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The Fed Flow-Through and the Banks since.
Friday 20th December 2024
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As we recovered in the later editions of the Morning Call yesterday there was a strong market response to the Fed yesterday -from the statement and the press conference. As NAB’s Taylor Nugent explains, there’s been a slight reversal in equity markets today, but nothing significant, and the US dollar continues to push higher. Since then, the Bank of Japan has done as expected, but still managed to weaken the Yen, perhaps because some are now wondering whether a rate rise won’t happen until March. The Bank of England kept on hold, but with a divided board. The Norges Bank and Riksbank did as expected. Meanwhile a s surprise in yesterday’s New Zealand GDP. Good news or bad?
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28. Trump’s Big Day includes VAT
18:40||Season 9, Ep. 28Friday 14th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABPresident Trump has announced that his reciprocal tariffs could start as soon as April. The surprise has been that he is not just looking at the topline balance of trade. He considers a VAT imposed on American goods as an impost that needs to be countered. That could be bad news for the EU, the UK, Australia and other countries who have favoured indirect taxation higher income tax. NAB’s Ray Attrill says it’ll be bad news from Europe, where shares rallied today on the hope that peace-deal for Ukraine will see energy costs come down. Meanwhile, US retail sales are out later, will this add to the watering down of American exceptionalism that we’ve seen this year?27. Weaker dollar, rising inflation, falling US shares. Not so rock n’ roll America.
16:22||Season 9, Ep. 27Thursday 13th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABDonald Trump posted on Truth Social that the Fed should lower interest rates to go hand in hand with tariffs, adding, “lets Rock and Roll, America!!!” It hasn’t unnerved Jerome Powell who was giving his testimony the House Economics Committee. His case for moving cautiously was evidenced by US inflation data which ticked unexpectedly higher hitting the dollar and US equities. JBWere’s Sally Auld says today is another day where markets have reversed their enthusiasm late last year for US exceptionalism. It was a strong day for the Euro and European equities, though, thanks to a positive phone call between Trump and Putin and hopes that the end is in sight for the Ukraine war. But, obviously, way too early to assume too much.26. EU says ‘Back atcha!’ Is Australia exempt?
18:16||Season 9, Ep. 26Wednesday 12th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe Trump administration is pushing ahead with 25% tariffs on all steel and aluminium. Australia still hopes it will be exempt, but there are no guarantees and, in any case, NAB’s Taylor Nugent argues there will be second-order impacts as the tariffs hit China. The EU meanwhile has promised swift retaliation, with the various trade ministers meeting today to map out their approach. Curiously, European equities are doing somewhat better than the US. The US dollar has also weakened, despite the President’s promise that the tariffs will make America rich again. The NAB Business Survey showed a slight rise in confidence, as business conditions softened. The latest small business survey in the US also back tracked a little. Today the main focus, apart from tariff news, is the latest setoff US CPI numbers.25. Trump - a man of steel (and aluminium)
17:03||Season 9, Ep. 25Tuesday 11th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABTariffs could be back, with Donald Trump warning of 25% tariffs on all steel and aluminium imports into the US. That would hit Mexico and Canada particularly hard, just as they thought they were off the hook (for now at least). But NAB’s Gavin Friend says there hasn’t been much more news on this since the President made the announcement on Sair Force One on Sunday. There’s some discussion about the three different classes of tariffs Trump could deploy and whether regions like Europe could be in the firing line. Gavin suggests a string representation of the new US administration at events in Europe this week could be part of a fact-finding mission to guide policy. Meanwhile, markets are positively sanguine, as they wait the next chapter in Trump’s trade plan.24. The Empire Strikes Back
15:15||Season 9, Ep. 24Monday 10th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABToday China’s retaliatory measures against the US take effect and it seems unlikely that the event will pass without comment and threats from the US President. NAB’s Taylor Nugent says Trump might also elaborate on his plans for other regions, such as the EU. Meanwhile jobs numbers from the US on Friday has pushed back expectations around the timing of cuts by the Fed, reinforced by a rise in inflation expectations in the University of Michigan survey on Friday. Aside from tariff news it’s a relatively quiet week, although it’ll be interested to see how Jerome Powell faces two days of questions from parliamentarians this week,23. Weekend Edition: 2025: Less growth, but still lots of opportunity
28:07||Season 9, Ep. 23Friday 31st Janaury 2025PleLast year was a stellar year for growth. Kylie Willment, chief investment officer at Mercer, says they provided a 14 percent return for their superfunds in2024. She highlights a number of opportunities for this year. including growth in private markets. But how will she weather the uncertainty of a Trump administration, where radical trade policies can be implemented quickly? Will Mercer be shying away from investments in areas likely to attract tariffs, like Europe for example? And is AI a technology that will continue to dominate? Do you invest more in it, or diversity away from it? Kylie says we can ‘t expect to see the same level of growth this year, but is she willing to have a stab in the dark and predict the sort of returns we could see?ase note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.22. US Jobs Day, Bad News Day for Britain
13:26||Season 9, Ep. 22Friday 7th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABNon-farms payrolls data is released later today in the US. NAB’s Taylor Nugent talks through some of this week’s other jobs-related data ahead of this key release. Meanwhile, good and bad news from the UK. The Bank of England cut rates by 25bp.Two members of the board wanted to go further. At the same time the bank cut its growth forecast and expects inflation to rise, extending the journey to their 2 percent target.21. Trade, gold, jobs and a rate cut
16:48||Season 9, Ep. 21Thursday 6th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe US President veered away from talking about trade today and there seems to have been little market response to his thoughts on the Middle East. Instead, the focus is on the Fed and the labour market. The ADP Employment Report showed a surprising rise in new jobs, but it doesn’t follow that it’ll be reflected in non-farm payrolls on Friday. It rarely is. NAB’s Gavin Friend points out that the latest ISM Services index has US growth at a similar rate to Germany. There have been a few Fed speakers out over the last 24 hours, and NAB’s Gavin Friend reflects on their musings, particularly in relation to potential tariffs. The immediate focus now is on the Bank of England, expected to cut rates tonight. Australia’s trade numbers are also out today.20. Tariffs. Here yesterday, gone today. What about tomorrow?
15:34||Season 9, Ep. 20Wednesday 6th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets have responded favourably to the news that tariffs have not gone ahead against Mexico and Canada although there is still a chance that there will be measures taken in relation to both countries strong balance of trade. It's likely if that happens that the EU will also be embroiled in that potential trade war. Hence markets have been positive on the latest news but there is still evidently some caution around what happens next. It means there is an unclear path forward for inflation and monetary policy which NAB’s Skye Masters says explains why there has been very little response in bond markets to all the latest tariff news. There’s also a focus now on U.S. jobs with JOLTs showing a sharp fall in job openings,then the ADP numbers out tonight ahead of non-farm payrolls on Friday.