NAB Morning Call

Thursday 27th August 2020There’s continued optimism in the markets, with equities reaching new highs again, helped on by better than expected durable goods orders in the US, and despite rising US-China tensions and the potential impact of Hurricane Laura. NAB’s Rodrigo Catril also discusses the continued interest in Australian bonds and the impact on GDP of yesterday’s construction numbers and today’s private capex read. Plus, what will be said at the virtual Jackson Hole, which kicks off today. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 26th August 2020The US dollar is down again this morning, with equities up and touching new highs again. More significantly, we’ve seen sizeable increase in government bond yields in the US and Europe. NASB’s David de Garis talks through the factors at play, including hope that the US China trade relationship will continue as planned in the phase one deal, and concerns that a bigger supply of bonds in the pipeline could be inflationary. Meanwhile the IFO numbers from Germany gave ground for some optimism, despite rising COVID-19 cases in the country. Yet consumer confidence in the US has fallen, even as home sales increase 13%, to levels not seen since the subprime crisis. Good news or bad? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 25th August 2020US equities reached new highs again, with big gains also in Europe. NAB’s Rodrigo Catril says investors are back to reacting to the vaccine hopes, with President Trump announcing he will fast track roll-outs in the US – faster than a ‘traditional’ administration. Meanwhile, NZ’s retail numbers yesterday fell significantly during Q2 as expected – so will they pay the price for a protracted lockdown? And will German IFO numbers today confirm that the European economy is recovering at a slower rate than the US? Plus, Australia’s payroll data today will show the early impacts of the Victorian lockdown. Hosted on Acast. See acast.com/privacy for more information.

Monday 24th August 2020Europe’s PMI’s disappointed markets on Friday, whereas the US numbers were better than expected, helping to lift equities to new highs (again). The UK provided mixed news, with string PMIs offset by a week of Brexit negotiations that led nowhere. Donald Trump is pushing out all the stops on a virus and cure for COVID-19, with announcements expected today on one, if not both. NAB’s Ray Attrill talks through all of this, and reports that the take-out from the National Cabinet Meeting on Friday was that States and Territories should do more to fund Australia’s recovery. In the week ahead, the meeting of central bankers at Jackson Hole should provide a steady stream of news and views. Hosted on Acast. See acast.com/privacy for more information.

Friday 21st August 2020US equities continue to rise, even though the jobless claims numbers rose last week. Phil Dobbie asks NAB’s Gavin Friend, at what point will they appear to be overvalued? There’s also discussion on bond movements, the continued fall in the Kiwi dollar, even against a weaker US dollar today, and the rise in the pound. There’s lots of PMIs released today – services and manufacturing for the UK, Germany, the Eurozone and the US – what will they tell us about the shape of the global recovery? Hosted on Acast. See acast.com/privacy for more information.

Thursday 20th August 2020There’s no doubt about it, there was disappointment from investors after the minutes of the recent FOMC meeting were released. There was hope that there would be some indication of how the committee would be arriving at a forward guidance for Fed strategy, but nothing. As NAB’s David de Garis says, Jerome Powell had suggested that their strategic review – that was interrupted by the COVID-19 outbreak - was well advanced and details would be released soon. Clearly not this soon, and equities fell back a little on the lack of new news. There’s a clearer picture on the direction of the RBNZ, with an expectation that interest rates will be in negative territory next year. There’s discussion of that on today’s podcast, plus the China-Australia fracas and US unemployment and stimulus (or lack of). Hosted on Acast. See acast.com/privacy for more information.

Wednesday 19th August 2020US stocks continue to rise to record highs, helped today by strong housing starts and building permits. Phil Dobbie asks NAB’s Tapas Strickland whether there’s too much optimism about the rate of recovery and that’s showing in overvalued assets, including stocks and gold. Maybe the FOMC minutes will bring us down to earth tomorrow morning, although the news that Nancy Pelosi has indicated she’ll agree to go halfway on a fiscal stimulus deal might add to market enthusiasm. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 18th August 2020The US dollar continues to fall, pushing the Aussie dollar higher this morning. The dovish tone set by the RBNZ – plus a delayed election – means the NZ dollar hasn’t seen the same level of growth. In fact, NAB’s Ray Attrill points out in today’s Morning Call, the Aussie-NZ dollar cross is at a two year high. That’s not all, US equities are hitting new levels too, even though the idea of any sort of fiscal deal seems to have fallen off the table and growth slowed markedly in the latest NY Empire Manufacturing Index. Hosted on Acast. See acast.com/privacy for more information.

Monday 17th August 2020Lockdowns have been extended in Victoria and Auckland, even as COVID-19 cases ease. But, NAB’s Rodrigo Catril, says hotspots around the world are becoming a bigger concern, hence the continued uncertainty in markets – although equities continue to perform close to record highs. With so much focus on the virus it’s not surprising that US China trade talks have been called off for the foreseeable future, with little market impact on the news. More interesting, perhaps, will be the Democrat Convention that kicks off today. What impact will their policies have? Can anything stop the slide in the US dollar right now? Hosted on Acast. See acast.com/privacy for more information.

Friday 14th August 2020Jobs data is confusing right now. How much is it influenced by government stimulus activity? Well, not much in the US right now because an agreement still hasn’t been reached, but weekly new claims are below a million for the first time since March. In Australia unemployment has risen to 7.5%, before the Melbourne lockdown. NAB’s Gavin Friend talks through the data, and the market reaction, with equities still high and the bond sell-off continuing even as the US Treasury auctions off a heap more of them. And will Auckland stay in lockdown? Also today, a slew of performance data from China and US retail sales. Hosted on Acast. See acast.com/privacy for more information.