The Morning Call – December 2017
The Prospects for 2018 – a NAB Markets review
Friday 22nd December 2018
In this final edition for 2017 the full Morning Call team weigh in with their views on how the Markets will move in 2018. Could rising inflation be the big surprise? What has been subduing wage growth? Will the GOP tax cuts have the intended effects and will they add strength to the US dollar? Could we see the pound gain some ground as agreement is reached on a Brexit transitional period? Or will it all fall in a heap? And where will the Aussie dollar go in 2018 – will it see any benefits wash off from the growth in emerging markets in Asia? If not, why not?
Phil Dobbie is joined by NAB’s Rodrigo Catril, Ray Attrill, David de Garis, Tapas Strickland and Gavin Friend, in this special edition of The Morning Call. We look forward to kicking off the next series on January 22nd.
Bond yields boosted by tax bill and tightening talk
Thursday 21st December 2017
Bond yields have continued their journey higher overnight as the US tax bill passes the senate. The equity markets, meanwhile, appear to have knocked off early for Christmas! Phil Dobbie asks Ray Attrill whether it’s the tax bill alone that is impacting bond markets, or is QE wind-down talk playing a part too? Plus, the Catalonia election, Barnier puts a firm end date on Brexit and the expectation for the NZ GDP figures this morning.
Beautiful Jobs From the Biggest Tax Cuts; ECB’s life after QE
Wednesday 20th December 2017
President Trump’s twitter stream has been in overdrive over the last couple of days with the vote on his tax bill passed by the House. Phil Dobbie talks to NAB’s David de Garis about the market reaction so far and what to expect now. They also discuss comments from the ECB which have seen global bond yields move higher. Plus the German IFO survey, Barnier’s latest on Brexit, New Zealand trade and yesterday’s minutes from the RBA.
A voting frenzy in the last gasp before Christmas
Tuesday 19th December 2017
Whilst office workers spill onto the streets for Christmas lunches and last minute shopping, folks in some parts of the world are engaging with democracy to vote on critical issues. Like, the House and Senate in the US, who will vote on the tax bill later in the week and, hopefully, approve a temporary spending bill so government workers get paid over the Christmas break. At the ANC party conference in South Africa delegates voted a new leader, to replace Jacob Zuma. Whilst the people of Catalonia vote for a new government on Thursday, with the question of independence firmly on the agenda. Phil Dobbie talks through it all with NAB’s Rodrigo Catril.
All Trump wanted for Christmas
Monday 18th December 2017
It seems there’s a strong chance that President Trump will have his Christmas wish come true – provided the reconciled bill is passed by Congress. Phil Dobbie talks to NAB’s Ray Attrill about the likely market reaction this morning. They also discuss Australia’s mid-year economic and fiscal update and the latest shenanigans on Brexit – including a survey at the weekend showing most Brits don’t want it!
Dovish Fed and ECB; tax is no done deal
Friday 15th December 2017
The Euro took a hit overnight as Mario Draghi suggested an “ample degree of stimulus was needed”, even as the central bank upgraded its growth forecasts. As Phil Dobbie discusses with NAB’s Rodrigo Catril, it gets back to the elusiveness of inflation. The Fed was similarly dovish, forecasting just 3 rate rises next year. We also look at the latest on the US tax deal, now expected to come together early next week, but Janet Yellen isn’t expecting it to be the miracle that President Trump is promising.
Fed hikes, US inflation down, UK wages up, seat lost, tax deal done, Brexit revolt
Thursday 14th December 2017
The Federal Reserve has raised interest rates as expected, but will the slide in core inflation slow down the speed of future hikes? Phil Dobbie asks NAB’s David de Garis whether two hikes next year is now more likely than three. It sounds like a deal has been done on the Tax Bill, just in the nick of time as a surprise defeat in Alabama reduces Trump’s senate majority. Whilst Theresa May is set to face a revolt on her Brexit bill.
UK Inflation Up; Westfield Sold; FOMC tomorrow
Wednesday 13th December 2017
Things are hotting up in the final furlong before Christmas. The Bank of England has been confronted with rising inflation, whilst the UK might face a longer wait before it can start trade talks with the EU. The Aussie dollar has risen on the news that Westfield is about to be sold to a European company. In the US the proposed final tax bill is now expected on Friday, with an FOMC meeting before that. And the people of Alabama will decide today whether or not the Republicans narrow their slim majority Senate.
Shock and Orr (and Oil)
Tuesday 12th December 2017
The markets reacted briefly to the shocking news of a terror attack in Times Square, but casualties were minimal and the reaction was short-lived. So, what has been influencing the markets? As NAB’s David de Garis discusses with Phil Dobbie, it’s a mix of central bank speculation, a reality-check on the Brexit deal and a rise in oil prices. Plus a new Governor for the RBNZ – Adrian Orr was clearly a popular choice with investors. They also discuss the NAB Business Survey out today.
EU deal fails to excite; low wage growth for US; listening for the dotpoints
Monday 11th December 2017
Despite the positive deal struck with the EU, the pound fell on Friday. Phil Dobbie talks to NAB’s Rodrigo Catril about this, and the non-farm payrolls data from the US, that posted positive news on job numbers but disappointed on wage growth, again. So, where will the markets head this week, on the back of Friday’s news, with an FOMC meeting that will announce a rate hike this week and give an idea of how many to expect next year. There’s also the possibility that the Trump administration manage to pull together their tax bill. And, where will the Aussie dollar head, now its down around 75 US cents?
Watering down the tax bill; Aussie takes a hit; Waiting on the border
Friday 8th December 2017
There’s progress in the US on the reconciliation of the two tax bills but, as Phil Dobbie discusses with NAB’s Ray Attrill, the extent of the corporate tax cut could be the major casualty. Meanwhile, the Aussie dollar took a hit with the smaller than expected trade surplus yesterday, and with China’s trade figures due today there’s a chance for another battering. Meanwhile Theresa May has till Sunday now to come up with an answer to the Irish border question. Good luck with that.
Aussie GDP target missed, trade figures today; Loonie hit by caution
Thursday 7th December 2017
The Aussie dollar headed south since yesterday’s GDP figures. Phil Dobbie asks NAB’s David de Garis if the response was consistent with such a small shortfall of the expected number and whether it will have any impact on the schedule of rate rises next year. They also look ahead to today’s trade figures, why the Canadian dollar fell despite no change in interest rates from the Bank of Canada, ADP employment figures from the US and the current state of Brexit.
Locked in talks on both sides of the pond; US deficit grows; Aussie up and down
Wednesday 6th December 2017
On both sides of the Atlantic frantic negotiation is taking place. The Brits are trying to resolve the Brexit border standoff, whilst in the US they’re trying to combine two tax bills into one. As Phil Dobbie discusses with NAB’s Rodrigo Catril, it has meant a relatively quiet overnight session, despite a reasonably rich flurry of data. The Aussie dollar, meanwhile, has climbed, thanks to yesterday’s retail numbers, but fell on a slump in metal. And there’s expectations of a strong GDP figure today.
No deal on Irish border, no rate rise for RBA, no delivery charge from Amazon
Tuesday 5th December 2017
The UK Prime Minister is having an awkward time of it. As Phil Dobbie discusses with NAB’s David de Garis, she thought she had an answer to the Irish border question, but her coalition partners are having none of it. Also, the markets settle down on the expectation of the US tax bill, possibly passed before Christmas, and we await the latest retail figures from Australia, ironically on the day that Amazon is said to be launching. All that, plus the RBA cash rate announcement, and more signs on the direction of the US economy.
After a volatile Friday, six things to watch this morning
Monday 4th December 2017
A lot happened on Friday and the repercussions of much of it will spill over into the markets this week. Phil Dobbie goes through them with NAB’s Ray Attrill, including the FBI investigation, the tax bill, Brexit d-day, OPEC and Canada. Plus, the fate of the Aussie and NZ dollars this week, after a surge on Friday.
UK borders on hope; inflation won’t budge; tax voterama
Friday 1st December 2017
Whilst inflation data from the US came in as expected, European figures disappointed a little. As Phil Dobbie discusses with NAB’s Rodrigo Catril, is this another case of rising employment without an inflationary lift? At the risk of being tedious they also touch briefly on the US tax bill, which is making headway, and the Brexit talks, where the Irish border question might have an answer. Or not. And there’s lots of manufacturing data out today to get your teeth into – they run through the main points.