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NAB Morning Call
US shares weaker on tech forecasts. UK markets judge budget.
Season 8, Ep. 258
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Friday 1st November 2024
NAB Markets Research Disclaimer
Financial Services Guide | Information on our services - NAB
Some big market moves overnight, with sharp falls in US equities. Markets are clearly not impressed with the forecasts that came with the strong earnings results this week. In the UK bond yields are markedly higher, particularly at the front end. NAB’s Skye Masters says there are concerns that the extra spending could boost inflation. The focus now is on tonight’s US jobs data, before a week that includes THAT election.
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38. Feeling Risky
15:48||Season 9, Ep. 38Wednesday 26th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThis morning the Aussie dollar is down whilst safe haven currencies have risen, as markets start to assess the risk of US tariffs. A lot of f the moves in the last 24 hours relate to Trump’s comments that Canada and Mexico are due to see their 25% import from 3rd March. Steel tariffs are then scheduled to follow on the 22nd, then broader reciprocal tariffs from April. NAB’s Tapas Strickland says Alcoa’s CEO has warned that 100kUS industry jobs could be at risk from tariffs on steel and aluminium. So, again, the question remains, is it bravado, given China’s 10% is the only tariff imposed so far?Australia’s monthly CPI is out today, although it has a heavy goods bias, so the read won’t be particularly accurate. This time tomorrow (after the US close) NVIDIA reports their earnings results.37. Markets coast as politics turns to peace talks
15:21||Season 9, Ep. 37Tuesday 25th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere’s a bit of buying the dip, says Sally Auld, NAB’s Chief Economist in waiting, on today’s podcast. The S&P tested 6,000 before rising sharply back and finishing well up on the day. Markets seem to be largely ignoring a spate of softer data, to which we can add the latest Dallas Fed Manufacturing Survey, which showed a sharp rise in business uncertainty.Germany’s Chancellor in waiting, Fredriech Merz has indicated he wants to move quickly to increase Germany’s defence spending, ahead of the new government, as Europe continues to scramble to forge its own path in the future for Ukraine, and the region’s defence strategy.New Zealand provides the best news of the week so far. Retail sales are well up, signalling that the economy could be on the road to recovery. Whilst there’s corporate earnings this week, and a sprinkling of data today, the focus will be on peace talks, with Macron in Washington right now to give the European perspective and avoid a deal that’s too favourable for Russia.36. A less confident US, a more divided Germany
17:19||Season 9, Ep. 36Monday 24th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABFriedrich Merz is likely to be the new Chancellor in Germany, but the exit polls show his CDU/CSU alliance will need to negotiate with other parties to form government and stave off the influence of the far right AfD. NAB’s Rodrigo says that could take some time. Meanwhile, a string of less optimistic data releases for the US. Friday’s Services PMI was a big downside surprise, falling into contractionary territory. The Michigan consumer sentiment survey also recorded a big fall, whilst there was a uptick in inflation expectations. And there’s a move down in US shares. Rodrigo wonders whether this could all encourage Present Trump to move faster on tariffs.35. Weekend Edition: Germany: Not a great time to change government
24:59||Season 9, Ep. 35Friday 21st February 2025Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.Germans will head to the polls on Friday. It seems highly likely that the centre-right CDU/CSU will gather the most votes, but over the last few months the right win populist AfD have been closing the gap. Dr Simon Toubeau, Associate Professor of Politics and International Relations at Nottingham University says it’ll be the CDU picking coalition partners in the centre and on the left, with the AfD left out in the cold. But how long will it take to arrive at a new workable government at a time when Europe is in discussions about increasing defence spending to protect Ukraine? How can Germany spend more on defence without undoing it’s self-inflicted debt-break? And where will the government stand on the idea of Eurobonds?34. Walmart worried, Trump mentions China deal
17:19||Season 9, Ep. 34Friday 20th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt’s not all good news from the US. Although Walmart reported strong profit growth yesterday the outlook is less certain, and there are indicators that their customer base is a section of US society that is suffering. The dollar is weaker today and shares, generally are lower. Nonetheless, NAB’s Rodrigo Catril says support for President Trump remains strong and markets did respond to a comment that a new deal with China was “possible”.Locally, there were no surprises in the latest Australian employment data yesterday. Unemployment did tick higher, but job numbers also increased, some of which can be explained by seasonality factors. He senses Michelle Bullock’s appearance at the House of Representatives Standing Committee on Economics could be a little politically charged, as the next election nears. And politics dominates the agenda in Europe, with Germany’s federal election on Sunday. How this could influence Europe’s plans for a more unified approach to defence and energy is a key question, looked at in the Weekend Edition out later.33. Is ECB rate still restrictive? Aussie employment today’s focus.
15:02||Season 9, Ep. 33Thursday 20th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets reacted strongly to comments from the ECB’s Isabel Schnabel who questioned whether they have already gone as far as they need to. She wonders whether the policy rate is restrictive anymore. NAB’s Skye Masters talks about the market reaction to that, and other central bank news over the last 24 hours. The FOMC minutes suggest slower moves by the Fed, rhe RBNZ seem set to reduce the size of cuts from hereon in, and UK inflation ticked higher than expected, which won’t see the BoE moving any faster. Today the RBA (and markets) will be focused on Australia’s unemployment rate. Skye said expectations are within a very tight range,from4 to 4.1%, so anything outside that could prompt a reaction.32. RBA easing slowly. More cuts “no lay-down misère”
17:28||Season 9, Ep. 32Wednesday 19th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe RBA cut rates yesterday, but is the first one in this cycle also the last one for a little while? Governor Michele Bullock said successive cuts wasn’t the lay-down misère that markets had been expecting. NAB’s Taylor Nugent talks through the decision, the forecasts and the commentary. There’s also discussion about UK employment, Canadian inflation and today’s RBNZ decision. Plus, the latest on Europe, where the idea of a more cohesive approach to defence seems to be gaining traction, whilst exploratory talks between the US and Russia provided nothing to get excited about. Nobody in the room looked happy.31. US & Europe: Divided they stand
16:50||Season 9, Ep. 31Tuesday 18th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe whole European defence issue is becoming very complicated. Phil makes sense of it all with NAB’s Tapas Strickland on the day that US and Russian delegations meet in Saudi Arabia to discuss a cease fire deal, without Ukraine present. Worried about their ongoing reliance on the US, EU leaders (and the UK) met to discuss future defence spending, perhaps supported by Eurobonds, hitting existing bond prices and pushing European defence stocks higher. In other news, President Xi met with tech leaders, OPEC+ could be delaying production increases, Japan’s GDP growth is higher than Bank of Japan forecasts and the RBA is likely to cut rates today but NAB says it’s not as certain as markets suggest.30. Have markets stopped believing?
17:06||Season 9, Ep. 30Monday 17th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABYou’d have thought, perhaps, that the threat of tariffs on any country charging GST on US imports (most OECD countries) would have had a string market reaction at the end of the week, but it didn’t. Phil asks NAB’s Ray Attrill whether markets have stopped believing him and assumes all such proclamations and merely a prelude to some sort of negotiated deal. The US dollar, meanwhile, continues to weaken and is now actually lower than when the President returned to the Oval Office. The RBA is expected to cut interest rates tomorrow, but Ray says it’s not as a clear a cut as markets are suggesting.