The AUD in November AUD/USD returned to ‘normal’ levels of monthly volatility in November.
“Rodrigo contributes to the creation of trade ideas and research publications, and advises our internal and external clients on developments in global foreign exchange markets.”
Rodrigo is a Currency Strategist and member of the FX strategy team at NAB. In this role, he contributes to the creation of trade ideas and research publications, and advises our internal and external clients on developments in global foreign exchange markets.
Rodrigo has lived and worked around the world. Before coming to Australia, he worked in London for Henderson Global Investors, firstly as the Head of Risk Measurement and then as a Quantitative Analyst in the Global Fixed Income Hedge Team. In 2009, Rodrigo made his move to NAB as an investment strategist within the private wealth division. He then worked in Rate Strategy for four years, before taking on his role today as Currency Strategist.
Rodrigo was born in Chile, and holds a Bachelor of Commerce, Honours and Masters in Economics from the University of the Witwatersrand in South Africa. He’s also a CFA charter holder, and has a diploma of Financial Markets (AFMA).
Recently Published Articles
After what has been a solid month for equities and bond investors, month end flows have probably play their part in the price action overnight, US equities have lost momentum, UST have led a rise in core global bond yields and the USD is stronger. US and European inflation releases favoured the notion the Fed and ECB are done with their respective tightening cycles.
US and European markets have begun the new week a subdued mood. But core global bond yields are showing some life, lower across the board while the USD is a tad softer too
Todays podcast US data not supportive of Fed’s inflation quest US Jobless claims fall well below expectations Final U of Michigan inflation expectations revised up UST curve bear flattens. 2y up 6bps to 4.93% US equities ignore data and keep marching higher Oil slips on news OPEC + meeting delayed. Saudis not happy USD […]
US equities start the new week in a positive mood, the USD has remained under pressure and after initially edging higher, longer dated UST yields edge lower supported by a well-received 20y Bond auction.
US equities recorded a solid end to the week with the S&P 500 closing above the 4400 psychological mark. Equity investors showed little reaction to news of a downbeat consumer
Risk assets had a solid end to the week with softer US economic data releases fuelling the notion that the Fed is done with the current tightening cycle. Front end yields led a rally in UST yields while the USD extended its decline to a third consecutive day.
European and US equities ended the week with a cautious tone. The S&P 500 extended its weekly decline to 2.53% and entering correction territory in the process. Weekend news that Israel has begun a ground invasion of Gaza suggest markets are likely to retain a cautious tone at the start of the new week.
US equities are lower led by the tech heavy NASDAQ index and not helped by a new surge in UST yields. The USD extended yesterday’s gains with the AUD at the bottom of the G10 board, reversing its post CPI gains.
Reaction to the Israel-Hamas conflict triggers a spike in energy prices while German Bunds lead a rally in European bonds with US Treasury futures also pointing to a decline in US Treasury yields. Not all the initial moves have been sustained. The USD is little changed, AUD is up, after being down with Fed speakers favouring holding rather than hiking rates, helping US equities rally while European shares fall.
Markets mark time ahead of payrolls tonight. Core global yields trade in narrow ranges, the USD loses a bit of altitude while US equities end the day little changed.
A better-than-expected US JOLT report provided rattled markets. US Treasuries led a rise in core global bond yields, equities traded lower and the USD was stronger. USD/JPY gapped lower ( official intervention?) and AUD was the notable underperformer.
The AUD/USD’s 1.9 cents range in September was the narrowest since the 1.74 cents October 2019 range. Still, the USD was in the driving seat, fuelled by “higher for longer” Fed messaging.
US equities start the new week in a sedated manner while European counterparts record sharp declines. Front end yields have a led a bear flattening of the UST curve and the USD is a tad softer
Todays podcast Tesla leads gains within in US equities Core global yields tick higher USD broadly weaker with JPY and CNY the notable movers JPY gains following Ueda’s interview suggesting openness to policy move this year CNY gains on PBoC strong fix, push against speculators and better data AUD and NZD benefit from spill over […]
It has been a quiet start to the week in Europe and the US with the latter out celebrating Labor Day. US equity futures closed little changed while US Treasury futures are pointing to some small upside pressure on yields.
US equities extend their positive run to a fourth consecutive day with softer US economic data fuelling expectations of a Fed on hold over coming months. UST yields edged lower while European yields rose following stronger than expected German and Spanish inflation data releases. The USD lost ground against EU pairs while the AUD is little changed.
Fed Chair Powell’s speech at Jackson Hole did not break new ground. US equities closed the day in positive territory with both the S&P 500 and the NASDAQ recording their first positive week since July. The UST curve flatten with front end yields ticking higher while the USD closed a tad stronger.
US equities traded in and out of positive territory, essentially marking time ahead of NVIDIA’s reporting tomorrow and Fed Chair Powell’s speech on Friday. It was also a quiet FX session while in rates 10y UST yields printed a fresh 16-year high before consolidating.
US equities started the new week on a positive note, notwithstanding a negative lead from Asia. Core global yields have continued their ascendancy while the USD is broadly stronger with negative China sentiment weighing on the AUD and NZD
Ahead of the July US CPI release tonight US equities closed on the back foot. Oil prices extend recent gains while LNG prices surge following news Australian workers vote to strike. Quiet night in FX land.
The US Treasury curve bear steepened following news the US government will increase its bond issuance by more than previously thought. US equities recorded small declines and the USD is stronger across the board with the AUD the notable underperformer, RBA on hold and underwhelming China data not helpful.
Not much reaction to the ECB, says NAB’s David de Garis, but a big reaction in currencies and Treasurys to the latest US GDP numbers. With a lot of European data today and early next week, things could stay quite ‘whippy’.
US equities closed the week little changed with the S&P 500 in consolidation mode ahead of a new week that includes the FOMC meeting and a busy earnings calendar. UST were little changed and the USD continued its recovery.
Underwhelming China economic data has weighed on sentiment, mostly in Asia and Europe with a decline in CNY also spilling over to NZD and AUD. Core global yields are a tad lower while US equities have resumed their upward trajectory.
A bear flattening of the UST curve post a better than expected University of Michigan survey so the S&P 500 closed marginal lower while the USD found some support.
After the softer US CPI print on Wednesday the cooling US economy narrative was further supported overnight by a softer than expected US PPI print. Megacaps have led gains in US equities while front end bonds have led a decline in UST yields. The USD is broadly weaker with several FX pairs breaking through key support/resistant levels.
Ahead of the all-important US CPI release tonight, US equities edged higher again overnight while the UST curve flattened driven by an uptick in front end yields. The USD is broadly weaker, but the AUD has been unable to perform.
US equities began the new week cautiously with hawkish Fed talk and concerns over upcoming earing season playing to the wariness in the air. A decline in UST yields weighed on the USD, but the AUD was unable to perform amid concerns over China and softer bulk commodity prices.
The AUD/USD price action in June was a story of two halves. Soft US data and a cash rate hike by the RBA helped propel the currency to an intra-month high of 69c, but then concerns over China’s growth outlook and better than expected US data releases weighed in the second half of the month.
Friday capped a risk positive end to the week and the month of June with softer US economic data releases treated as good news. Weaker US consumer spending and inflation boosted US equities with gains over 1%, US Treasury yields traded lower after the data release and the USD closed the week broadly weaker.
The string of positive US data surprises continued overnight with a big drop in Jobless claims and a decent upward revision to Q1 GDP. US Treasuries led a jump in core global bond yields and US equities closed in the green, unperturbed by the move up in yields. Positive US data surprises help the USD reverse earlier losses, but the AUD/USD held its ground aided by yesterday’s stronger than expected retail sales figures.
Better than expected US data releases and hawkish ECB talk are two main macro themes from the price actions overnight. US equities embraced the positive vibes from Asia and then better than expected US data releases provided an additional tail wind. In contrast, European equities were little changed with hawkish ECB talk dampening the mood. The belly of the curve led a rise in UST yields while the USD lost a bit of ground.
European equity markets have started the new week on the back foot following a negative lead from Asia. Investors are seemingly disappointed by the lack of new news on China’s stimulus, US equities are closed for a holiday with futures contracts pointing to small dips for the S&P 500 and NASDAQ 100.
US equities have pushed on yet again, shrugging off a string of soft US data releases. The ECB hiked its deposit rate as expected, lifted its inflation forecast and delivered a hawkish guidance. Core European yields climb on the back ECB news with the euro gaining over 1% while soft US data triggers a decline in UST yields with the USD weaker across the board.
After closing modestly higher on Friday, US equities have started the new week with modest gains, led by big tech. 10y UK Gilts, up 10bps to 4.33%, are the notable movers within core global bond yields on the back of hawkish BoE talk. The USD is a tad higher with AUD retaining its upward trend that has been in place since the start of the month. Oil prices tumble on supply-demand dynamics and another downgrade by GS.
A combination of a US debt ceiling resolution alongside a mixed US jobs report, still favouring a June Fed pause, and news that China may be considering further support to its beleaguered property sector boosted risk sentiment (VIX sub-15), major equity indices closed the week with solid gain.
After enjoying a long weekend, the US is back with mixed signals coming from equities and bond markets. US Treasuries have led a move lower in core global bond yields while the S&P 500 is unchanged. Oil prices fall over 4% with OPEC + meeting looming large, the USD is little changed, but AUD and NZD struggle, not helped by Yuan weakness.
US equities struggled for direction on Friday, ending the day marginally lower. After a choppy session, UST yields closed higher across the curve with the USD broadly weaker, ending a three-day winning streak. Debt impasse did not helping sentiment while Fed Chair Powell expressed a bias for pausing rate hikes in June.
Positive soundbites from Biden and McCarthy give hope a debt deal can be reached.
Markets are treading water as we await the outcome from the Biden-McCarthy debt ceiling meeting and the US CPI data release tonight. US and EU equities have ended the day lower while core yields have edged a little bit higher. Fiscal updates revealed contrasting AU and NZ fortunes while cautiousness in the air has favoured the USD.
US and EU equities have closed with modest gains while core yields extended Friday’s rise. The Fed Senior Loan Officer revealed a modest deterioration in lending standards alongside a drop in demand for loans, so no evidence of an imminent credit crunch. The USD is little changed with NZD leading a modest outperformance by pro-growth currencies.
The last trading day of April had a lot to digest with BoJ policy decision alongside market moving data both in Europe and the US. Equities ended the month on a positive move, core yields drifted lower amid growth concerns while the USD was little changed. JPY was the big underperformer and AUD starts the new week at 0.6601.
The US share market is split between tech majors, doing well on the back of strong earnings versus Financials (and the rest) which are buffeted by banking uncertainty and recession fears. Core global yields are higher and the USD is weaker largely reflecting EU FX outperformance while the AUD has led a commodity linked FX decline.
A softer than expected JOLT report shook the market overnight, triggering a bull steeping in the UST. The USD fell with JPY along with European currencies outperforming. Commodity linked currencies lagged the move with AUD the notable underperformer, following yesterday’s RBA decision to pause it tightening cycle. US equities ended a four day rally with pro-cyclical sectors underperforming.
The positive vibes evident during our trading session yesterday have extended overnight with European and US equity indices higher on the day. Movements in rates and FX markets have been more subdued. The USD is a tad stronger in index terms with JPY the notable underperformer. AUD and NZD are also lower with the former not helped by a yesterday’s softer than expected monthly CPI print.
Deutsche Bank woes weighted on European equities and on US equities at the open, but the latter enjoyed a decent rebound before the close. Core global yields ended Friday lower across the board , the USD was broadly stronger , but still fell for a third consecutive week, AUD and NZD were the week’s underperformers.
After a positive start, US equities struggled for direction amid lingering banking stability concerns. Front end tenors have led a decline in UST yields with similar price action seen in European curves. BoE, SNB and Norges Bank deliver on expected rate hikes. AUD gives back earlier gains as equities struggle.
Todays podcast VIX tumbles as investors see the glass half full ahead of FOMC early tomorrow morning Banks lead gains in Equities with HG bond issuance also signalling improvement in risk appetite UST and Bund curves bear flatten as market increases Fed and ECB rate hikes expectations 2y UST jump 20bps, 10y UST gain […]
Reassurances from US authorities not enough yet to appease markets. Bank stocks remain under pressure with bond yields diving as the path of future Fed hikes comes into question. The USD is also weaker across the board.
Jump in US jobless claims provides hope US labour market may be cooling while Challenger layoff data suggests there is more weakness ahead Softer US data triggers rally in UST and weakens the USD. AUD struggles to perform as US equities tumble with bank stocks leading the decline.
The market was not prepared for Powell’s hawkish remarks, sending short rates and the USD higher and equities lower.
The US economy has started 2023 from a stronger position that many of us had expected and when looking at the Fed’s new preferred inflation reading that tries to exclude much of the noise in the data, the story doesn’t change.
US equities stage a late recovery, but remain edgy
The flow of economic data surprises has continued overnight and this time it was a uniformly stronger than expected performance of the services sector across major Developed Market economies.
US retail sales soared in January jumping 3% well above the consensus, 2.0% and Sales ex-autos jumped by 2.3%, more than double the consensus, 0.9%.
The main takeaway being that Americans anticipate income growth to slow and inflation to stay elevated.
Powell then also noted how the strength in the labour market underscores why the Fed thinks it could take time to bring inflation down.
The S&P 500 Index closed 0.25% higher on Friday, finishing the week 2.5% higher.
Tech stocks lead gains in US equities. NASDAQ up just under 2%.
As the market waits for the BoJ policy decision today, the ECB has been the market mover overnight following a Bloomberg source story suggesting the Bank may be turning less hawkish.
Equity sentiment has not been helped by a decent sell-off in core global bonds.
Early this morning and in line with market expectations the Fed lifted the funds rate by 0.5% to a range between 4.25% and 4.5%, a rates level not seen since 2007. The 50bps increase was a downshift following four consecutive hikes of 75bps.
US equities close the week flat to lower, but with solid gains on the week
In a quitter session, relative to recent times, the risk positive vibes have extended into a third consecutive day with higher global equity markets, lower global rates and a weaker USD.
US equity investors are certainly looking at the glass half full ahead of Thanksgiving tomorrow with all major equity indices showing decent gains on the day.
It has been a wild night in markets. After initially enjoying a broad and solid risk on move with equity markets rising and core global bond yields falling alongside a broadly weaker USD
The new week has begun with a small reversal in the some of the risk positive moves recorded last week, particularly in FX markets and US Treasuries while equity market are showing resilience.
It has been a super risk positive night courtesy of a big downward surprise in the US CPI release.
It has been a volatile session in markets with risk assets initially lifted by rumours China was looking at phasing out its zero-covid policy, only for Beijing to later deny the speculation.
Big gains in US equities on Friday help extend rally for a second week
The ECB meeting was the big event for markets last night and as expected the Bank delivered a 75bps hike, but it sounded less committal on future rate hikes.
Rise in 1y ahead US inflation expectations spooks markets
Volatile overnight session sees risk on, risk off then risk on again
Risk aversion has dominated the start of the new week amid heighted geopolitical tensions and a market disillusioned by credible BoE support for the Gilts market.
Another volatile session in markets; US equities opened lower, not helped by anticipated news of a bigger oil cut supply agreement by OPEC +.
After recording hefty losses post the US CPI release on Tuesday, US equity markets closed with modest gains.
Risk appetite improves despite hawkish Fed talk
It has been all about the ECB and Fed overnight with the former delivering a jumbo hike and hinting at more to come while Fed Chair Powell reiterates commitment to act forcefully against inflation
A broad rise in core global yields has been the big news overnight, fuelled by a better-than-expected US ISM report and news UK PM Truss is planning a huge debt-funded fiscal stimulus.
August has been a terrible month for balance fund investors with no diversification gains from holding a portfolio of equities and bonds.
Following a negative lead from Asia, US and EU equities have begun the new week on the back foot.
NAB's Rodrigo Catril says the Canadians are out shopping; we also saw a big increase in purchase prices in Germany, in fact the largest monthly rise since 1949.
After a negative start, US equities managed to end the day in positive territory supported by better than expected earnings reports from retailers.
There was no let-up in elevated price pressures in the July NAB Business Survey published yesterday, with price indicators accelerating further from the already record highs of recent months.
As widely expected, the BoE lifted the cash rate by 50bps and retained the option to act forcefully in the future, the Bank now officially sees a recession in the horizon.
The AUD/USD opened the month at 0.6903, fell to its monthly low of 0.6682 on July 14 and made a high of 0.7032 on July 29 before closing the month at 0.6985.
Data releases over the past 24 hours have provided further evidence the global economy is slowing. China’s Caixin Manufacturing PMI confirmed that China’s reopening rebound is over.
A round of softer than expected PMIs on Friday added further fuel to ongoing concerns over a global economic slowdown with the move into contractionary mode for both the EuroZone composite and US Services PMIs the main culprits.
Draghi’s government looks set to fall after three key parties failed to support him in a confidence vote which could complicate the ECB plans to deliver details on its new anti-fragmentation tool.
ECB now seen hiking by 50bps tomorrow and then again in September
After a dismal first half, US equities start H2-22 with a positive tone
Core global yields have been the big market movers overnight with European bonds leading the decline in yields.
US equity markets have begun the new week on the back foot with a clear lack of conviction.
US and European equities showed signs of stabilisation on Friday, but still ended with sharp declines on the week which was not helped by Fed Chair Powell's words that the Fed has unconditional commitment to restoring price stability.
Ahead of tomorrow's FOMC meeting we have seen an increase in market volatility across Equity, Rates and FX.
Rise in oil prices fuels inflationary concerns and the need for central banks to increase their hawkishness.
Reaction to a strong set of US data releases has been the main story overnight
Brent oil recorded its 8-consecutive day of price increases, supported by expectations of a China reopening in addition to the expected EU Russian oil ban.
The market found some relief on the notion that the FOMC Minutes revealed a broad consensus for 50bps hikes in June and July and the possibility for a pause later in the year.
The UK's unemployment rate fell to it's lowest level since 1974 and along with a further pickup in average earnings growth, now see money markets pricing 125bps of BOE rate hikes by December.
Another volatile session in markets with an upward surprise in the April US inflation data release adding an extra layer of uncertainty
Decline in inflation expectations drive core global bond yields lower with further fall in oil prices helping the move.
The NASDAQ recorded its worst monthly performance in more than a decade.
News of Russia’s decision to cut gas supply to Poland and Bulgaria triggered a 30% jump in EU gas prices at the open before eventually settling 10% higher.
Eurozone inflation printed a new record high with ECB hawks calling for policy action.
ECB Lagarde warning of supply and uncertainty shocks from the Ukraine war.
It has been a nervous start to the new week with big moves seen in rates, oil and FX markets.
Investors are showing a preference for US equities with all three major indices enjoying a decent rebound after yesterday’s decline.
Friday was a day of contrasting fortunes for US and EU equity markets.
The ECB has surprised markets with an accelerated QE unwinding plan
Markets remain volatile unable to confidently price implications from the news flow given the complex state of the global economy
Russia’s Ukraine invasion and sanctions continue to roil commodity markets which were already tight given the increase in demand from a reopening global economy and low inventories
News from Ukraine remain bleak with Russia Ukraine talks yielding no resolution while fighting rages on.
US President Biden is convinced Russia has decided to attack Ukraine
Yesterday’s glimpses of risk off vibes have intensified over the past 24 hours with Russia Ukraine tensions the main culprit.
President Putin spoke to the media saying that "of course" Russia does not want war in Europe, but then added that his security concerns must be addressed and taken seriously .
US economy brushes Omicron aside with a strong January Labour market report
Equities recovery continued overnight with both European and US markets extending recent gains.
The US economy is travelling with some momentum along side a tight labour market and still elevated inflationary pressures
US and EU equities rebound overnight with mostly positive Omicron news lifting sentiment while company specific news have also helped the cause.
Against the consensus view for an unchanged outcome, the BoE unexpectedly also raised rates by 15bps to 0.25%.
US PPI beat expectations fuelling hawkish FOMC expectations
After a solid run in the previous two days, equities are taking a breather with European shares closing lower amid concerns over the need for a new round of covid restrictions.
Positive Omicron reports coming from South Africa alongside an encouraging preliminary assessment from Dr Fauci over the weekend boosted sentiment with overnight news of policy easing in China, an additional bonus.
Omicron uncertainty triggers a rethink on the global economic outlook
Rising COVID infections around Europe and news that Austria will go into lockdown rattled markets on Friday with 10y Bunds leading a decline in core global bond yields.
Some in the market were positioned for an upside surprise in Australian wages data, but that wasn’t forthcoming, with the data bang in line with expectations at 2.2% y/y, back to pre-pandemic levels.
Data, supply and hawkish CB talk push core yields higher
US CPI jumped in October with annual readings printing at new multi-decade highs, the broad base acceleration in prices challenges the transitory narrative and increases the pressure on a patient Fed.
US equities close slightly higher while Europe starts the new week on the back foot.
US equities have remained resilient and oblivious to the volatility seen in rates markets amid increasing concerns over higher inflation and the prospect of Fed funds rate hikes coming sooner than expected.
US equity continue to march to their own beat, oblivious to softer data releases and volatility in rates markets driven by Central Bank policy uncertainty.
US and European equities have ended the day in positive territory, supported by solid earnings reports and better than expected US data releases.
The S&P 500 has extended its winning streak to a sixth day with mixed earnings and a subdued Fed Beige report not enough to derail the positive vibes
Although the US is less exposed to the energy crunch, supply bottle necks are still affecting its economy, particularly in sectors there is a shortage of workers, raw materials, and chips.
US September payrolls were a big miss, but strong revisions to prior months alongside a decline in the unemployment rate and lift in hourly earnings resulted in a relative subdued reaction by markets, suggesting the figures were strong enough to keep the Fed on track to begin its QE tapering programme in November.
Risk asset have enjoyed a solid rebound overnight following news that the US Senate had reached an agreement to extend the debt ceiling through early December.
European and US equities rebounded overnight with a stronger than expected US Services ISM supporting the view that it’s all good, notwithstanding the ongoing rise in energy prices and supply bottlenecks.
There have been quite a lot of moving parts to the price action overnight.
The market was looking for an ease in US CPI readings and in the end the figures delivered a bit more than expected
After a positive APAC lead, equities came under pressure again on Friday night following news the Biden administration was considering a new investigation into Chinese subsidies and their damage to the US economy
As expected, the ECB will moderate its Pandemic Emergency Purchase Program (PEPP) bond buying pace in Q4 with its December meeting now a key event. China makes historic sale of oil reserves weighing on oil prices.
US investors have returned from the long weekend in a cautious mood. US and EU equities are broadly weaker with big tech outperforming, helping the NASDAQ stay on the green. Core yields are also higher with supply and ECB meeting on Thursday factors at play.
Ahead of US payrolls on Friday the decline in ADP private payrolls report overshadowed a better than expected ISM manufacturing print. The ADP miss points to downside risk to payrolls on Friday (the bad news), implying a likely delay to the Fed’s tapering decision (the good news).
The lack of a starting QE gun alongside a strong message that there is a stricter test for rate hikes compare to QE tapering resulted in a risk positive reaction to the much-awaited Fed Chair Powell’s Jackson Hole speech on Friday. A QE tapering decision remains live, although now November looks more likely than September.
In a low trading environment, equities have edged higher again with procyclical sectors leading the way. The bond market continues to catch up to the positive vibes evident in other markets with core yields higher across the board.
Risk assets have enjoyed a positive start to the new week with European and US equities extending Friday’s rebound. After a positive lead from Asia, European and US equities closed the Monday session with gains across the board, extending Friday’s rebound.
US equities recover into the close calming market sentiment. Spike in VIX and rotation into defensive/tech stock point to a cautionary tale. European equities cannot escape the negative vibes from Asia
The negative vibes from our APAC session extended overnight with softer than expected US data releases not helping the cause. US retail sales were broadly softer, and the NAHB housing market index also came in weaker than expected.
Friday was all about US payrolls and the report did not disappoint. Along with solid employment gains, there were improvements in the other metrics of the US labour market edging us one step closer to a Fed tapering announcement. Market reaction to the data saw the UST curve bear steepened with the 10y UST Note testing 1.30% while the USD ended the day broadly stronger.
Mixed US data and hawkish take on Fed Clarida shake markets. ADP is a big miss, US ISM a big hit.
US equity markets have begun the new week in a tentative manner with a nervous feeling in the air. A slightly softer, but still elevated ISM print added fuel to peak growth concerns and the UST curve bull flattened.
US Q2 GDP was the data release to watch overnight and while the print missed expectations, a healthier US consumer that seemingly can’t get enough was the bright spot and carried the day.
After an initial hint of contagion, European and US equities looked past Asian concerns over China’s regulatory crackdown, closing the day with modest gains at or near record highs. Meanwhile the real story in the rates markets has been the record move decline in the 10y US real rate.
The Aussie dollar is under pressure because of global market uncertainty over COVID says NAB’s Rodrigo Catril on today’s podcast.
More inflation signals with the RBNZ moving towards rate rises. NAB’s Gavin Friend says there are no signs that other central banks will be following in a hurry.
Following a positive lead from Asia, US and EU equities have kick started the new week with a positive tone.
The ECB’S new strategy has driven the Euro higher in a market which has generally been driven down by COVID concerns. NAB’s David de Garis explains what’s changed in the ECB’s 2% inflation target.
The RBA is focused on data not dates, says NAB’s Rodrigo Catril in today’s Morning Call. It’s data from the US and Germany that’s added caution to markets overnight, along with rising concerns about China.
Despite lots of data for markets to chew over, they are looking for a directional lead from non-farm payrolls, says NAB’s Gavin Friend. Whether they’ll get it or not is the question.
Reopening and vaccines are helping economies, but the Delta variant is still a concern for markets says NAB’s Rodrigo Catril, explaining today’s sideways moves.
The US dollar continued to rise at the end of last week hitting a two-month high after the surprisingly bullish outlook from the Fed, but is the Aussie dollar paying too high a price?
US CPI was a higher than expected but the Market seems to have taken it largely in its stride.
Bond yields are pushing lower and market volatility is easing.
Not too good, not too bad, that seems to have been the market response to the non-farm payrolls numbers out of the US on Friday.
There was speculation that the Fed would taper sooner rather than later.
The RBA didn’t steer from its earlier stance that it was too soon to be looking at any changes in policy right now.
The RBNZ surprised many yesterday by indicating there could be an interest rate rise as soon as next year.
Equities are back on the rise and bond yields are falling, slightly, as investors seem to have accepted the line of most central banks that inflation is only transitory.
Share markets are riding high again in the US despite a triple whammy of disappointing reports.
The risk off mood is being driven by increasing inflation concerns.
Inflation expectations continues to influence markets.
The Bank of England has upped its forecasts for the growth of the UK economy this year – from 5 percent a few months ago, up to 7.25 percent.
The Fed’s board continues to talk down the prospect of tapering, pushing the argument that price rises will be transitory.
Janet Yellen surprised the markets uggesting it might be necessary to raise interest rates to stop the economy from overheating.
Demand is outstripping supply on both sides of the Atlantic.
The AUD/USD traded in a 2.86c range in April with a low of 0.7532 recorded on the first day of the month while a high of 0.7818 printed on April 29.
It’s been a choppy session for US stocks, even though the news on the economy was largely positive and earnings results have been strong.
Markets are treading water ahead of the FOMC meeting tomorrow morning.
A new podcast series to help small to medium sized businesses make sense of current market movements.
There’s still plenty of positive sentiment around as the US, UK and Europe continue to vaccinate at pace.
Equities came back off the highs we saw on Tuesday/Wednesday, but their decline didn’t reflect the sentiment in the market.
It’s been a session with mixed messages.
The AUD/USD averaged almost exactly 0.77 over the month.
This podcast focuses on the New Zealand dollar – what’s been happening and what lies ahead for the rest of the year.
The Fed will push on with ending its lower capital requirements held against Treasurys, sticking with a schedule that will see the so-called supplementary-leverage ratio (SLR) ending on 31st March.
This podcast focuses on the Japanese Yen – what’s been happening over the last 12 months and NAB’s forecast.
There was more reaction to the FOMC meeting with bond yields rising sharply.
The Fed has upped its growth expectations for the US economy, driven by the fiscal support and the vaccine rollout.
The fear of blood clots from injections means use of the Astra Zeneca vaccine has been suspended in an increasing number of European countries.
The story of the day was the softer US inflation numbers which saw yields pull back and helped stocks rise.
US Treasury yields pushed steadily higher overnight, reaching 1.6 percent for 10 year Treasuries.
Bond yield have been rising sharply overnight.
Friday saw a reversal in the bond sell-offs earlier in the week, seeing 10 year yields in the US falling back top 1.4%.
Central bankers are fighting amongst themselves as to who can sound the most dovish.
Australian 10 year bond yields have nudged 1.65 percent for the first time since May 2019.
There have been big falls in US equities overnight after higher than anticipated jobless claims, showing its not a smooth recovery for the US.
Equities were mixed in the US overnight, but the S&P 500 did manage to claw out a new record high, whilst the NASDAQ fell.
Friday’s non-farm payrolls numbers in the US surprised on the downside.
The UK and the US are well ahead of Europe on vaccine rollouts, and that seems to be the major focus of markets right now.
All eyes and ears will be on Philip Lowe’s speech today, following the very dovish outlook from the RBA yesterday.
After the big gains during November and December last year, the first month of 2021 has been a period of consolidation for AUD/USD.
The markets have so far been unmoved by the FOMC announcement, perhaps because it said so little.
Markets responded at the end of the week to Joe Biden’s proposals for stimulating the US economy.
Bond yields were already on the rise before Fed chairman Jerome Powell talked down the likelihood of any easing in bond purchases this year.
With yields rising there’s been a question mark over whether the appetite for treasury bonds is falling.
There’s a strong expectation that the US fiscal stimulus deal will be resolved in the next few hours.
The post-Brexit trade deal and the US fiscal stimulus deal have been pushed back time and time again, but we really are at the point of no return.
Equities have climbed higher in the US and Europe on the hopes two deals will be struck this week.
Ursula von der Leyen and Boris Johnson have been meeting over dinner to discuss the progress of the UK-EU trade deal.
The UK-EU trade deal really is going right down to the wire – and the wire itself keeps getting pushed back.
The pound has already recovered the losses it made on Friday, when Brexit rhetoric was ramped up on both sides of the English Channel.
The ECB’s Philip Lane expressed concern about the tightening of credit standards which could impede the European recovery.
New positivity with the Dow breaking 30,000 for the first time, due in part to hopes for; a vaccine and a peaceful transition for the Biden administration.
Markets continue to be torn between the good news and the bad news.
Markets have been lifted higher on further vaccine news, with Moderna saying their trials have shown 94.5 percent effectiveness.
This week’s earlier optimism over a possible vaccine for COVID-19 has disappeared completely, with equities falling and bond prices rising.
Those vaccine hopes continue today, even though there were warnings from Fed officials that the economy still faced ongoing impacts from COVID-19, with structural differences highlighting the need for the fiscal stimulus that now seems unlikely to happen this year.
After the markets finished with a strong equities and bond sell-off on Friday, expect a busy week, with the RBA, the Fed and Bank of England all meeting, with the difficult job of determining how to see the economy through rising infection numbers.
Markets have been hit by concerns over COVID-19 and the US election aftermath.
Markets are displaying classic risk-off moves today – with equities down, bond prices up and the US dollar the safe haven currency of choice.
After a fairly volatile week markets were calmer on Friday on the back of positive retail numbers from the US.
There’s a strong risk off mood in the air, which has pushed the US dollar higher and hit stocks.
The Aussie dollar has taken a hit twice in the last twenty-four hours.
There’s been a strong reaction in the equity and currency markets to Donald Trump’s sudden decision to stop talks about a fiscal stimulus, even though he tweeted about the need for it whilst in hospital over the weekend.
What more can central banks do to help stabilise the global economy?
US interest rates will be lower for longer – that’s the takeout from today’s FOMC meeting.
Shares climbed in the US on the hope Pfizer will have a vaccine ready by the end of the year.
The pound lost further ground today as the EU objected to a new government bill that would unilaterally overturn the Withdrawal Agreement.
US equities have had a third session with substantial falls.
US jobs data on Friday helped the equities market to regain a little composure as it fell for the second day.
There have been massive falls in US equities, particularly tech stocks.
Deflation in Europe comes as no surprise but the markets are still adjusting to the shift in the Fed’s monetary policy.
The Australian and NZ dollars reached two-year highs in the overnight session.
There’s continued optimism in the markets with equities reaching new highs again.
US equities reached new highs again, with big gains also in Europe.
US-China trade talks have been called off for the foreseeable future with little market impact.
The AUD/USD in July was a tale of two halves.
Jobs data is confusing right now. How much is it influenced by government stimulus activity?
Markets in Europe seem to have been encouraged by the news that Russia is to start vaccinating key workers in the next few weeks.
Gold has broken the $2,000/ounce mark, so is it making a run for it?
The Australian economy will take a hit from the stage four lockdown in Melbourne, but it’s not alone.
The US dollar lost a lot of ground last week as Congress argued over the shape and form of the next recovery package.
Europe's done it, Australia's done it. Now it's the US' turn to extend their fiscal support, and the deadline is looming.
Scott Morrison will unveil changes to the JobKeeper and JobSeeker programs today
Equities in the US spent most of the session rising, driven by the news that Pfizer and BioNTech’s experimental vaccine has being fast tracked in the US.
Which way will the markets be pulled this week?
The US President declares the economy is roaring back following 4.8 million new jobs in June.
Dr Fauci has declared the virus as ‘out of control’ in the US and more measures need to be brought in to contain it.
The easing of banks’ investment rules contained in the so-called ‘Volcker Rule’ has helped to boost stocks.
In a day that’s been light on news, markets have had a chance to take a more positive outlook, pushing equities higher and the US dollar lower.
The markets lost a chunk of optimism last week.
After a solid April, the AUD/USD began May with some trepidation dipping below the 64 cents mark a few times early in the month
The US Fed has reiterated that they will do whatever it takes to protect the US economy, with inflation expected to remain below 2 percent through to 2022.
Australia has entered a recession but, as Josh Frydenberg was quick to point out yesterday, the Q1 fall in GDP was miniscule compared to most of the rest of the world.
It’s all good news as far as the markets are concerned, pushing the Aussie dollar even higher.
The Australian dollar has lost ground as China threatened to ban imports of Australian coal.
Equities have staged a broad-based rebound and are expected to continue as markets reopen in the US and UK.
The US President has said the US needs to get back to work, vaccine or not.