NAB Morning Call

Monday 12th May 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets were taken aback by the size and immediacy of tariff cuts announced Monday between China and the US. Although we did highlight it as a possibility in yesterday’s podcast. NAB’s Gavin Friend says it wasn’t just the size of the tariff cuts, down to 30% on China and 10% on the US, but also the goodwill displayed after the weekend talks. Equities have risen sharply, the dollar is stronger, and markets are pricing in more rate cuts.  The news does make upcoming data a little less relevant. We get the US inflation print today - if its higher the US administration can say the lower tariffs should fix that. Just as the UK government can respond to higher unemployment -  if it happens today -by saying they have just proposed sweeping changes to immigration rules. That’s politics. And there’s a lot of it lately.GOT A QUESTION FOR NAB’S CEO? Phil will be talking to Andrew Irvine on the Weekend Edition, a week on Friday.  Ask what you like about finance and the economy, globally or locally. Orif you   want your voice heard, ask your question out loud and send in a sound file to be played on the podcast. Whichever way you want to do it, email morningcall@nab.com.au - don’t forget to include your name and where you are from.

Monday 12th May 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS Treasury Secretary Bessent said there had been ‘substantial progress’ in the negotiations with China over the weekend. Maybe the US is feeling the pressure, with stores warning of supply shortages. China, meanwhile, according to trade data on Friday, is exporting more, they’ve just switched the destination away from the US. Phil asks NAB’s Rodrigo Catril if China exports have a deflationary impact elsewhere (not the US), will we see more of a divergence in the approach taken by central banks? And could this be a big week for deals? With China? With other nations? And potentially positive talks over Ukraine with Putin and Zelensky supposedly set to meet face to face.  

Friday 9th May 2025Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.The commercial real estate (CRE) market has struggled post-COVID, with working from home and online shopping both taking a chunk out of demand for properties. But the tide is starting to turn, with investment picking up and a stronger focus on building greener premises or adapting older buildings to meet new green regulations. It’s a Herculean task, with CRE contributing 18 percent of direct carbon emissions in Australia.Nonetheless, we are winning the battle, according to Natasha Mulcahy, the Pacific region director, ESG at the global commercial real estate consulting and investment firm CBRE. And NAB is doing its part. Paul Lennard is NAB’s Executive, Business Lending Products – his team includes a sustainable finance unit which has built a growing portfolio of around $2bn in green finance over three years, including the CRE sector. Natasha and Paul join Phil this week to talk about the growth in sustainable CRE, who is driving that change and the regulations that make it impossible to ignore.

Friday 9th May 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets have seen the positive side of the US-UK trade deal. It’s a sign that deals can be done to reduce tariffs, but NAB’s Ken Crompton wonders whether sentiment is running ahead of itself. Although there are some carves out for sectors, including steel, the UK base tariff rate remains at 10 percent. This for a country that already buys more from the US than it sells to them. For that the UK has reduced some of its tariffs and is expected to remove invisible barriers around agriculture. If anything, it could be seen as a sign that tariffs won’t move down far, even when a deal is done. Still, the US President gave another tip to buy shares because they are going to take off “like a rocket ship”. Beyond the optimism of the share market central banks are still grappling with the uncertain environment. The Bank of England vote was split three ways. The focus is on China this weekend, with trade data, CPI and PPI and the start of those trade talks.

Thursday 8th May 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUS equity markets took a hit when the Fed announced no change in interest rates, even though it was expected by just about everyone. Then shares picked up as Jerome Powell gave his press conference, in which he talked up the current state of the US economy and said they were in a good place to cope with whatever comes down the track. He was uncommitted on any future decisions, saying they will have to wait and see what impact tariffs have on employment and inflation. NAB’s Gavin Friend talks through what was said. Meanwhile, China is not in wait and see mode. The PBoC cut base rates, cut lending rates further and eased bank reserve requirements. And the Bank of England is widely tipped to cut rates themselves today.  

Wednesday 7th May 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe US President has made it clear there won’t be negotiations back and forth on tariffs, he’ll simply make the call. NAB’s Sally Auld says that accounts for most of the uncertainty in markets today, with big falls in equities again. The US dollar is weaker again, with the Aussie gaining some strength. The repricing in Asian markets, including the ‘violent repricing of the Taiwanese dollar’, will drag the Aussie higher in the process, says Sally. Today all eyes will be on the FOMC meeting, early tomorrow morning Australia time. It’ll be more about the words in the statement than the decision itself, which is firmly priced for a hold.

Tuesday 6th May 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere’s much less enthusiasm in the markets today, with US equities finishing deeply in the red at session lows, finishing a nine-day winning streak. There’s no readily apparent reason, except perhaps for concerns the scope and timing of US trade deals. The Taiwanese dollar rose further today over reports that a trade deal would be based on an appreciation in their currency. NAB’s Taylor Nugent talks through the latest tariff news, the latest Services ISM data for the US, as well as the declines in oil prices as OPEC+ increase supplies at a time of an expected global downturn.  

Monday 5th May 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere was a risk-on Friday, as the price of equities rose, and repricing of Fed rate cut expectations saw bond yields rising too.  NAB’s Tapas Strickland says there are two reasons for this optimism. First, the continued hope that some sort of truce will be found in the tariff war between the US and China, and secondly the strength in the labour market demonstrated in non-farm payrolls on Friday. The cautionary note is that this report is based on jobs held just a few days after ‘Liberation Day’. Still, no rush yet for the Fed to cut rates, hence the repricing. It was the opposite story  in Australia on Friday, where a surprise plateauing of retail sales reinforces the need for a cut at the next RBA meeting, as well as raising the case for successive cuts this year. 

Friday 2nd May 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABAustralian house prices are back on the rise, but how sustainable is this growth considering global economic uncertainty. Or will any potential external factors be more than offset by falling interest rates? Core Logic’s Eliza Owen joins Phil to discuss what’s been happening in Australia’s capital city and regional markets and where could see the most growth this year. Also, what influence will affordability have on the housing market? Could we see a situation where price growth slows when a peak in the price people will pay for rent starts to impact yields?