The Morning Call Podcast – March 2017
US and Europe – More Different by the Day
Friday March 31st, 2017
They both drive on the wrong side of the road, but there the similarity ends. For Europe and the US, there are certainly differences as far as the economies are concerned. Phil Dobbie talks to NAB’s Rodrigo Catril about how the divergent monetary policy is reflected in the direction of each currency and a widening spread between US and European bonds. We also look at data from Japan and China due today, plus the RBA Credit report – is our housing debt growing further?
Return of risk-on? And Missing EU already.
Thursday 30th March 2017
Despite the President’s seeming lack of progress on fiscal policy, Phil Dobbie asks NAB’s Rodrigo Catril whether the mood is sliding back to risk-on? We also look at the rise in the Aussie dollar overnight, the muted market reaction to the Brexit ignition, and how data today and tomorrow from Europe might have more of a market impact.
Debbie Does Damage; US Confidence on 16 Year High
Wednesday March 29th, 2017
Cyclone Yasi caused billions of dollars of lost coal sales back in 2011. Phil Dobbie asks NAB’s David de Garis whether Cyclone Debbie (now downgraded to a tropical low) could have a similar level of impact. We also look at the latest positive data from the US – consumer confidence is at a 16 year high, despite (or, perhaps, because of) Donald Trump’s difficulties in passing reforms. And we’ve found out how Article 50 will be delivered in Brussels today.
German confidence up, commodities down, US aftermath continues
Tuesday 28th March, 2017
The Germany economy seems to be going well with the latest IFO business confidence reading exceeding expectations. Phil Dobbie asks NAB’s David de Garis whether this, plus less political concern, will strengthen the Euro and bonds? We also look at the continued aftermath of the Healthcare defeat and falls in commodity prices and their impact on Australia. Plus Brexit D-Day -1.
Marginal reaction to healthcare fail. EU readies for an “Open Brexit”
Monday March 27th, 2017
There wasn’t much of a reaction to President Trump’s failed attempts to pass his healthcare bill on Friday. The question is, will he have greater success with his tax cuts? And what does it mean for rate hike expectations this year. Questions Phil Dobbie puts to NAB’s Rodrigo, as we kick off another week of The Morning Call – the week that the UK pushes to “go” button of Brexit.
Healthcare – no deal (yet)
Friday March 24th, 2017
It looks like President Trump will have to wait to see his Healthcare Bill pass through the Congress. It raises the serious question about how much of his reforms will actually come to pass. Or will they be watered down significantly. Phil Dobbie asks NAB’s Rodrigo Catril what impact we’ve seen on the markets today, including the rising strength of the Yen. Meanwhile, more positive data from the UK, with more expected from Europe tonight.
Will it be a big day for healthcare? Or Not?
Thursday 23rd March 2017
Donald Trump has described today as a big day for healthcare. But will his healthcare bill manage to make it through Congress? Phil Dobbie asks NAB’s Tapas Strickland what the consequences are if it fails on the first pass. We also look at the falling price of oil, Japan’s expanded trade surplus, a bit about the Aussie dollar and the RBNZ rate decision this morning.
Trump rally unwinds a little, UK inflation rises, Euro assumes a Macron win
Wednesday 22nd March 2017
The post Trump rally continues to unwind a little today. Phil Dobbie asks NAB’s David de Garis whether we are starting to see a bit of risk-off sentiment in the markets, hitting the dollar, bond prices and oil. Meanwhile UK inflation is now above the BoE’s 2% target, the Euro has risen with hopes that Macron will see off Le Pen, and Canada has enjoyed strong retail sales ahead of their budget. Plus, what next for the Aussie dollar.
Britain Boldly Goes Where Nobody Will Ever Go Again
Tuesday 21st March 2017
Theresa May has named the date – March 29 is when the fun and games begin for Britain – and it might be a tortuous journey, with EU President Jean Claude Juncker saying nobody will ever leave after what Britain’s about to go through! Aside from that, a quiet night overnight. Maybe the main thing to look out for is the RBA minutes today – just how worried are they about home loans?
Mnuchin pushes G20 to accept protectionism
Monday March 20th, 2017
The G20’s long standing support for free trade was cut adrift at the weekend with Steven Mnuchin, The US Treasury Secretary, successfully removing reference to resisting “all forms of protectionism”. NAB’s Ray Attrill joins Phil Dobbie to discuss the implications of this shift, with the US clearly planning to significantly reduce its trade deficit. Also, could the UK face a hefty Brexit fee and the difficult path for Australia, given increasing concern about household debt driven by property investment.
US budget cuts run deep. What happened to pro-growth?
Friday March 17th, 2017
The blueprint for Trump’s first budget has hit the desks, with massive cuts to spending in a range of departments, but significant rises in Defence, Homeland Security and Veterans Affairs. Phil Dobbie asks NAB’s Rodrigo Catril why there has been no market reaction to the figures – perhaps it’s because we won’t believe it till it’s passed Congress. We also look at yesterday’s Aussie employment figures, the Trump-Merkel meeting and the G20 this weekend.
US Rates up, Fed deletes a word, is Geert in the Wilders-ness?
Thursday March 16th, 2017
No surprise, the US federal reserve has just raised interest rates by 0.25 percent. But the more dove-ish tone from Janet Yellen in the press conference that followed has seen the markets stepping back a little – the US dollar spot index has fallen 0.8 percent. NAB’s Ray Attrill joins Phil Dobbie to talk about the announcement, the Dutch election, Australia’s labour force data and Donald Trump’s budget outline, which might be out sometime today or tonight. Or maybe not!
Saudi’s Pump Out More Oil, Dollar Up Ahead of Fed Decision
Wednesday 15th March 2017
Phil Dobbie talks to NAB’s Tapas Strickland about a sharp fall in oil prices overnight. Saudi Arabia is back to pumping out more than ten million barrels a day. Meanwhile the dollar has risen slightly in anticipation of tomorrow’s rate hike from the US Federal Reserve. And comments from Michelle Bullock, Assistant Governor of the RBA, suggest rates won’t be changing in Australia any time soon. Plus UK employment and US CPI data out tonight.
The calm before the storm (that stopped Merkel)
Tuesday 14th March 2017
It’s been a sideways kind of day where the keyword was procrastination. As the dollar shifted sideways the UK PM has pushed back the triggering of Article 50 till later in the month, and bad weather has stopped Angela Merkel from meeting President Trump at the White House. So what have the markets been reacting to? As NAB’s Rodrigo Catril discusses with Phil Dobbie, not a great deal really. Expect a quiet day. The calm before (another) storm.
Six things that could change the world this week
Monday March 13th, 2017
Apologies for the alarmist headline, but you’d have to admit, it’s a very significant week for finance markets (and the wider community) in lots of ways. Phil Dobbie talks to NAB’s Ray Attrill about the week ahead including: the Fed rate decision; the US budget outline; the US debt ceiling; the Dutch general election; the UK invokes article 50 and; the G20 is pushed for a new stance on protectionism. Can you remember a week with so many significant events packed into it? By the end of the week lots of questions could be answered, or maybe, the world’s collective pool of thinking will look a little murkier.
Has Draghi won the fight against deflation?
Friday March 10th, 2017
Mario Draghi, the President of the ECB seems to be talking down the need to do more to boost inflation, and his optimism has had some impact on the markets overnight. The NAB’s Rodrigo Catril joins Phil Dobbie to dissect his comments and whether the pound could hit new lows with a swag of output data due today. Plus, of course, US non-farm payrolls tonight.
Jobs bonanza seals the deal for next week’s US rate hike
Thursday 9th March 2017
ADP jobs data shows US private sector jobs surged by 298,000 in February, well above estimates and paving the way for another surprise with non-farm payrolls on Friday. In today’s podcast Phil Dobbie asks NAB’s Ray Attrill whether this effectively seals the deal for a US rate hike next week. We also look at why the Aussie dollar is one of the worst performing of the major currencies this morning, and why there’s been a 3 percent drop in oil prices.
US Deficit widens, China’s forex reserve grows, Europe looks calmer
Wednesday March 8th, 2017
Talk about a quiet night. There’s been very little movement on currencies, equities or commodities. Perhaps because there was no surprise in data or the news cycle. As expected, the US trade deficit widened and expectations of a March rate rise increased slightly. In Europe fears of far-right wins in Holland and France seem to be on the wane. And even though China’s forex reserves have unexpectedly grown, NAB’s Tapas Strickland explains to Phil Dobbie it’ll only be significant if it is repeated next month. Otherwise, not much happened overnight. You could have had a lie-in!
Missiles have no impact; trade balance a bigger concern for Trump
Tuesday 7th March 2017
Even as North Korea fires missiles into the Sea of Japan the markets still see the Yen as a safe-haven, keeping up with the rise in the US dollar overnight. Most other major currencies failed to keep pace. But uncertainty is playing a little on equity markets, with most down overnight. As Rodrigo Catril explains to Phil Dobbie, the most significant data today is the US balance of trade – whatever the result, we can be certain President Trump will not be best pleased. We also discuss the PSA acquisition of GM’s European operations – good news or bad for a post-Brexit Britain? And what will the RBA say today when they announce their expected hold on interest rates?
Could China’s Blue Skies Muddy the Waters for Australia?
Monday March 6th, 2017
At the National People’s Congress in Beijing yesterday, Premier Li Keqiang predicted 6.5% growth in the Chinese economy this year and spoke of a return to ‘blue skies’ over China’s cities. Phil Dobbie asks NAB’s Ray Attrill what this could mean for Australia’s steel and coal exports. We also look at the rising rate hike expectation in the US and whether the emerging wire-tapping allegations could have any impact. Plus today’s retail sales figures for Australia – do we expect to recover from December’s slip?
A rate hike realisation, a Snap sale and a Brexit countdown
Friday 3rd March 2017
US equities fell today on the realisation that a Fed rate hike this month seems more likely than not. As NAB’s Rodrigo Catril explains to Phil Dobbie, a big drop in weekly jobless claims was a strong forward indicator of the strength of the US economy, to such an extent that it would take a disastrous set of non-farm payrolls to change the expectation. Meanwhile an investigation into Attorney General Jeff Sessions seems to have had little impact on the markets. And Theresa May is reported to have set May 15th as the day she will invoke Article 50. We also look at the fall in the Aussie dollar after yesterday’s lower than expected trade surplus.
The Fed Trumps the President
Thursday March 2nd, 2017
There wasn’t a strong reaction to Donald Trump’s speech to the Congress yesterday. Instead the market moved on hawkish talk from Bill Dudley, vice chair of the OMC, who gave hints that a rate hike on March 15 could be on the cards. Phil Dobbie asks NAB’s Ray Attrill why the strongest response came from equities with the US dollar making only modest gains. We also look at mixed news from Europe and the expectations for Australia’s trade balance figures today.
Aussie GDP and the Trump Show
Wednesday 1st March, 2017
The US dollar and equities were slightly lower overnight as the nation – and the world – awaits President Trump’s appearance at a joint session of Congress later today. Phil Dobbie asks NAB’s Tapas Strickland whether he will say anything new. The slight downturn in markets presumably suggests not. Meanwhile there was mixed US data overnight, yet a rising expectation of a March rate hike. Today’s PCE deflator figures will be important to watch for more clues on that. And Australia’s GDP figures are released this morning. Does the NAB still expect 0.9% growth in the last quarter?