The Morning Call – February 2018
Powell’s tailwinds blow Treasury yields higher
Wednesday 28th February 2018
There’s been a swift reaction to Jerome Powell’s hawkish sentiment during his congressional testimony this morning. He said headwinds had become tailwinds. Phil Dobbie talks to NAB’s David de Garis about the market reaction, which includes falling equities and rising bond yields. They also look at European inflation data and preview PMIs from China today.
Iron strong, Corbyn confused, Powell on the way
Tuesday 27th February 2018
The markets didn’t react positively to the UK opposition leader’s Brexit speech – infact, they hardly reacted at all. Phil Dobbie asks NAB’s Tapas Strickland in London about the latest chapter in the saga. Plus, what Mario Draghi had to say in his testimony to the EU parliament, the impact of rising iron ore prices and have Australians lost confidence all of a sudden?
Trump to build a steel wall, with aluminium edges
Monday 26th February 2018
Reports suggest President Trump favours a 24 percent tariff on steel imports, with 10 percent on aluminium. Phil Dobbie asks NAB’s Ray Attrill what impact the news could have on the markets this week, after a rally on equities at the end of last week. They also look at the Fed’s Monetary Policy Report, Jerome Powell’s testimonies to Congress this week and Warren Buffet’s tax windfall.
China re-opens, Britain slows, stocks rise and fall, minutes tick by
Friday 23rd February 2018
With China back open for business, it’s a confusing equities picture right now. Indices are falling in many parts of the world, just as the US decides to rebound. Phil Dobbie asks NAB’s David de Garis if he can explain what’s happening. They also look at the minutes from the FOMC yesterday, and the ECB overnight. Plus, slower growth for Britain and a fall in German business sentiment. And a look ahead to this morning’s retail sales from New Zealand.
Who’s buying bonds? Is Britain really losing jobs? Are Aussie wages really growing?
Thursday 22nd February 2018
The Fed minutes will be the focus of attention this morning. Phil Dobbie asks NAB’s Gavin Friend whether they could lift bond yields, particularly given low interest in this week’s big auctions from the Treasury. Gavin also explains why the UK’s jobless figures are not as bad as they seem, how Brexit talks are reaching the pointy end, and what will be the consequences of yesterday’s rising wages data in Australia.
Mad Max – Beyond the Eurozone
Wednesday 21st February 2018
Okay, the UK was never in the Eurozone, but we couldn’t resist the headline. Brexit Secretary David Davis probably wishes he hadn’t drawn a Mad Max analogy for Britain after withdrawal from the EU. Phil Dobbie talks to NAB’s Tapas Strickland about what he was trying to say. Plus, the response to US Treasury auctions, what to expect from the Fed minutes, the latest expectation on Aussie rate rises and what’s the story with oil?
Roll up, roll up! It’s the $258 billion Treasuries Sale
Tuesday 20th February 2018
The US Treasury plans to issue $151 billion in bonds today, $258 billion across the week. Phil Dobbie asks NAB’s Rodrigo Catril what this will mean for bond yields in the US and around the world. They also discuss the big correction – is it over yet? – and Japan’s trade balance. Plus, anything to come out of the RBA minutes today?
Russia spooks and a Stairway to Brexit
Monday 19th February 2018
The markets were a little spooked on Friday with Mueller’s report on Russian involvement in the 2016 election. Phil Dobbie asks NAB’s Ray Attrill whether it will spillover to this week, creating more volatility. They also discuss the significance of Barnier’s Stairway to Brexit, and the importance of Australia’s wage price index this week.
More inflation signals, but equities recovery continues
Friday 16th February 2018
Equity markets continued to climb back, even though there was further evidence of rising US inflation overnight. Phil Dobbie talks to Rodrigo Catril about the latest US data, Europe’s widening trade gap with the US, the rise and rise of the Japanese Yen, and what we can expect from RBA Governor Philip Lowe at a the House of Reps Standing Committee today.
Markets pulled each way on US CPI and retail figures
Thursday 15th February 2018
There was a sharp reaction to higher than expected CPI figures overnight but they have been tempered by weaker than expected retail figures. Phil Dobbie asks NAB’s David de Garis whether the market had paid too much attention to the retail numbers. They also look at European data, the inexplicable growth in the pound, a leap in the Rand and what we can expect from Australia’s employment data this morning.
Valentines Day Nerves Ahead of CPI; Aussie nudges higher
Wednesday 14th February 2018
The US dollar is on the slide again. As Phil Dobbie discusses with NAB’s Ray Attrill the volatility remains ahead of US CPI figures tonight. Meanwhile, inflation in the UK has remained at 3% – it was expected to fall – presenting a challenge to the Bank of England. And business conditions in Australia are excellent, but what’s the wages story? Does it give a hint of inflation prospects in our part of the world?
Markets up, budget ignored, Zuma to go
Tuesday 13th February 2018
US and European equities are back on the march upwards, with significant rises on most indices this morning. Phil Dobbie asks NAB’s Gavin Friend whether company buy backs could be part of this shift. They also discuss the significance (or otherwise) of President Trump’s budget announcement, the prospect of peace talks for Korea, and how the Rand indicates it’s exit stage left for Jacob Zuma.
Will new inflation figures give the markets another bashing?
Monday 12th February 2018
The markets are prepared for another day of volatility, but there were signs on Friday that things might be returning to normal. The question is, what does normal look like now? Phil Dobbie talks to NAB’s Ray Attrill about the lasting impact of the last week on equity prices and bond yields, and how the Australia dollar will fare. It’s a quiet couple of days data wise, but we can expect some reaction to US CPI figures this week – after all, it was the inflation story that kicked the whole thing off in the first place.
Rocky Road As Share Indices Crumble Again
Friday 9th February 2018
Stocks fell across Europe and the US overnight. Phil Dobbie talks through a night that’s also seen fluctuations in treasury yields and currencies, with NAB’s David de Garis. They also contrast the views of various central bankers – William Dudley from the US Fed is talking up four hikes for 2018, whilst the RBA’s Philip Lowe says he won’t be pushed on rates, and the Bank of England’s Mark Carney is hinting strongly at a rise in May.
The Big Bounce and the BoE’s Super Thursday
Thursday 8th February 2018
It was a strong day on European stock markets and the day started well in the US, although the early bounce has lost a little ground since. Phil Dobbie talks to NAB’s Gavin Friend in London about the direction of equities, bonds and currencies – including the one percent hit taken by the Aussie Dollar. They also look ahead to the Bank of England rate decision, minutes and inflation forecasts – all released tonight. And the attitudes expressed by a string of Fed speakers in the US.
Volatility reigns. Is the ride over?
Wednesday 7th February 2018
Roller-coasters take you on an exhilarating ride, but they tend to be over quickly. So has the excitement on equity markets run its course? Phil Dobbie puts the billion dollar question to NAB’s Rodrigo Catril. They also look at yesterday’s trade and retail figures in Australia – worse than expected, but perhaps lost in the global turmoil. Still, are there implications for growth in our part of the world?
Equities hit, Draghi speaks, the RBA and other Aussie news
Tuesday 6th February 2018
US equities continued to fall overnight, having pulled down prices in many parts of the world. Phil Dobbie asks NAB’s David de Garis if the market has over-reacted to Friday’s US wage data. They also discuss Mario Draghi’s appearance in the European parliament, today’s rate announcement from the RBA, and trade and retail sales data for Australia.
Is Inflation making a comeback?
Monday 5th February 2018
Friday’s payroll figures in the US showed a surprise increase in wages, sparking feverish activity in bond markets, currencies and equities. Phil Dobbie asks NAB’s Ray Attrill whether the response was justified, and whether this was the correction we had to have? They also look at the local implications, on the Aussie dollar, plus equities and government bonds. And what about the latest power struggle in the UK – Boris for PM? And another potential government shutdown for the US.
How low will the US dollar go? Payrolls Friday
Friday 2nd February 2018
The US dollar slipped again overnight, whilst equities bounced up again. Phil Dobbie asks NAB’s Rodrigo Catril how far the dollar could fall and are shares reaching unsustainable levels? That was the view of Alan Greenspan on Bloomberg this morning. They also look at tonight’s US Labour Market Report – the expectation is for a strong read, but what of today’s surprising fall in productivity? Plus, consumer confidence in New Zealand – just how well are the new government’s policies working out?
No move on Yellen’s swansong
Thursday 1st February 2018
The Fed has made its final rate announcement under the stewardship of Janet Yellen and, as expected, there has been no movement on interest rates. Phil Dobbie asks NAB’s Gavin Friend what we can glean from the commentary. They also discuss rising US Treasury yields, Trump’s State of the Union address, Governor Kuroda’s announcement on the continuance of QE at the Bank of Japan, the fall in the Aussie dollar, mixed data from Europe and whether positive ADP employment data has any bearing on Friday’s non-farm payrolls in the US.