NAB Morning Call

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.

Monday 9th September 2024NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABWhilst the US unemployment rate came in as expected on Friday, at 4.2 percent, it was downward revision to the previous two months numbers that seem to have caused the most consternation. With the Fed signalling their focus is on ensuring there isn’t a sudden downturn in employment, will these numbers raise the expectations that the cut next week will be a big one. Not yet says NAB’s Rodrigo Catril, even though there has been a notable change in language from the Fed. Friday also saw a rise in demand for housing loans in Australia – adding to the RBA’s argument that there’s no need to move quickly to cutting rates. The week ahead includes US CPI numbers and an interest rate decision from the ECB.

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!