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NAB Morning Call
Weekend Edition: The Year That Was, and the Year That Will Be
Friday 20th December 2024
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It’s been a year of surprises. US exceptionalism has long been talked about, but this year it particularly exceptional, particularly in relation to the rest of the world. Growth has picked up, the dollar has strengthened, and the share market has repeatedly hit new highs, driven by Trump, tech and the AI revolution. So, what does 2025 have in store?
The entire NAB Morning Call team - Sally, Skye, Ray, Rodrigo, Gavin, Tapas, Taylor and Ken - join Phil to crystal ball gaze on 2025. Will Trump push ahead with his tariff threat? What will that mean for international trade? Will China manage to find the ways and means to stimulate its domestic economy and, it not, what’s the impact on the CNY and the Aussie dollar? Could the Aussie fall below 60 US cents next year?
They also discuss the path of central banks next year. Speculation has been rife this year about who will cut when and by how far. There’s no clear agreement on the neutral rate that each bank is striving for. Does that mean we’ll see smaller movement in bond market.
A myriad of questions tackled in this special 40-minute episode, the final Morning Call of 2024. We’re back on January 13th, by the way. Usual time.
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31. US & Europe: Divided they stand
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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.29. Weekend Edition: The Irvine Fix: Simplicity, Productivity and Confidence
17:43||Season 9, Ep. 29Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.This week Phil talks with NAB's CEO, Andrew Irvine, discussing the uncertainty of international trade and the slow road to lower inflation. What impact does he think a global trade war (if it gets to that) could have on Australia? And what can we expect after the assumed RBA rate cut next week? The NAB chief has spent some time in Europe and talks through how our economic fundamentals stack up against the UK and Europe. Whilst Australia has many natural advantages, he points to the lack of productivity growth as the biggest issue we face. Confidence is also key he says, because that drives investment decisions.There’s also discussion about scam regulation. Phil points to the UK where banks are obliged (to an extent) to refund scam victims. Do we need the same approach or are there more significant ways of reducing the problem, particularly as AI threatens to make the issue worse.Listen in for Andrew Irvine’s take on the economy and the prospects for the year ahead.28. Trump’s Big Day includes VAT
18:41||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?
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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 2025Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.Last 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.