NAB Morning Call

Thursday 6th March 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABGerman bund prices have seen the biggest single day fall since the collapse of the Berlin Wall, pushing 10 year yields up30bp.  It’s a similar story all over Europe, whilst movement in the US has been relatively tame. NAB’s Taylor Nugent says it is all on the back of extra spending on defence and infrastructure in German, outside the limits of their discal brake. It’s all happening ahead of an expected cut by the ECB later on. Market moves were less pronounced all round in the US – equities have rebounded, helped later in the session as rumours of some backtracking on the 25% tariffs on Canada and Mexico turned to reality. There’s also discussion on Australia’s GDP yesterday and yesterday’s US Services ISM. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 5th March 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt has been an alarming 24 hours. The US has applied tariffs on Mexico and Canada, added to those already applied to China, and pulled funding for Ukraine’s war effort. Share markets have responded the world over, but not as much in the US as you might expect. NAB’s Ray Attrill says the response has been stronger in Europe, presumably on the realisation that Trump’s word should now be taken literally. The impact of a trade war -with China, Canada and Mexico all likely to retaliate, is obvious. Prices will rise and demand will fall. Markets have taken the inevitable economic slowdown as a reason for the Fed to cut more and sooner - but Ray thinks it’ll be hard to cut in such an inflationary environment. Meanwhile, the US President is forcing Europe to come together, with Germany announcing new defence spending and Europe allowing members to go beyond their fiscal limits for military spe

Tuesday 4th March 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABUkraine is behind a world of difference between US and European markets today. European leaders are resigned to the need to spend more to defend Ukraine and Eastern Europe, pushing bond yields higher and equities also rising sharply, led by European defence stocks. In the US stocks are sharply down, led by the tech sector, with bond yields also falling. The ISM manufacturing index fell much more than expected, with concerns about tariff uncertainty, but rising prices also showing in the data. NAB’s Skye Masters wonders whether markets have fully responded to the price data, which could be a warning sign for further inflation against a slowing economy. Today, Australia’s focus will be on retail sales, and the extent to which we could be impacted by a new agricultural tariff just announced by President Trump. Hosted on Acast. See acast.com/privacy for more information.

Monday 3rd March 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere were two bits of news to drive markets on Friday, First, that press conference that left us wondering whether a peace deal in Ukraine could ever happen, But the gathering of European leaders on Sunday suggests peace could be brokered, at least between Zelensky and Trump. So. the dream has been kept alive. The other news was the signs of softness in the US economy, evidenced by lower spending, a massive increase the trade deficit and a complete turnaround in the Atlanta Fed’s GDPNow forecast. But, as NAB’S Tapas Strickland explains, a lot of this could be driven by pre-tariff behaviour, particularly for the import of machinery earlier than usual. There are concerns, though, that the economy might be slowing more than expected, which has nudged rate cut expectations slightly higher. Supposedly tariffs on Mexico and Canada kick off today, but we look at one way it might be av

Friday 28th February 2025Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.The consequences of President Trump’s policies are being felt far and wide. The US now has a transactional based approach, even with its allies on areas such as defence which were considered shared values. So, what are the repercussions for Australia? Phil talks to Dr John Kunkel, senor economics adviser at the United States Studies Centre at the University of Sydney.   He suggests that, whilst some of the approaches are questionable, Australia should continue to  engage and, more than most, is well placed to take advantage of US growth. And if Australia has to spend more, for example, on defence, it is simply a reflection on how ill-prepared we have been in the past. Hosted on Acast. See acast.com/privacy for more information.

Friday 28th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABPresident Trump has made some more sharp moves on tariffs. The date for Mexico and Canada is now back to the middle of next week, and a further 10 percent is to be imposed on China at the same time. Phil asks NAB’s Gavin Friend about the market reaction and how much of this will actually come to fruition. UK Prime Minister Keir Starmer has been to the White House, but it seems Ukraine was off the agenda ahead of a ‘big deal’ supposedly being signed with Zelenskyy tomorrow. There’s also discussion on US PCE numbers and Australian capex. All very interesting, but clearly the focus is on which tariffs happen where and when (and by how much). Hosted on Acast. See acast.com/privacy for more information.

Thursday 27th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABPresident Trump has his first cabinet meeting and announced delays on the introduction of tariffs for Mexico and Canada (now April 2nd) and revealed how much Europe will be paying (25%) although he was a bit nonspecific on some of the detail. Nab’S Ray Attrill says the US Houe of Reps has also passed the budget, which includes big spending cuts, but tax cuts see the deficit expanding. It did impact bond yields a little, but there’s not been much market reaction to the latest tariff talk. Locally, CPI came in a little weaker than expected, helped by a continued fall in housing costs which could help bring down the next quarterly CPI result and keep the RVBA on track for a May cut Hosted on Acast. See acast.com/privacy for more information.

Wednesday 26th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThis morning the Aussie dollar is down whilst safe haven currencies have risen, as markets start to assess the risk of US tariffs. A lot of f the moves in the last 24 hours relate to Trump’s comments that Canada and Mexico are due to see their 25% import from 3rd March. Steel tariffs are then scheduled to follow on the 22nd, then broader reciprocal tariffs from April. NAB’s Tapas Strickland says Alcoa’s CEO has warned that 100kUS industry jobs could be at risk from tariffs on steel and aluminium. So, again, the question remains, is it bravado, given China’s 10% is the only tariff imposed so far?Australia’s monthly CPI is out today, although it has a heavy goods bias, so the read won’t be particularly accurate. This time tomorrow (after the US close) NVIDIA reports their earnings results. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 25th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThere’s a bit of buying the dip, says Sally Auld, NAB’s Chief Economist in waiting, on today’s podcast. The S&P tested 6,000 before rising sharply back and finishing well up on the day. Markets seem to be largely ignoring a spate of softer data, to which we can add the latest Dallas Fed Manufacturing Survey, which showed a sharp rise in business uncertainty.Germany’s Chancellor in waiting, Fredriech Merz has indicated he wants to move quickly to increase Germany’s defence spending, ahead of the new government, as Europe continues to scramble to forge its own path in the future for Ukraine, and the region’s defence strategy.New Zealand provides the best news of the week so far. Retail sales are well up, signalling that the economy could be on the road to recovery. Whilst there’s corporate earnings this week, and a sprinkling of data today, the focus will b

Monday 24th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABFriedrich Merz is likely to be the new Chancellor in Germany, but the exit polls show his CDU/CSU alliance will need to negotiate with other parties to form government and stave off the influence of the far right AfD. NAB’s Rodrigo says that could take some time. Meanwhile, a string of less optimistic data releases for the US. Friday’s Services PMI was a big downside surprise, falling into contractionary territory. The Michigan consumer sentiment survey also recorded a big fall, whilst there was a uptick in inflation expectations. And there’s a move down in US shares. Rodrigo wonders whether this could all encourage Present Trump to move faster on tariffs.  Hosted on Acast. See acast.com/privacy for more information.

Friday 21st February 2025Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.Germans will head to the polls on Friday. It seems highly likely that the centre-right CDU/CSU will gather the most votes, but over the last few months the right win populist AfD have been closing the gap. Dr Simon Toubeau, Associate Professor of Politics and International Relations at Nottingham University says it’ll be the CDU picking coalition partners in the centre and on the left, with the AfD left out in the cold. But how long will it take to arrive at a new workable government at a time when Europe is in discussions about increasing defence spending to protect Ukraine? How can Germany spend more on defence without undoing it’s self-inflicted debt-break? And where will the government stand on the idea of Eurobonds?   Hosted on Acast. See acast.com/privacy for more information.

Friday 20th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABIt’s not all good news from the US. Although Walmart reported strong profit growth yesterday the outlook is less certain, and there are indicators that their customer base is a section of US society that is suffering. The dollar is weaker today and shares, generally are lower. Nonetheless, NAB’s Rodrigo Catril says support for President Trump remains strong and markets did respond to a comment that a new deal with China was “possible”.Locally, there were no surprises in the latest Australian employment data yesterday. Unemployment did tick higher, but job numbers also increased, some of which can be explained by seasonality factors.  He senses Michelle Bullock’s appearance at the House of Representatives Standing Committee on Economics could be a little politically charged, as the next election nears. And politics dominates the agenda in Europe, with Germany’s federal election on

Thursday 20th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABMarkets reacted strongly to comments from the ECB’s Isabel Schnabel who questioned whether they have already gone as far as they need to. She wonders whether the policy rate is restrictive anymore. NAB’s Skye Masters talks about the market reaction to that, and other central bank news over the last 24 hours. The FOMC minutes suggest slower moves by the Fed, rhe RBNZ seem set to reduce the size of cuts from hereon in, and UK inflation ticked higher than expected, which won’t see the BoE moving any faster. Today the RBA (and markets) will be focused on Australia’s unemployment rate. Skye said expectations are within a very tight range,from4 to 4.1%, so anything outside that could prompt a reaction. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 19th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe RBA cut rates yesterday, but is the first one in this cycle also the last one for a little while? Governor Michele Bullock said successive cuts wasn’t the lay-down misère that markets had been expecting. NAB’s Taylor Nugent talks through the decision, the forecasts and the commentary. There’s also discussion about UK employment, Canadian inflation and today’s RBNZ decision. Plus, the latest on Europe, where the idea of a more cohesive approach to defence seems to be gaining traction, whilst exploratory talks between the US and Russia provided nothing to get excited about. Nobody in the room looked happy. Hosted on Acast. See acast.com/privacy for more information.

Tuesday 18th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe whole European defence issue is becoming very complicated. Phil makes sense of it all with NAB’s Tapas Strickland on the day that US and Russian delegations meet in Saudi Arabia to discuss a cease fire deal, without Ukraine present. Worried about their ongoing reliance on the US, EU leaders (and the UK) met to discuss future defence spending, perhaps supported by Eurobonds, hitting existing bond prices and pushing European defence stocks higher. In other news, President Xi met with tech leaders, OPEC+ could be delaying production increases, Japan’s GDP growth is higher than Bank of Japan forecasts and the RBA is likely to cut rates today but NAB says it’s not as certain as markets suggest. Hosted on Acast. See acast.com/privacy for more information.

Monday 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. Hosted on Acast. See acast.com/privacy for more information.

Please 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 A

Friday 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? Hosted on Acast. See acast.com/privacy for more information.

Thursday 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. Hosted on Acast. See acast.com/privacy for more information.

Wednesday 12th February 2025NAB Markets Research Disclaimer Financial Services Guide | Information on our services - NABThe Trump administration is pushing ahead with 25% tariffs on all steel and aluminium. Australia still hopes it will be exempt, but there are no guarantees and, in any case, NAB’s Taylor Nugent argues there will be second-order impacts as the tariffs hit China. The EU meanwhile has promised swift retaliation, with the various trade ministers meeting today to map out their approach. Curiously, European equities are doing somewhat better than the US. The US dollar has also weakened, despite the President’s promise that the tariffs will make America rich again. The NAB Business Survey showed a slight rise in confidence, as business conditions softened. The latest small business survey in the US also back tracked a little. Today the main focus, apart from tariff news, is the latest setoff US CPI numbers. Hosted on Acast. See acast.com/privacy for more information.