherwise, markets wait for US CPI and the big debate, both more than a day away.