The Morning Call Podcast – October 2017
The Slow Road to a Quick Tax Win
Tuesday 31st October 2017
The US equity markets have reacted to news that the Trump administration’s tax plan could see corporate tax reductions phased in over five years. Hardly a quick win. Phil Dobbie talks to NAB’s Rodrigo Catril about the market reaction, the re-emergency of Robert Mueller’s investigation into Russian links during the Presidential election, the smoothing over of Catalonian cracks, and economic data from Europe and China. Plus much more!
Tech stock jackpot, tax bill bonanza
Monday 30th October 2017
The US economy continues to go from strength to strength, helped on Friday by a steep jump in tech stocks and a GDP reading that was scarcely influenced by the two hurricanes that hit the US last quarter. Phil Dobbie asks NAB’s Ray Attrill whether this positive news increases the likelihood of the Trump tax bill being passed, with the full detail expected this week. They also look at the next Fed chair, with the contest possibly over already. And what of the Aussie and Kiwi dollars this week?
US Budget Passed, ECB Comes Clean
Friday 27th October 2017
The ECB announced the long anticipated tapering of its QE program yet, even though it was expected, the Euro has taken a hit. Phil Dobbie talks with NAB’s Gavin Friend in London about the ECB meeting and surprising retail figures for the UK. NAB’s Tapas Strickland talks through the impact of the US budget, how the Fed chair role is now a two horse race, why oil has been on the rise and what Guy Debelle’s been saying about inflation and jobs.
Ahead of the ECB taper, Flake and Corker have Trump tantrums
Thursday 26th October 2017
Two republican senators have had a dummy spit and could make life difficult for President Trump. Phil Dobbie asks NAB’s Rodrigo Catril whether the market is back to questioning whether the tax reform bill will actually happen. Meanwhile, all eyes will be on the ECB tonight, with the expected details of tapering of their asset purchase program. Plus, the fallout from Australia’s inflation figures and the UK’s GDP figures – both surprised, in opposite directions.
Xi enshrined, US enriched, UK entrenched
Wednesday 25th October 2017
President Xi’s thoughts on socialism have got him a mention in the Communist Party Charter. So, what does that mean for the world economy over the next decade. Not an easy question to answer but Phil Dobbie puts it to NAB’s David de Garis anyway. On more immediate matters, strong earnings have added to US stocks, whilst the assumption that the Fed will raise rates and the new chair will have a more hawkish outlook, has flattened the yield curve. They discuss that, plus the continued slide in the NZ dollar and the expectation for Australia’s Q3 CPI today.
Trump “very, very close” to Fed chair decision
Tuesday 24th October 2017
Having seemingly narrowed down the field to just two men, President Trump told a press conference that he was “very, very close” to announcing his nominee. Phil Dobbie asks NAB’s Tapas Strickland for the likely market reaction to a power share between Powell and Taylor. Plus, as the NZ government settles in for its first official working day, has the NZ dollar hit the floor, or is there more to come.
Tax plan gets closer, Fed chief’s odds narrow, Abenomics continues
Monday 23rd October 2017
President Trump spoke on Fox Business over the weekend saying he expects his new tax plans to be passed before the end of the year, at the latest. Phil Dobbie discusses how the markets could react today with NAB’s Ray Attrill. They also discuss the narrowing race for the chair of the Federal Reserve, some nuggets from Janet Yellen on Friday night, Abe’s win at the weekend and the challenges for NZ’s new government where, for the next few years of so, every day is a Labour Day!
China’s Minsky Moment; NZ’s new PM; Spain plays hardball; Brits buy less
Friday 20th October 2017
30 years on from the Black Monday stock market crash, equity markets were a little jittery. As Phil Dobbie discusses with NAB’s Taps Strickland, a warning from the People’s Bank of China over debt fuelled asset bubbles might not have helped. They also look at the market reaction to New Zealand’s new government, Spain’s stance on Catalonia and the UK’s poor retail sales.
Xi’s control, UK’s jobs, Peters’ choice and Mnuchin’s warning
Thursday 19th October 2017
What can we draw from President Xi’s three hour address to the 19th National Party Congress in China? That’s a question Phil Dobbie puts to NAB’s Ray Attrill in this morning’s podcast. They also look at the implications of Catalonia’s deadline today, Winston Peters’ decision on the NZ government, jobs data from Australia and the UK; and a warning from US Treasury Secretary Steve Mnuchin on the repercussions if his tax package was to fail.
UK Prices Up, NAFTA stuck, Xi sets the agenda – and will Taylor Rule the Fed?
Wednesday 18th October 2017
The US dollar and bond rates reacted (mildly) to rumours that John Taylor is the President’s favourite pick for chair of the Federal Reserve. Phil Dobbie asks NAB’s Rodrigo Catril whether this could mean a steeper path of rate rises? They also look at UK inflation, now at 3 percent, and Mark Carney’s testimony to the UK’s Treasury select committee. Just how quickly will they lift rates – and will we hear more tonight about the ECB’s plans to ease off on QE? Plus, President Xi’s opening speech at the 19th Communist Party Congress today, and important data from NAB on Aussie retail sales and commercial property out today.
RBA thinking, Oil Worries, May’s Mercy Dash and Trump’s next withdrawal
Tuesday 17th October 2017
This morning we get a taste of how the RBA sees the state of the Australian economy although, as Phil Dobbie discusses with NAB’s Rodrigo Catril, there’s been a lot of mixed news since they last met. They also look at how unrest around Kirkuk has hit oil supplies, how speculation mounts around NAFTA and whether the British PM will be able to get Brexit talks on track. And still no word on who will form the next New Zealand government.
Yellen Bets on Her Big Surprise
Monday 16th October 2017
US CPI figures were a little lower than expected on Friday night, but Fed Chair Janet Yellen said yesterday she still expected it to pick up, calling the delay in inflation growth a “big surprise”. Phil Dobbie asks NAB’s Ray Attrill what this surprise means for rate hike expectations now. And could Trump see his budget passed through the Senate this week and what will it mean for the US dollar (and the Aussie dollar) if he does or, more importantly perhaps, if he doesn’t?
Le Deadlock and the Inflation Waiting Game
Friday 13th October 2017
The pound was hit hard when Michelle Barnier said Brexit talks were in deadlock overnight, but bounced back. Phil Dobbie discusses why with NAB’s David de Garis. They also look ahead to tonight’s US inflation figures and what central bankers have been saying at a conference in Washington overnight. Also, the impact of continued foreign investment in the Australian housing market and what to expect from the RBA Financial Stability Review today.
Fed mooted, Rajoy resistant, NZ unresolved
Thursday 12th October 2017
Few surprises in the US Fed’s FOMC minutes released this morning. As NAB’s Rodrigo Catril explains to Phil Dobbie, it was another case of being “informed by incoming data” – in other words, do they wait for inflation to kick in. Meanwhile, in Europe Spanish PM Mariano Rajoy has issued an ultimatum to the Catalonian President – a move which seems to have helped the Euro and Spanish equities. Closer to home we see Australia’s inflation expectations today and New Zealand still waits for resolution of their new government.
Catalonia back from the brink, US tax plan on the cusp, more fuel for BoE rate rise
Wednesday 11th October 2017
Catalonia’s President has said he can’t ignore the will of the people and needs to push for independence of his region, but will negotiate with Spain rather than make a binding declaration right now. Phil Dobbie asks NAB’s David de Garis how the markets reacted to the news. They also discuss data from the UK that could give the Bank of England more reasons to raise interest rates. And a twitter battle could see Trump lose vital support for his tax plan. All that and more on the daily podcast that keeps you abreast of what’s driving markets.
Turkish tit for tat; fixing figures; and final round for Brexit
Tuesday 10th October 2017
Argie bargy between Presidents Trump and Erdogan has hit the Turkish Lira overnight. As Phil Dobbie discusses with NAB’s Tapas Strickland this is another area of unrest in an increasingly complex political landscape. Meanwhile it’s a day for putting figures right – the UK’S ONS admits they underestimated wage growth and China’s Caixin Services PMI tells the exact opposite story to the official figures last week. Plus the EU and the UK argue over who is next to serve in a match that is going nowhere. New balls please.
The Calm Before (and after) the Storm(s)
Monday 9th October 2017
When President Trump talks of the calm before the storm we can assume he’s not speaking meteorologically. Phil Dobbie asks NAB’s Ray Attrill what the return of Trump’s rhetoric against North Korea mean for the markets this week. They also look at the impact of the recent storms on Friday’s non-farm payrolls report, and look at some of the things we might learn this week. Like the composition of the New Zealand government and perhaps the new chair of the US federal Reserve. Plus the potential for more unrest in Spain and the UK cabinet. And China returns from a week’s holiday with fresh Caixin PMI Services data. Will it differ from the official figures?
Hawks out on eve of Payrolls; Disquiet for Catalonia and May
Friday 6th October 2017
US data continues to surprise on the upside. Phil Dobbie talks with NAB’s Rodrigo Catril about the US balance of trade and weekly jobless claims – both better than expected. Should we revise our expectations for the non-farms payroll data tonight? In any case, Fed speakers are out in force, most talking up the economy. Less optimism in Europe, where the ECB ponders its rate of QE wind back, Catalonia readies itself for a split and Theresa May struggles to get her mojo back.
Strong US data; Aussie up; Catalonia set to go; May speechless
Thursday 5th October 2017
Further signs of the strength of the US economy with positive service sector data and a strong employment reading. Yet, as Phil Dobbie discusses with NAB’s Tapas Strickland, it did little to move the US dollar. Perhaps speculation over who will chair the Fed is weighing it down. They also look at two significant pieces of data for Australia today, the latest on Catalonia, what Putin had to say and how Theresa May’s speech went so badly wrong.
A budget out of whack and a plague of boils
Wednesday 4th October 2017
UK Foreign Secretary Boris Johnson gave a speech this morning in which he urged the UK to stop treating the Brexit referendum result as a “plague of boils”, yet over the Channel the EU continue to see Britain’s warring cabinet as a reason for slow progress on finding an agreed exit strategy. As Phil Dobbie discusses with NAB’s Ray Attrill there’s uncertainty over the Atlantic too, where lines are being drawn between Republicans who will pass a tax bill that cuts deeper into the budget deficit, and those who won’t. And the RBA changed nothing yesterday, but was there any noticeable shift in attitude?
Manufacturing confidence and civil unrest
Tuesday 3rd October 2017
The good news from the US is a stellar Manufacturing ISM reading – the best in 13 years. The bad news, of course, is the horrific shooting in Las Vegas. Phil Dobbie asks NAB’s David de Garis whether this will add to politic uncertainty, in much the same way as police violence in Catalonia has impacted Spanish bonds and the Euro. The positive manufacturing story is echoed in China and Japan, but not Britain where Brexit uncertainty continues to be a negative force. Plus, what to expect from the RBA today.
Trump interviews for Yellen’s job
Monday 2nd October 2017
It looks like the week will be influenced by US politics again. In particular, how will Trump’s tax plan progress, and who is expected to be the next chair of the US Federal Reserve. Whilst it’s unlikely we’ll have a definitive answer to either question this week, the speculation could have some market impact, as Phil Dobbie discusses with NAB’s David de Garis. They also touch on Friday’s US inflation figures, this week’s non-farm payrolls, the troubles in Catalonia and the RBA meeting tomorrow.