NAB Morning Call

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.

Thursday 3rd December 2020The UK is the first country to approve the Pfizer BioNtech vaccine and will start jabbing people with it next week. That’s kept Brexit off the front pages in the UK, even though the pound has taken a sharp hit as talks don’t seem to have progressed much at all. NAB’s Ray Attrill talks about Australia’s GDP numbers which technically mean we are out of recession, but unemployment and annual GDP suggest otherwise. He also talks about Philip Lowe’s comments about following the world on future QE decisions, softer jobs numbers in the US and what to look out for today, including the Caixin Services PMI. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 2nd December 2020There’s a positive vibe about this morning, pushing equities higher and Treasury yields have seen a sharp rise too. NAB’s Tapas Strickland says it's down to a number of factors – stronger than expected Caixin PMI numbers from China, fast-tracking of vaccines, news that US stimulus talks are back on the table and reports that UK-EU trade negotiations have entered the tunnel. The only downside today has been a delay in reaching an agreement by OPEC – they'll try again on Thursday. Today we see the numbers for Australia’s Q3 GDP, which is expected to bounce back sharply. The RBA didn’t have much to say yesterday, avoiding any signals around whether it will extend, stop or reduce its QE program. Hosted on Acast. See acast.com/privacy for more information.

Monday 30th November 2020The pound has already recovered the losses it made on Friday, when Brexit rhetoric was ramped up on both sides of the English Channel. Over the weekend, though, reports suggest talks have been far more productive, tackling the last sticking point of fishing rights, and there’s a real possibility that a deal could be reached in the early part of this week. NAB’s Rodrigo Catril says the deal could include a new transition period, just for fish! Meanwhile, relations between Australia and China remain tense, even if it is having little influence on currencies or equities just yet. Today’s China PMI numbers will confirm how well the country is doing, compared to the rest of the world right now. But it’s been an incredibly strong month for global equities, spurred on by vaccine news, even though US infection rates continue to rise. Hosted on Acast. See acast.com/privacy for more information.

Friday 27th November 2020There are some questions over the numbers provided in phase three of the Astra Zeneca vaccine trial. NAB’s David de Garis says the concern is over the age of participations in the subset who achieved the highest level of efficiency. The makers claim a rerun of trials won’t slow progress, although some believe it could delay entry into the US. The ECB’s Philip Lane expressed concern about tightened of credit standards which could impede the European recovery. Meanwhile, lockdowns are being extended in parts of Europe. And on a quiet day in the markets, the pound is lower, with another day passing without any Brexit progress. Hosted on Acast. See acast.com/privacy for more information.

Thursday 26th November 2020It’s Thanksgiving today in the US and markets have been cautious ahead of the holidays. Vaccine hopes have been pushed aside after Wednesday’s post first-wave high for COVID fatalities in the US. There was also a string of disappointing data, including a rise in unemployment claims for the second week in a row. NAB’s Ray Attrill gives us his reaction to the FOMC meetings, hot off the press. Plus, the UK's Rishi Sunak paints a glum picture for the UK economy, but manages to avoid mentioning Brexit. A quiet data for global data, but at home private capex number, with a wide variety of opinions on what they’ll actually come out at. And what’s going on with the Kiwi dollar? Hosted on Acast. See acast.com/privacy for more information.

Wednesday 25th November 2020President Trump made an appearance before cameras today to boast about the rise in equities, with the Dow breaking 3,0000 for the first time. NAB’s Rodrigo Catril tells Phil Dobbie it’s in part down to the relief that the Biden administration has now been given access to the handover process for the White House. It’s mixed with continued optimism around vaccines, which is seeing stocks that have suffered, like airlines, starting to bounce back. Oil is also back to pre-pandemic prices. The news that Janet Yellen is likely to be Treasury Secretary has also has a positive impact, whilst in New Zealand the request from the Finance Minister for the RBNZ to consider control house prices as part of its remit has seen sharp moves in bonds and the NZ dollar. Meanwhile, COVID numbers in the US continue to cause concern, even though it seems to have slipped the concern of investors right now. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 24th November 2020Astra Zeneca announced the results of their trials, with efficacy up to 90 percent with a drug that is cheaper to produce and easier to distribute. Yet the markets were cautious in their response, although equities are on the rise and tech stocks are taking a back seat. NAB’s David de Garis talks through the response, with the US dollar also spurred on by better than expected Markit PMI numbers for the US. Donald Trump is still in the White House and trying to build a western alliance to play it tough against China, although the response has been somewhat muted. The pound has strengthened on Brexit hopes even though there’s been no specific news. And it’s the Victoria budget today, with a focus on infrastructure spending. Hosted on Acast. See acast.com/privacy for more information.

Monday 23rd November 2020NAB has revised its forecasts for growth in the Australia economy. NAB’s Tapas Strickland talks us through it, plus Josh Fryenberg’s plans to boost invest from larger corporations. Meanwhile, markets continue to respond to COVID-19 infection rates, punishing equities in the US, with growth switching to Europe. There’s been a spat between the US Treasury and the Fed with Steve Mnuchin wanting to see the Fed return unused funds from emergency lending programs. And stand by for a Brexit deal – something has to happen this week, surely. Hosted on Acast. See acast.com/privacy for more information.

Friday 20th November 2020Schools out for winter in New York as COVID cases in the US continue to rise, with the country passing a quarter of a million deaths from the virus. Phil Dobbie talks to NAB’s Gavin Friend about how the markets are more focused on the short-term economic hit than the longer-term vaccine fuelled positive outlook The short-term hit was demonstrated, however, by a sharp increase in unemployment claims in the US. The reverse was the case in Australia yesterday, but worsening relations with China add another dimension to local markets. And Brexit talks have been delayed by a senior negotiator on the EU side contracting COVID-19, but Gavin reckons we can still expect positive news next week and the pound is behaving as though that is the case. Hosted on Acast. See acast.com/privacy for more information.

Thursday 19th November 2020Markets continue to be torn between the good news and the bad news. On the positive side, Pfizer is set to apply for emergency authorisation for its COVID-19 vaccine. NAB’s David de Garis says you’d have expected the news to have created more of a risk-on mood but, on the negative side, infection rates continue to rise. The spike in South Australia, with the six day statewide lockdown, has shown Australia is not immune. Beyond the virus, there’s hope that a UK-EU trade agreement will be announced next week, and the world is preparing for a different political outlook as the Biden administration gets set to move into the White House. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 18th November 2020There was no new vaccine news overnight and the markets seemed a little disappointed by that, with equities down and a move to government bonds. But NAB’s Tapas Strickland says this respite could be short lived, with the results of the Oxford vaccine trials imminent. Meanwhile, there seems to be less of a temptation to take an overly negative view despite the rising COVID-19 cases and sluggish retail sales in the US. The pound has been helped by positive talks around Brexit, although it’s unlikely any deal will be reached this week. And central banks are suggesting that financial regulators are stopping investors dipping into their savings. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 17th November 2020Markets have been lifted higher on further vaccine news, with Moderna saying their trials have shown 94.5 percent effectiveness. NAB’s Rodrigo Catril says markets are pricing in the positive news that we could have vaccines distributed early next year, whilst ignoring the bad news of rising infection rates, particularly in the US. There’s also discussion on today’s podcasts about comments from the RBA’s Philip Lowe yesterday, with a focus on the labour market and the need to contain the strength of the Aussie dollar. Plus, the latest on Europe’s recovery plans and Japan’s trade numbers and US retail numbers due out later today. Hosted on Acast. See acast.com/privacy for more information.

Monday 16th November 2020Last week was a volatile one, but markets enthusiasm stemming from the hope of a vaccine led the charge, with some shifting of focus on equity markets. That said, infection numbers continue to rise, particularly in the US, where the President has flatly stated there will be no lockdowns so long as he’s in charge. NAB’s Ray Attrill says the push-pull effect of vaccine news versus COVID data will drive the markets again this week, with the added diversion of Brexit. There’s an EU Summit this week and Boris Johnson’s chief advisor Dominic Cummings left No. 10 on Friday, which some are reading as a sign that the UK will take a more conciliatory approach and a deal could be forthcoming. Perhaps. Hosted on Acast. See acast.com/privacy for more information.

Friday 13th November 2020This week’s earlier optimism over a possible vaccine for COVID-19 has disappeared completely, with equities falling and bond prices rising. NAB’s Gavin Friend says rising COVID numbers in the UK and Europe have provided a dose of reality, with almost 33.5k cases in the UK on Thursday, despite a national lockdown. Numbers are also rising sharply in the US with the possibility that schools will close again in New York. The pound has taken the hardest hit today. Phil Dobbie asks Gavin how much of that is to do with a lack of progress on Brexit? Hosted on Acast. See acast.com/privacy for more information.

Thursday 12th November 2020Even though the markets continue to respond positively to the hope of a vaccine, central bankers seem to be taking a more cautious tone. NAB’s David de Garis said the tone set by the ECB’s Christine Lagarde was one of concern, at their central banker’s conference. The RBNZ also continued to present a dovish outlook – despite New Zealand’s low infection rates – but the expectation of negative interest rates has diminished significantly. There’s push and pull factors at play – on one side the vaccine hopes, on the other, what’ll happen in the meantime, with the virus still raging. The UK reached the sombre milestone of 50,000 fatalities today. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 11th November 2020Those vaccine hopes continue today, even though there were warnings from Fed officials that the economy still faced ongoing impacts from COVID-19, with structural differences highlighting the need for the fiscal stimulus that now seems unlikely to happen this year. NAB’s Rodrigo Catril says there’s also some caution over the vaccine news, and a response to antitrust action against Amazon ramping up in Europe. On today’s podcast there’s also discussion on yesterday’s NAB Business Survey, which showed business confidence picking up, and today’s RBNZ meeting – will they be less dovish that many had anticipated? Hosted on Acast. See acast.com/privacy for more information.

Tuesday 10th November 2020The markets have scarcely had time to respond to the news that Joe Biden is the next President of the United States than we’re it with the (potentially bigger) news that Pfizer have successfully completed stage three of their COVID-19 vaccine trials, with an astonishing 90% success rate. NAB’s Ray Attrill talks through the market’s response, which includes rising equities in the US and Europe, higher bond yields, a bounce in oil prices. Phil Dobbie asks whether this will alter the approach taken by the Fed and other central banks, starting with the RBNZ tomorrow. Hosted on Acast. See acast.com/privacy for more information.

Monday 9th November 2020There’s still a chance that in January the Democrats will take control of the Senate. Until then, President Trump is still in charge and the US faces rising COVID cases without a fiscal stimulus. Larry Kudlow suggested that Friday’s non-farm payrolls were so strong there isn’t a need for support but NAB’s Tapas Strickland says high-frequency data suggests the job recovery is slowing. Similarly, China reported a big increase in exports, but can that last if demand for goods is subdued by the continued strength of the pandemic. It’s a quiet week this week, except for the President’s legal challenges on the election result, but markets are not likely to respond to the sideshow. Similarly, there’s no market reaction to Brexit talks, even though the clock is ticking louder now. Hosted on Acast. See acast.com/privacy for more information.