The Morning Call – March 2018
Is Goldilocks About to Take a Hit?
Friday 16th March 2018
The markets were relatively calm today, with light trading on equity markets. Phil Dobbie asks NAB’s Gavin Friend if we are in a Goldilocks environment right now, with just the right amount of growth and not too much inflation. Maybe, but not for long is the warning, as President Trump’s new economic advisor ratchets up the rhetoric against China. It might be a quiet end to the week, but Goldilocks could be in trouble.
US targets China, UK targets Russia
Thursday 15th March 2018
It seems highly likely that President Trump will be targeting China with a tariff package that could impact more than 100 products and impose restrictions on Chinese investment. Phil Dobbie talks to NAB’s Tapas Strickland about the market reaction to this, and to Theresa May’s announcement that 23 Russian diplomats will be sent packing in response to the Salisbury nerve agent attack. They also look at the weak retail sales results in the US and China, consumer confidence in Australia and today’s GDP figures for New Zealand.
Tillerson out & Broadcom blocked as Trump takes control
Wednesday 14th March 2018
Rex Tillerson was fired by a tweet this morning. Phil Dobbie talks to NAB’s Rodrigo Cattril about the market impact of a President following a “my way or the highway” agenda. We saw another example of his America First approach with his decision to block the acquisition of Qualcomm. Meanwhile, CPI figures overnight indicated inflation is not running away, whilst Canada’s central bank hints that there’s more slack in the labour market for prices are expected to rise. And the Spring Statement for the UK shows growth is going to be slow for some time yet.
Will CPI rise, will Abe go?
Tuesday 13th March 2018
The markets are waiting for today’s CPI figures from the US. Phil Dobbie asks NAB’s David de Garis whether they will influence speculation on the path of rate rises this year. They also discuss the latest on Trump’s tariffs, today’s NAB Business Survey, Hammond’s Spring Statement in the UK and the scandal brewing in Japan which is posing a threat to the Abe government.
Steel stories, payrolls surprise and a meeting of the supreme leaders
Monday 12th March 2018
It looks like Australia will be exempt from US steel tariffs. Phil Dobbie asks NAB’s Ray Attrill about the impact on the Aussie dollar and whether it would have any material impact on our economy. They also look at the surprising impact of Friday’s non-farm payrolls data in the US, which showed a jump in employment but a fall in wage growth. And what of the Trump Kin Jong Un meeting, if it ever happens?
Will Australia make it to Trump’s exclusion list? ECB unanimously says very little
Friday 9th March 2018
As we record this morning’s podcast President Trump is about to meet at the White House to discuss trade tariffs. As Phil Dobbie discusses with NAB’s Ray Attrill, we know Canada and Mexico have been excluded from the new measures, but there’s a chance Australia might also be given preferential treatment. They also discuss the latest ECB meeting in which Mario Draghi removed the pledge to increase its asset buying program, but gave nothing away about when it might end altogether. Plus, the all-important non-farm payrolls data tonight, where all eyes will be looking for signs of wage growth.
With Cohn gone, Trump is unbalanced on trade
Thursday 8th March 2018
The resignation of the US President’s economic advisor Gary Cohn hit US equities overnight. As Phil Dobbie discusses with NAB’s Rodrigo Catril, there are reports that Trump will extend tariffs further against China in retaliation for intellectual property theft. So how concerned should we be about a trade war? And to add fuel to the fire, China, Japan and Australia release balance of trade figures today. Plus, how likely is a soft Brexit? The latest response from the EU seems to suggest a free trade agreement is the only outcome. Will all the Brexit and tariff talk have any influence on the ECB’s QE timetable – will the Bank actually commit to one tonight?
Two Wars Could Be Off the Agenda
Wednesday 7th March 2018
Even though the US dollar and equities slid today, there’s optimism that President Trump will see sense and reverse his plans to kick start a trade war, or at least be more specific about which countries he targets. Phil Dobbie discusses the shifting scene with NAB’s Gavin Friend in London. They also look at the day’s second big back down – could North Korea go as far as removing its nuclear weapons after peace talks with the south? They also look ahead to today’s GDP figures for Australia and what to expect when the Fed’s Lael Brainard speaks this morning.
Self-deprecating Trump stands firm on steel, or does he?
Tuesday 6th March 2018
There’s been a mixed reaction to President Trump’s continued insistence on steel tariffs today, as Phil Dobbie discusses with NAB’s Tapas Strickland. On the one side equities are on the rise, with traders assuming some sort of compromise will be reached. On the other side, the Canadian dollar has taken a hit with continued fears that tariffs will impact NAFTA. To lighten the mood, President Trump did a stand-up routine at a journo’s dinner overnight. He says he was very good. They also discuss a slug of Aussie data, the RBA rate decision today, Brexit (of course), US ISM figures and the meeting of the People’s Congress in China.
My tariffs are bigger than your tariffs
Monday 5th March 2018
The markets continued to react to President Trump’s stance on steel tariffs, with his resolve seemingly increasing over the weekend. Phil Dobbie asks NAB’s Rodrigo Catril how far the influence will reach this week. They also discuss the situation in Europe, where Teresa May’s speech is seen by many as a step in the right direction and where another election in Germany is no longer on the cards. We still have to wait and see how Italy voted. They also discuss Japan’s exit strategy from QE, Australian property and China’s Caixin PMI today, will it echo the decline shown in the official figures last week.
Trump Rolls Out Steel Tariffs; Politics dominates Europe
Friday 2nd March 2018
Lots of numbers out overnight but it’s politics driving the markets right now, with President Trump saying he will sign the order next week to impose tariffs on steel imports. Phil Dobbie talks to NAB’s Rodrigo Catril about the market reaction. Plus, an election this weekend in Italy, the SDP vote in Germany that could determine whether another general election is imminent, and Theresa May’s response to the EU – what’s her answer to the Irish border question? They also look at Jerome Powell’s senate appearance – he seems to be blowing hot and not quite so hot on the economy. And discussion about the Aussie capex figures yesterday – a cause for concern?
Brexit Breakdown Pummels the Pound
Thursday 1st March 2018
A transition agreement for Brexit is by no means a done-deal. The EU’s draft agreement is far from acceptable to the UK. The reaction has hit the pound, bond yields and equities – Phil Dobbie asks NAB’s Ray Attrill if the situation could worsen if Theresa May offers up no answers. They also discuss the growth in US oil production, Europe’s evasive inflation, China’s cooling economy and what to expect from today’s capex figures in Australia.