NAB Morning Call

Thursday 8th October 2020There’s been a market rebound on the hope that some sort of stimulus deal in the US is still possible before the election, but will it really happen? Phil Dobbie asks NAB’s Tapas Strickland whether the rising likelihood of a Biden victory is also an influence. The FOMC minutes haven’t shifted markets much this morning, so was there anything surprising in there? There’s also discussion in today’s podcast on last night’s Australian Federal Budget. There’s plenty of stimulus, but has the government got it right on growth forecasts? Hosted on Acast. See acast.com/privacy for more information.

Wednesday 7th October 2020There’s been a strong reaction in the equity and currency markets to Donald Trump’s sudden decision to stop talks about a fiscal stimulus, even though he tweeted about the need for it whilst in hospital over the weekend. NAB’s Rodrigo Catril wonders whether he’s serious, or is it a last minute bargaining tactic? It comes after the Fed’s Jerome Powell warned that too little fiscal support would lead America to a weak recovery. All this at a time when Biden seems to be pulling away in the polls. Meanwhile, the RBA and Australia government are more in-tune on the need for stimulus to create and retain jobs, whilst the ECB is sounding more dovish. And Brexit talks – the reports are mixed. Deadlines are getting pushed back. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 6th October 2020As the President prepares to leave for the White House there’s still hope that a deal will be reached to pass version 2 of the Heroes Act, adding more stimulus to the US economy. Phil Dobbie asks NAB’s Gavin Friend if that’s what’s driving the risk-on mood today, or is it the news that the President will be out of hospital soon? Gavin suggests the rising gap in the polls will also be driving the mood, removing the uncertainty perhaps of a drawn out election process. The President told people not to be afraid of COVID in a recent tweet, which could mould his campaign message from now on. The non-manufacturing ISM read has added to the plethora of strong(ish) data from the US. It’s a busy day for Australia today, with the RBA meeting and the Federal Budget tonight. Hosted on Acast. See acast.com/privacy for more information.

Monday 5th October 2020Friday was certainly a gamechanger. The US President went into hospital without a clear picture of his condition. Now, it seems he could be returning to the White House as soon as today. So, do the markets take back some of their risk concerns, and focus on the positives of the situation? That’s a question Phil Dobbie puts to Ray Attrill in today’s Morning Call podcast. One positive could be that Republicans are more prepared to reach a deal on a stimulus package. Friday’s non-farm payrolls in the US on Friday were largely ignored by the markets, but showed a slowing in jobs recovery. The pound strengthened on Friday on hopes that talks over Brexit will step up, but there’s still a lot of ground to be covered in a very short period of time. And locally, we’re one day away from the next RBA meeting and the budget, but markets are more likely to be eyeing Washington than hanging out for words from Josh Frydenberg. Hosted on Acast. See acast.com/privacy for more information.

Friday 2nd October 2020Equities in the US rose overnight despite a stalemate on the fiscal stimulus package. Optimists insist there is some hope that a deal will be reached but, as NAB’s David de Garis puts it, the whole thing is being held back by philosophical differences. The pound has had a choppy day today, with little progress on the Brexit talks. The EC has started legal proceedings against the UK with regard to their Internal Markets Bill, giving the UK Prime Minister a month to respond. By then you’d hope a trade deal will be reached, but there’s no guarantee the two parties will go into tunnel talks. Non-farm payrolls from the US will be the major bit of new data tonight, the weekly jobs numbers released last night showed the claw back in employment is slowing and many US companies have announced major layoffs this week. Hosted on Acast. See acast.com/privacy for more information.

Thursday 1st October 2020No sell off in equities after that yelling match that was apparently a presidential election debate. In fact, equities have been helped by some strong data from the US and continued hope on a stimulus deal, although enthusiasm for that waned somewhat later in the session. Elsewhere, the Bank of England’s Andy Haldane criticised the Chicken Licken mentality. NAB’s Gavin Friend says it’s a curious comment given the sharp rise in COVID-19 cases in the UK. The pound has gained more as the UK potentially gave some ground in the Brexit negotiations, and the Aussie dollar boosted by rising commodity prices and strong PMI numbers from China. The US manufacturing ISM and weekly jobless claims will be numbers to look out for tonight. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 30th September 2020Despite a big jump in confidence in the Conference Board numbers for the US, there’s not much optimism in the markets today. NAB’s David de Garis says, as the virus refuses to settle down, the lack of a fiscal stimulus deal – the so-called Heroes Act – will be playing on markets (hence the title of today’s podcast, a homage to the 1970’s punk band The Stranglers). There’s also the pre-debate nerves, with Trump and Biden battling it out in the next few hours. Oil has taken a hit today, again because of COVID concerns and the realisation that demand will be slow to pick up. Today, China’s PMI numbers and RBA credit numbers will be of interest to Aussie investors. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 29th September 2020US and European equities rose sharply, with rising confidence seeing a fall in the US dollar and a rise in the Aussie. The reports that the US President has paid very little in tax might provide some fodder for Joe Biden in the TV debate and NAB’s Tapas Strickland says it could influence undecided voters. Whichever way you look at it, it’s going to be a messy election. Meanwhile, the pound has gained in hopes of a Brexit deal, which has offset any concerns about further lockdowns in the UK. The gains in the Aussie dollar will be partially influenced by an expectation that the RBA won’t cut rates next week, waiting instead till November. Hosted on Acast. See acast.com/privacy for more information.

Monday 28th September 2020COVID19 cases continue to rise in Europe, with numbers in the UK and France now well above the first wave. Yet, whilst there’s very little in the way of new data to influence the markets this week, there’s plenty of non-COVID politics; the President’s nomination of Amy Comey Barrett for the Supreme Court, the first Presidential election debate mid-week, and the start of another round of Brexit talks, with hopes increasing that a deal will be struck. NAB’s Ray Attrill talks through a week which will be less about economic data and more about geopolitics – and virus numbers of course. Hosted on Acast. See acast.com/privacy for more information.

Friday 25th September 2020Equities were rising again in the US overnight on the hopes that a stimulus deal would be struck between the GOP and Democrats, but as optimism turned to reality, prices fell, the US dollar regained some of its strength and bond yields weakened. NAB’s Gavin Friend says it demonstrates how markets are clinging to any good news in amongst what’s a pretty bleak picture right now. The pound gained a little ground as the Chancellor Rishi Sunak unveiled the follow-up to the furlough scheme, but its clear many workers will not be covered and unemployment will rise. Have we reached the end of the road for sizeable bailouts from governments? Hosted on Acast. See acast.com/privacy for more information.