NAB Morning Call Phil Dobbie

Thursday 27th June 2024
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Yesterday’s inflation number for Australia was a big surprise, pushing up yields, particularly at the front end, and pushing back expectations for cuts by the RBA. Some commentators – not NAB – are arguing this reinforces the case for a rate rise. But NAB’s Ken Crompton says travel was a largely responsible for the rise. He also talks about speculation from the RBA’s Chris Kent about the neutral rate, being somewhat higher than many might have expected. This morning’s other big story is the fall in the Yen to a 38 year low, and the response from China.

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Wednesday 26th June 2024
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Canada’s inflation came in hotter than expected in May and that’s pushed up Canadian bond yields overnight, but there’s been limited reaction to that – or anything really – on currency markets. NAB’s Taylor Nugent says the print has pushed back expectations for the Bank of Canada to cut again in July. What happens next depends on the data. We get more Australian data today, with the CPI print for May and a speech by the RBA’s Chrisopher Kent. 

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Tuesday 25th June 2024
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There are three broad themes on today’s podcast. First, a missed day on US equities again, with falls in the S&P and NASDAQ. NVIDIA shares are well down, but even a minor correction is only a deny in their upward trajectory this year. There’s also the divide between the European and US economies, evidenced by last weeks PMIs. But is the difference really that great. NAB’s Rodrigo Catril agrees with the ECB’S Isabel Schnabel that, when it coms to fighting inflation, they’re not that far apart so it would be wrong to assume a divergence in policy by the two central banks. The other theme is the continued fall in the Yen and the repercussions it could have across the region, including the Australian dollar.

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Monday 24th June 2024
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PMIs on Friday continued to show the dichotomy between Europe and the US. Even within Europe we saw clear evidence of the weakness within Germany. Phil asks NAB’s Tapas Strickland what these latest PMI numbers mean for central banks. Could the strong US print delay the Fed into next year, whilst providing the reasoning for the ECB to perhaps move a little faster? It all depends on the inflation data, of course. And we don’t have to wait long for that, with thew Fed’s preferred measure, the core PCE deflator out at the end of the week and European CPIs ahead of that. 

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Friday 21st June 2024
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Markets reacted rather swiftly to the news that President Macron had called a snap election for France, just after his own party had been heavily beaten in the European elections by Marine Le Pen’s Front National. 
This week Phil talks to Anne Bucher, from Bruegel, an independent European economic think tank. Anne is a former Director-General in the European Commission until October 2020 – in fa
ct, she joined the commission in 1983 working across a wide variety of policy areas over may years. She has an innate knowledge of European politics.
So, how does she see the French situation play out? Can we expect the more extreme elements of the Front National agenda to be watered down? Has the UK’s Liz Truss moment served as a warning bell for any party promoting higher debt?
Whilst we can expect some compromise, Anne says the big casualty will be progress. As the EU fights battles with the right it’ll struggle to develop a cohesive plan for growth and climate change.

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Friday 21st June 2024
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Europe is in the midst of the group rounds of the Euros, but when it comes to central bank cuts Switzerland is already the champion, with Britain the favourite to cut next. JBWere’s Sally Auld talks through yesterday’s decisions by the Bank of England, the Swiss National Bank and the Norge’s Bank. In the US markets seemed unfazed by Neel Kashkari’s claims that hitting the Fed’s inflation target might take a year or two. Perhaps his views were surpassed by more soft data overnight, including another rise in jobless claims. New Zealand’s GDP was a little higher than expected, but it won’t last, says Sally. And tonight the PMI data-dump for Germany, France, the Euro area, the UK and the US.

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