NAB Morning Call

Thursday 17th December 2020The US dollar slid overnight as US retail sales figures for November were released. The numbers “were grim” says NAB’s Gavin Friend on today’s Morning Call podcast. Sentiment turned more positive as the session progressed, with rising hopes that a fiscal stimulus deal is imminent. There’s also hope that a UK-EU trade arrangement is getting close, with Ursula von der Leyen saying there is a path to a deal. The FOMC met and announced no changes to interest rates or bond buying. Their forecasts see this year a little less bleak for GDP, and a big stronger than previously forecast for 2022. The Bank of England is also expected to sit on its hands tonight too. The US weekly job numbers are also worth watching – new jobless claims have been rising recently. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 16th December 2020Equities have climbed higher in the US and in Europe on the hopes that two deals will be struck this week. NAB’s Rodrigo Catril talks about the market response to a tweet from the BBC’s Nicholas Watt, suggesting there was a buzz around Brexit talks and a resolution could be close. There’s also renewed hope that the text for a fiscal stimulus deal will be agreed in the US. We might hear progress on both of those in the next few hours … or maybe not! Aside from all that, tomorrow morning’s question will be, what next from the FOMC? There’s some discussion on that in today’s podcast. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 15th December 2020The markets lost some of their mojo today. They kicked off well as the US starts its vaccination program, but the UK health secretary upset the apple cart by announcing that the rise in infections in and around London has been attributed to a new, faster-spreading variation of the virus. As NAB’s Ray Attrill point out, there is no suggestion that vaccines won’t be responsive to the new strain, but it could mean we see more lockdowns and restrictions – as evidenced by Germany, London and, potentially, New York. There’s hope a fiscal stimulus deal will be reached in the US this week, with the wording for a potential bill to be released in the next few hours. China’s activity numbers will be the main data point today. Oh, and Brexit talks continue. Hosted on Acast. See acast.com/privacy for more information.

Monday 14th December 2020The inoculation program in the US has ambitious targets. NAB’s Tapas Strickland says the aim is to have given the jab to 75% of the population by June. Even so, markets were a little subdued on Friday, as infection numbers continued to rise in the US and across Europe. Germany has announced its most pronounced lockdown so far, starting Wednesday. Meanwhile, Brexit hopes linger on, with Sunday’s deadline pushed back and negotiations continuing. That’s helped cable this morning, even though Boris Johnson has reiterated no-deal remains the most likely outcome. There’s also discussion on today’s podcast about the US stimulus, the FOMC meeting this week, Australia’s MYEFO and the rising price of iron ore. Hosted on Acast. See acast.com/privacy for more information.

Friday 11th December 2020Even though a hard deadline has been set for Sunday for the UK-EU trade deal, there’s no guarantee it will all end there. NAB’s Gavin Friend says a no-deal could weaken the pound and soften the Aussie dollars chances of maintaining its position over 75 US cents. The ECB has announced more bond buying, whilst the EU has managed to broker a deal to pass its budget, including the Recovery Fund, using the age-old EU technique of kicking the can down the road. The US is also obfuscating on the fiscal stimulus package as virus numbers continue to rise. Hosted on Acast. See acast.com/privacy for more information.

Thursday 10th December 2020As we recorded this morning’s podcast Ursula von der Leyen and Boris Johnson were meeting over dinner to discuss the progress of the UK-EU trade deal. NAB’s Rodrigo Catril predicts there will be no definitive outcome tonight, but it remains unlikely that the UK will accept what the Europeans are putting on the table. The EU will also have difficulties tomorrow as it tries to pass its budget and the Recovery Fund. More significant for us is the outcome of the ECB meeting. Rodrigo says any indication for how long the central bank continues its bond buying program will have repercussions for the RBA. US equities saw sharp falls today as infection rates rise and the passage of a stimulus deal this year seems to be slipping away. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 9th December 2020The UK has started injecting people with the COVID vaccine. If only they could inject compromise in the UK and EU negotiators who remain a long way from reaching a deal. The chances are slim according to Michel Barnier, as Boris Johnston travels to meet Ursula von der Leyen Wednesday night (Thursday morning AEDST). No deal, plus the potential blocking of the EU budget by Poland and Hungary could make for a very disappointing EU summit at the end of the week. Meanwhile,. There’s no progress on a fiscal stimulus package in the US, but as NAB’s Tapas Strickland points out, even if there is a smaller than anticipated deal, it’ll be the bridge to a larger deal after Joe Biden takes office. On today’s podcast there’s also discussion on yesterday’s NAB business survey and today’s China GDP ands PPI figures. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 8th December 2020The UK-EU trade deal really is going right down to the wire – and the wire itself keeps getting pushed back. On today’s Morning Call NAB’s Rodrigo Catril says the decision to hold a face to face meeting between Boris Johnson and Ursula von der Leyen means the decision will be reached in coming days, not in the next few hours. We might see a version of the $908b fiscal stimulus package in the US in a short while, though, although even here differences remain. Locally, yesterday’s downgrading of NSW and Victoria’s credit rating will push up borrowing costs, but the states will emerge from COVID-19 better placed than most parts of the world. Today’s NAB Business Survey will show how much confidence there is in the economy right now. Hosted on Acast. See acast.com/privacy for more information.

Monday 7th December 2020US equities reached new highs again on Friday even though the jobs numbers were lower than anticipated. NAB’s Ray Attrill says the logic is that the disappointing numbers heighten the prospect of an agreement being reached on a fiscal stimulus deal. But its not there yet. It’s the same with a UK-EU trade deal. After cancelling talks on Friday they were back at it on Sunday, but Ray reckons the chance of a deal being struck is now 60 percent at best. Expect a lot of European market action late ri the week, with the EU summit, plus an ECB meeting where they are likely to up their bond-buying program. Today China’s trade numbers are the most significant data releases. Hosted on Acast. See acast.com/privacy for more information.

Friday 4th December 2020OPEC+ has struck a deal to slowly increase oil production from next month, rather than letting the production cuts fall off a cliff. NAB’s Tapas Strickland says they will also monitor progress and make adjustments accordingly. That’s helped the oil price this morning, but the two other deals on the table remain in limbo. Talks over the post Brexit EU-UK trade deal remain in gridlock. The pound has remained resiliently strong, although it’s lost a little ground as doubt creeps in over last minute talks. The US fiscal stimulus deal seems to be edging slowly forward, although the size of it might be reduced in the rush for a compromise. Meanwhile equity markets have hit new highs as investors see through the rise in US infections, hospitalisations and fatalities, and ignore weaker ISM numbers. Perhaps tonight’s non-farm payrolls are a less important too. It’s less about the “now” and more about the “what next”. Hosted on Acast. See acast.com/privacy for more information.