The Morning Call – August 2018
A Fowl Monday as Turkey Spreads
Tuesday 14th August 2018
The Turkish Lira continues to fall and, in todays podcast, Phil Dobbie asks NAB’s David de Garis whether the contagion is being contained. The Aussie dollar was one of the hardest hit currencies overnight, so will it find a new (lower) trading range? Plus, what can we read from a rise in new Yuan loans in China ahead of a slew of market data today. And what’s pushed Italian bond yields up overnight?
Monday 13th August 2018
The crisis in Turkey’s currency is having ramifications far afield, as Phil Dobbie discusses with NAB’s Ray Attrill in this morning’s Morning Call podcast. President Erdogan sees it as a conspiracy to bring his country down, whilst refusing to accept any emergency plan to prop up the Lira. They also discuss a fall in hourly wages in the US, the weakness in the Kiwi dollar and the prospect for the Aussie dollar in a week high on uncertainty.
Kiwi caught in risk off climate
Friday 10th August 2018
A doveish RBNZ and the uncertainty over trade hurt the Kiwi dollar more than most overnight, with the Russian Rouble and the Turkish Lira also hit hard over US sanctions. Gavin Friend explains how this risk-off mood has spread across emerging markets, not helping the Kiwi or the Aussie dollar. But can’t we expect trade tensions to ease and our local currencies recover?
More tit for tat makes it feel real
Thursday 9th August 2018
The markets are a little subdued this morning. Phil Dobbie asks NAB’s Rodrigo Catril whether this is to do with China’s (anticipated) retaliation against the US’s 25% tariff on $16 billion worth of Chinese goods. Has China’s response made it seem real rather than rhetoric? They also discuss Japan’s trade talks that kick off today, what Philip Lowe had to say yesterday and the RBNZ Monetary Policy Statement this morning.
What’s happening with the Yuan?
Wednesday 8th August 2018
The Renminbi rose today and, demonstrating its dependency, the Australian dollar followed suit. As NAB’s Ray Attrill explains, it’s the result of moves by the People’s Bank of China, keen to ensure the Yuan isn’t seen as a one way better, particularly in light of the looming trade war with the US. Speaking of which, today’s China trade balance figures will either please or upset President Trump. Phil Dobbie asks Ray how crucial these figures could be for Trump’s next steps. And after yesterday’s anticipated non-event, what next for the RBA?
US reimposes Iran sanctions tomorrow
Tuesday 7th August 2018
As if the trade spat with China isn’t bad enough, the US move to push ahead with sanctions against Iran will heighten tensions with Europe. As NAB’s Gavin Friend points out, trade tensions are already hitting EU trade, evidenced by the latest German factory orders. Meanwhile, traders are feverishly shorting the pound as further warnings are issued about the possibility of a ‘no deal’ Brexit. To top it all, add the Italian budget to market concerns, with the coalition government ready to spend big. Phil Dobbie asks Gavin whether the RBA can ignore all these external tensions when the Board meets today.
China steps in to stop currency slide – the Aussie impact
Monday 6th August 2018
Whilst the trade tariff rhetoric continues unabated between the US and China, President Trump will presumably be happy with a move by the Peoples Bank of China to stop the slide in the value of the Yuan. Phil Dobbie asks NAB’s David de Garis whether the impact of this on the Aussie dollar on Friday could continue this week. They also discuss Friday’s payrolls data and service ISM from the US, and look ahead to the RBA and RBNA meets this week.
Trade war talk makes Dollar-Yuan worse for Trump
Friday 3rd August 2018
The US dollar has powered ahead of a falling Yuan today as the Trump administration threatens to lift the tariff rate on $200 billion of Chinese imports to 25%. Phil Dobbie talks to NAB’s Tapas Strickland, who explains the market reaction. They also look at the latest in Japan’s yield control, the Bank of England rate rise, the Aussie balance of trade figures, plus a look ahead to tonight’s Non-Farm Payrolls numbers from the US.
Up – tariffs, Apple shares, bond yields; Down – the Aussie Dollar
Thursday 2nd August 2018
The Trump administration will make an announcement today and its plans for tariffs on Chinese imports. Reports suggest they will raise the rate on the planned impost. Phil Dobbie talks to NAB’s David de Garis about the impact the news has had on the markets and how China is reacting to the uncertainty. There’s been less reaction to the FOMC meeting this morning and a rate rise from the Bank of England seems a near certainty. They also discuss the plight of the Aussie and Kiwi dollars, both taking a hit this morning.
Japan’s little tweaks, China’s new talks and Canada’s closed door
Wednesday 1st August 2018
The markets somehow expected more from the Bank of Japan, who soutlined only minor tweaks to its policy stance. But as Phil Dobbie discusses with NAB’s David de Garis there was a swifter market reaction to news that the US and China might restart trade talks, hopefully removing the threat of further tariffs. What does that mean for the Aussie dollar? Meanwhile Canada celebrates strong GDP growth, but reportedly finds itself shut out of NAFTA talks. All this, with the next FOMC meeting less than a day away.