US equities finish last week strongly with positive trial results from Merck's Covid treatment drug helping sentiment.
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US equities finish last week strongly with positive trial results from Merck's Covid treatment drug helping sentiment.
Now that the other side of the pandemic is emerging, clients are starting to ask how high rates will go when central banks start to normalise policy.
There's been some speculation that Australia’s AAA rating may be downgraded by one notch to ‘AA+’ in the wake of the Federal Budget.
The labour market recovery has been much faster than expected.
We look at population dynamics over the COVID period and assess their implications for the outlook for rents.
远期合约能够帮助企业控制成本且锁定企业的预算外汇汇率,本文通过例举三个被普遍使用的远期合约策略来阐述进口商们是如何通过这些策略来管理企业的外汇风险
The signals to watch to see if central banks are right or wrong.
What's the economic and financial markets landscape 12 Months on from the onset of the COVID-19 pandemic?
We investigate the implications of the sharp fall in underemployment.
AUD/USD outlook revised up.
The Weekly analyses the RBA’s macro-econometric model.
We’ve constructed an experimental summary index based on the common trend in a range of a mix of daily and weekly private-sector and official statistics
The Weekly looks at the Parliamentary Budget Office’s estimates of the impact of the virus on the budget. Plus, the Government’s recently announced housing subsidy.
Budget revision provides scope for additional stimulus to shore up recovery.
Measuring spare capacity amid an exodus from the workforce.
Lower net overseas migration should see Australia’s population growth more than halve to 0.7% in 2020-21.
Easier monetary policy should be helpful in supporting the economy as activity rebounds later this year.
The instant recession caused by the coronavirus pandemic has seen an unprecedented easing of both monetary and fiscal policy.
Read the findings of our analysis of past depressions and recessions in Australia.
Insights from the Kennedy paper.
NAB continues to expect the RBA to cut the cash rate to 0.25% in April.
Markets are now monitoring the spread of coronavirus outside China.
We've constructed a leading index of unemployment based on the predictive power of a very large number of official and surveyed indicators.
The Reserve Bank has a renewed focus on financial stability, where the benefit of lower rates in achieving the inflation target and full employment is weighed against the longer-term risk of adding to already-high household debt.
We've analysed the impact of an assumed 1% shock to Chinese growth on Australia to estimate the potential impact of the virus coronavirus on Australia's economy.
The government has introduced travel restrictions on arrivals from mainland China and advised Australians to avoid travelling to China because of the novel coronavirus.
The market has substantially reduced pricing for a February interest rate cut following the surprise improvement in the unemployment rate last week
Calculating confidence intervals around cash rate futures pricing and the Reserve Bank's economic forecasts, we estimated an average probability of QE through to mid-2021 of about one-third.
The Mid-Year Economic and Fiscal Outlook (MYEFO) released today reveals downgrades to the economic outlook.
Markets have been calm overnight, in wait and see mode ahead of a series of more important events this week.
The Reserve Bank’s persistent overestimation of growth likely reflects not allowing for the decline in potential growth.
President Trump has upset markets further today suggesting that the trade deal with China might be left till after the US election, a year away.
The Reserve Bank anticipates a strong rebound in GDP growth, with annual growth accelerating from 1.4% currently to 3.1% by end-2021.
President Trump has signed the Hong Kong human rights act.
The effective lower bound for the policy rate is negative, but the Reserve Bank only seems comfortable with a 0.25-0.5% floor for the cash rate.
Household debt is growing very slowly at present, up only 4% over the past year.
Total income is growing strongly, led by a boom in mining profits as non-mining profits languish, while growth in disposable income is more measured.
Business investment is exceptionally weak at present, only slightly above the multi-decade low reached as a share of GDP in the early 1990s recession.
The Weekly explores the impact of interest rate cuts on consumer sentiment.
With the cash rate at a record low of 0.75%, short-term interest rates broadly match the all-time low reached in the 1950s.
Across advanced economies, business investment has underwhelmed since the global financial crisis, contributing to weak productivity and lower potential growth.
There was something for everyone in Friday night’s US employment report.
The RBA meets today and the market is 79% priced for a rate cut with 74% of economists surveyed also expecting a rate cut, including NAB.
The Government pushes for greater transparency as unconventional monetary policy nears.
Unemployment has edged higher since earlier this year as strong employment growth has failed to keep pace with even stronger growth in the supply of labour.
Crude oil markets may tighten significantly following weaponised drone attacks on the world's largest oil refinery at Abqaiq on Saturday.
The Reserve Bank believes the main domestic risk to the outlook is consumer spending.
Retail property conditions have been mixed given low wage growth and weak consumer demand.
The main domestic risk to the outlook is the uncertainty around consumer spending.
The RBA sees Australian QE as unlikely in the near term. Read our analysis.
The RBA thinks the economy may be at a "gentle turning point" underpinned by their optimism for mining investment. The Weekly analyses.
The Weekly analyses the impact of the housing downturn on inflation.
Our analysis suggests that the real exchange rate has more of an impact on growth than earlier RBA analysis.
Eurozone manufacturing PMIs are well down, hitting a seven-year low in Germany.
Reserve Bank research suggests that the two rate cuts to date will boost growth by 0.25-0.4pp over two years and lift inflation by only 0.1pp over two to three years.
Recent RBA research shows that high mortgage debt is a drag on consumer spending, helping explain the weak growth in consumption since the global financial crisis.
The RBA has cut the cash rate to 1%, arguing that lower rates are an effort to reduce unemployment and not a response to a deteriorating outlook.
Fruit and vegetable prices are the two most volatile components of the CPI and can have a large effect on headline inflation.
Economic growth is slowing as public demand continues to be the main driver of GDP growth.
The federal election and lower expected interest rates have contributed to a rebound in business confidence- but not business conditions.
Governor Lowe has said that reducing unemployment to the bank’s 4.5% estimate of the NAIRU should return inflation to the 2-3% target band.
The RBA is expected to cut the cash rate on Tuesday, with a follow-up cut expected in August.
The RBA will be helped by looming personal income tax cuts and a relaxation of prudential regulations on mortgages.
Shock election result sees the unexpected re-election of the Coalition government
This week, the labour market dominates in Australia.
This week we’ve examined excess capacity in the labour market.
Australia recently experienced one of its largest booms on record in residential investment, driven by new construction as renovations to existing homes inexplicably languished. The Weekly analyses.
The Weekly explores falling house prices – how do they compare with history and international experience?
This weekly investigates the divergence between weak GDP growth and the strong labour market.
In this weekly, we've looked at low inflation, focusing on the role played by weak wage growth.
In this weekly, we explore the weakness in consumer spending, which helped drive the broader economic slowdown that took the RBA by surprise in the second half of last year.
The weekly looks at the turnaround in the budget where our analysis suggests the budget returned to surplus in the second half of 2018.
The RBA has downgraded its outlook for growth, although history shows that the Bank has regularly overstated growth since the global financial crisis.
Get up to speed on the key themes for the Chinese economy in 2019 with our latest podcast.
It has been another bad day at the office for equity markets, beginning in the Asian session and spreading across Europe and the US.
It was a subdued end to last week for markets, oil still high in the aftermath of Trump reimposing sanctions on Iran. The housing sector is our special topic for this Weekly.
FX Hedging Trends
Testing and (hints of) building capacity
Views from the US on Australia and the US
Breaking down RBA research on wages.
In understanding the drivers of the rise in AUD/USD from 0.75 in early December to above 0.81 in January, higher commodity prices have justified much of the move.
Friday was another choppy day for equity markets, although the S&P500 managed to end on a positive note.
Focus is currently on Washington where a US government shutdown deadline looms this weekend unless a stopgap funding bill is agreed.
We’ve analysed where the Aussie dollar has spent most of its time since it was floated in 1983 and the results may surprise you.
Two weeks ago, we wrote on the outlook for the AUD from our Head of FX Strategy, Ray Attrill highlighting the expected move of the AUD/USD into the US$0.70-0.75 cent range.
Our 2018 forecasts for Asian currencies reflect the view of reduced impact of Fed’s policy normalisation and more confidence about Asia’s external sector performance and overall growth prospects along a global economic recovery.
While significant progress has been made on liberalising the RMB and opening up the onshore bond and equity markets, there are other structural reforms that need to happen before the floodgates can be thrown open.
North Korea, China’s Communist Party Congress and Singapore's policy rate decision are on market radar in October, along with Fed’s policy normalisation thereafter.
China is set to increase foreign ownership of Chinese debt. In the near term, we expect Chinese bond market inflows north of US$1 trillion, but in the medium term inflows of more than US$2.5 trillion would not be beyond the pale.
North Korea, China’s Communist Party Congress and Singapore’s policy rate decision are on market radar in October, along with Fed’s policy normalisation thereafter.
There are some signs of hesitation about pushing Asian currencies to significantly stronger levels than currently. While most will still respond to the US-centric factors in the USD price actions, but some domestic concerns could be kicking in.
Most Asian currencies ended the first half of 2017 stronger vs the USD, this strength has led to the unintended consequences of tighter monetary conditions and worsening terms of trade.
Focus is now on whether the interest rate differentials between the US and Asia will start to matter for Asian currencies.
The USD’s softness has “strengthened”, ironic as it sounds. Perhaps it is more apt to say that the USD is increasingly depicting a soft Trump environment.
Our G10 FX Strategists still believe that the dollar can end 2017 higher than it is today, but a resumption of an appreciation trend could well be delayed until H2 2017.
Thinking about some of the challenges facing Australian policy makers – and arguably consumers - at the present time, the slow growth in wages looms large.
Infrastructure spending could support growth to different extents, which in turn will support equity inflows.
One feature of Australia’s recent employment growth has been the subdued pace of full-time job creation at a time when part-time employment has grown strongly
Over the medium term, the use of the RMB as both a trade settlement currency as well as a reserve currency remains a priority. This suggests the scope for an eventual “strong RMB policy".
Mere speculation of a trade war could send the USD/CNY to around 7.2 as market starts to price in this risk premium.
While it is reasonable to expect economic change, the degree is understandably uncertain given that in recent days some of the President Elect’s policy positions have been softened and meanwhile policy initiatives will need to be approved by Congress.
The Bee Gees 1979 classic “Too Much Heaven” pretty much sums up overnight news, with UK GDP printing much better than expected at 0.5% q/q against expectations of a 0.3% print.
We revisited and reassessed our currency forecasts for Asia, in light of a base case scenario of a Clinton victory as well as the lesser probability scenario of a Trump victory.
While the FOMC Minutes captured the market’s attention, for your scribe the most instructive comments came from the Fed’s Dudley who serves as the FOMC vice-chair in his fireside chat overnight.
Coming into work this morning I couldn’t help but think of Diana Ross’ Chain Reaction. It certainly was where US markets were concerned, with markets playing catch-up following the Columbus Day holiday to developments since the weekend.
The past week has been dominated by bond yields moving higher as have oil prices.
The main focus by markets ahead of Tuesday was no doubt the US Presidential Debate, billed as the showdown of the century.
A potential “time of stress” with the US elections and FOMC meetings in November and December may cause large swings in risk appetite and global liquidity conditions.
24 hours on, under my [central bank] umbrella is how the markets have interpreted Wednesday’s US FOMC meeting.
For this week’s weekly we take a closer look at Australian household balance sheets.
Jump (for my love) was a classic 1980s hit by the Pointer Sisters and one suspects would be particularly high in the Spotify lists of several Fed officials after last night’s weaker than expected Manufacturing ISM.
The major development for markets last week was confirmation that the US Federal Reserve is looking to hike interest rates this year.
While the latest development may underpin the broad USD’s strength, we will not rule out some differentiation in Asian FX movements.
The market has continued to price toward the likelihood that the RBA will cut rates again at tomorrow’s Board meeting, pricing in this morning a 64% chance of an easing, with 36 of 47 economists surveyed by Reuters on Friday forecasting a cut this week.
Gimme Gimme Gimme was ABBA’s most successful hit in Japan, reaching No.17 on the billboard charts in 1979. It might be time to dust that record off today ahead of the Bank of Japan meeting decision at around 12.45pm AEST.
Limbo Rock is the less famous (and in your scribe’s opinion underrated) hit song by Chubby Checker. No surprises for its inclusion today, with Aussie CPI out at 11.30am and key to the RBA August Board meeting next week.
The “tsunami warning” has been lowered and the Brexit-triggered shockwaves to financial markets was surprisingly shortlived. The global financial markets have renewed their risk appetite and developed a tentative pattern of hunting for yield.
"Brexit" has engendered the risk of further fiscal and monetary easing in Asia and eventually, will renew focus on the widening growth and interest rate differentials with the US in relation to Fed’s policy tightening bias in 2017. We still view this risk as under-priced and an instrumental driver to sustain firmer USD strength ahead.
The RMB flexibility helps to ensure that China is able to retain a meaningful degree of autonomy in its monetary policy. The authorities however are still keeping the volatility of the RMB significantly lower than the DXY and this is likely to persist.
Markets mostly treaded water, and most US economic data was bang in line.
A quiet night overnight with US Treasury yields moving 3.5bps lower to 1.8%, alongside weaker than expected core durable goods and capex orders.
A perfect opportunity for a Bee Gees classic with more Jive Talkin’ amongst US Fed officials with Lacker and Dudley hitting the wires overnight following Wednesday’s more hawkish Fed Minutes.
Against this strong USD background, we have identified KRW, SGD, MYR, THB, and TWD as being the most vulnerable over the next few months on account of their low carry.
For US equities, it was a case of one bad apple in the bunch with investor Carl Ichan stating he sold his stake in Apple.
The market is still fairly ambivalent over the prospects of USD strength and for the time being, markets are not likely to be directional in nature – any positions would have to be tactical rather than strategic.
Labour market suggests RBA on hold but keep an eye on inflation expectations Markets again moving around sharply with a less aggressive Fed (two rate hikes now expected in 2016 versus four previously) seeing the US$ broadly weaker and $A stronger. Australian labour market data show slower trend employment growth in recent months, though some […]
Within Asia, those currencies with a greater sensitivity to global moves, like the KRW and SGD, have been amongst the bigger beneficiaries in March.
The past week broadly saw an extension of the prior week’s price action, which broadly continued the rally in commodity prices.
Markets calm down but plenty on the menu this week
Another volatile week in markets with equity markets up and the bond market also rallying on expectations of the US Fed delaying further rate hikes.
We think Asian currencies are likely to still be tethered to the RMB, which is still likely to be subject to the authorities’ allowing of corporate outflows to dominate.
NAB Business Markets Podcast – February 2016 Video transcript (Word, 26kb)
A macro strategist’s view on Asian economies and markets
The wild start to 2016 has continued in the past week. Equities, commodities, commodity currencies, and yields are all lower.
No news in falling commodity prices. The big questions for 2016 are residential construction cycle and the non-mining economy. We expect RBA to be on hold right through 2016.
Similar themes from yesterday are at play today– China in the spotlight with its devaluing currency and equity market shenanigans; lower commodity prices and global equity markets tumbling; and a flight to the safety of the Yen.
Market jitters continued, with another sea of red for equity markets and Yen being the favoured currency.
It was a more “normal” overnight trading session, following the big risk-off move on Monday night.
The first day of trading for many markets was a memorable one, with some big falls in equity markets. With the plunge in risk appetite, the Yen was the best performing currency
Ever get the feeling that you’ve been here before?
Some argue that there can’t be too many better analogies to predicting markets than playing cards or rolling dice, so the late Lemmy’s classic The Ace of Spades from the band Motörhead seems very apt this morning.
NAB Business Markets Podcast with Mark Todd and Peter Hartley.
With U.S. interest rates on the rise, the focus for Asia is likely to shift to the relative ability to cope. Key highlights: With the U.S. Federal Reserve embarking on a path to rate normalization, the focus in Asia is likely to shift to which economies are best placed to cope. Asia is likely to […]
NAB Business Markets Podcast – RBA & US Fed Christmas Messages with Mark Todd
A huge week for data and events.
A macro strategist’s view on Asian economies and markets
In a relatively quiet session, the impact from the Paris attacks on global markets has been fairly muted. The USD is stronger against all G10 currencies with the euro and NZD sitting at the bottom of the leader board.
A macro strategist’s view on Asian economies and markets
A macro strategist’s view on Asian economies and markets
A macro strategist’s view on Asian economies and markets
A macro strategist’s view on Asian economies and markets
In this special edition podcast, Peter Jolly, NAB Global Head of Research, and Peter Hartley, NAB Business Markets - Foreign Exchange, discuss the latest developments in the Greece referendum fallout.
A macro strategist’s view on Asian economies and markets
NAB's Director & Senior Economist, David de Garis shares a market update for the week ending 5 June 2015
A big week with Q1 Australian GDP, the RBA’s June Board Meeting and US non-farm payrolls for May at the end of the week. Greece faces a tough three months, with large debt, loan and interest payments due between June and August. In our highlighted article, we focus on different scenarios for Greece and what they mean for the EUR and AUD.
A macro strategist’s view on Asian economies and markets
A macro strategist’s view on Asian economies and markets
A macro strategist’s view on Asian economies and markets
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