The Morning Call Podcast – November 2017
Brexit Bravado, Bond Yield Bonanza and Stock Shuffling
Thursday 30th November 2017
The pound has been helped by hopes that trade talks on Brexit will start next month and global bond yields are a lot higher. As NAB’s Rodrigo Catril explains, the rise in yields appears to have been triggered by higher than expected German inflation. The USD is also enjoying positive news, with a strong GDP reading and more data out tonight. Meanwhile the share market seems to be rearranging itself in readiness for news on President Trump’s much heralded tax bill. Plus what to expect from Australia’s capex reading today.
Brexit deal rumours boost pound; Powell helps dollar; Un Fires Again
Wednesday 29th November 2017
The pound was drifting downwards overnight until sudden reports suggested an agreement had been reached on the size of the UK Brexit divorce bill. As Phil Dobbie discusses with NAB’s Gavin Friend, if it means trade talks can commence next month, then it’s the most positive Brexit news of the year so far. Meanwhile the US dollar has been helped by a mix of positive data and a conciliatory tone set by Fed chair in waiting Jay Powell, who fronted up to his senate confirmation hearing overnight. We talk about what he had to say with NAB’s Rodrigo Catril.
Cyber dreams, Fed visions and NZ’s surprise
Tuesday 28th November 2017
Cyber Monday was a big success, particularly for Amazon, but the US dollar has remained relatively flat. Phil Dobbie talks to NAB’s Ray Attrill about progress on the tax bill, what we’ll glean from the round of Fed speakers today and the surprise rise in the New Zealand dollar overnight. Plus the fall in oil and a question on whether a fall in Chinese stocks could spread caution to Australia.
Bigger EU US divide, oil spurts higher, the impact of South Africa’s junk
Monday 27th November 2017
Europe, in particular Germany, is doing well. Yes we know that. But the good news keeps coming, as Phil Dobbie discusses with NAB’s Ray Attrill. Meanwhile the Aussie dollar seems to be struggling alongside the US dollar, despite the rise in commodities. Oil is at a two year high and iron ore rose 8.5 percent last week. Does that mean there’s some latent demand for the Aussie?
Europe is Good, Britain Bad
Friday 24th November 2017
We seem to have been comparing the plight of the Brits and the continentals a lot lately, but none more so than today. Phil Dobbie goes through the differences with NAB’s David de Garis, with Europe reporting best PMIs for six years and forecasts for the UK seeing income falling every quarter till 2020, at the earliest. Meanwhile, the Aussie dollar has not responded to a continued rise in iron ore prices – is that because there’s a more cautious mood around China?
A cautious Yellen, a lacklustre Hammond and a divisive Coeure
Thursday 23rd November 2017
Janet Yellen’s cautious tone around the dangers of falling inflation sent the US dollar and treasury yields downwards. This morning’s FOMC minutes did nothing to change the direction. In Britain the weaker dollar softened the impact of Philip Hammond’s budget, that promised little and was accompanied by downward revisions on growth forecasts. Yet, whilst the UK and US might be concerned about the real state of the economy, ECB’s Benoit Coeure has been talking up the need for a faster wind-down of QE and a more rapid timetable for rate rises. All in all, uncertainty abounds.
Lowe and behold – Aussie rises, NAFTA stalls, Hammond prepares
Wednesday November 22nd 2017
The Australia and New Zealand dollars provided two big jumps in a fairly flat currency market overnight. Phil Dobbie asks NAB’s Ray Attrill whether it was something Philip Lowe said last night? They also look ahead to Janet Yellen’s talk this morning, the rise in emerging markets currencies and Philip Hammond’s UK Budget – will it include a magic Brexit fee?
Flatter curves, narrow swaps and broken talks
Tuesday 21st November
The US yield has flattened further with 2 year Treasury yields up almost 3 basis points. Phil Dobbie talks to NAB’s Rodrigo Catril about the swap differential with Australian yields – it’s impact on the Aussie dollar and whether it will influence next year’s timetable for the RBA. Also, trouble in Germany. Can we expect more uncertainty with the collapse of talks for a coalition government?
Thanksgiving leaves no time to talk turkey on tax
Monday November 20th 2017
There’s little chance of the US tax reform bill passing through the senate this week, so the arduous task of reconciling the senate and house bills will be pushed into December, possibly next year. Phil Dobbie asks NAB’s Ray Attrill if this is why the US dollar is underperforming? And why has it taken the Aussie dollar down with it. Meanwhile Europe has its own deadlines looming, on Brexit and Germany’s coalition government. The clock is ticking.
House tax bill passed; risk mood eases; Merkel battles for Jamaica
Friday November 17th 2017
President Trump has given the pep talk and the House has voted. So the first part of the new tax bill is done, but that was the easy part. Meanwhile, Angela Merkel could be facing the fight of her life, and several bits of key data in the last 24 hours has surprised on the downside. Yet the mood on risk seems to have switched direction today. Phil Dobbie asks NAB’s David de Garis, why is that?
Equities, Commodities, Bond Yields & the Aussie Dollar – all down
Thursday 16th November 2017
The risk off mood has influenced the markets overnight. Phil Dobbie asks NAB’s Tapas Strickland what’s driving this sentiment and is it expected to continue? Solid CPI and retail sales figures from the US don’t seem to have had much impact. Meanwhile, the Aussie dollar hasn’t gained ground since the collapse on the release of weaker than expected CPI figures yesterday. And Britain’s wage growth was weak too, but no worse than expected. So, a morning of falling prices – but, hey, things can only get better, can’t they?
Inflation and Wages Day; Mr New Normal for Fed Deputy?
Wednesday 15th November 2017
US inflation figures are out tonight – Phil Dobbie asks NAB’s Rodrigo Catril how significant the news will be ahead of the December Federal Reserve meeting. Britain’s inflation remains one percent ahead of the Bank of England target, and wages data today will show how much the UK’s standard of living is getting slugged. Plus, wages data from Australia and analysis of yesterday’s NAB Business Survey. And could Mr New Normal, could he be the next deputy chair of the US federal reserve.
The fall of the Aussie, a flattening yield curve and UK withdrawal worries
Tuesday 14th November 2017
The pound was slugged overnight as the UK government tries to pass it’s Withdrawal Bill this week. There’s more posturing stateside, where President Trump says the Tax Reform Bill is getting close, apart from the minor issue of agreeing the detail. Phil Dobbie discusses the day’s key data with NAB’s Ray Attrill, including today’s NAB Business Survey, inflation figures from Britain and industrial production in China. Plus the flattening yield curve in US Treasuries – normally the sign of an imminent recession, so what’s so different this time?
Bond yields rise, Aussie falls, Brexit bumbles along
Monday 13th November 2017
Friday saw a surprising rise in bond yields in the US and UK. Phil Dobbie asks NAB’s Ray Attrill whether this reflects December’s rate hike expectations, or is some other factor at play? They also discuss the plight of the Australian dollar after Friday’s fall on the back of the RBA’s inflation forecasts. And Brexit – which way it will turn this week is anyone’s guess but the British press seem to be calling for the Prime Minister’s head.
Is this the biggest tax delay in history?
Friday 10th November 2017
The President promised the biggest tax cuts in history, but US corporations might have to wait a couple of years to see them, if one US Senator is to be believed. Phil Dobbie talks to NAB’s Rodrigo Catril about the market reaction to the rising uncertainty about the tax bill, and the looming debt ceiling. Plus, Europe upgrades its economic forecasts, the RBA releases its Statement on Monetary Policy and we get to see just how much is China borrowing.
Mayhem for May; Turmoil for the Tax Bill; Trade the Target for Trump
Thursday 9th November 2017
The amendments to the House version of the US tax plan actually went backwards, adding to the forecast deficit. Phil Dobbie asks NAB’s David de Garis whether we’re seeing a lowering of expectations around the delivery. It wasn’t the only bad news for the Republicans, losing two elections to Democrat Governors. And Theresa May’s government is in turmoil, losing a second cabinet minister in less than a week. Not the best position to restart Brexit negotiations. They also look at China’s latest trade figures, the Trump visit, this morning’s RBNZ rate announcement and Australian housing finance approvals.
Saudi Freezes, Britain Dismal, Trump Mellow
Wednesday 8th November 2017
There’s been more uncertainty in Saudi Arabia, where those not being arrested are having assets frozen. Phil Dobbie asks NAB’s David de Garis why this has seen oil prices switch direction, with Brent Crude down 0.8 percent. They also discuss dismal retail figures for the UK, whilst shopping is on the up on the other side of the channel. And has anyone noticed how President Trump shoots from the hip a little less about countries he’s actually in at the time? Locally they discuss yesterday’s announcement from the RBA, and the potential for a change to the RBNZ Act on the other side of the Tasman.
<strong>Saudi concerns push oil higher, Aussie dollar follows</strong>
Tuesday 7th November 2017
Oil has gained again overnight, driven by concerns over political stability in Saudi Arabia as the crown prince tries to push through reforms. As NAB’s Tapas Strickland explains to Phil Dobbie, the Australian Dollar has been one of the main beneficiaries. They also discuss Trump’s visit to Asia, words from the BoJ’s Governor Kuroda, and why the pound climbed ahead of the next round of Brexit talks.
Get Ready for the Trump Tour
Monday 6th November 2017
President Trump is in Japan on the first leg of his 13 day Asian tour. In today’s Morning Call Phil Dobbie talks to NAB’s Rodrigo Catril about the potential for more geopolitical influence over the next week or so. Plus, mixed data from the US on Friday, and the impact of another set of weak retail figures on the Aussie dollar. Plus the continued rise on oil and a warming on debt from the Governor of the Peoples Bank of China.
Carney delivers, pound sinks, Powell confirmed, tax plans leaked
Friday 3rd November 2017
There’s little to surprise today, except for the sharp fall in the pound. Phil Dobbie asks NAB’s David de Garis why Sterling reacted so sharply to the Bank of England’s announcement today. There’s been virtually no reaction to the news, leaked earlier, that Jay Powell would be the next Fed Chair, and mixed movements in response to leaked portions of the US tax bill, which is still to see the light of day. And what of Australian retail sales – will they bounce back after a big fall in August?
Fed on hold; Markets wait for Brady’s last 10%
Thursday 2nd November 2017
The least surprising news of the week was the US Federal Reserve’s decision to keep interest rates on hold. But, as Ray Attrill explains to Phil Dobbie, the firm expectation is that the next meeting will see a hike, and the last press conference by Janet Yellen. It looks like we’ll have to wait another day to find out who will be her successor, and to see the text of the tax bill. We look at the impact the delay is having on markets. And the UK set to see an interest rate rise tonight.
China Slows, Europe Deflates, US Assured
Wednesday 1st November 2017
The new month kicks off with lower than expected PMIs from China. Phil Dobbie talks to NAB’s David de Garis about the impact this has had on the Aussie and New Zealand dollar. There’s also weaker than expected inflation in Europe and slower GDP from Canada. But it’s not all bad news; US consumer confidence is the highest it’s been since the year 2000 and Brexit talks might be speeding up a little. And Donald Trump says the tax plan is 90% written.