Growth slows in line with NAB’s forecast
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Growth slows in line with NAB’s forecast
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NAB’s Non-rural Commodity Price Index is expected to ease in Q1 2024
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A slow end to 2023
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Weaker global growth in 2024 to drive modest commodity demand
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A further slowing in growth
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Below trend growth to continue
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The AUD in November AUD/USD returned to ‘normal’ levels of monthly volatility in November.
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.
Bond markets have been supported by some market-friendly data and while Fed speakers were again mixed, it was the more dovish remarks that captured attention.
Fed's Waller inches open the US rate cut door
Podcast
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
The Aussie dollar came within kissing distance of 66 US cents on Friday
UK best Eurozone on the PMI front in Thanksgiving- thinned markets
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 […]
The FOMC Minutes out 6am Sydney time didn’t do much to excite markets. The euro is a little weaker over the past 24 hours, while the equity market rally has lost some steam.
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.
Another choppy night on bond markets with 10yr yields on net little changed and the curve twist flattening slightly.
A choppy session with softer-than expected second-tier US data seeing yields fall, while the USD gained smalls and commodity currencies underperformed
It was a busy 24 hours for data flow globally. Yields partially retraced yesterday’s post-CPI bond rally, while equities have held onto gains.
US CPI came in a tenth below consensus on both the headline and core rates, leaving yields sharply lower, the USD weaker, and equities higher.
Subdued start to the week ahead of US CPI tonight
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
Two events late in the session dominated price action. The first was a poorly received US 30yr Treasury auction. The second was not dovish comments by Powell who sounded still hawkish.
Oil prices down again as demand pessimism deepens
Quiet data wise, but some notable moves in markets.
It was a quiet start to the week for news flow, which was mostly reflected in market movements, though yields are generally higher.
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.
Risk-on continues in the wake of Wednesday’s FOMC meeting as investors price the aggressive monetary hiking cycle as being closer to the end.
The FOMC was on hold as expected. Yields are lower, though most of the moves came ahead of the Fed with soft US data.
Japanese Yen slumps after only minor BoJ policy tweaks
Risk sentiment started the week on firmer footing. Equities are higher, the US dollar is lower, and US yields were higher. Brent oil lost 3%, back below $88 a barrel.
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.
Risk sentiment remained fragile overnight with equities extending recent losses with disappointing earnings outlooks from major tech companies, despite mostly beating on current quarter earnings.
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.
Weaker European PMIs, and potentially some unwind of yesterday’s move, have seen a stronger US dollar the main mover overnight, up 0.7% on the DXY.
A quiet night for data, but a big night for bonds.
Close but no cigar – US 10 year bonds traded to as high as 4.99% on Friday
Fed Chair Powell’s remarks have seen a choppy market response and a steeper curve, but against a backdrop of weak risk sentiment
Higher US yields and 'risk-off' tone see AUD's hard-fought gains undone
Strong US retail sales sees yields rocket – 10yr yield +14bps to 4.84%
Todays podcast Positive risk appetite to kick off the new week Equities higher, S&P500 +1.1% Yields higher, US 10yr +9bp to 4.70% Dollar loses 0.4% on the DXY with AUD an outperformer, +0.8% to 0.6344 Coming up: NZ CPI, RBA Minutes, US Retail, CA CPI, UK Wages, FED & ECB speakers Events round-up NZ: Performance […]
Podcast
US CPI reverses much of the earlier week market moves
Global markets were relatively stable overnight ahead of tonight’s key risk event of US CPI.
Lower US bond yields and softer US dollar lift AUD back above 0.64
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.
Stronger than expected payrolls data initially saw yields sharply higher, equities lower, and the USD stronger, though with the unemployment rate steady and earnings growth moderating, those moves were retraced.
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.
The bond sell-off that dominated the early part of the week has been put on pause. Why? NAB’s Taylor Nugent says there are a number of factors, but it’s tomorrow’s non-farm payrolls that will really set the direction for early next week.
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 sell-off in global bonds continued with fresh cycle highs being set for longer-term yields. The
Todays Podcast UK gilts lead global bond yields higher, Italy and France also up a lot, budget news hurts Treasuries recoil ~10bps from new (4.685%) high ahead of expected government shutdown tomorrow This plus reduced UAW pay demands, news of possible Xi-Biden meet, boosts US equity sentiment, AUD/USD recovers more than 1% of recent losses […]
The bond selloff continued overnight in what was a very quiet night for newsflow. The US 10yr hit a 16yr high of 4.55%, now 4.53%, and up some 11.2bps over the past 24 hours.
The path of central banks does seem to be having as many twists and turns as a Dickensian novel. NAB’s Ray Attrill says the path of bond yields at the end of the week showed how the UK is taking a divergent path from the US, where central bank speakers are still suggesting there will be more hike(s) to come.
The BoE is the latest to put rates on hold. But are they done? JBWere’s Sally Auld says its not safe to assume it’s over for any central bank.
Todays podcast ECB opts to hike, but taken as dovish with guidance read as a peak in rates Euro -0.8% and European yields are lower US Retail Sales data stronger in August, though offset by revisions AU Employment bounced in August Coming up: China Activity & MLF rate, NZ Manufacturing PMI, US UMich confidence […]
It was a subdued market reaction to the highly anticipated US CPI print.
Ahead of US CPI tonight, oil prices have ratcheted higher as OPEC+ cuts continue to bite
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 […]
US equities manage a marginal gain on Friday, but lower over the week and yields edge higher.
Yields are generally lower globally after a boost to US 2-year yields from lower jobless claims proved short-lived while equities declined.
A rise in Services activity last month confirms the US economy still sits firmly on top of the world
In this Weekly, we take stock of progress rebalancing labour markets in the US and Australia, finding significant progress has been made on a range of indicators even without a sizeable lift in unemployment rates
A softer Caixin Services PMI soured the mood yesterday, with the USD broadly stronger and the AUD the worst G10 performer
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.
Neither the Fed nor President Biden could have scripted Friday’s US payrolls report any better had they tried
Overnight, the BoE’s Pill references ‘Matterhorn’ versus ‘Table Top Mountain’ approaches to monetary policy
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.
The new report asks 800-900 Australian corporates across the non-farm business sector (who may or may not be NAB customers) on their progress, plans and strategies to achieve net zero greenhouse gas emissions.
Softer US consumer confidence and a JOLTs report suggesting ongoing rebalancing in the labour market saw the US dollar and US yields lower, while equities were higher.
Aussie retail sales were stronger than expected in July, but World Cup fever was a factor says NAB’s Ray Attrill
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.
Caution prevails in front of Jackson Hole; stocks down, bond yields back up, AUD back lower
Yields were generally lower globally as PMI data came in softer than expectations, with deterioration most pronounced in German Services. The AUD was stronger, as were US equities, with tech leading once again ahead of much anticipated earnings from Nvidia.
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 yields resumed their grind higher to start the new week, though there was little news to speak of, while US equities where higher.
Yields lower on Friday, but still close to recent cycle highs
It’s been onwards and upwards for global bond yields overnight, and AUD has spent time below 64 cents
Todays podcast FOMC Minutes show concern about upside risks to inflation US yields higher led by 5bp rise in 10yr Equities were lower, S&P500 -0.8% with declines late in the session Asia equities weighed by China concerns AUD -0.5% against a broadly stronger dollar at 0.6421 Coming up: AU Employment, NZ PPI, JN Machinery Orders, […]
A stark contrast Tuesday between strong US retail sales and very weak China data
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
A higher-than-expected US PPI print contributed to higher yields, while equities ended the week on a muted note.
US Core CPI just 0.160% m/m and 3m annualised rate now 3.1%
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.
Risk appetite has been weighed over the past 24 hours by a trio of soft China data, a surprise ‘windfall’ tax on bank profits in Italy, and a downgrade of a number of small and mid-sized banks by Moody’s.
Northern hemisphere summer holidays and a lack of data has seen markets treading water ahead of US CPI figures on Thursday.
Bond sell-off reverses on softer US payrolls
BoE lifts Bank Rate by 25bps to 5.25% as expected, to limited market reaction. US payrolls tonight
Yields rise, US 10yr hits 4.12% before easing back to 4.08%, highest since Nov 2022
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.
Markets were generally quiet to start to week ahead of key risk events later in the week (BoE Thursday, US ISM Services Thursday, US Payrolls Friday).
Friday’s BoJ announcements made a bigger initial impression on global bond markets than FX
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’.
The US FOMC hiked rates by 25bps to 5.25-5.50% as universally expected.
AUD approaches 0.68, buoyed by China stimulus news and RMB gains
Weak European PMIs have seen yields fall, though moves in US Treasuries retraced latter in the day.
US yields higher with Jobless Claims lower than expected
Central bankers globally seem to have switched to a more measured tone recently. Overnight tapas
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.
Yields tumbled and risk assets soared as US CPI came in much softer than expected
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.
Payrolls failed to deliver the upside surprise feared following strong data earlier in the week, seeing some pullback in the USD and short-end yields on Friday.
The RBA met yesterday and held rates steady. Other than that, it was a very quiet 24 hours characterised by thin trading alongside the US 4 July holiday.
A quiet night overnight given shortened pre-holiday trade in the US ahead of Independence Day today.
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.
Fed, ECB, BoE heads reiterate hawkish views; BoJ reiterates dovish stance
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.
This week we examine some possible budget assumptions for Australian growth, inflation, wages, interest rates and the $A for 2023-24 as well as the context, thinking behind and risks to the forecasts
Quiet start to week with no market fall-out from weekend Russia news. Weaker Yuan a focus.
PMIs on Friday showed Eurozone output growth close to stalling, seeing Europe lead yields lower and the euro fall.
The BoE surprises market with 50bps, Norges Bank less so with its 50bps. SNB opts for a ‘hawkish' 25bps
Powell added little new information in House testimony, but the US dollar was weaker and equities were lower. UK CPI data surprised higher ahead of the BoE later today
The NAB Rural Commodities Index has continued to fall over autumn and into winter, largely reflecting steep declines in cattle and lamb prices.
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Soft risk sentiment overall last night which was mostly China driven.
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.
AUD ends a big if short local week at the top of the G10 currency pile, AUD/USD +2% w/w
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.
Fed pauses as expected but ‘dot plot’ adds two, not one, more rate rises to 2023
US CPI was in line with expectations, adding to confidence the FOMC will skip at tomorrow’s meeting even as yields pushed higher. Strong UK labour market saw UK yields surge.
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.
Jump in US jobless claims supports lowers US yields and US$; S&P500 back in bull market
The BoC shocked markets overnight, hiking by 25bps to 4.75%.
A soft start to 2023
Insight
It has been a quiet 24 hours in markets with generally small market movements, while the Australian dollar held onto its gains following yesterday RBA rate hike, 0.8% higher against the US dollar.
Markets go into today’s RBA decision ascribing a roughly 65% chance to a pause
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.
A slow start for growth in 2023
Insight
A positive night for risk sentiment with equities up (S&P500 +1.0%; Eurostoxx50 +0.9%), USD down (DXY -0.7%), and yields lower (US 10yr -3.8bps to 3.60% and 2yr -6.4bps to 4.34%).
The AUD had fallen to a new post November 2022 following more disappointing China data
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.
Public Holidays in the US, UK and Germany made for a very quiet night as far as market moves are concerned.
US equities were higher on Friday as hopes grew of a debt ceiling deal, ahead of news on the weekend that an agreement in principle had indeed been found. US data was strong and Fed tightening expectations firmed.
The US dollar extended its positive streak and yields globally were higher despite mixed economic data as AI-related tech saw US equites higher
Still no sign of breakthrough on US debt ceiling talks, souring risk sentiment.
The absence of a debt ceiling deal weighs on risk sentiment even as Biden calls talks ‘productive,’ while global PMIs reaffirm the stark divergence between services and goods.
A quiet start to the week with little in the way of significant market moves.
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.
Hopes for a deal on the debt ceiling improved.
A quiet start to the week with little in the way of new news or top-tier data.
Markets were spoked on Friday by an unexpected rise in US consumer inafltion expectations
Latest US yield curve movements are giving an even stronger signal of imminent US recession
US yields were lower and the dollar stronger with the FOMC increasing rates by 25bp as expected and dropping the expectation for further hikes.
Big moves in markets overnight as US regional bank worries reignited, signs of catering in European loan demand, and a sharp fall in US job openings.
US yields are higher and the dollar stronger with little fallout from the failure of First Republic, being acquired by JP Morgan in an FDIC-supported deal.
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.
Softer US growth but stubbornly sticky prices has seen US yields higher, while US equities recorded their biggest gain since January.
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.
Us equities haven fallen sharply, bond yields are lower and AUD/USD is back near 0.66, ahead of CPI this morning.
A quiet end to a choppy week, with some intra-day volatility following stronger than expected PMIs.
Weaker second-tier US data has helped push global yields lower, while disappointing earnings by Tesla (-9.7%) and talk of margin compression dragged down equities.
The RBA ‘Fit for the future’ review out this morning, with media saying Treasurer Chalmers accepts all 51 recommendations
A quiet overnight session despite the plethora of earnings reports.
The uplift in US bond yields continued overnight, supporting the US dollar but not hurting equities
Stronger than expected US data pushed US yields higher and supported a broadly stronger US dollar on Friday.
Todays podcast Soft US PPI helps drive a risk-on rally Adds to views the US Fed is almost done USD falls, and AUD and NZD outperform Yields mixed, equities up ahead of earnings Coming up: US Retail Sales, US Bank Earnings “Love is in the air, everywhere I look around; Love is in the air, […]
US treasuries retraced most of their post-CPI rally overnight with core CPI coming in as expected.
It was a quiet session overnight ahead of key risk events later in the week (US CPI is on Wednesday and bank earnings are on Friday, including Wells Fargo, Citigroup and JP Morgan).
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.
Weak US Manufacturing survey data overnight reversed the impact of higher oil prices, leaving bond yields lower and the AUD higher. It’s all about the RBA today
A softer than expected US Core PCE Deflator (0.3% m/m vs. 0.4% expected) helped push yields lower on Friday (US 10yr -8.1bps to 3.47%).
It’s a third successive day of relative calm across markets, though an upside surprise to German CPI has seen European yields push higher.
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.
There has been little top-level news flow over the past 24 hours, which has seen markets relatively calm by the standards of recent weeks.
Bond yields are sharply higher overnight, improved sentiment towards the banking sector one key driver
After steep falls in late 2022 and early 2023, Australian agricultural commodity prices were more stable last month.
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.
The FOMC hiked rates by 25bps to 4.75-5.00%, continued QT, and kept the existing dot plot which pencils in one further hike to 5.00-5.25%. Market reaction was dovish, but was not risk on.
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 […]
It was another fairly volatile day following the weekend deal for UBS to buy Credit Suisse, though overall the deal seems to have found some cautious acceptance.
A deal was struck over the weekend that sees UBS buying Credit Suisse for CHF3.0bn, a fraction of its value at Friday’s close. Iitial market response, in FX at least, has been (cautiously) favourable.
The ECB delivered on its 50bps rate promise but scraps forward guidance. Meanwhile the US’ First Republic Bank gets a $30bn deposit injection from other banks
Banking sector turmoil is back to the fore driving all markets, today centred on Credit Suisse.
Bond yields rose sharply on the developing assessment of turmoil in US banking, helped by but largely overshadowing a stubbornly strong US CPI.
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.
The collapse of SVB, the 16th largest bank in the US with $209bn in assets (as at 31 Dec 2022), shook markets on Thursday and Friday. That
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.
Markets broadly held onto Tuesday’s wild moves, which were driven by US Fed Chair Powell’s Senate Testimony. Overnight Powell spoke again to the House.
The market was not prepared for Powell’s hawkish remarks, sending short rates and the USD higher and equities lower.
Hawkish comments from ECB’s Holzmann send European yields higher in an otherwise quiet night for news flow
The US dollar and Treasury yields both fell back on Friday in what was a good day for equities everywhere – except Australia.
The run of worse than expected (global) inflation-related news continues to ripple through markets, the latest culprits being core Eurozone CPI and revised US Q4 unit labour costs.
The US 10yr finally breached 4.00% for the first time since November, following five days of resistance. A hot German CPI and renewed price pressure in the Manufacturing ISM drove, while risk assets were mixed given the strong China PMIs yesterday
Growth slows as consumption softens
Insight
Upside surprises to European inflation out of Spain and France have seen ECB pricing and European yields push higher, with some bleed through into the US. Elsewhere, US equities are little changed, shrugging off soft consumer confidence data, but are and on track for a monthly decline of more than 2%.
A quiet start to the week with no top-tier data. The biggest piece of news was the EU and UK agreeing to a new Northern Ireland trade agreement, now termed the Windsor Agreement.
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.
A solid outcome to round out 2022
Insight
US equities stage a late recovery, but remain edgy
In Australia yesterday, WPI wages data showed less wages pressure than feared. WPI grew 0.8% q/q and 3.3% y/y, 0.2ppts below the market consensus and RBA expectations.
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.
Australian agricultural commodity prices have continued to fall in the new year.
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Since Australia Day the two biggest pieces of news were the BoC explicitly signalling a pause to the hiking cycle on Wednesday after hiking by 25bps, and US Q4 GDP which although beating expectations had a soft underbelly (2.9% annualised vs. 2.6% expected; but private domestic just 0.2%).
European and US PMIs were the main data flow overnight.
Tech stocks lead gains in US equities. NASDAQ up just under 2%.
5% Netflix post-earnings pop helps drive best day for S&P500 in two weeks
USD softer despite ‘risk-off’ market tone.
Very weak US retail and industrial production adds to the tumble in yields
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.
US out for MLK day holiday. S&P futures little changed
US equities managed to claw back into the green on Friday to extend the strong start to the year.
US CPI cools as expected, but with even more encouraging details.
Ahead of CPI tonight US Treasuries (and bonds globally) have rallied, 10-year US notes off 5bps (3bps of that seen in the Tokyo session) and 2s down just under 2bps.
Economic news flow overnight has been relatively light, though playing with the grain of the suggestion from last week’s US data (ISM Services) that the US is in process of losing its global growth leadership position.
BoJ stuns markets with a 0% YCC tolerance band widening…
The BoJ thus takes out our award for the most unpredictable central bank of 2022.
Equity sentiment has not been helped by a decent sell-off in core global bonds.
Recession risks were highlighted on Friday with the US S&P Global Services PMI again in contractionary territory.
Australian agricultural commodity prices retreated on average last month, with the NAB Rural Commodities Index down 2.6% m/m in November.
Report
Hawkish ECB rhetoric post 50bps rate rise spooks risk markets
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.
CPI comes in cool at 0.1% m/m and 7.1% y/y, two tenths below consensus
A distinctly cautious air prevails in front of tonight’s all-important US CPI release and tomorrow’s FOMC.
Solid US PPI cements apprehension ahead of the US CPI & FOMC
It was a quiet night for markets devoid of any top-tier data or news flow ahead of key risk events next week (of US CPI, FOMC, ECB).
The Bank of Canada rose 50bps, the sixth consecutive increase, and took the target rate to 4.25%.
Post-COVID normalisation continues.
Insight
The RBA increased interest rates by 25bp to 3.1% and continues to guide that “the Board expects to increase interest rates further over the period ahead".
WSJ’s Fed Whisperer Nick Timiraos wrote overnight if CPI on Tuesday comes in hot then the Fed could consider another 50bp increase in February.
The dollar was softer and US yields lower over the past week as markets both pared terminal rate pricing and priced in more cuts from mid 2023.
Slowing growth as consumption, trade normalise
Insight
Markets hold, and more importantly extend yesterday’s post-Powell moves.
Markets were relatively muted ahead of Powell’s remarks with US yields and the Dollar were tracking a little higher and equities a little weaker.
China vaccination push sees Hang Seng gains extended to 5%+ by the close
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.
The single biggest piece of market-moving economic news overnight has come via the US S&P Global PMIs, which slumped to 47.6 from 50.4, well below the 50.0 consensus.
NAB’s 2022 Renewables Survey signals a further acceleration of Australia’s transition to renewable energy and net zero carbon emissions policies, a trend we expect to see globally into 2030.
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.
Oil market volatility is showing no signs of let-up , Brent crude down to a low of $83 overnight on a Wall Street Journal report suggesting Saudi Arabia was contemplating a 500,000 barrels per day production increase from December.
Latest Fed speak from Boston Fed President Collins, suggests 75bps is still in play for December, noting markets price around 52bps for the December meeting.
US yields are higher and the dollar stronger in a modest and reversal of some of last week’s post CPI moves as Fed speakers remain stubborn that rates will continue to go higher to get to a level that is sufficiently restrictive.
Fed speakers were clear that a pause is not imminent and there is more to do, even as they may move at a slower pace, while stronger US retail sales numbers showed resilience in spending, providing some small counter to the burst of optimism after softer-than-expected US inflation data last week.
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.
US CPI, US political gridlock (maybe) and China covid policy tweaks...
It has been a super risk positive night courtesy of a big downward surprise in the US CPI release.
Republican ‘red wave’ failed to materialise, but still expect slim House majority
The NAB Business Survey showed Conditions falling just one point to +22 to remain at very elevated levels, above the pre-pandemic highs for the series.
Speculation about China reopening continues to add some market volatility with WSJ reporting Chinese leaders were considering reopening steps getting some notice.
Risk appetite soared on Friday as Chinese whispers swept markets last week that China had put together a ‘conditional re-opening plan’, reportedly mapping out a material re-opening by March 2023.
Wednesday’s FOMC meeting continues to reverberate through markets.
FOMC Statement hints at reduced pace of tightening ahead…
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.
NAB has pencilled in a 25bp hike, we also think there is a real risk that the RBA hikes by 50bps, and that this risk is higher than the 22% chance that markets are currently pricing.
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.
Yields are generally lower globally as the earlier run up in expectations for central bank tightening are pared a little further. A hike of ‘only’ 50bp from the BoC helping that sentiment.
Last night’s first Federal Budget under Labor Treasurer Jim Chalmers contained no fireworks, falling fully in line with pre-Budget media briefings.
The UK has a new PM in Rishi Sunak, and gilts have rallied in response. UK 10yr gilt yields were 31bp lower at 3.75%. That’s 90bp off their peak of 4.64%, but still about 60bp above their level before the Truss Premiership.
This week we provide a further update on supply chain disruptions and highlight a few areas where businesses might reasonably expect some lower prices from suppliers in coming months.
Friday’s offshore markets produced as many fireworks as we have seen on just about any day this year with the mere suggestion of the Fed stepping down from 75bps to a 50bps incremental rate hike in December producing a fierce rally in US equities.
Terminal Fed Funds pricing have lifted to 5.00% by March 2023 from 4.92% last week and continue to price a 75bp hike at the upcoming November FOMC meeting and a 75% chance of a follow up 75bp at the December meeting.
Yields rose to fresh cycle highs and risk appetite soured. US equities were lower, halting a 2-day rally despite relatively upbeat earnings from the likes of Netflix and United Airlines.
The selloff in bonds has seen a ‘reversal of the reversal’.
Another big UK fiscal U-turn and positive earnings from BofA boosted global risk appetite last night.
Rise in 1y ahead US inflation expectations spooks markets
Volatile overnight session sees risk on, risk off then risk on again
UK markets remain at the epicentre of global market volatility
Bailey in Washington says bond purchases will end as scheduled on Friday
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.
It was ‘good news is bad news’ for US Payrolls which were a touch better than expected and seen as too solid to support a pivot narrative.
In Australia there are two macro developments worth watching, Seek new job ads and Consumption imports in the August trade balance.
Another volatile session in markets; US equities opened lower, not helped by anticipated news of a bigger oil cut supply agreement by OPEC +.
Yesterday 25bps RBA cash rate rise, defied the broad consensus among economists and investors (~45bps was priced in for the meeting) but which was justified by the Board in part on the premise that “the cash rate has been increased substantially in a short period of time”.
A surprise U-turn by the UK government on the fiscal package and a weaker than expected US ISM Manufacturing (50.9 vs. 52.0 expected) have driven a large fall in global yields.
US equites fall on Friday to close out a 3rd consecutive negative quarter
In a positive development the OBR will provide preliminary costings of the UK’s fiscal package on 7 October, instead of the previously signalled deadline of November 23 (the same day as the Budget).
Bank of England has pledged to buy up to £5bn of longer dated gilts each day for up to 13 days (£65bn total) with a motive of protecting the UK pension industry.
UK rates continue to push higher
Fallout from UK mini-budget continues.
Epicentre of current market turmoil shifts across the Atlantic to UK on Friday
BoE, SNB and Norges Bank follow the Fed’s +75bps with 50bps, 75bps, 50bps respectively
Fed hikes 75bps as expected, looks for 125bps in ’22 then 25bps more in ‘23
A sourer tone took hold over the past 24 hours, with equities lower and haven currencies, including the dollar, stronger.
US yields continued to push higher ahead of the FOMC
Last week will be marked out as one of the more tumultuous for financial markets since the early days of the pandemic, says NAB's Ray Attrill.
Volatility has come roaring back in Thursday’s offshore session.
After recording hefty losses post the US CPI release on Tuesday, US equity markets closed with modest gains.
Today’s podcast Overview Rumours of inflation’s demise much exaggerated US CPI shocks to the upside: stocks, bonds take fright USD bounces back, AUD and NZD both down by more than 2% Next week’s Fed debate now seen to be between 75 and 100bps (83bps priced) German ZEW survey readings slumps while US NFIB Business Optimism […]
Positive risk sentiment ahead of US CPI tonight.
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 volatile night where earlier price action in Asia was largely reversed.
A solid result ahead of a slower H2 2022
Insight
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.
Eurozone bonds yields and stocks falling on the latest jump in energy prices – both oil and gas – following confirmation the NordSteeam1 gas pipeline will remain shut while Russian sanctions are in place.
A goldilocks payrolls report failed to support risk assets on Friday, with equities and the USD quickly reversing on news that Russia was not restarting gas flows through the Nord Stream pipeline
A solid outcome ahead of a slower H2 2022.
Insight
The bond sell-off shows no signs of abating with a stronger than expected US ISM Manufacturing helping to drive the US 10yr yield up.
August has been a terrible month for balance fund investors with no diversification gains from holding a portfolio of equities and bonds.
Goldman’s noted inflation could hit 22.4% y/y in the UK in early 2023 if gas prices don’t moderate and if there is little in the way of cost of living relief.
Following a negative lead from Asia, US and EU equities have begun the new week on the back foot.
After clocking 5.5 million podcast plays and 15,000 daily listeners, NAB’s Morning Call is celebrating six years of market highlights, with even more expert analysis to come.
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Fed chair Jay Powell’s address to the Kansas Fed’s Jackson Hole Symposium on Friday was short and as far as equity market investors were concerned, bitter not sweet.
Another day spent in anticipation of Powell’s speech tonight
Another night devoid of top-tier data or news flow. The past week has been a bit like Waiting for Godot with markets apprehensive ahead of US Fed Chair Powell’s Jackson Hole speech on Friday.
Composite PMI sub-50 everywhere in the world bar UK; US worst of all.
Markets are apprehensive ahead of US Fed Chair Powell’s Jackson Hole speech on Friday
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.
Following yesterday’s FOMC Minutes overnight we’ve heard from FOMC members wanting the Funds Rate up to 3.75-4.0% this year and questioning why you’d want to drag rate rises out into next year.
In Australia, wages data for the 3 months to May disappointed most forecasters, though the result was in line with the RBA August SoMP (and NAB) forecast.
This week we expand on the hot inflation reads seen in the NAB Business Survey and what this may mean for CPI pressures in Australia, particularly for Q3.
After a negative start, US equities managed to end the day in positive territory supported by better than expected earnings reports from retailers.
Oil prices have fallen to their lowest since early February 2022 with falls of around 4% in part due to weaker China demand.
Equities continued their relentless rise, brushing off the inflation expectations data and hawkish Fed rhetoric
The San Francisco Fed’s Mary Daly warned it is too early to ‘declare victory’ over inflation.
It was all about US CPI overnight with markets reacting sharply to a lower than expected print with Equity and FX markets taking the CPI miss as a positive signal, taking some pressure off the Fed and a sign that inflation has peaked.
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.
China is continuing its military drills around Taiwan, but that hasn’t impacted markets apart from gold (+0.7% to 1,787.61) retaining some slight geopolitical risk premium.
An all-round stronger than expected US employment report Friday dominated the end-of-week market price action; whether they extend or at least partially reverse this week hinges in large part on Wednesday’s US July CPI data.
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.
A few hours on from Nancy Pelosi leaving Taiwan and markets have almost forgotten she ever came. Equity market have recovered their poise, a tech sector rally seeing the NASDAQ close at its highest level since 4 May.
In Australia, the RBA met yesterday and raised the official cash rate by 50bps to 1.85% as expected, the third consecutive 50bps increase to be at its highest level since April 2016.
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.
US economic data on Friday underscored the inflation challenge facing the Fed
ECB’s Visco says “there is a risk of a recession” and that ECB policy can’t drive down gas prices.
The Fed delivered a unanimous 75bp hike as widely anticipated.
More price increases are likely for food and grocery. If they continue to rise in Q3 and Q4, it is hard to see US core inflation numbers moderate sufficiently for the Fed to pivot.
Kremlin confirms 20% cut of gas to Europe from Wednesday. Gas up 9%
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.
The ECB hiked rates by a more-than-expected 50bps, taking the deposit rate back to 0% and ending its negative interest rate policy that has been in place since 2014
The last month has brought big changes for Australian agriculture, with global growth concerns hitting many commodity prices, but seasonal conditions still mostly supportive and further signs that input costs are stabilising.
Insight
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
Oil is the standout mover, Brent +$4.50 and WTI crude +$4.60 on reports Saudi Arabia won’t be pumping any more oil
Risk sentiment rallied on Friday with a better than expected US retail sales print and positive earnings from Citigroup lifting equities
Australian employment data yesterday was showed a tighter labour market than the RBA had been expecting with the unemployment rate plummeting four tenths to 3.5% , a new 48-year low.
Bank of Canada surprises with ‘front-loaded’ 100bps rate rise
Risk off again overnight as recession fears intensify
In this Weekly we highlight some of the indicators that suggest a peak in global inflation is near
Risk off ahead of a big week for data, partly driven mainly by China virus news
US June non-farm payroll employment 372k vs. 265k expected.
Risk sentiment improved over the past 24 hours.
Higher US yields together with a further drop in the EUR sees the USD in DXY terms now at its highest since September 2002.
Brent oil prices are down 17% since 14 June and have the potential to drive some welcome relief on headline inflation prints.
In this Weekly we explore how central banks may respond to rising recession risk and expand upon some of the leading indicators of recession
Europe remains stuck in the middle between the Russia/Ukraine crisis and a weakening global economy
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.
In this weekly, we look at some indicators that might reliably provide warning of some unwind or easing of the supply chain disruptions.
Weaker US consumer confidence dents equities
Since last month’s wrap, we have seen further gains in most agricultural commodity prices, tentative signs of a stabilisation in fertiliser prices, combined with a lower AUD and a weakening global growth outlook.
Report
US equity markets have begun the new week on the back foot with a clear lack of conviction.
It was a great day for US stocks on Friday, with two-thirds of the mid-month sell-off now retraced.
Despite softer PMIs and still-hawkish messaging from the Fed, US equities managed to turn around intraday.
Recession or hard landing fears have taken a firmer hold on most markets in the past 24 hours.
Some relief in equities with a strong bounce back from last week’s decline
The RBA is front and centre in local markets this morning.
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.
The Bank of England rose rate by 25bps and left its options wide open on future moves
Fed delivers 75bps rate rise, sees 50 or 75 most likely at next meeting
Ahead of tomorrow's FOMC meeting we have seen an increase in market volatility across Equity, Rates and FX.
A hot US CPI report and signs of inflation expectations de-anchoring on Friday has seen yields surge, risk assets sell off, and recession talk rise.
Announcing the end of the Asset Purchase Programme (APP) as of July 1, the ECB also pre-announced a 25bps rise in interest rates out of its July meeting with a further rise planned out of the Sept meeting.
Rise in oil prices fuels inflationary concerns and the need for central banks to increase their hawkishness.
RBA surprises (most) for second month running with 50bps Cash Rate rise to 0.85%
The RBA’s Board meets today and a further interest rate increase is unanimously expected by market economists with the size of the rate increase uncertain.
Yields rose notably in what was a quiet night for data and events.
Markets took the strong US payroll gains on Friday as affirming the near-term path for continued Fed tightening.
A positive day for risk sentiment ahead of US Payrolls tonight on no new news
Reaction to a strong set of US data releases has been the main story overnight
A solid result despite virus disruptions early in the year.
Insight
Inflation is back in focus with European inflation at its highest ever level of 8.1% y/y helping rates extend yesterday’s selloff.
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.
After having moved briefly into bear market territory the previous Friday, last Friday saw the S&P500 up by its largest weekly gain so far this year.
Imports to weigh on growth despite strong consumption.
Insight
US equities had a strong night with the S&P500 +2.0% and NASDAQ 2.7%.
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.
Monday’s upbeat sentiment was short-lived with falls in equities and yields overnight.
A more positive risk backdrop begins the new week. US equities are higher, the S&P500 up 1.9%, extending a turnaround after dipping into bear market territory intraday on Friday.
The S&P500 falls into bear market terrain Friday before late day pull-up
Although employment growth disappointed yesterday, and along with wages data from earlier in the week, remains consistent with a rate rise of 25bp by the RBA in June.
The S&P500 high to low fall since the early January high puts it down 19% year to date and although not officially in bear market territory yet, looks to be only a matter of time.
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.
Since last month’s wrap, we have seen three key changes, namely more rain forecast, ongoing inflationary pressures making central banks more hawkish and a materially weaker global economic outlook.
Report
The biggest news overnight is commodities, oil prices are up, which threatens to prolong the inflation narrative.
US Consumer Sentiment fell further than expected to be at its lowest level since August 2011 and with consumer confidence so low, the risk of recession is rising.
Risk assets remained out of favour as concerns over inflation and recession risk continued to dominate.
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 ongoing theme of mounting growth concerns against a backdrop of central bank tightening is continuing to drive market movements.
The current debate in Markets is whether the Fed would be willing to let the economy slip into recession to tame inflation.
Inflation is now forecast to peak at over 10% this year in the UK
Powell comments that 75bps isn’t something the FOMC is actively considering and that 50bps is on the table for the next couple of meetings
The RBA yesterday increased the cash rate target by 25bp to 0.35% and said it will do what is necessary to return inflation to the band
US 10-year Treasuries have just breached the psychological 3% barrier for the first time since late November 2018 in what has been a further bear steepening of the US curve
The NASDAQ recorded its worst monthly performance in more than a decade.
A wild ride in FX markets over the past 24 hours
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.
The World Bank has warned the war in Ukraine is set to cause the "largest commodity shock" since the 1970s (referencing the 1973 oil embargo).
There’s been a strong risk-off sentiment to the start of the week.
Markets are a little easier to understand today. Bond yields are back on the rise, given inflation expectations and more hawkish rhetoric from central banks.
Bond yields have fallen sharply overnight, but that doesn’t mean inflation expectations are going away, or does it?
It’s not something that will continue for long, but US bond yields have risen sharply today, and so have equities. Which one will give in first?
Global yields continued their March higher over the Easter period with the US 10yr yield hitting a fresh cycle of 2.88%, its highest since 2018.
Despite 50 basis point hikes by the Bank of Canada and the RBNZ over the last 24 hours, bond yields haven’t moved a great deal.
US inflation rose as expected, but there’s still been a reaction in the bond markets.
Bond yields continue to climb with risk assets now coming under pressures.
No respite from rising Treasury yields – 10s up another 4bps to 2.70% +32bps on week further hurting tech. stocks/NASDAQ vs other indices and boosting USD DXY index to 100.
The reaction to the Fed minutes early yesterday morning continued to dominate markets overnight.
FOMC Minutes reveal plans for much faster and more aggressive balance sheet reduction than 2017-2019
RBA’s April meeting yesterday left policy on hold at 0.1% but underwent a substantial rewrite to the post meeting statement.
Talk of Europe restricting Russian oil and gas has re-surfaced, driving oil prices 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.
Last night’s Federal Budget contained few surprises and won’t be a big influence on markets this morning.
It has been a nervous start to the new week with big moves seen in rates, oil and FX markets.
The NAB Rural Commodities Index ticked up another 0.9% on a monthly basis in February - its eleventh consecutive gain to another record high.
Insight
Economists outdo each other for Fed hikes with Citi calling four 50 basis point hikes back to back
Investors are showing a preference for US equities with all three major indices enjoying a decent rebound after yesterday’s decline.
Russia intends to make ‘unfriendly’ countries pay for gas in rubles.
Yields continue to rise with US 10yr now +9.6bps to 2.39%.
US bond yields march higher pre and post Powell speech
AUD/USD closed above 0.74 for the first time this year, cementing its position as the world’s strongest G10 currency year to date.
Russia makes USD bond payments, adding to a sense of hope on Russia/Ukraine
US Fed lifts cash rate 25bps, as expected
In this Weekly we explore how central banks might balance the two conflicting forces – inflation expectations key according to Fed speak.
A switch of market focus from Ukraine to China (and Hong Kong)
Yields have soared even as commodity prices have fallen.
Friday was a day of contrasting fortunes for US and EU equity markets.
The ECB has surprised markets with an accelerated QE unwinding plan
War still rages, but Eurozone stocks and EUR roar back to life
Markets remain volatile unable to confidently price implications from the news flow given the complex state of the global economy
Brent oil is up 30% on the week to US$130 a barrel and wheat, thermal coal and gas prices have also surged.
Germany rejects proposed US, EU embargo on Russian oil imports
Risk sentiment was hammered on Friday with sharp falls in stocks and a large rally in bonds
EU considering further measures against Russia overnight which would allow them to impose tariffs and quotas to Russian exports, further disrupting global trade.
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
A strong rebound in activity as lockdowns end.
Insight
History suggests Russia’s actions in the Ukraine may result in only a short-lived episode of risk aversion with contemporary macro themes eventually reasserting themselves.
Risk sentiment craters (S&P500 -1.3%) as the Russia/Ukraine situation has no sign of ending
News from Ukraine remain bleak with Russia Ukraine talks yielding no resolution while fighting rages on.
Markets are opening up to headlines that ‘Putin puts Russian nuclear forces on ‘special alert’.
Rebound sets the stage for a strong 2022.
Insight
Biden announces range of sanctions on Russia, but not including SWIFT.
Ukraine/Russia tensions continue, no further military escalation apart from cyberattacks
Restrained market reactions so far (bar oil) to Russia-Ukraine developments…
How high rates will go in this cycle is a key question that is being asked by clients.
Geopolitical tension lifted overnight with President Putin formally recognising the two Ukrainian breakaway regions of Donetsk and Luhansk and signing aid and cooperation agreements.
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.
The standout data point overnight was US Retail Sales, which came in well above consensus expectations.
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 .
The Q3 result showed WPI wage increases broadly back to pre-pandemic patterns, and our forecast for Q4 sees an acceleration in private sector wages growth to 2.5% y/y.
The S&P is back in the red (-0.5%) following reports of satellite images being circulated purportedly showing Russian troops leaving assembly points and moving to attack positions.
Russia/Ukraine headlines weighed heavily on risk sentiment late Friday with the US again warning Russia could invade at any time.
US inflation comes in hot again with core measures showing wides-spread inflation pressures
Lots of central bank speak from Fed, BoC, ECB and BoE today
The key question as yields march higher is how high can they go in this cycle?
Inflation and related central bank thinking remains by far the bigger influence on market sentiment
As agriculture’s record run continues, what’s ahead for 2022.
Insight
US economy brushes Omicron aside with a strong January Labour market report
European yields soar as ECB pivots more hawkish – Lagarde fails to rule out hiking in 2022
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
Bostic retracts his 50bps comment, states “is not my preferred policy action” for March
AUD below 0.70 to lowest since mid-July 2020 – month end could be a factor
Shares attempts a recovery but US equities back in negative territory in afternoon trade
Hawkish hold by the FOMC/Powell sees yields rip higher and equities reverse earlier gains
Geopolitics has had an influence on markets today, but the influence of the Fed should still not be underestimated.
Bond yields retreated at the end of last week even though the assumption remains that the Fed will signal a March hike.
Latest flurry ahead of January 25-26 FOMC suggests March rates lift off expected.
US and EU equities rebound overnight with mostly positive Omicron news lifting sentiment while company specific news have also helped the cause.
Commodity market news overnight is a fresh surge in European gas prices
Expect a cautious start to the week with the Netherlands going into lockdown on Sunday
Against the consensus view for an unchanged outcome, the BoE unexpectedly also raised rates by 15bps to 0.25%.
The FOMC delivered a hawkish tilt for Christmas with the Fed dot plot showing three rate hikes in 2022 while also accelerating the taper profile.
US PPI beat expectations fuelling hawkish FOMC expectations
2022 is set to become a year of central banks removing monetary accommodation.
Slight risk aversion to start the week with equities down, yields down and US dollar up
Limited market reactions to ‘as expected’ US CPI – 6.8% headline highest since June 1982
Risk tone deteriorates in front of US CPI tonight, lack of positive new news on Omicron
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.
Markets continue to travel with optimism that Omicron will not have the severity of prior variants in terms of health outcomes, even if it is more transmissible.
Markets might be right on the interest rate outlook.
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.
As we start a new week, Omicron headlines were positive on Saturday which may add to some stabilisation in risk sentiment.
Risk sentiment recovered overnight with virus/vaccine news flow being net positive
The US CDC has just identified the first case of Omicron in the United States – joining the UK, Switzerland and Brazil overnight – at a time when US infection rates of the delta variant had already started creeping back up.
GDP Q3 2021 – A short and sharp fall, now firmly in the rear view mirror.
Insight
It has been a volatile session overnight driven by differing headlines around vaccine efficacy, capped off by very significant hawkish tilt by US Fed Chair Powell in Senate Testimony.
Global markets have seen a modest retracement of many of last Friday’s violent ‘risk-off’ moves, with equities higher in Europe, so too US government yields up, as too is oil, but in all cases to nowhere near Friday’s closing levels.
Omicron uncertainty triggers a rethink on the global economic outlook
Large fall sets up “W-shaped” recovery.
Insight
BoE’s Bailey still guiding that rates will need to be higher ahead of the Dec MPC meet.
Dovish Fed Official (Daly) flips to looking at accelerating tapering and to hikes in 2022
Eurozone PMIs spring upside surprise, supporting EUR and holding USD in check
Ahead of a speech by President Biden later today on the economy and inflation, we got news that Jay Powell is to be re-appointed to a second term as Fed chair.
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.
Fed speak was not market moving, but it is worth noting it is mostly turning slightly hawkish.
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.
Trio of strong data with US Retail, US Industrial Production, and UK Jobs all beating
The RBA’s wish of achieving wages growth at 3% plus is well known, however the reaction function is not as clear
Data, supply and hawkish CB talk push core yields higher
US stocks had a positive day on Friday, so further recouping some of last Tuesday and Wednesday’s pre and post CPI weakness
The US has been out for Veterans Day, though stock markets have been open and have recouped a little of their pre and post US CPI losses
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.
Risk sentiment takes a turn for the worse with the first S&P down day in nine.
In this Weekly we look at Australia’s latest monthly deficit figures ahead of MYEFO in December, which show the deficit is set to come in much better than expected even with Sydney, Melbourne and Canberra having been in lockdown
US equities close slightly higher while Europe starts the new week on the back foot.
There was a mixed market reaction to the better than expected US Payrolls print on Friday with equities up, yields down and the USD lower.
The BoE shocked markets overnight with its thunderous silence.
No surprises from the FOMC in its formal policy pronouncement, the Fed announcing a November start to the QE tapering process at the as-expected pace of $15bn per month.
Global yields fall at the short end in the wake of the RBA’s dovishness yesterday.
Stock mostly firmer at start of new month, Europe faring better than US where S&P 500 ends +0.2%
NAB recently brought forward its view of the first cash rate hike to mid-2023 with a relatively aggressive series of hikes thereafter to bring the cash rate to 1.75-2.00% by end 2024.
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.
A volatile night for rates markets with short-end rates shooting up driven by hawkish signals from yesterday’s Aussie Q3 CPI and Bank of Canada meeting, but longer-end rates tumbling after the UK budget showed a sharply lower debt profile.
US and European equities have ended the day in positive territory, supported by solid earnings reports and better than expected US data releases.
The RBA is likely to lag the US, UK and NZ in rates normalisation coming out of the pandemic.
Inflation fears continued to build amid the backdrop of a strong Q3 earnings season which is showing firms have some pricing power to pass on higher transitory inflation
Friday’s main economic events, namely the ‘flash’ PMIs, tell us that there is little reason to fear stagnation, for the time being at least, given still elevated levels for all readings across Europe and the US.
The biggest moves across Global Markets have been seen in the US rates market, where break-even inflation rates have jumped by a full 10 basis points at both 5 and 10 years.
The good news just keeps rolling on for Australian agriculture, with already very good seasonal conditions boosted by the increasing possibility of a La Nina event, combined with ongoing commodity price strength.
Insight
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
If the market is rethinking how soon the Fed might lift rates, there was nothing from incoming Fed speakers overnight to support this view.
In this Weekly, we look at some of the key risks around the Australian inflation outlook in the context of measured inflation turning higher globally.
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.
Inflation fears are clearly lifting, with the latest driven by the rise in energy prices.
The sun has been shining on risk sentiment, commodity prices and commodity currencies overnight
With markets having aggressively pushed Fed pricing into 2022, it is likely there is some thought that such a tightening will weigh on demand earlier.
The ‘Quit Rate’ is the highest on record, reflective of the ease which workers are switching jobs, in part at least for better pay or conditions elsewhere.
We are unlikely to get a true read of the underlying pace of inflation until mid-2022, with both transitory and policy driven impacts continuing to play out.
The rise in energy prices is fuelling concerns that the transitory lift in inflation seen in the wake of the pandemic may prove to be longer lasting.
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.
High vaccination rates should give consumers confidence to resume economic activity as restrictions ease.
Words from politicians of various stripes have gone a little way to alleviating two of the major concerns currently plaguing global markets, namely the ongoing energy crisis centred on Europe and the looming deadline for lifting or scrapping the US debt ceiling
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.
NSW meeting the 70% full vaccination target may be announced as early today (more likely tomorrow) in which case it may well attract more local media headlines than the RBA meeting.
US equities finish last week strongly with positive trial results from Merck's Covid treatment drug helping sentiment.
US equity losses accelerate into Thursday’s close; worse month for S&P500 since March 2020
Equities made an unconvincing “buy the dip” bounce as yields consolidated their recent moves.
Fed talk overnight tilted hawkish with the Fed’s Bullard advocating for two hikes in 2022 and also flagging the case for balance sheet unwind after tapering ends.
For Australia, population growth should begin to recover when international borders are re-opened (latest guidance is from mid 2022).
10yr Treasuries spend time above 1.50%. Neither equities nor USD seem to care….
Week ends quietly after Evergrande/FOMC related volatility earlier in the week
BoE meeting more hawkish than expected, seen opening door to hikes by year’s end.
COVID 19 continues to be the main driver of growth both in the recovery phase and as the Delta variant spreads. With vaccines looking promising 2021 looks like being a bounce back year.
Insight
Fed tees up November taper announcement, subject to reasonably good Sep. employment report
US equities fail to bounce after Monday, with the S&P500 down -0.1 ahead of the FOMC.
A torrid day for Hong Kong’s hang Seng index yesterday, driven by sharp fall in property sector stocks and led by a 16% fall in Evergrande ahead of Thursday’s bond coupon payment day, spilled over to the global arena on Monday with equities down sharply, bond yields lower and safe haven currencies in the ascendancy.
Caution is in the air ahead of the FOMC this week where market moves on Friday tiled towards a mildly hawkish outcome.
There have been quite a lot of moving parts to the price action overnight.
The lift in equities appears to be a case of ‘buy the dip’ with an absence of any positive news flow apart from the very second-tier Empire Fed Manufacturing Survey which surprised sharply to the upside.
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 equity markets slip for second day, bigger falls in Europe amid more cautious mood. NY Fed’s Williams re-enforces markets views post-Jackson Hole, August payrolls.
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.
US markets being out for the Labor Day holiday hasn’t prevented global equity markets forging ahead. The US dollar has recouped a little of its (further) losses seen post last Friday’s US payrolls report and since AUD and NZD have been the two biggest beneficiaries of USD slippage of late, no great surprise they have lost a little more than most other currencies overnight.
US payrolls came in softer than the consensus (235k vs. 733k expected), but a soft print was widely expected given the weakness seen in high frequency indicators such as HomeBase. The surprise for markets was more on Average Hourly Earnings which were stronger than expected
In what have been predictably quiet bond and equity markets ahead of US payrolls tonight, currencies are continuing to enjoy their week in the sun.
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).
GDP surprises, rising 0.7% q/q.
Month end flows interrupt week-long USD depreciation trend but AUD and NZD have done enough work to suggest a base is now in after failing to take a hit from weak China PMI data.
A quiet night with markets continuing to bask in the glow of Powell’s Jackson Hole speech. The explicit de linking of tapering to rate rises has allowed equity markets to rally, while yields have moved lower. The S&P500 rose 0.4% overnight and is up 1.3% since Jackson Hole on Friday.
A soft outcome ahead of a Q3 fall.
Insight
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.
Cautiousness has crept back into markets on the eve of Jackson Hole. Twin suicide attacks outside of Kabul airport has seen 12 US service members killed along with at least 60 Afghans. Coming up today, Fed Chair Powell gives his key mark address at Jackson Hole.
NAB Rural Commodities Index hits a record high sitting 12.6% above August 2020 levels.
Insight
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.
Another day of equity gains and commodities prices. Markets are still basking in the glow of the Pfizer/BioNTech vaccine having received regulatory approval on Monday. China’s delta outbreak also appears to be under control with two consecutive days of no new domestic cases.
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.
Mid-morning in Friday’s US trading day, Bob Kaplan said he may rethink his call for the Fed to quickly start to taper its $120 billion per month in bond purchases if it looks like the spread of the coronavirus delta variant is slowing economic growth. This didn’t have a big impact on bonds, but we can date the start of the run-up in US equity indices and a pull back in the USD to his comments hitting the screens, testament to the ongoing sensitivity the currency and risk markets are exhibiting to the question of when QE tapering starts.
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
Following a fair amount of volatility in the immediate wake of the FOMC Minutes US equities are lower, bond yields and the USD are lower, the latter allowing the AUD some relief after posting a new year-to-date low of 0.7229 in the run up to the Minutes, but the gains are already proving hard to hold.
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.
The much weaker than expected China data, lack of encouraging covid news over the weekend – no more so than in Australia – and the news out of Afghanistan which adds another dimension to ever-present geopolitical concerns (in this case, international terrorism) perennially cited as a risk to positive market sentiment – haven’t prevented the S&P 500 closing at a new record high.
US consumer sentiment plunges to below pre-pandemic levels with yields tumbling (US 10yr -8.2bps), but equities steady to higher with the S&P500 +0.2% to a new record high. For bonds, the plunge in consumer sentiment is an amber signal for the near-term, which if realised in real activity may impact on the timing and form of tapering and puts the focus squarely on retail sales on Tuesday
Quiet night but S&P 500 ekes out a third successive record daily close. Stronger than expected US PPI a reminder that supply chain disruptions are still with us.
US inflation moderates, taking the pressure down a notch and playing into the Fed’s transitory narrative. It’s no surprise to see yields and the USD lower in the wake. The US 10yr fell 1.5bps to 1.33%, though CPI was the catalyst for a larger fall after it reached an intra-day high of 1.3743%.
US Senate passes $550bn Infrastructure bill as expected but still a road ahead for passage by House. No positive covid developments overnight, but markets behaving as though there were. New record high for Eurostoxx 50, S&P500 closes flat, NASDAQ pressured by higher bond yields.
Markets opened with a cautious mood to start the week , reflecting on both the stellar US payrolls report on Friday and the surge in the delta variant which has seen China tighten restrictions and Israel contemplate another lockdown. The Fed’s Bostic was the first voter to speak post payrolls, indicating that the Fed should taper after one or two more payroll prints.
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.
The S&P500 (+0.6%) hit another record high ahead of US Payrolls later tonight. Payrolls of course key to the Fed’s decision on the timing and pace of tapering (see Coming Up for details). Market moves elsewhere were more limited
Mixed US data and hawkish take on Fed Clarida shake markets. ADP is a big miss, US ISM a big hit.
The antipodean central banks are taking an optimistic view of the recovery with the RBA pushing ahead with its tapering of asset purchases (despite the protracted Sydney lockdown) and the RBNZ has as good as said the central bank will lift rates in August.
Lots of economic data to digest on Friday but none of which had a major impact on markets, while Saturday’s China official PMI data showing a further (and bigger than expected) fall in its Manufacturing Index threatens to play with the grain of recent AUD underperformance.
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.
Lower currency continues to buoy Australian agriculture.
Insight
A couple of comments from the Fed chair during the post-FOMC meeting Statement have been responsible for most of the market price action, notably, Powell’s remarks “we’re some ways away from substantial progress on jobs” and that “the Fed is nowhere near considering raising rates”.
For the first time, we are now seeing contagion from the sell-off in Hong Kong and US-listed Chinese shares, to global markets – the NASDAQ in particular, ending the day down 1.2% in front of the earnings results from Apple, Alphabet and Microsoft.
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.
Strong earnings continue to outweigh Delta concerns with the S&P500 reaching a new record high, So far 87% of companies reporting have beaten expectations and if maintained would be the strongest earnings beat since 2008.
Monday’s delta blues are once again talking back-seat in driving markets, the winning streak in the major US stock indices extending to a third day as incoming quarterly earnings reports for the most part continue to beat expectations, the S&P500 closing within 0.4% of last Mondays record high.
Strong earnings have swept away Delta concerns in the US with 85% of companies reporting so far beating expectations.
The Delta variant continues to spread, vaccination rates have slowed, and case numbers are rising.
Markets have dipped sharply on the back of rising COVID cases.
The Aussie dollar is under pressure because of global market uncertainty over COVID says NAB’s Rodrigo Catril on today’s podcast.
There’s more caution in the markets today, even though numbers out of Australia, the US and China were better than expected. There’s a bit of battle fatigue hitting the market says NAB’s David de Garis.
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.
US inflation has surprised again, up even higher than last month. But NAB’s Tapas Strickland says the indications are that it’s still transitory.
The FOMC minutes did little for cautious markets. NAB’s Gavin Friend says the outcome of the ECB’s Strategic Review should hold more interest.
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.
What follows the QE2 in September? NAB’s Ray Attrill says the market is expecting a flexible target, but that we can expect a ripple of surprises from the RBA today.
The Fed will not see the need to act swiftly after Friday’s payrolls numbers, but it will be a different story for thew RBA tomorrow. NAB’s Tapas Strickland says, given the improvements in the Australian economy, the need to run QE at $100 billion every six months is not there anymore.
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.
It’s been a scratchy session, says NAB’s David de Garis, as markets shy away from sharp moves ahead of Friday’s payrolls data from the US.
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.
Risk appetite retreats a little ahead of the non-farm payrolls on Friday and with the Delta strain delaying the reopening of economies, says NAB’s Tapas Strickland on today’s Morning Call podcast.
The impact of the latest lockdown and Biden’s stimulus backflip. NAB’s Ray Attrill on two bits of news for markets to respond to this morning.
Equities driven higher by Biden’s infrastructure plan deal. NAB’s Gavin Friend says bond markets were unmoved by Fed speakers suggesting higher inflation for longer and rate rises sooner.
Bond yields are back to where they were before the FOMC meeting, says NABs David de Garis, with the focus now back on the reflation trade.
The global reflation trade is not dead, says NAB’s Ray Attrill, as Fed speakers help markets further unwind their response to last week’s FOMC.
Agricultural commodity prices continue to perform generally very well, rounding out a generally strong period for many agricultural producers.
Insight
Things were better in the old days
Last week’s post FOMC sell-off was overdone, says NAB’s Tapas Strickland on today’s Morning Call podcast, evidenced by a big reversal overnight. Although markets remain jittery.
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?
The US dollar continued to rise yesterday, after the hawkish comments from the Fed.
At the FOMC meeting this morning the Fed upped their growth and inflation forecasts, with the dot plots pointing to rate rises as soon as 2023.
The FOMC meeting is tonight and markets are being cautious, with little movement in bonds or equities. A weaker than expected set of retail sales numbers has added to the uncertainty.
Oil has hit a two-year high.
US CPI was a higher than expected but the Market seems to have taken it largely in its stride.
Bond yields have fallen further overnight, in some cases to levels not seen for several months.
Bond yields are pushing lower and market volatility is easing.
If non-farm payrolls gave markets a Goldilocks moment on Friday then maybe markets are already starting to question whether it was exactly what was needed.
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.
If there’s one takeout from the Fed’s Beige Book overnight, aside from the continued improvement in the US recovery, it was the rising concern about input costs.
GDP Recovers Pre-COVID Levels
Insight
The RBA didn’t steer from its earlier stance that it was too soon to be looking at any changes in policy right now.
Q1 2021 - GDP continues to recover.
Insight
The rising Yuan is clearly a concern for the PBoC who announced measures to tackle it, whilst Chinese authorities are now permitting families to have three children.
It was an early start to month-end on Friday, with the US and UK off on holiday today.
Three central bankers argued for a more rapid tightening of monetary policy overnight.
The RBNZ surprised many yesterday by indicating there could be an interest rate rise as soon as next year.
The US dollar has fallen again with rises in the Euro and a shift up in the Yuan, but will it stick?
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.
The Euro lost ground on Friday as President Lagarde refused to commit to any schedule for talking tapering.
Equities bounced back in the US and Europe as markets re-evaluated the comments about the timing of tapering in this week’s FOMC minutes.
Our new podcast series to help small to medium sized businesses make sense of current market movements.
The FOMC minutes gave away more than expected with the Fed suggesting it might be appropriate at some point to discuss a plan to adjust the pace of asset purchases if the economic recovery continues.
It’s been a mixed session for US equities overnight whilst bonds headed sideways.
US shares fell as investors once again weighed up inflation concerns.
Share markets are riding high again in the US despite a triple whammy of disappointing reports.
USA equities came bouncing back after yesterday’s sharp response to the higher than anticipated CPI numbers.
US CPI numbers came in on the high side and markets have reacted swiftly with equities falling sharply and the bond sell-off pushing Treasury yields up.
The risk off mood is being driven by increasing inflation concerns.
Inflation expectations continues to influence markets.
US non-farm payrolls markedly undershot market expectations on Friday with just 266k more people in work versus the expectation of close to one million.
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.
Commodity prices stay strong amid rising Australian Dollar.
Insight
Markets turned a little sour at the end of the week.
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.
“long ways to go” is the Fed’s Jerome Powell’s take on the path to recovery for the American economy and the reason that rates won’t be lifting anytime soon.
Markets are treading water ahead of the FOMC meeting tomorrow morning.
Equities are on the rise again as risk sentiment rises following largely positive data.
A new podcast series to help small to medium sized businesses make sense of current market movements.
Markets were on a positive frame of mind at the end of the week,
Shares in the US have fallen on news of a planned sizeable hike in capital gains for wealthy Americans.
The Canadian dollar has been boosted by the Bank of Canada markedly increasing their growth forecasts for this year
There’s a cautious mood in the markets right now.
US equities dipped a little overnight, pulling back from record highs.
There’s still plenty of positive sentiment around as the US, UK and Europe continue to vaccinate at pace.
The news was largely positive overnight.
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.
It’s been a fairly quiet session overnight.
Equities in the US finished Friday on new highs.
Australia has become the latest nation to express concern about the use of the Astra Zeneca vaccines on young people, except here young is anyone under 50.
It’s been one of the quietest sessions for some time.
There were no significant market moves overnight.
US equities have been boosted by a string of positive data.
President Joe Biden and Treasury Secretary Yellen are about to give the details of their long-awaited infrastructure spending plan.
US 10 year Treasury yields hit a 14 month high overnight, as the US dollar rose higher.
Early in the session the fire-sale of $20 billion of stocks held by Archegos Capital was all everyone was talking about.
There was quite a bit of optimism in the air on Friday as we career towards the end of the month and the end of the quarter this week.
It’s been another mixed session.
Autumn rain lifts EYCI outlook in the short-term.
Insight
Even though countries are pressing ahead with vaccine role outs, the speed of recovery might be slower than envisaged.
Market sentiment has switched in the last 24 hours, with concerns that the economic recovery from COVID-19 might be slower than anticipated.
There were big rises in US shares overnight, with the NASDAQ rising 1.7% in this session, helped by a moderate fall in Treasury yields.
Last Thursday’s sharp fall in unemployment to 5.8% from 6.3% took the market by surprise.
Rising commodity prices underpin positive outlook.
Insight
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.
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.
A new podcast series to help small to medium sized businesses make sense of current market movements.
Asset markets continue to be drawn by bond markets.
The story of the day was the softer US inflation numbers which saw yields pull back and helped stocks rise.
COVID-19 continues to present some uncertainty around the outlook, particularly with the rollout of vaccines to emerging markets lagging that of advanced economies.
Insight
Shares have reverted to a focus on tech in the US with a sharp rise in tech stocks.
Despite a very strong start to the recovery, the economy is likely to have spare capacity for some time.
Insight
US Treasury yields pushed steadily higher overnight, reaching 1.6 percent for 10 year Treasuries.
The US senate has passed the $1.9 trillion stimulus package, so it will almost certainly become law this week.
Bond yields are on the rise, in the US and in Australia – for very similar reasons.
Bond yield have been rising sharply overnight.
Rebound continues as Victoria ends lockdown.
Insight
All eyes will be on Australia’s GDP read this morning, which Ray Attrill says is expected to be close to 3% growth QoQ, driven by consumer spending.
The RBA might have left itself with very little to say today, having upped their bond buying in response to the sharp rise in yields last week.
A new weekly podcast series to help small to medium sized businesses make sense of current market movements.
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%.
The rebound continues.
Insight
Despite the increasing dovishness of central bankers the markets have been selling government bonds like they are going out of fashion.
Central bankers are fighting amongst themselves as to who can sound the most dovish.
Many believe the RBA didn’t go far enough on Monday, buying up a $1 billion of bond purchases in the face of sharply rising bond yields.
Australian 10 year bond yields have nudged 1.65 percent for the first time since May 2019.
There was a big rise in the Aussie dollar and the pound on Friday, both reaching multi-year highs.
There have been big falls in US equities overnight after higher than anticipated jobless claims, showing its not a smooth recovery for the US.
There was a strong bounce back in US retail sales in January.
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.
America has been off work for Presidents Day, but that hasn’t stopped markets optimistically looking to a world where COVID-19 isn’t centre stage.
There’s absolutely no surprise that Donald Trump has been acquitted in Washington,
It’s been a relatively quiet 24 hours with only slight market moves
Markets have been fairly subdued on the back of soft inflation numbers in the US, and as investors hold off for any revelations from Jerome Powell as he addresses the Economic Club of New York.
A range of key commodity prices rose in January.
Insight
The Euro gained on two fronts overnight.
Janet Yellen shrugged off concerns about the Biden stimulus package unleashing inflation on the US economy.
Australian agriculture set for solid year.
Insight
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.
New Zealand’s labour force data yesterday showed a strong fall in unemployment, possibly down to NAIRU levels.
All eyes and ears will be on Philip Lowe’s speech today, following the very dovish outlook from the RBA yesterday.
In normal times an episode like the Reddit induced short squeeze would eventually see markets return to normal.
Equities were hit hard on Friday as the Reddit warriors made their mark.
US equities have bounced back after a day influenced by speculative trading on retail platforms with investors spurred on by chatter on Reddit.
The markets have so far been unmoved by the FOMC announcement, perhaps because it said so little.
The IMF has upped their forecasts for global growth but, as Tapas Strickland suggests on this morning’s podcast, markets don’t tend to pay a lot of attention to these numbers
Markets turned sharply to a risk-off mood at the end of last week, on the realisation that vaccine roll outs will take longer than hoped whilst infections are growing.
The ECB changed nothing overnight, with President Lagarde saying risks remained on the downside.
New highs on the NASDAQ and S&P500.
It’s Inauguration Day, or it will be when Wednesday eventually ticks round in the US.
Markets are looking through the prospect on any unrest on inauguration day, but the more immediate question is what will the President do today?
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.
An ensuing impeachment of the US President continues to be of little concern to the markets.
With yields rising there’s been a question mark over whether the appetite for treasury bonds is falling.
Bond yields continue to rise in the US as markets prepare for an expected multi-trillion dollar stimulus package from the President-elect.
The Morning Call is back, and the new year has kicked off pretty much where we left off.
You might have expected a positive market response as the US politicians reach agreement on a fiscal stimulus bill, particularly as Europe became the latest region to approve a vaccine.
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.
There's rising hopes that a US fiscal stimulus deal is imminent.
Equities have climbed higher in the US and Europe on the hopes two deals will be struck this week.
The markets lost some of their mojo today.
The inoculation program in the US has ambitious targets.
Even though a hard deadline has been set for Sunday for the UK-EU trade deal, there’s no guarantee it will all end there.
Ursula von der Leyen and Boris Johnson have been meeting over dinner to discuss the progress of the UK-EU trade deal.
Markets have been buoyed by positive COVID-19 vaccine news, which could correspond with stronger economic activity and demand for commodities next year.
Insight
The UK has started injecting people with the COVID vaccine. If only they could inject compromise in the UK and EU negotiators who remain a long way from reaching a deal.
The UK-EU trade deal really is going right down to the wire – and the wire itself keeps getting pushed back.
US equities reached new highs again on Friday even though the jobs numbers were lower than anticipated.
OPEC+ has struck a deal to slowly increase oil production from next month, rather than letting the production cuts fall off a cliff.
The pound has taken a sharp hit as Brexit talks don’t seem to have progressed much at all.
A strong rebound as the recovery begins. GDP rose by a large 3.3% in Q3, following the sharp 7% fall in Q2.
Insight
There’s a positive vibe about this morning, pushing equities higher and Treasury yields have seen a sharp rise too.
The US dollar was losing ground for most of the session before a sudden reversal that knocked the Euro off a multi-year high.
The pound has already recovered the losses it made on Friday, when Brexit rhetoric was ramped up on both sides of the English Channel.
Large rebound from COVID impacted Q2.
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How high can Australian cattle prices go?
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The ECB’s Philip Lane expressed concern about the tightening of credit standards which could impede the European recovery.
It’s Thanksgiving today in the US and markets have been cautious ahead of the holidays.
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.
Astra Zeneca announced the results of their trials, with efficacy up to 90 percent with a drug that is cheaper to produce and easier to distribute.
NAB has revised its forecasts for growth in the Australia economy.
The markets are more focused on the short-term economic hit of lockdowns than the longer-term vaccine fuelled positive outlook.
Markets continue to be torn between the good news and the bad news.
There was no new vaccine news overnight and the markets seemed a little disappointed by that, with equities down and a move to government bonds.
Markets have been lifted higher on further vaccine news, with Moderna saying their trials have shown 94.5 percent effectiveness.
2020-21 on track to deliver above average winter crop.
Insight
Last week was a volatile one, but markets enthusiasm stemming from the hope of a vaccine led the charge, with some shifting of focus on equity markets.
This week’s earlier optimism over a possible vaccine for COVID-19 has disappeared completely, with equities falling and bond prices rising.
Even though the markets continue to respond positively to the hope of a vaccine, central bankers seem to be taking a more cautious tone.
October was another mixed month in commodity markets.
Insight
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.
The markets have scarcely had time to respond to the news that Joe Biden is the next President of the United States than we’re it with the (potentially bigger) news that Pfizer have successfully completed stage three of their COVID-19 vaccine trials, with an astonishing 90% success rate.
There’s still an outside chance that in January the Democrats could take control of the Senate.
Markets have adopted a risk-on stance with the hope that there'll be fiscal stimulus to counter the impacts of COVID-19.
US equities have climbed as the US goes through Wednesday without a clear winner in the election.
The RBA announced cuts to interest rates and a $100bn bond buying program yesterday.
Markets flipped from Friday’s share and bond sell-off, with more optimism a day or two out from what is expected to be a Biden victory.
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 turned around again with equities rising sharply.
Markets have been hit by concerns over COVID-19 and the US election aftermath.
There’s a risk that next week’s US election is more contestable than we might have considered a week ago.
Markets are displaying classic risk-off moves today – with equities down, bond prices up and the US dollar the safe haven currency of choice.
Market and seasonal conditions strengthen Australian agriculture.
Insight
Last week finished with US stocks down, the US dollar down and the price of bonds down.
In a few hours Joe Biden and Donald Trump go head to head in the last election debate.
Talks are back on.
Equities are higher in the US today.
Markets are waiting to see the outcome of two on again off again decisions, both with sizeable economic consequences.
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.
Philip Lowe, the Governor of the RBA, is talking this morning.
Trends in global commodity prices remain mixed.
Insight
The Aussie dollar has taken a hit twice in the last twenty-four hours.
The US Senate is seemingly preoccupied with pushing through Amy Coney Barrett as Supreme Court nominee, casting aside any bandwidth for fiscal stimulus talks.
The US dollar hit a two and a half year low on Friday, whilst the Chinese Yuan showed big gains.
Donald Trump continues to talk about a stimulus deal, even though he said it had been shelved.
There’s been a market rebound on the hope that some sort of stimulus deal in the US is still possible before the election.
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.
As the President prepares to leave for the White House there’s still hope that a deal will be reached to pass version 2 of the Heroes Act, adding more stimulus to the US economy.
Friday was certainly a gamechanger. The US President went into hospital without a clear picture of his condition. Now, it seems he could be returning to the White House as soon as today. So, do the markets take back some of their risk concerns, and focus on the positives of the situation?
Equities in the US rose overnight despite a stalemate on the fiscal stimulus package.
Equities have been helped by some strong data from the US and continued hope on a stimulus deal.
Despite a big jump in confidence in the Conference Board numbers for the US, there’s not much optimism in the markets today.
US and European equities rose sharply, with rising confidence seeing a fall in the US dollar and a rise in the Aussie.
COVID19 cases continue to rise in Europe, with numbers in the UK and France now well above the first wave.
Equities were rising again in the US overnight on the hopes that a stimulus deal would be struck between the GOP and Democrats, but as optimism turned to reality, prices fell, the US dollar regained some of its strength and bond yields weakened.
NAB had forecast that the Aussie dollar would reach 74 US cents by the end of the year. It did earlier this month but, as global risk sentiment rises, it is rapidly losing ground.
In the US Jerome Powell spelt out very clearly in his testimony before Congress that more fiscal stimulus was needed and had been assumed by many board members in their policy predictions.
Concerns over the impact of a second wave in the US and Europe seem to be gathering momentum, driving investors to government bonds and safe-haven currencies.
What more can central banks do to help stabilise the global economy?
It’s been a topsy turvy session overnight.
US interest rates will be lower for longer – that’s the takeout from today’s FOMC meeting.
US equities are on the rise again driven by a flurry of M&A activity, alongside vaccine hopes and reasonable activity numbers from China.
Shares climbed in the US on the hope Pfizer will have a vaccine ready by the end of the year.
It’s just over six months since the COVID-19 pandemic was declared and we’re still unsure about how it will all end.
The pound lost further ground today as the EU objected to a new government bill that would unilaterally overturn the Withdrawal Agreement.
There’s been a rebound in risk sentiment.
At a high level, commodity prices broadly strengthened in August (with coal and gold the notable exceptions).
US equities have had a third session with substantial falls.
A drop in the pound was the only significant market move overnight.
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.
The US dollar managed a slight recovery which has also seen continued growth in US equities.
Q2 GDP fell by a massive 7% (-6.3% y/y), confirming the large hit to economic activity as a result of the shutdown to limit the COVID-19 pandemic.
Insight
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.
The US dollar bore the brunt of Friday’s reflective thinking on Jerome Powell’s Jackson Hole speech.
GDP is expected to decline by 5.8% (-5.1% y/y) in Q2 – the largest quarterly fall on record.
Insight
Jerome Powell used his virtual address to the Jackson Hole Symposium to announce the Fed’s strategy of targeting an ‘average’ 2% inflation rate
There’s continued optimism in the markets with equities reaching new highs again.
The US dollar is down again with equities up and touching new highs again.
US equities reached new highs again, with big gains also in Europe.
Europe’s PMI’s disappointed markets on Friday, whereas the US numbers were better than expected.
US equities continue to rise, even though the jobless claims numbers rose last week.
There was disappointment from investors after the minutes of the recent FOMC meeting were released.
US stocks continue to rise to record highs, helped today by strong housing starts and building permits.
The US dollar continues to fall, pushing the Aussie dollar higher this morning.
Demand fundamentals limiting outlook for wool.
Insight
US-China trade talks have been called off for the foreseeable future with little market impact.
Jobs data is confusing right now. How much is it influenced by government stimulus activity?
US equities continue to race upwards, at or near record highs.
Commodity markets have continued to display differing trends.
Insight
Markets in Europe seem to have been encouraged by the news that Russia is to start vaccinating key workers in the next few weeks.
The latest JOLTs (job openings) showed there are 5.9 million jobs available, more than expected, but it didn’t give markets any kick.
Trump’s executive orders hit technology stocks in the US and China on Friday.
President Trump has indicated if no stimulus deal is reached he’ll use his executive powers.
Gold has broken the $2,000/ounce mark, so is it making a run for it?
Treasury bond yields are reaching new lows which has heightened the appetite for gold.
Appreciating AUD takes gloss off positive seasonal outlook.
Insight
There was a lot of optimism in the markets overnight, driven by strong manufacturing numbers in the US and Europe.
The Australian economy will take a hit from the stage four lockdown in Melbourne, but it’s not alone.
The US dollar continued to slide, with a fall in shares and US Treasury yields, as GDP numbers showed the extent of the shock to the US economy in Q2.
“We’re in a tough situation” – that was the response from Jerome Powell to one question during the FOMC press conference this morning.
The US is no nearer to reaching agreement on their fiscal stimulus package.
Food service spending under pressure amid new restrictions.
Insight
Gold has reached a record high, whilst the US dollar continues to slide.
The US dollar lost a lot of ground last week as Congress argued over the shape and form of the next recovery package.
It's been a classic risk-off session so far, at least in the second half.
Europe's done it, Australia's done it. Now it's the US' turn to extend their fiscal support, and the deadline is looming.
The Aussie dollar rose over 1.7 percent, helped by the gain in the Euro after leaders there reached an agreement on a European Rescue Plan.
Scott Morrison will unveil changes to the JobKeeper and JobSeeker programs today
After three days debating the size and shape of the European Recovery Plan, EU leaders failed to reach an agreement.
There's been a lot of employment numbers out over the last 24 hours – for the US, the UK and Australia.
There’s another possibly shape – the W recovery.
A number of commodity markets saw stronger prices in June –particularly base metals, gold and oil.
Insight
The Euro’s rise is based on hopes that European leaders will reach a consensus on their rescue package this week.
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.
Markets opted to take the positive news on Friday, sending shares higher and the US dollar lower.
Markets are split between the confidence things might be getting better versus the realisation that in the US southern states infection rates (and fatalities) are getting worse.
The UK government going halves on lunch if you eat out in the first half of the week.
There isn’t an immense amount of confidence about how quickly economies will recover.
Everyone is seeing the silver lining, but clouds could be forming.
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.
The overnight session started on a sour note over increasing concerns about Hong Kong.
Dr Fauci has declared the virus as ‘out of control’ in the US and more measures need to be brought in to contain it.
Record cattle prices face risks amid global pandemic.
Insight
There’s a little positive sentiment pushing shares higher again today and helping the US dollar gain on the Yen and Swiss Franc.
Rising infection rates in US southern states hit equities hard on Friday.
The easing of banks’ investment rules contained in the so-called ‘Volcker Rule’ has helped to boost stocks.
Markets have been hit with a triple whammy – disturbing COVID-19 numbers emerging from the United States, a worse than expected downgrade to global growth forecasts and a big rise in oil inventories.
There’s a lot of positive sentiment again today, with US equities on the up and the NASDAQ reaching a new high.
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.
Last week was a choppy week as markets tried to balance out positive economic news against rising concerns about COVID-19 infections.
Markets continue to be jittery, with news of reopenings offset by concern over rising infection rates.
Australia’s latest unemployment numbers are out this morning and the rate is expected to rise.
Market sentiment is higher again this morning from a surprise rebound in US retail sales, coupled with talk of a $1 trillion infrastructure program from the Trump administration.
2020-21 winter crop prospects strong.
Insight
Globally equities had been dampened on Monday morning but equities are back on the rise in the US.
The markets lost a chunk of optimism last week.
There’s been a swift move to bonds and safe haven currencies since the Fed’s message yesterday that it would take a couple of years at least for life to return to normal.
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.
Trends across commodity markets were mixed in May.
Insight
The rally in equities has stalled for now – except for the NASDAQ.
Equity markets continue to rise and the US dollar continues to weaken with increasing risk-on sentiment.
The ECB announced it will extend its bond buying program by a further €600b.
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.
GDP declines on early COVID-19 impacts.
Insight
It’s all good news as far as the markets are concerned, pushing the Aussie dollar even higher.
The Australian dollar has climbed even higher this morning, reaching 68 US cents.
The calm before the storm.
We’re seeing iron ore prices rise largely because of concerns over supply from Brazil.
US equities continued to rally as investors looked for signs the economy would be getting back on track. But then …
The Australian dollar has lost ground as China threatened to ban imports of Australian coal.
There’s a strong risk-on mood in the markets this morning.
Equities have staged a broad-based rebound and are expected to continue as markets reopen in the US and UK.
Podcast
The unrest in Hong Kong is likely to impact the Australian dollar.
Market sentiment was tempered somewhat by rising rhetoric between the US and China.
It’s been another positive session, driving equities higher and giving another boost to the Australian dollar.
Markets have controlled their excitement after the burst of optimism over a potential COVID-19 vaccine.
There’s been big increases in equity markets and bond yields on news of a successful stage one vaccine trial in the US.
The US President has said the US needs to get back to work, vaccine or not.
The US and Australia have both reported dour job numbers, although markets were braced to expect it.
The Fed’s Governor Jerome Powell took a very sombre tone about the response to the COVID-19 crisis.
Commodity prices generally fell in April – with particularly steep falls in oil and LNG markets, along with declines in iron ore and coal.
Improved seasonal conditions drive a 17-point jump in NAB’s National Agribusiness Conditions Index.
Podcast
There’s been a swift reversal in sentiment.
When we’ve had positive risk sentiment in the past we’ve tended to see a stronger Aussie dollar but that’s not the case today.
The non-farm payrolls data on Friday showed 20.5 million new job losses in one month in the US and yet equities rose
Future contracts for Fed funds turned negative for the first time.
Two questions remain over the COVID-19 crisis: when is it safe to lift lockdowns and what will the debt-impact be on the economy?
The Euro and Italian bonds took a hit with German judges challenging the ECB on its QE activity.
Airline stocks have taken a heavy hit after Warren Buffet’s decision to bail out at the weekend.
May got off to a bad start on Friday with falls in equities and the Aussie dollar the worst currency on the day.
Month-end has seen a broad sell-off of the US dollar.
Fed warns of considerable medium-term risk.
The Aussie dollar has been steadily rising, now around 65 US cents.
Again, it seems markets are ignoring the bad data of which there’s plenty.
There’s still talk of a v-shaped recovery in the US.
US unemployment registrations have added another 4.4 million, European PMIs hit record lows and the EU failed to reach an agreement on how to fund a recovery package for Europe.
Oil prices have recovered somewhat and equities have risen again.
Oil rout sours risk sentiment across the board.
WTI lurched into negative territory with a vengeance.
Industrial production numbers from China on Friday gave investors hope.
Another 5.2 million jobless in the US.
March data out of the US is bad and the share market has taken it badly.
Overall, the global economic outlook has deteriorated since last month, with the downturn expected to far exceed the Global Financial Crisis.
Australia joined the bull run in the share market yesterday, clocking up 20.7 percent growth since March 23.
The US Fed has extended its QE shopping list, agreeing to buy junk bonds from corporations suffering the impacts of the coronavirus.
Rural commodities continue to climb.
There’s more optimism today that countries are reaching the peak of COVID-19, which is pushing US equities higher.
Optimism is being driven by the infection and fatality curves for COVID-19 in Europe and the US.
Equities have bounced back in a big way on hope that countries will start to ease restrictions and get more people back to work.
Hope is a rare commodity these days – unlike oil.
Oil shot up in price overnight.
The quarter has started with big falls again on equity markets and lower Treasury yields, whilst oil prices continue to be driven downwards.
Equities in Europe are on the rise. Equities in the US are on the slide.
Scott Morrison’s job retention program helped equities yesterday but doesn’t explain the rise in the US and Europe.
Other parts of the world are getting ready for a lockdown that could last a few months.
US equities rose sharply overnight despite the news unemployment claims in the US have risen to 3.2 million for the week to March 21.
Equities are on the rise in the US and Europe.
Markets reversed a little overnight with US and European equities rising.
Rural commodities resilient amid COVID-19 crisis.
The US Fed announces unlimited QE.
It’s likely prices will fall further as more countries and regions go into lockdown.
Oil has shot up in price, with equities rising too and there’s a bit more interest in government bonds.
Big falls in equities and oil, as well as widespread selling of government bonds, even gold is being ditched.
The Aussie dollar has fallen below the post GFC low.
Despite extreme measures by the Fed yesterday and the return of QE, markets were far from impressed.
The RBNZ has slashed rates this morning to a quarter percent.
Markets are in free fall as containment measures impact heavily on business.
The Bank of England and UK government launched a coordinated approach on tackling COVID-19 headwinds, with an emergency rate cut and fresh fiscal stimulus.
Commodity markets generally remain volatile, reflecting the uncertainty presented by the Coronavirus (Covid-19) outbreak.
Markets have bounced back a little even though the battle over oil seems to be getting worse.
Risks remain amid rapid rise in cattle prices.
There has been a massive fall in oil prices.
The rush to bonds continued on Friday, hitting new lows for Treasury yields, even as equities in the US saw a last-minute push and actually finished the week up a little.
Markets have switched back to risk-off mood.
A moderate outcome pre COVID-19.
Equities and the US dollar have bounced back even if bond yields remain low.
The US Fed dropped interest rates by 50 basis points in an emergency cut.
Central bankers and finance ministers are hooking-up on a conference call later today to discuss a coordinated response to the impact of the coronavirus.
Friday marked a bad end to a tumultuous week for the markets, with equities, commodities and bond yields all hit hard.
A weak result ahead of the Coronavirus outbreak.
Thursday proved to be a very volatile day towards the end of a very volatile week.
The markets attempted a bit of a rebound earlier but it hasn’t lasted long.
Markets continue to respond to news reports highlighting the (admittedly slow) spread of COVID-19.
The extent of the spread of the coronavirus in South Korea, Europe and numerous other countries, has driven a major fallout in markets overnight.
There was a strong risk-off mood on Friday due to the spread of the COVID-19 infections and the impact it's having on the global economy.
Asian currencies have born the brunt of rising concerns over the spread of COVID-19 beyond the Chinese mainland.
The markets have spun around again,with renewed optimism and not much lingering concern from Apple’s revenue warning yesterday.
Markets have returned to adopting a more cautious approach to the impact of COVID-19, after Apple said it didn’t expect to meet its forward guidance.
Nobody was expecting anything other than a bad GDP read from Japan but it was worse than bad.
Markets are cautiously hoping the worst of the coronavirus is over.
The markets slipped momentarily into risk-off as the number of COVID-19 infections jumped in volume, but concern slipped back a little as it became clear that the way cases were being measured had changed.
The markets are continuing to discount the impact of the coronavirus.
Commodity prices have generally retreated in early February in response to the Coronavirus outbreak in China.
Good January rainfall across key agricultural production areas drove the NAB Rural Commodities Index 4.6% higher this month, despite the impact of bushfires and coronavirus.
Trump tweeted as Jerome Powell spoke saying shares were falling the more he spoke.
There seems to be hope of an early recovery to the impacts of the coronavirus.
Ordinarily these numbers would be a cause for optimism in the markets, yet concerns of the impact of the coronavirus are having the opposite impact.
The sun continues to shine on the equity market with the S&P500 making a new record higher, +0.3% to 3,344.
As this week wears on the combination of more positive news is able to lift markets, even while the Coronavirus continues to show no signs of slowing down.
Since Monday the markets have dived, then climbed back again.
US equities bounced back today – perhaps because there wasn’t a lot of new news on the coronavirus but also because US ISM numbers exceeding expectations.
The Australian dollar – and emerging markets more broadly – were hit by further concerns over the spread of the coronavirus.
Coronavirus continues to cause concerns, hitting all asset classes overnight, including US and European equities.
The least surprising news today is the decision by the FOMC to keep rates on hold in the US.
US stocks have rebounded after a day when they were hit hard over concerns on the spread of the coronavirus.
The Australian dollar has fallen more than one percent today as concern continues over the spread of the Corona virus.
Markets push back the timing of a rate cut from the RBA.
US equity markets have regained composure but will news of a lockdown of the Wuhan district fan further volatility?
Whilst President Trump was self-aggrandising at Davos, US equities stalled.
The US was on holiday Monday so it’s been a quiet session all round.
Dairy dynamics: prices, drought and costs impacting dairy landscape.
The rally in US equities continued at the end of the week, with the optimism spreading to Europe.
US equities rose higher still on the back of the latest US retail numbers.
Equities have posted further gains and new record highs.
The US and China will sign the phase one trade deal tonight.
There are reports the US Treasury Department will no-longer consider China a currency manipulator.
In our first podcast of 2020, Ray Attrill discusses the week’s economic news and the broader prospects for the year ahead.
We’re ending the week with risk sentiment at its best level of the year.
Markets have now largely unwound the risk-off moves that have occurred since Friday.
It’s been a particularly bad 24 hours for the AUD (if you aren’t an Australian exporter, that is).
Geopolitical tensions remain centre stage with markets clearly in wait-and-see mode.
With renewed hopes for a Brexit deal and a truce at least on the US China dispute, could 2020 be a year of strong growth?
The AUD held its position after the better-than-expected Australian Labour numbers yesterday.
Not much movement in currencies or equities.
The pound took a hammering after Boris Johnson indicated the end of 2020 will be a firm deadline for Brexit, deal or no deal.
There’s been feverish activity in equity markets over the last 24 hours as investors respond to the US-China trade deal and the removal of Brexit uncertainty (for now).
Two of the biggest obstacles to global economic growth have seemingly been removed, or at least sidestepped for a while.
Two significant deadlines today means, whatever happens, we can expect some volatility.
The Fed has announced no moves on rates in the US, with no expectations for cuts in 2020.
Economic conditions in 2020 are expected to remain unfavourable for commodity markets.
The markets continue to ignore the US impeachment proceedings.
Markets have been calm overnight, in wait and see mode ahead of a series of more important events this week.
Jobs numbers from the US on Friday were well above expectations and we saw a swift response in the markets.
All eyes tonight will be on the US non-farm payrolls data.
Oil has been the big mover overnight ahead of the OPEC summit.
Consumer growth slows further.
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 markets were spooked overnight by threats of further tariffs from the US President if a trade resolution isn’t reached.
It’s an important week for Australian markets, with a slew of data today, GDP released on Wednesday and the RBA meeting between them.
Consumption growth remains weak.
President Trump has signed the Hong Kong human rights act.
For once US markets have been driven not by trade talks, but by hard numbers.
RBA Governor Philip Lowe said QE wouldn’t happen in Australia until interest rates got down to 0.25%.
The hope that something will happen soon between the US and china has sent US equities to new highs.
There was renewed hope a phase one trade deal could be reached between the US and China by Christmas.
The markets anticipate the next development in the US-China trade talks.
Markets adopted a mild risk-off mood overnight.
Sterling has been the biggest mover as Boris Johnson pulls ahead in the polls.
High cost of water dries up basin profit margins.
US equities finished last week on new highs on the hope the phase one trade deal between the US and China is close.
The Aussie dollar fell sharply yesterday on the back of disappointing jobs numbers, followed by weaker than anticipated activity data from China.
The NZ dollar saw the biggest currency move over the last 24 hours.
NAB’s Non-Rural Commodity Price Index is forecast to fall by 7.9% quarter on quarter in Q4 2019.
The US President offered nothing new about where trade talks are at and the markets little moved.
Sterling bounced higher today, shortly after GDP figures showed the UK had narrowly missed a recession.
The fact Trump wasn’t entirely keen on giving up existing tariffs hasn’t stopped investors from pushing equity prices higher.
Shares rose higher on further hope that trade talks with China will see a roll back in existing tariffs.
Market sentiment has done a complete U-turn.
With nothing concrete to go on, markets continue to factor-in optimism over the US-China trade talks.
Yesterday’s retail numbers showed Australians are cutting back on their shopping habits.
US equities hit new highs again on Friday.
There’s a risk-off mood today.
The US Federal Reserve has cut interest rates as expected.
Australia’s CPI read today and US GDP numbers tonight.
US stocks are on the rise as optimism for a trade deal intensifies.
A rate cut is anticipated by the Fed and there’s further hope a phase one deal will be signed by the US and China.
The pound weakened as Boris Johnson calls for an election on December 12th.
The market reaction has not been favourable to the latest Brexit events.
Two familiar stories dominated the markets overnight.
The pound has already weakened on the latest Brexit delay.
The early market response to a new Brexit deal and Aussie employment numbers.
Wheat crop cops sharp downgrade amid tough spring.
The pound has risen again as negotiations continue into the night (again) over a Brexit deal.
The pound is riding higher on the back of optimism.
There’s a little apprehension in the markets this morning because the US China trade deal might not be a done deal.
The markets finished last week on a high.
US-China trade talks and Brexit negotiations both look like some sort of deal could be reached.
There’s a risk on mood in the markets today.
NAB’s Non-Rural Commodity Price Index is forecast to fall significantly in Q4 2019.
Even though trade talks are still going ahead between the US and China this week, what little hope of any sort of outcome, seems to be rapidly diminishing.
Markets are more preoccupied with the outcome of the US-China trade talks this week.
There was something for everyone in Friday night’s US employment report.
In the US the non-manufacturing ISM read came in a lot lower than expected.
It’s a sea of red for global equities and US bond yields.
The markets have reacted firmly to news from the RBA yesterday.
US equities are on the rise as markets brush off concerns over the lack of progress on US China trade talks
US equities felt the heat on Friday with news that the Trump administration was looking at new ways of limiting investment in China.
The US dollar index (DXY) reached over 99.3, close to a two-year high.
The markets reacted positively to indications from President Trump that a trade deal with China could be close.
Impeachment proceedings against the US President has hit equities, bond yields and oil prices hard.
RBA Governor Philip Lowe is talking in Armidale later today.
Seasonal conditions and declining winter crop forecasts reflect drop in NAB Rural Commodities Index.
Hopes of a quick resolution to the US China trade dispute seem as unlikely as ever.
There’s rising expectation the RBA will cut interest rates at their next meeting.
The Federal Reserve cut rates but didn’t give a clear indication of further cuts or promise the return of QE.
Oil prices fell sharply on news Saudi oil production will be back in full by the end of the month.
Brent Crude rose 20 percent at the market open on Monday morning, the biggest single move since the invasion of Kuwait in 1990.
Crude oil markets may tighten significantly following weaponised drone attacks on the world's largest oil refinery at Abqaiq on Saturday.
Attacks on the world’s largest oil refinery has hit global supplies hard.
The ECB is to reintroduce quantitative easing.
A stimulus boost from the ECB is widely anticipated.
In US dollar terms, NAB’s Non-Rural Commodity Price Index is forecast to increase by 1.8% quarter on quarter in Q3 2019.
Globally yields are on the rise again.
Bond yields have paved down across the world, driven by a sell-off in German bunds.
US payrolls numbers disappointed a little on Friday and China’s trade numbers over the weekend demonstrated what impact the trade war is having.
There’s been big moves on equities and bonds today as talks between the US and China appear to be back on.
The US dollar is weaker today on the back of positive developments in other parts of the world.
Private sector stalls.
Very soon it’s likely that the UK parliament will take the first step to delaying Brexit, allowing for yet more negotiating time with the EU.
Boris Johnson stood outside No. 10 Downing Street earlier, saying he didn’t want an election before the Brexit deadline.
In the US new tariffs on Chinese imports kicked in over the weekend,.
Private sector weakness continues.
In the US, the dollar, equities and bond yields have all risen on the news that China would rather talk than retaliate.
UK politics has turned even more toxic with Prime Minister Boris Johnson suspending parliament from September 12, for five weeks.
Markets have taken a hit as much of yesterday’s optimism subsides.
The markets have done a complete u-turn overnight on the back of positive news on the US China trade talks and some wins from the G7 summit, including proposals to reform WTO rules and a potential US Iran meeting.
China’s official response to President Trump’s latest round of import tariffs sent markets into a spin on Friday.
Markit PMIs show US manufacturing has contracted, whilst in Europe it remains in a slump but hasn’t fallen as far as anticipated.
The FOMC minutes released highlight the divisions in the Fed at their last meeting.
The markets retreated from yesterday’s optimism.
A wave of positivity seems to have hit the markets.
Resilient cattle and lamb prices sustain flat NAB Rural Commodities Index.
The surprise news on Friday were reports that the German government might relax some of its spending rules to splash out and prevent a recession.
An ECB Governing Council member suggests markets hadn’t priced in the extent of the stimulus measures coming next month.
It’s far from a quiet day in markets.
US dollar NAB’s Non-Rural Commodity Price Index is forecasted to increase by 2.1% yoy in Q3 2019, however underlying trends remain highly mixed. Higher export prices for LNG and iron ore (despite more recent spot price falls) are the key contributors, while both thermal and metallurgical coal are weaker, as are most base metals.
There’s been a sharp turnaround in market sentiment as the US announced delays to the extra tariffs on Chinese imports for certain consumer-sensitive products.
There’s a continued risk-off mood in the markets today, not helped by protestors forcing the closure of Hong Kong Airport and a surprise defeat of Argentina’s President Macri in primary elections at the weekend.
The US President hinted that a resumption of trade talks with China wasn’t a done deal, adding uncertainty in an already shaky market.
Are the markets more concerned about the relative strength of the Chinese currency than they are about tariffs?
It’s been a hectic 24 hours, with shares falling them climbing back, with bond yields doing the same.
US stocks have bounced back and the US dollar has picked up against the Yen.
Markets continued in risk-off mood as China announced its response to President Trump’s threat of extended import tariffs.
There was a swift market reaction to President Trump’s announcement of further tariffs on imports from China
A tweet from President Trump promising a 10% tariff on the remainder of imports from China has sent the markets into a tailspin.
There was some short-term market reaction during Powell's press conference.
Get ready for a busy 24 hours.
The pound took another hit today, now at its lowest level since March 2017.
The US finished on a high last week.
The latest IFO readings have shown a sharp downturn.
Eurozone manufacturing PMIs are well down, hitting a seven-year low in Germany.
US shares were doing well ahead of the news that trade talks would resume between the US and China next week.
The race is on to try and get through stuff before the summer recess in the US and Europe.
There was a reversal of fortunes on Friday as the NY Fed clarified comments from their President John Williams the day before.
Could the Fed be careering to a half percent rate cut at the end of the month?
The Fed’s Beige Book is out this morning.
US retail sales were strong but t’s not all good news.
The NAB Rural Commodities Index rose 0.5% in June.
China's industrial production numbers were far better than anticipated.
China reported disappointing import numbers at the close on Friday.
Fed Chair Jerome Powell didn’t alter his stance despite signs of inflation picking up in the US.
Jerome Powell has sent the markets back to where they were before the non-farm payrolls data last week.
NAB’s Non-Rural Commodity Price Index has been on the up in recent quarters, in large part due to iron ore prices.
Ray Attrill explains how the latest small business survey data in the US shows signs that tariffs on Chinese imports might be starting to make their mark.
There were no big movements on US equities or bonds overnight, as markets wait to see what Jerome Powell has to say in his Congressional testimonies mid-week.
The US payrolls data was stronger than expected on Friday.
Trading has been thin as US markets closed for the 4th July holiday.
US equities took an early mark on record highs, whilst bond yields fell further.
Global bond yields have fallen after BoE Governor Mark Carney warned of a shipwreck to the global economy if trade tensions intensify.
Horticulture exports grow to rival Australian lamb and dairy.
The RBA meets in Darwin today and is expected to cut interest rates.
The markets breathed a collective sigh of relief that the Trump-Xi meeting at the weekend culminated in some sort of truce.
Markets seem to indicate a little optimism on the outcome of the Trump-Xi meeting at the G20 this weekend.
Will interest rates in the UK go up or down?
Cattle markets and southern rain stabilises NAB's Rural Commodities Index
Risk adversity drives yields to record lows in Europe.
Even an executive order declaring more sanctions against Iran did little to influence markets.
NAB’s Non-Rural Commodity Price Index is expected to increase by 0.9% quarter on quarter in Q2 2019, a little stronger than anticipated in May.
European markets reacted to better than expected PMI numbers on Friday
The market continues to respond to the Dovish Fed statement yesterday with a rally in US equities, falls in Treasury yields and a fall in the US dollar.
The Fed has kept rates on hold but have kept the door wide open for future rate cuts.
There’s been a lot of movement in equities and bonds.
What picture will Mario Draghi paint of the European economy at the ECB forum today and what does he intend to do about it?
There are rate meetings for the FOMC, Bank of Japan and Bank of England this week, as well as the ECB Forum opening in Portugal tonight.
The Aussie dollar was the worst performing of the major currencies overnight following yesterday’s unemployment numbers.
News of President Trump threatening sanctions on Germany had an immediate impact on the Euro.
China is doing what it can to boost infrastructure investment.
There’s a ‘risk on’ mood in the markets this morning after Friday’s u-turn by the US President over Mexican tariffs.
The Euro rose today after the ECB spoke little of new measures to combat the economic downturn.
Markets are hopeful that a deal will be reached between the US and Mexico, and tariffs will be avoided.
Household weakness persists.
There’s been a sharp rise in US equities after comments from the Fed’s Jerome Powell, signalling rate cuts are likely.
The RBA is expected to cut interest rates today, but more interesting will be what Philip Lowe says this evening.
The market continues to adjust to the expectation that the US-China trade spat won’t disappear in a hurry.
Prospects of another soft quarter.
Treasury yields have continued their downward direction indicating growing expectations for a Fed rate cut – possibly three.
How far do US stocks need to fall before the President takes note and tries to resolve the US-China dispute?
Consumer confidence in the US hit a six month high, yet there’s a continued flight to bonds, pushing Treasury yields to the lowest level since September 2017.
There are repercussions being felt across the continent following the election.
Markets calmed a great deal on Friday.
There have been significant moves overnight, with the US dollar losing ground against the Yen and Swiss Franc.
In the FOMC minutes the Fed reiterated its pledge to wait and see on interest rates.
US equities have been boosted by a brief reprieve on Huawei trading restrictions.
Bond yields have risen slightly ahead of Jerome Powell’s talk today - will he give a strong hint a rate cut is coming? And will Philip Lowe from the RBA be doing the same?
Following the Coalition’s surprise victory on Saturday night, we’re already seeing a rise in the Aussie dollar.
Overnight we saw rising US share indices and a strengthening dollar.
US and European equities are up again on reports President Trump is delaying auto-tariffs due to kick in this weekend.
Reflecting the sustained strength in iron ore prices, NAB’s Non-Rural Commodity Price Index is forecast to increase by 0.4% qoq.
In Europe they’ve nicknamed last night as 'Turnaround Tuesday as stocks regained much of their losses.
Stocks, currencies, bonds and commodities have all felt the impact as China responds to US tariffs.
Overall, the NAB Rural Commodities Index rose 1.1% in April, largely reflecting higher cattle, lamb, dairy and cotton prices, offsetting further declines in grain.
The US President has threatened further tariffs on China over the weekend, on top of those imposed on Friday.
The imposition of tariffs by the US on Chinese imports is just hours away.
US equities have partially reversed their declines.
US equities have been knocked again as increased tariffs from the US on Chinese imports are looking more likely than not.
It’s not beyond the realm of possibility that the RBA could cut interest rates today.
The US President has been on Twitter in the last few hours threatening to lift tariffs on China by the end of the week
The market continues to react to Fed chair Jerome Powell’s ‘transitory’ remark on low inflation yesterday.
Markets moved sharply during Jerome Powell’s press conference.
It’s less than a day before the FOMC meets and Jerome Powell talks to the press.
It’s been a relatively quiet 24 hours as markets wait for word from the Fed later in the week.
Friday’s headline US GDP numbers was surprisingly strong.
It’s been a dovish couple of days for central banks.
Earnings results have pushed US equities to record highs.
The Trump administration announces an end to waivers for nations buying Iranian oil.
China delivered some more positive results in the last 24 hours.
The OECD suggests China’s stimulus measures may only offer short term benefits but the markets are happy to ignore the long term impacts.
Overall, the NAB Rural Commodities Index fell 2.7% in March, largely reflecting lower cattle, grain and fruit prices.
The week’s got off to a quiet start.
Last week finished on a positive note, sparked by a strong bounce back in credit growth in China, together with very strong export numbers.
The US dollar was helped overnight with surprisingly low jobless claims numbers in the US.
What did the RBA’s Guy Debelle say yesterday to spur the Aussie dollar on so much?
In USD terms, NAB's Non-Rural Commodity Price Index is forecast to fall by 1.9% qoq in Q2 2019.
There’s certainly a more cautious mood today.
It’s been a quiet 24 hours that has seen stocks lose some of their gains of last week.
US non-farm payrolls data emed to indicate a Goldilocks economy – more jobs and with wages contained.
US payrolls data is out this evening (Australia time) and, unless something else is brewing, markets tend to tread water in anticipation.
There are three bits of news driving optimism in the markets.
The markets are a lot calmer after yesterday’s rally in shares and sell-off of bonds. And the Kiwi and Aussie dollars have taken the biggest hit out of the major currencies.
There was continued optimism in the markets overnight with more strong data reads from China and the US.
China’s PMI numbers over the weekend were better than expected.
The UK Prime Minister will table her Withdrawal Agreement again tonight.
A risk-off mood saw moves to US Treasuries with big falls in yields and shares.
The US stock market has rebounded helping the Aussie dollar.
Overall, the NAB Rural Commodities Index gained 0.2% in February – “above water” only due to strong gains in fruit and vegetables, dairy and to a lesser extent wool and sugar.
The pound has suffered the most of the major currencies.
The markets seem a little spooked with big falls in equities in the US on Friday.
So what now for Brexit? Plus the marked reaction to yesterday’s Fed forecasts.
The US Fed has revised its growth forecasts for this year and next, and removed all dot points for rate moves this year.
Media reports suggest China is playing hard ball in negotiations with the US.
The markets are on-hold ahead of the FOMC meeting later in the week.
It’s a slow start to the trading week.
Why are the Aussie and New Zealand dollars amongst the worst performers overnight?
And signs that the European economy might be levelling off rather than falling.
In USD terms, NAB’s Non-Rural Commodity Price Index is forecast to increase by 3.1% qoq in Q1 2019.
Boeing's share price has driven the Dow down whilst lower than expected inflation will have had a bit to do with bond prices today.
US stocks rose sharply following the release of US retail numbers which showed a bounce back in January.
Friday saw quite a shocking miss on US non-farm payrolls.
Markets have reacted swiftly to the latest ECB meeting.
Australia’s GDP numbers yesterday surprised many.
Household income and construction drag.
It’s been a strong 24 hours for data releases.
Markets in the US and Asia buoyed by news that a deal between the US and China was close.
The US saw some poor economic data on Friday yet bond yields rose as did equities.
Household sector weakness to persist.
Trump’s walkout of the meeting with Kim Jong Un dominated had little interest to the markets.
Three pieces of news drove sentiment overnight.
A boost for the pound and mixed data from the US.
There’s been significant progress on the two stories that have hindered markets this year.
The markets were buoyed at the end of last week by hopes that some sort of trade deal with China was closer.
Reports China is blocking the import of Australian coal into its Dalian port hit the Aussie dollar hard with no sign of recovery just yet.
Have the Fed clarified its position after an apparent U-turn at their last meeting?
The US dollar is a little weaker this morning as the deadline for US tariffs on Chinese goods looms.
Markets are speculating whether the US will impose tariffs on car imports from Europe.
Could Trump’s declaration of an emergency to fund his wall have consequences for the markets?
Markets have been choppy on the back of surprisingly poor retail numbers from the US.
The NZ dollar jumped 1.7 percent yesterday after the RBNZ indicated they weren’t expected to change rates till 2021.
It’s looking likely the 1 March deadline for higher Chinese tariffs will be pushed back on the hope of progress on trade talks next month.
In USD terms, NAB’s Non-Rural Commodity Price Index is forecast to increase by 2.7% this quarter – driven almost entirely by the upturn in iron ore prices.
Overall, the NAB Rural Commodities Index was up 0.5% in December but down 1.1% in January.
The US dollar is now sitting at its strongest level of 2019 in DXY terms.
Talks at averting another US government shutdown ended in deadlock at the weekend.
It’s a sea of red for shares this morning. How much of this is down to Larry Kudlow’s comment that there’s a “pretty sizeable distance to go” before trade issues are resolved with China?
Words from the RBA’s Governor Lowe send the Aussie dollar spiralling downward yesterday.
Trading volumes have been lower ahead of President Trump’s State of Union address.
It’s a significant day for Australian news, in a period where little else is driving markets in the rest of the world.
On the face of it, the US looks like it's enjoying a Goldilocks economy right now: there’s growth, employment is strong and inflation is low.
The dovish tone set by the Fed yesterday has seen renewed vigour in the US equity markets helped by further strong earnings.
The Fed's stance has had a strong impact on markets in the immediate aftermath.
The US equity markets are mixed ahead of the Apple earnings results.
Equities took a hit as Caterpillar, a bellwether stock, missed its quarterly forecast, showing that the tariff war isn’t just hitting the Chinese economy.
European PMIs came out weaker than expected. That, together with a downbeat Mario Draghi, saw the Euro weaken.
Negativity on the state of the global economy has managed to overshadow positive earning results from US companies.
A blue day on the global markets.
Global Dairy Trade auction results have seen some upside since December after a fairly weak run over much of 2018.
On a quiet day on the markets (due to Martin Luther King Day in the US) the main focus has been, again on Brexit.
There was renewed hope at the tail end of last week the answer to the US China trade dispute isn’t far away.
There’s still no sign of an end to the US China trade dispute as the end of the cease-fire period draws closer.
Theresa May has won the confidence vote in her government, so she can battle on with Brexit.
Theresa May’s government faced a massive defeat in Parliament with a 230 vote loss on their Brexit withdrawal agreement.
The US government shutdown is now in its 25th day but the direction of the global economy is a bigger concern.
The shutdown impacting parts of the US government remains, the passing of Theresa May’s meaningful vote on Brexit seems unlikely and negative data from Europe has some wondering whether the region is already in recession.
Fed Chair Jay Powell’s comments at the Economic Club in Washington supports risk sentiment.
FOMC Minutes just released show Fed more dovish than post Dec-18-19 meeting statement/presser suggested
US-China trade talks extended into a 3rd day.
Positive sentiment in the US on Friday and in the APAC session yesterday has carried through into overnight markets notwithstanding a downside surprise in the US non-manufacturing ISM report.
It was far from a quiet Christmas period, with volatility driven by data, trade concerns, a government shutdown and a very different attitude coming from the US Fed.
2018 has been a year of surprises. In the final podcast for the year, the team discuss the year that was and what to expect in 2019.
US stocks have fallen markedly since the Fed meeting yesterday, with the dollar also taking a hit and the yield curve flattening a little.
Does the message from the US Fed set the right tone given sensitivities in the markets right now?
Oil fell even further overnight.
Equities, oil and bond yields are all down.
The NAB Rural Commodities Index fell 2.0% on a month on month basis in November, mirroring a 2.0% gain in October.
US shares were pummelled on Friday as fears of a global slowdown widen.
Mario Draghi’s fear of growing downside risks didn’t do too much damage to the Euro.
US equities have had a shot in the arm following a Wall Street Journal report that China might open up access to their domestic markets for foreign companies.
A positive reaction to reports China might drop tariffs on US car imports reversed by threats from President Trump about a possible government shutdown if he doesn’t get the funding to build the wall.
The pound has taken a hit on the increased uncertainty on where Brexit is heading.
The markets reacted sharply to weaker than expected payrolls data from the United States.
Risk sentiment has turned sour all of a sudden, with flattening yield curves preying heavily on the concerns of investors.
Equities were boosted overnight by the positive (temporary) deal between the US and China.
Healthy momentum continues
The markets have been treading water ahead of the meeting between Presidents Trump and Xi at the G20 this weekend, impacted a little by the news that Peter Navarro might also be attending the dinner.
President Trump is threatening more tariffs – this time on car imports.
President Trump has threatened China again, suggesting the prospect of tariffs at the year end is real.
There was a spark of confidence in the markets overnight as equities rose in the US, along with a bounce back in oil and a rise in Treasury yields.
Thanksgiving week finished with a rapidly falling oil price and questions over the strength of growth in the US economy.
Harvest is now underway for 2018-19 winter crop, a season which will likely go down as one of the most mixed in years.
Theresa May and European negotiators have agreed an outline of what the relationship will be after the UK finally leaves the EU which helped the pound today.
Oil and equities have bounced back up.
Oil prices and US equities are back close to where they were at the start of the year.
US stocks take a big hit. The Aussie and New Zealand dollars seem to have come off the worst out of the major currencies with a rise in uncertainty, whereas Sterling has risen.
The US dollar and Treasury yields fell on Friday as Fed Vice Chair Richard Clarida said they were close to being neutral on interest rates.
How low can the pound go if the UK shifts towards a no-deal Brexit?
Uncertainty on whether the UK Cabinet would pass May’s Brexit deal played heavily on the pound overnight but it rebounded when the deal was approved.
A first Brexit milestone could mean a volatile 24 hours or so for Sterling.
With just 137 days until Britain leaves the EU, how low could the pound could sink given the rising uncertainty?
The NAB Rural Commodities Index rose 1.8% in October, following a 6.5% jump in September.
Is the bear market in oil about to turn?
The FOMC has kept interest rates on hold. Meanwhile Italy and the EU seem to be at loggerheads on budget numbers and the UK’s Brexit secretary appears a little uninformed, as one cabinet minister breaks ranks on Theresa May’s plan.
Will the results of the US mid-terms impact the focus of the Fed?
As Americans head out to the polls the markets are left guessing whether it’ll be a good or bad result for President Trump.
Sanctions are stepped up against Iran today. Plus, the latest on Brexit.
As harvest gets started, hear from growers and traders across the country on the first NAB Growers’ Podcast.
The US dollar staged a swift reversal overnight, with the spot index falling significantly. We’ve also seen US stocks on the rise, along with significant leaps forward for the Aussie dollar and the pound, whilst oil falls sharply.
US equities bounced higher overnight, helped by Facebook’s earnings report.
Equities rebounded sharply at the start of the session in the US, but lost ground, but are still up on the day.
It’s a big week for global markets as well as the AUD.
US equities reversed their declines with a sharp rise overnight, ahead of today’s GDP numbers.
The US stock market took another hammering overnight, with a move to safe-haven treasuries.
It has been another bad day at the office for equity markets, beginning in the Asian session and spreading across Europe and the US.
The Chinese stock market performed well on the back of yesterday’s proposals from the government and the PBoC. And there’s increasing questions over whether the UK PM should stand-down.
AUD (and NZD) this week look set to remain in the hands of broader USD and Emerging Market (EM) moves.
There’s caution in the air, but could it just be for a day?
Despite increasing tensions over the missing Saudi journalist, oil fell sharply.
US shares are racing ahead again on earnings results and further evidence of a strong US economy.
AUD/USD positively correlated to oil prices more often than not.
Still hope a Brexit deal can be found, fears of a US response to the death of a journalist in Saudi Arabia seem to have been put on hold, keeping oil prices in check. And a look ahead to today’s NZ inflation figures.
In US dollar terms, the NAB non-rural commodity price index rose marginally in Q3 2018 – increasing by 0.4% qoq. The strong upturn in the first quarter of this year contributed to a much more significant increase in year-on-year terms – up by 8.2%.
The pound has fallen sharply as the currency markets opened on the news that a Brexit deal this week is looking very unlikely.
The NAB Rural Commodities Index rose 6.5% in September, recording the biggest monthly gain since December 2010.
Equity markets took another hammering overnight.
Overnight saw a big sell-off of US and European stocks.
Whilst the US economy seems to go from strength to strength, there is speculation that China will ramp up stimulus measures to keep their economy strong.
Equity markets took a hammering overnight. China felt it worst after their Golden Week holiday.
Strong US payrolls data on Friday saw bond yields push higher.
The rising US dollar is playing havoc on emerging market currencies and the Aussie has got tied up in the bad news.
Could oil reach $100 a barrel? And why have US treasury yields leapt forward overnight?
Italy’s travails continue and heightening oil prices are causing problems for Indonesia.
An eleventh-hour deal has has buoyed markets and contributed to increased risk sentiment.
The size of the Italian government’s budget deficit is causing concern in Europe.
The Italian budget wasn’t as easy to resolve as the markets had hoped.
The FOMC lifted interest rates in the US this morning with the expectation of another hike in December.
The markets are quiet ahead of tomorrow morning’s FOMC meeting. Meanwhile, there seems to be a further waiting game on Brexit and NAFTA.
Oil reached a multiyear high.
Yesterday President Trump pushed ahead with further tariffs on Chinese imports and the promise of retaliation soon followed.
The Aussie dollar was on the rise overnight, even as all eyes and ears were waiting on an announcement on the next round of tariffs from the White House.
The US President is keeping everyone guessing on further tariffs on Chinese imports.
Quite a few moving points to what has been a reasonably volatile night in markets.
The Aussie and Kiwi dollars gained some ground helped by hopes of renewed trade talks between China and the US.
A strong first half and easing downside risks.
US 10 year Treasuries are closing in on 3 percent again, as expectations firm on two further rate hikes this year.
No further news on tariffs overnight calmed down emerging markets overnight and gave the Aussie dollar a short reprieve.
President Trump has threatened to sharply escalate the US trade war with China.
There’s a risk-off mood in the markets this morning.
The Aussie dollar was higher despite continued woes in emerging markets, whilst the pound gained strength on positive hearsay on Brexit negotiations.
The Aussie and the Kiwi dollars have hit multi-year lows as the situation worsens in emerging markets.
Quieter markets didn’t help the pound which fell on further UK-EU disagreement on Brexit and more speculation on a leadership challenge.
Are hopes of a US-China trade deal waning?
Reasonable growth.
Equities and currencies in emerging markets took a tumble overnight, hurting the Aussie and Kiwi dollars in the process.
The pound soared higher today whilst the Aussie dollar suffered.
US consumer confidence is the highest its been in 18 years, even as the US trade deficit worsens, largely through weaker agriculture exports.
There’s been a swift market response to a possible understanding between the US and Mexico to replace NAFTA, helping the Canadian Dollar as well as the Peso.
US equities hit record highs on Friday.
Ray discusses the possible scenarios that could play out in Australian politics today and what the market impact will be – it’s already hit the Aussie dollar quite markedly.
News of five of the US President’s associates being guilty of felonies continues to have little reaction on the markets.
What influence has President Trump’s discontent with the work of Jerome ‘Jay’ Powell had on the markets?
Treasury yields drifted lower in the US today.
Speculation the US and China will strike a deal on trade around November has given markets some reason for optimism.
Markets turned on their head a little today, as the possibility emerges of trade talks between the US and China before the end of the month.
The US dollar and equities are on the rise and EM currencies teetering on the edge of a bearish market.
An unchanged economic outlook, but downside risks building.
Markets seem less concerned about the troubles in Turkey.
The crisis in Turkey’s currency is having ramifications far afield.
The Russian Rouble and the Turkish Lira hit hard over US sanctions.
The NAB Rural Commodities Index gained 1.3% month on month in July, following a 1.4% gain in June. On a year on year basis, the index was down 0.3% in July.
The markets are a little subdued this morning.
The Renminbi rose today and, demonstrating its dependency, the Australian dollar followed suit.
The US move to push ahead with sanctions against Iran will heighten tensions with Europe.
Markets revert to trade focus as China announces specific tariff rises on $60bn goods should the US $200bn threat come into force.
Dirty trade talk rattles the markets.
The market reaction to today’s US announcement on Chinese import tariffs, the FOMC meeting this morning and a near certain rate rise from the Bank of England.
The markets somehow expected more from the Bank of Japan but there was swifter market reaction to news that the US and China might restart trade talks.
Today, a session that has been high on movement, even though it’s been low on data. And the Bank of Japan’s attempts to control bond yields has impacted bond prices across the globe.
The US has boasted about the economic turnaround evidenced by Friday’s GDP figures.
Equity markets got a boost from the news Trump and Juncker have reached an agreement to halt further tariffs but tech stocks took a dent from the sharp fall of Facebook’s earning results.
Despite trade talks, shares continue to rise, but for how long? And what’s happening to Australian inflation – a temporary falter or the start of a softening trend?
China’s burst of confidence, irrespective of trade talks, is helping the Aussie dollar, but will it continue if the uncertainty continues?
The Bank of Japan’s changing approach to yield control and China’s policy to protect the economy had the most impact on markets today.
What will be the impact of a prolonged trade war? Is it bad news for the Aussie dollar?
The Yuan has served to undermine all of the gains in the AUD generated by yesterday’s good employment report.
Could slowing inflation cause the Bank of England to rethink the prospect of an August rate rise?
The move higher in front end yields boosted the USD, although the greenback was already on the ascendency early in the overnight sessions.
Trump in Helsinki and the EU in Beijing didn’t really move markets but the dissent in the UK has weakened the pound.
China’s M2 money supply grew less than expected on Friday.
Whilst Trump is overseas, the stock market has rebounded from yesterday’s falls, whilst Brent Crude continues to fall.
The US has imposed extra tariffs on Chinese imports. Gavin Friend discusses the market reaction.
Forecasts broadly unchanged but new risks to watch.
The next battle for Theresa May is in Brussels – will the EU accept her proposal, at least as a starting point? Plus, US ‘poised’ to release $200bn China tariff list, puncturing risk-positive offshore sentiment.
In June, the AUD/USD saw a new year-to-date low – a level last seen in May 2017 | Over the fiscal year the AUD/US traded between a high of 0.8136 and a low of 0.7311.
The NAB Rural Commodities Index gained 1.4% month on month in June, following a 3.1% gain in May. On a year on year basis, the index was down 2.9% in June. The monthly gain reflects strong lamb, wool and cotton prices.
The markets outside of the British Isles have seen some positive sentiment, including Australia.
Theresa May has presented her Brexit strategy with the full support of her cabinet, apparently.
The Fed, ECB and the BoE seem a little more hawkish, indicating that, whatever is going on in the background, their economies seem to be faring well.
NAB’s USD non-rural commodity price index declined by over 3% q/q in Q2 2018. This only partially reversed the large gain made in the previous quarter and, as a result, it is still 7.5% higher than a year ago. The fall in Q2 mainly reflected a decline in iron ore and metallurgical coal prices, although LNG export prices – linked to the price of oil – rose.
On an otherwise quiet day there was some volatility in the Yuan on reports that China is happy with a weakening currency.
Overnight we saw US stocks fall and bond yields up, but the real action has been in China with a weakening of the Renminbi reportedly kept under control by lots of buying from state banks.
The Aussie and Kiwi dollar were two of the worst performing currencies overnight.
Not the quietest start to the week.
The New Zealand dollar has taken a hit. Meanwhile markets remain confused and concerned about the continuing trade tensions.
The new approach to China isn’t any softer.
Oil prices pushed higher.
President Trump’s protectionist measures and OPEC’s increased oil production could be the two major market influences this morning.
The markets have moved very little today as investors contemplate the next steps in the tariff battle between the US and China. Even the EU response, with tariffs to follow on Harleys, Levis and Bourbon, did little to stir a response.
Equities, currencies, bonds and commodities all reacted to more rhetoric from President Trump about Chinese tariffs.
There’s been very little movement in anything overnight, except the price of oil.
Trade talks between the US and China took a turn for the worse at the end of last week, with the Trump administration issuing a list of $50 billion worth of products that would be hit with a 25 percent tariff.
The ECB announced today, as anticipated, that their QE program will finish at the end of the year. But markets weren’t quite expecting the anticipated delay in raising rates – which could be late in 2019.
There was little market reaction to the big deal between Presidents Kim and Trump.
Further speculation that NAFTA talks might fall apart, strong data from the US and UK, and a look ahead to today’s GDP figures for Australia.
The NAB Rural Commodities Index gained 3.1% month on month in May after falling 2.8% in April. On a year on year basis, the index was down 4.4% in May. The monthly gain reflects strong grain, horticultural, dairy, wool and cotton prices.
The markets have switched back to risk-on, helping the Aussie dollar rise faster than any of the majors this morning.
After the excitement of Parmageddon last week, followed by the sudden enforcement of steel and aluminium tariffs on Trump’s supposed allies, the markets can at last look forward to a more traditional week where data and central bank policy drives the agenda.
Solid start to the year.
As concerns over Italy subside, for now, President Trump has upped the ante against the EU, Mexico and Canada, with tariffs from midnight on steel and aluminium.
Italy looks set to go back to the polls. NAB’s Rodrigo Catril looks at the market reaction on today’s Morning Call podcast.
Despite an awful lot of noise in markets, the boringly positive development has been that the central forecast for a slow improvement in Australian and global growth, continues to play out.
The breaking news this morning is that Italy’s premier designate Guiseppe Conte has stepped aside, unwilling to form a government.
There wasn’t a strong response to the news that peace talks between the US and North Korea have broken down.
It's been a quiet session overnight. Oil rallied as supply fears rose on Trump’s sanctions imposed on the country this week, but it has since retreated.
The positive news regarding China has seen stocks rise in the US today but there has been little movement on Treasuries or the US dollar.
Steven Mnuchin says the trade war with China is on-hold, for now, after the agreement that will see China supposedly buying more from the US, but not the reported extra $200 billion worth.
In Italy, the populist parties aiming for a coalition Italian government are said to be demanding a €250bn debt write down by the ECB.
The continuing rise in oil prices and rising bond yields in the US – where they have tipped the 3% yield mark again.
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.
Trump seems to be offering a lifeline to Chinese telecoms company ZTE, whilst threatening car manufacturers with a 20 percent import tariff.
2018 has been exceptionally dry across much of Australia, with knock-on downside to restocker interest and young cattle prices.
The NAB Rural Commodities Index gained 3.0% month on month in March, its second consecutive rise.
The NAB Rural Commodities Index gained 1.2% month on month in February, following a drop of 1.8% in January. On a year on year basis, the index was down 2.9% in February. The gain was driven by higher grain, fruit and dairy prices, offsetting falls in beef, lamb and sugar.
The economy looks to have performed solidly in Q4, despite a large subtraction from net exports.
Stability in financial markets over 2017 and early 2018 came to abrupt end in recent weeks, with a surge in market volatility and big falls in equity markets and prices for many commodities.
2018 has seen a fairly mixed start to the year, with significant differences between regions and industries.
2017 Surprised on the upside. Small deficit expected in 2018.
The economy is likely to have grown at a solid clip in Q3. While some pieces of the growth puzzle are falling into place, the stark divergence between business and consumer spending remains despite jobs growth. Non-mining and infrastructure investment will be encouraging for the RBA, but higher wages growth is required.
The Australian beef cattle industry has enjoyed a great run over the past couple of years, with the Eastern Young Cattle Indicator (EYCI) hitting a record over 720c/kg in September last year.
There were very few consistent themes across the commodity complex this quarter.
The NAB Rural Commodities Index rose 2.1% in October, its first monthly gain since May.
The NAB Rural Commodities Index rose 2.1% in October, its first monthly gain since May.
The index tracks 28 commodities weighted by the relative size of each commodity in the Australian agricultural sector.
All eyes on China’s steel sector.
Q2 GDP data will be released on Wednesday 6 September at 11:30am AEST. Additional partials will be available tomorrow and may alter our forecast.
The NAB Rural Commodities Index fell 1.2% in July as generally higher grain prices were offset by weakness across livestock, dairy, cotton and mixed performance in horticulture.
Gold began 2017 strongly, up 8% in the first half - despite falling 2% in June. This weakness has continued into early July, with the strong US payrolls data exerting further weakness on gold. However, gold received some support following Fed Chair Janet Yellen’s semi-annual testimony, which the markets interpreted as somewhat dovish.
In terms of market moves, most action happened in bonds. The bond sell-off continued overnight, underpinned by a weak French 30-year bond auction.
The NAB Rural Commodities Index is an index of 28 agricultural commodities weighted by the relative size of each commodity in the Australian agricultural sector.
The autumn break this year was rather mixed, with some areas receiving good rain and others missing out.
Many farmers take control of their supply chain but few market the benefits to customers as successfully as Australian Grain Link. Over the past 16 years this strategy has helped them carve out lucrative specialty niches that show no signs of shrinking.
Production growth to decline or slow in 2017 and 2018.
This is the second month of NAB’s new regional price indicators, in effect a separate NAB Rural Commodities Index for every region in Australia.
OPEC deal was extended a further nine months despite low prices.
This month NAB Economics introduces new regional price indicators, in effect a separate NAB Rural Commodities Index for every region in Australia.
Short term spike in coking coal masks softer trend for bulks.
Results from the March NAB Monthly Business Survey point to an overall healthy economy that is gaining momentum, at least in the near-term.
Prime Minister Turnbull visits India after important economic reforms.
Head of Asia Business Development, NAB Business & Private Bank, Laura Mattiazzi recently hosted a roundtable discussion at the Global Food Forum addressing the challenges and opportunities facing cropping industries - and how Australian businesses can compete globally.
The NAB Rural Commodities Index is an index of 28 agricultural commodities weighted by the relative size of each commodity in the Australian agricultural sector.
The German economy is continuing to out-perform. The run of better than expected data continued, this time from the German Ifo Survey for March.
The market opened yesterday in the Asia session where it closed on Friday with the USD and Treasury yields in retreat.
From its peak in July 2011 to a trough some 4½ years later at the start of 2016, the RBA commodity price index fell by more than half (-57%) in SDR terms (or -45% in AUD terms).
What was meant to be a quiet night ahead of key risk events (US FOMC and Dutch elections today) turned out to be rather more exciting.
Business survey suggests solid near-term activity, despite easing from multi-year high.
As expected the ECB left its key interest rates and QE programme unchanged, but a more optimistic Draghi has helped the EUR performed and it has also pushed bond yields higher.
When nothing else springs to mind, David Bowie songs are always a handy source for a daily note title.
Recession fears overblown as GDP rebounds; income surges despite weak labour income.
Astute readers (and listeners to our early morning podcast) will note Empire of the Sun’s Walking on a dream was one of our first song titles for 2017. That title was prompted by a lack of detail around Trump’s policies ahead of inauguration day which led markets to ask “is it real”?
Summer has brought extremely volatile conditions to Australia’s cropping districts. While much of eastern Australia has baked in an extraordinary heatwave, Western Australia has suffered substantial flooding.
Thinking about some of the challenges facing Australian policy makers – and arguably consumers - at the present time, the slow growth in wages looms large.
Another quiet end to a quiet week but with the U.S. dollar grinding out small gains despite further slippage in US bond yields (10s -6bps) and a fairly flat U.S. stock market (albeit new record closing highs for the S&P and the Dow).
Q4 GDP data will be released on Wednesday 1 March at 11:30 AEDT. Additional partials will be available next week prior to the GDP release.
More focus on the US economy and the big dollar overnight in the wake of a spate of interviews given by now-confirmed US Treasury Secretary Steve Mnuchin. He gave his first interview with the Wall Street Journal yesterday and followed that up overnight with two more interviews with CNBC and Bloomberg TV.
It’s a rather odd world scene right now. Geopolitical factors abound across the globe, with markets again focussing on European politics again overnight, but despite all this and the uncertain shape of US growth, tax and trade policies, the global economy has started the year in rude economic health with evident momentum.
Strong European data failed to excite markets – the exception being equities – as the upcoming French Presidential elections take centre stage. Betting markets now ascribe Eurosceptic Le Pen a 34.2% chance of winning, while a poll by Elable for L’Express magazine overnight puts her within striking distance in a run-off with Fillion with 44% of the vote – inspiration for today’s title “Livin’ on a Prayer” by Bon Jovi.
For the 2016-17 season, we developed a new wheat production forecast model, based on regional rainfall and state yields going back to federation, with an allowance for technological change.
With the US out celebrating president’s day, Europe was always going to be the focus in the overnight session. My dad used to listen to Santana, so the first song that came to mind was “Europa”, a mellow song with no lyrics, but notable for Santana’s guitar solo.
Just over a week ago, President Trump promised a ‘phenomenal’ tax announcement in 2-3 weeks, so as the clock ticks down to some form of announcement, market inertia is set to reign.
Don’t be alarmed. It’s not that markets have spat the dummy, but rather US equity markets are down, having opened high, with bond yields also lower. In the currency space the USD has been softer, Euro, Sterling and the CHF stronger. The Aussie has been steady-to-lower, though hugging 0.77, supported by the soggy big buck.
Low-tier SMEs’ business conditions now comparable to that of their mid-tier and high-tier counterparts
Brighter signs suggest moderate global reflation continues
My colleague Rodrigo Catril warned yesterday of the possibility of a US Fed March rate hike – what he termed the Ides of March. That argument gained further currency overnight with the US CPI and core‑Retail Sales printing double the market consensus.
Reaction to Fed Chair Yellen’s semi-annual testimony before the senate triggered a sell-off in US Treasury yields and a broad USD rally as she left the door open for a rate hike as soon as the next FOMC meeting in March.
The RBI, somewhat surprisingly, maintained the policy repo rate at 6.25%. Uncertainty about the effects of demonetisation and sticky core inflation were factors.
The strength witnessed in last month’s NAB Monthly Business Survey continued into January, with both business conditions and confidence jumping to much higher levels.
The message in American band Daughtry’s 2011 song later covered (with aplomb) by the Arctic Monkeys is, according to the writer, “Your significant other is in the right and just like she said it would happen, you come crawling back”
Look out quinoa – an Australian-grown ancient grain with serious health credentials is gaining ground on menus as awareness builds about its many benefits.
Last week the USD regained its mojo largely thanks to President Trump's hint of a phenomenal tax policy announcement and on Friday the USD waivered, particularly against JPY when at a joint press conference with Japan’s PM Abe, President Trump responded to a question about currency devaluation saying that "we will all eventually...be at a level playing field." and then added "That's the only way you can fairly compete in trade”.
The Trump-trade was reignited overnight on the back of the President flagging an impending “phenomenal” tax announcement.
It’s been a rather listless overnight session as the US earnings season is drawing to a close with one of the best quarters of growth for quite some quarters. But that, and the tantalising prospect that corporate tax reductions and deregulation from the Trump Administration, and hopes of better growth, seems to be priced in.
In what has been a quiet night of data releases and tweets from President Trump, the USD has been the quiet achiever amid simmering political and fiscal uncertainties in Europe, softer oil prices, flat US equities and lower US Treasury yields.
It’s been something of a risk off session to open the week. There’s been a focus on the upcoming French Presidential elections, ECB President Draghi has been batting back criticism from across the Atlantic on currency manipulation (regretting nothing), US markets fretting about the extent of timing of Trump reflation, not to mention ongoing tweets.
A bit of early 19th century opera to kick off the week (don’t fret, I’m sure we’ll be back in rock & roll mode for the rest of the week).
Prices across the base metals complex have generally been stronger than expected in recent months, prompting some upward revisions to our price forecasts
The supposedly “lively” conversation that President Trump and PM Turnbull had yesterday over the Australia-US refugee deal has gotten quite a deal of not just Australian press but international press coverage overnight.
The major event overnight was the US FOMC meeting where rates were left on hold as expected. There were very few changes to the post meeting statement with the Fed playing a straight bat. Markets were somewhat disappointed with Treasury yields and the US dollar reversing earlier gains that had occurred following stronger than expected US economic data.
More unwinding of the Trump lower taxes/higher infrastructure spending US$ reflation trade has again been the order of the day. The Bloomberg spot USD dollar index is down by ¾% as markets again sell the big buck, reacting to the latest statements from the new Administration, selling kicking off earlier in the session with some safe-haven buying of JPY and CHF in response to the immigration policies.
Business confidence has held up quite well and is remarkably steady given the context of major uncertainties both at home and abroad. That said, the level of confidence has not picked up to reflect the overall strength in business conditions seen over the past year or more.
Economic reports have been scant overnight. Trump, trade, executive orders and a White House press briefing have provided wire feedstock for news and trade into Asia trade today.
In a defiant and brief speech, President Trump made it clear that from now on “It's going to be only America first” and in what has now become a great economic debate he reiterated his view that “Protection will lead to great prosperity and strength”. Against this view, history and economic theory tells us that protectionism usually involves an increase in tariffs and a decline in trade.
Markets continue to digest Yellen’s speech yesterday which was seen as mildly more hawkish and positive US economic data overnight played into that view. The ECB also met last night with Draghi coming off as slightly dovish, playing down the recent uptick in inflation and remaining committed to the asset purchase program.
A free trade zone to expedite Australian food exports into China may soon become a reality. NAB’s Chief Customer Officer believes it’s a game changer for Australian agriculture.
It’s been a reversal back to USD strength overnight – including a late session kick along from the Fed Chair, more on that below - the Bloomberg spot dollar index up 0.35% before she stepped up to the plate, and another ½% since.
Never underestimate the ability of markets to discount the same news twice. Or in the case of the US dollar, the ability to ignore a relevant piece of news one day only to react with alarm to it a day or two later.
While prices are likely to stay subdued for some time, increased volume will see the value of exports increase significantly.
2016 was a very tough year for many Australian dairy producers, with farmers beginning the year amid extremely dry conditions in key dairy regions and steep cuts to farmgate prices
In 1979 President Carter endorsed a bill to have a holiday in honour of Martin Luther King (MLK), but a Conservative Congress at the time refused to pass the bill. Eventually President Reagan signed the holiday into law in 1983 and it was first observed three years later.
Donald Trump’s inauguration as the 44th President of the United States (45th if you count Grover Cleveland as both the 22nd and 24th President) will capture the world’s attention on Friday.
Walking on a Dream was the inaugural 2008 hit song by Aussie electropop outfit Empire of the Sun. That seems an apt description of how markets have been since the election of Trump with a dream run for equities and the US dollar all premised on the idea of a Trump fiscal stimulus boosting growth and inflation. Now with inauguration just a week away (20 Jan), markets are asking “is it real”?
According to the most recent surveys, business conditions and household sentiment are solid, and on an upwards trend.
The overnight session has been a tale of two halves, a dull affair ahead of Trump press conference and a volatile session post.
US small business owners tend to be Republican, and those who are member of the National Federation of Independent Businesses (NFIB) overwhelmingly so. Thus optimism among NFIB members surged to its highest level since 2004 in December and with the monthly increase, from 98.4 to 105.8, the largest since 1980.
Global equities were mostly lower overnight, dragged lower by the oil price. That added to an already uncertain tone following indications that the UK may be hurtling towards a harder Brexit than first thought.
When thinking about a title for today’s note and the impact the US labour market report had on Friday’s session, Aristotle’s quote ” the whole is greater than the sum of its parts” seemed quite fitting, but way too long for a title.
As the markets quieten down for the holiday break, we reflect on the tumultuous year we’ve just been through: Trump, Brexit, the rise of far-right politics and the tide of anti-immigration fervour.
It seems unlikely that Italy’s largest Bank, Monte dei Paschi di Siena, will meet today’s timetable to raise five billion Euros and provide a lifeline beyond March.
Tapas Strickland shows his knowledge of the Classics, describing yesterday’s RBA minutes as Delphic, in places.
Janet Yellen gave a talk this morning reinforcing the commentary around the strength of the US economy, pointing to steady growth in jobs and rising living standards. A less rosy picture for Australia, of course, but, not bad enough for ratings agencies to act.
We are becoming increasingly concerned about the underlying momentum in the economy as evidence mounts that the non-mining economy is losing steam.
China’s capture of a US Navy Drone showed that the US dollar is not infallible.
The US dollar continued to rise after the FOMC rate decision yesterday and Janet Yellen’s more Hawkish tone.
Agronomist Peter Birch details five agricultural technologies on the radar for Australia farmers.
No technical recession, but outlook for domestic demand uninspiring
Monthly business survey readings provide the most up to date measure of the pulse of global economic growth, they have been improving in the months leading up to November.
It’s been a rather uneventful night as the offshore markets did some more final positioning ahead of tomorrow morning’s FOMC meeting.
In Chile, Tuesday 13th instead of Friday 13th is considered to be an unlucky day.
How fast (or slow) is Australian employment growth?
Shock and awe is how one London based analyst described the Saudi’s decision to cut oil production even further at the weekend.
Contraction in Q3 GDP raises questions about non-mining recovery
Back in March 2011 Lady Gaga’s hit “Born this way” was leading the music chart in Australia and Pink was number one on the Billboard chart.
The market’s knee jerk reaction to “no” outcome from the Italian referendum saw the Euro fall back by over a big figure for an hour or so, but that was it.
NAB economists continue to monitor recent disappointing momentum in indicators of the NSW economy, employment and – until Friday – also in retail sales.
Our outlook for agricultural production is highly reliant on the climate outlook
The income measure of GDP is likely to be mixed, but stronger than the expenditure measure
Talk of oil cuts has been enough to see prices rise again overnight, up 15% this week. So what’s it doing to bond yields and the US dollar?
The key event this week will come from Vienna where ministers from OPEC are scheduled to meet and hopefully finalise the first cut in oil production in eight years.
Oil remains a keen focus with prices back up around $1 a barrel.
Rising oil prices from early this year and again from the middle of the year have been associated with rising medium-to-longer term US inflationary expectations (and indeed expectations globally).
In his 2007 best seller “The Black Swan” Nassim Taleb uses the life of a thanksgiving turkey as an analogy for explaining a black swan occurrence i.e. a tail event that is so remote that is completely unforeseen.
In 2015, JT Johnson & Sons, a fourth generation family business selling ruminant animal pellet feed and hay, celebrated its 20th anniversary with Japanese joint venture partner Asahi.
The USD continued to march a little higher, the Bloomberg spot dollar index up another 0.14%, gains mostly against the Euro, the Yen, and Sterling, the latter from some self-inflicted news.
The S&P 500 hit a new high overnight, largely because of a spike in oil prices as Vladimir Putin steps in and says he expects OPEC to reach a deal next week, and agreeing to limit production in Russia.
A key question this week, for the AUD at least, is whether local exporters will continue to stand aside expectant of still better levels to initiate longer dated hedges and/or whether local real money will now look to lift hedge ratios.
While the 24-hour news cycle may talk down Australia’s transition from a commodity to service economy, the figures tell a different, and very positive, story.
Prospects of greater US fiscal spending (infrastructure and tax cuts) under a Trump Presidency continue to buoy equity markets, while US bond markets are sold on the prospects that such policies are inflationary.
US election highlights social and economic tensions
Business confidence has proven to be relatively resilient this year, but did moderate in October – falling 2 points to +4 index points (below the long-run average of +6).
Another big story for the Australian economy this year has been the strength in bulk export commodity prices.
Modest dollar strength and higher Treasury yields was the initial response to the US payrolls data but proved fleeting.
The global aluminium market continues to be driven by Chinese producers, which plan to add significant new capacity at lower costs.
The focus for markets overnight was well and truly back on the UK with Sterling the stand-out performer overnight, trading this morning with a solid 1.24 handle, a full three big figures above where it opened the week.
US Equities are off, the VIX is up, the US dollar is lower, US Treasury yields are lower and the Mexican Peso/Japanese Yen cross (-2.5%) is still proving to the be the FX market’s weapon of choice when it comes to reflecting sentiment regarding the prospect of Donald Trump.
This week we report on the views of Japanese clients of Australia following a recent trip to the country.
The progress of the season, which has been generally much wetter than average in eastern Australia but dryer in the west, continues to be the major consideration for Australian agriculture.
With the RBA a keen inflation targetter, albeit within a flexible medium-term framework, each quarterly CPI reading provides an important update on current inflation trends and is a key input into the Bank’s forecasts.
The revelation by Bank of Canada Governor Stephen Poloz following an as-expected unchanged monetary policy decision that the Bank ‘had actively discussed the possibility’ of further monetary policy easing at Wednesday’s meeting.
Bruce Springsteen cautious man tells the story of a man that has doubts about his marriage and in a similar way markets have started the week in a tentative mood reflecting some concerns on the outlook.
Global economic growth remains soft with a sub-trend pace of expansion set to continue and few signs of an upturn.
The RBI cut the policy rate by 25bp to 6.25% at the October meeting.
The NAB Monthly Business Survey still suggest solid levels of activity in the non-mining economy, but points to relatively patchy conditions at the industry level.
Well it wasn't exactly midnight, but close enough. In a night that was expected to be relatively quiet given the US was celebrating Columbus Day, oil prices provided some fireworks after President Putin announced his support to a production freeze or even cut in oil output.
The more favourable USD has been a source of support for most commodity markets in the first half of 2016, but heightened uncertainty has seen additional volatility across financial markets, including commodity markets, more recently.
Selling of Sterling re-emerged in the Asia session yesterday and into London as the prospect of a “hard” exit from the EU loomed large.
Spring has brought not only considerable rain to parts of the country but also a further uptick in the NAB Rural Commodities Index.
Not a huge amount to say about Friday’s offshore markets (unlike Saturday night’s AFL preliminary final), characterised by a give-back of some of the post-FOMC stock market euphoria, fractionally lower US bonds yields and a slightly stronger dollar.
24 hours on, under my [central bank] umbrella is how the markets have interpreted Wednesday’s US FOMC meeting.
The bigger picture – A Global and Australian economic perspective
How one assesses Australia’s economic performance at present depends in large part on which industry / geography one looks at and whether the benchmark is in real or nominal terms.
Mental preparations for another onslaught of selling bonds and equities offshore were put on the backburner with markets becalmed overnight.
Global growth still not lifting off.
The results from this month’s survey remain broadly consistent with our prior view of the economy and the near-term outlook. It points to a patchy, but sustained, improvement in the non-mining economy, with the major services sectors and construction leading the way.
Three main developments overnight, a spike in oil prices, a somewhat more content ECB President, and a renewed AUD warning from RBA Governor Stevens in an AFR interview, the AUD in the wake of the interview pulling back from over 0.77 to 0.7642 this morning.
Gold prices have been relatively resilient in the past couple of months, fluctuating between $1300/oz and $1370/oz since late June
Expenditure components show a lift in domestic demand, supported by public spend.
The Australian lamb industry has enjoyed broadly favourable conditions of late, and we remain upbeat in our assessment of the industry.
Almost 24 hours after yesterday’s decision by the RBNZ to lower the OCR by 25bps and the NZD USD is almost exactly where it was before the rate announcement.
NAB’s Rural Commodities Index includes 28 commodities. The index is weighted annually according to the gross value of production of each industry in Australia.
In this report we present a strong outlook for Australian pulses production, reflecting the exceedingly favourable season so far and greater plantings for some varieties.
Uncertainty around the outlook for commodity prices has ramped up further in the wake of the recent Brexit decision.
Our expectations for prices in the coming year are underpinned by our forecasts for a generally lower AUD, tracking in the high 60s range in late 2016 and 2017.
The winding down of the mining investment boom has largely unfolded as many had predicted.
Iron ore prices trended lower across 2015 – from around US$70 a tonne (for 62% fines landed in China) in January, to a record low.
This report presents our initial estimates for Australian wheat production for the 2016-17 season.
Australian agriculture has seen a number of significant developments since the release of the last NAB Rural Commodities Wrap
Our forecasts point to Australian agricultural prices trending generally somewhat higher in AUD terms this year, despite challenging international conditions. However, the stronger AUD presents a risk to local prices.
2016 is shaping up to be a crucial year for copper producers and copper markets. Its biggest consumer, China, is going through a period of slower economic growth, with structural transitions under way and a depreciating currency.
The Australian cattle industry is in the midst of a significant transition following a period of almost unprecedented growth in cattle prices.
The focus remains very much on the impact rising supply is having on some commodities.
Our forecasts point to Australian agricultural prices trending higher in AUD terms in 2016, despite challenging international conditions.
Sally Campbell from JBWere looks at the carbon footprint considerations within fund managers’ assets, highlighting that some are more progressive than others.
The impact of oil complicates the outlook.
Since early November, oil prices have resumed a clear downward trend, punctuated by episodes of sharp declines during early to mid- December and the first half of January.
The falls in global oil prices over the last year or so are fundamentally a reaction to oversupply in global markets – as US new oil supply comes on board, OPEC puts the squeeze on profitability of new sources of supply by refusing to cut production.
The NAB Group Economics team identify 10 global and domestic themes which will have bearing on the economic and financial market outlook for 2016.
Commodity markets remain under pressure, reflecting concerns over emerging market demand (especially from China), at a time when the supply of many commodities is on the incline. Anticipated policy tightening by the US Fed is also having an impact.
Agricultural markets continue to react to the unfolding El Niño event, albeit in varying directions. Overall, the NAB Rural Commodities Index was stable in October.
Agricultural prices continued to diverge in September. Most major grains fell as did fruit, vegetables and trade lamb (reflecting seasonal trends) however dairy prices strongly rebounded and sugar, beef and rice were also higher in AUD terms.
Earlier this week, Australia agreed to become part of a historic trade agreement, including countries that account for nearly 36% of global GDP and one quarter of global trade. This document provides a summary of the key measures, reported benefits and what we know so far about contentious issues.
Key Points Agricultural prices diverged in August and into September – protein and fibres generally rose while crops trended lower. Overall, the NAB Rural Commodities Index was flat in AUD terms in August (down 0.1%) and moderately lower in USD terms (down 2.0%). The AUD continued its downward trajectory in August, before sinking below 70 […]
Lamb prices follow a generally seasonal pattern, rising early in the year before declining in spring as spring lamb supply becomes available. Nonetheless, monthly average trade lamb prices have remained reasonably steady through July and into August this year and prices are now well ahead of the same time last year.
NAB’s non-rural commodity price index is expected to fall a further 8% in the September quarter (in US dollar terms) – following an anticipated 7% decline in June.
The NAB Rural Commodities Index continues to rise in AUD terms (up 4.1% in July), supported by a lower dollar and higher beef, fruit, domestic wheat and sugar prices.
NAB Agribusiness has revised its national wheat crop forecast up to 21.6 million tonnes for this season, with 23 million tonnes possible contingent on good spring rain in key wheat regions.
After recording gravity-defying price gains in April and May that are largely denominated by correlation with the USD, oil price movements have turned bearish in June and July-to- date.
The NAB Rural Commodities Index was steady in June. The neutral result largely reflects higher grain and protein prices offset by sharply lower fruit, vegetable and to a lesser degree sugar prices.
There were no signs of global growth accelerating in early 2015. Weak GDP results in the US, UK and Canada outweighed a pick-up in Japan and the Euro-zone and commodity prices have been mixed, partly in response to USD movements.
Overall, we expect prices to generally rise in AUD terms for most of these commodities, with the exception of dairy and sugar, reflecting strong demand for beef in particular as well as the impact of a falling AUD.
The NAB Rural Commodities Index rebounded in May – up 4.2% in AUD terms and 3.4% in USD terms. The improvement comes off the back of higher beef, lamb, wool, fruit, vegetables and pulses prices, offsetting further declines in dairy.
Oil prices rebounded sharply in April and May, benefiting from a confluence of factors: a stall in the USD rally, signs of slowing inventory build-up in the US, as well as unabated geopolitical volatility in the Middle East marked by Yemen civil unrests.
April saw a renewed rise in beef and lamb prices, combined with stability across major grains, balanced against lower dairy, fruit and vegetable prices.
In May, gold prices averaged at around US$1199 per ounce, largely unchanged compared to April. This reduction in volatility has largely been associated with contained macroeconomic volatility, as most major economies continue to be on a path of gradual recovery.
The changing composition of China’s growth model – towards services rather than heavy industry – means it is less commodity intensive than in the past.
Cattle prices began to ease in February and continued to fall until late March, before trending upward in early April in line with higher 90CL export prices to the US. Overall, the Eastern Young Cattle Indicator fell 4.6% (AUD) month on month to 424.7 AUc/kg.
The NAB Rural Commodities Index, which covers 28 agricultural commodities, fell 1.7% (AUD) and 3.3% (USD) in March, led by lower beef, lamb, fruit, vegetable and sugar prices. Partial data for April to date points to a recovery in beef and lamb prices.
The Rural Commodities Index, which covers 28 agricultural commodities, gained 2.1% (AUD) and 0.5% (USD) in February on the back of higher fruit, dairy, fibre and pulses prices, which offset mixed performance across grains and protein.
2015 brings an expanded Rural Commodities Index, which now includes 28 commodities, up from eight. The Index increased 5.6% in January in AUD terms, as sharply higher beef prices - and to a lesser extent higher lamb, dairy and vegetable prices - offset mixed performance across grains.
Based on adjusted World Steel data, global steel production rose by 3.5% in 2014 to total 1.64 billion tonnes. Prices for metallurgical coal have remained comparatively stable since March 2014. Spot prices for thermal coal have continued to drift lower.
Moderate sub-trend global growth continues with a diversity of economic conditions. This has been reflected in lower prices for a number of industrial commodities. Falling oil prices should boost global activity, although the impact varies between oil exporting and importing countries.
A new approach to risk management looks at the range of variables rather than average values. Cam Nicholson, a farm consultant with Nicon Rural Services, explains how this approach can help shape a more effective risk management strategy.
After the drastic falls towards the end of 2014, oil indexes started to exhibit some tentative signs of stabilisation since mid-January. Prices traded mainly around mid to high USD40s a barrel in the second half of the month, before breaking above USD50s in the first week of February.
Combined with strong industry fundamentals, Queensland saw significant rainfall during December 2014 and January 2015. In response, cattle prices have risen substantially as producers look to restock. However, despite this optimism, a number of challenges remain.
Since 2008, global quinoa consumption has rapidly increased. In Australia, planting has been concentrated largely in Western Australia. While there are potential benefits from diversification for wheat producers, concerns remain around reliability of yield, weed control and marketing.
2015 could be a very good year for agribusiness, with easier access to Asian markets and favourable economic conditions. Five of NAB’s leading commentators take a close look at the opportunities and share their tips on how to make the most of them.
The Bank of Canada is the latest Central Bank to deliver a shock; cutting its main policy rate to 0.75% from 1.0% in a move which none of the 22 analysts surveyed had anticipated.
Oil prices have again been the stand out story overnight with Brent now clearly below $50/bbl, having tested below $50 last week, and both WTI and Brent down 5-5½% overnight to below $46 for WTI and currently $46.66 for Brent.
General Manager of NAB Agribusiness, Khan Horne says the falling Australian dollar is a real boost for agriculture, and combined with the recent announcement of the China–Australia Free Trade Agreement, conditions for 2015 are looking positive for agricultural exporters.
The China-Australia Free Trade Agreement (FTA) offers considerable potential for Australian agricultural and services firms as a result of their improved market access. Dairy, meat and horticulture stand to gain significantly while most resource exports will end up having duty free access.
Divergent economic conditions around the world are having a net negative impact on commodity prices. Chinese GDP growth slowed to its lowest pace since early 2009, while parts of the economy that are key to industrial commodities remain comparatively weak.
While global grain prices are currently weaker than recent seasons, NAB's Greg Noonan says Australian growers are being paid a hefty premium. He's urging them to work through the pros and cons of marketing options when deciding whether to sell now or hold onto their grain.
China’s third quarter National Accounts showed the economy grew by its slowest rate since March 2009. From a bulk commodity perspective, key parts of China’s economy remain comparatively weak. Industrial production has slowed in recent months.
The overall price outlook for rural commodities stabilised somewhat in September and early October as a falling AUD blunted the impact of lower global prices.
Could Australia become “the food bowl of Asia”? NAB’s Frank Drum and Ben Matigian look at the infrastructure gap in Australian agriculture and the potential for strategic investment in the sector.
Recent global economic data and less favourable supply fundamentals have put downward pressure on many commodity prices. China, Europe and Japan were softer, while the U.S recovery appears to be gaining traction (US GDP grew at its fastest pace since 2011)…
Speaking at the BeefEx conference on the Gold Coast today, NAB’s Regional Head of Food and Agribusiness, Patrick Vizzone, explained that China is changing how it does business and the shift in thinking from self-sufficiency to trade provides a massive opportunity for beef exporters.
Since our last Quarterly Oil Market Update in June 2014, global crude oil prices have fallen sharply amid ample supply and weak demand combined with an increasing confidence that turmoil in Iraq is unlikely to disrupt supplies.
The Australia China Business Council (ACBC) promotes trade and investment between Australia and China. National President, Duncan Calder reflects on this critical partnership as China’s burgeoning economy fuels unprecedented demand for Australian supplies and services.
The overall outlook for rural commodities deteriorated in August and September on account of a weak finish to winter rains in many areas combined with forecasts of abundant global grain supplies and lower prices for major agricultural commodities.
Global economic data sent divergent signals to commodity markets in August. China’s outlook gave less comfort in comparison to the better US data. There was more movement in financial markets during the month. Meanwhile further sanctions on Russia were put on hold.
Tensions between the Ukraine and Russia have been less disruptive than a month ago, reducing market volatility and bringing down gold’s risk premium –allowing gold markets to refocus attention on macroeconomic drivers. Reasonably positive economic data out of the US, and some recent…
Having fallen for much of the year, wholesale gas prices in the United States and Europe have begun to edge up slightly since July. With the northern summer now coming to a close, mild weather should keep prices in check until the onset of colder winter conditions sees gas use increase.
China accounts for a staggering 43 per cent of the projected increase in global agrifood demand over the next 35 years, and Australian agribusinesses are positioning themselves now to seize the business opportunities.
Australian beef prices are forecast to increase 3.5 per cent in 2014-15 on the back of a 4 per cent fall in production as producers rebuild herds, according to the latest NAB Agribusiness Rural Commodities Wrap.
As part of the current local reporting season last week, we heard that both the Gladstone and Australia Pacific LNG projects are on track and on budget.
The direct impact to Australian agricultural producers of the Russian Government’s embargo on most food imports is likely to be relatively small. However the secondary impacts are likely to be of greater concern for Australian producers.
Commodity prices remained divergent in July, reflecting broadly positive but somewhat mixed economic data as well as flaring geopolitical tensions in Ukraine and the Middle East. Crude prices fell in early July as concerns about a disruption to Iraqi oil supplies dissipated.
Economic trends in China –the key consumer for bulk commodities –are mixed, with stabilising trends in the industrial sector (having slowed across Q1) in contrast to a slowing trend in the real estate sector (a major consumer of steel). Global steel production has continued to increase.
On the demand side, industrial activity has improved in 2014, but recent indicators have been mixed. In China, the industrial sector appears to have stabilised following signs of moderation in recent months. Mini stimulus measures may have assisted the improvement.
One of the largest vertically integrated supply chain organisations in the world, Australian Country Choice (ACC) is looking to expand its supply of high quality meat into Asia. CEO David Foote discusses the challenges and opportunities ahead.
The 2014-15 Australian wheat season is off to a good start in most growing areas following autumn rain, and domestic prices are at a premium to international levels due to concerns about the impact of a dry spring.
With information about prices, market trends and the supply chain, farmers can plan more effectively and run a more profitable business. Mick Keogh, Executive Director of the Australian Farm Institute (AFI), explains the importance of statistics and where to find the most useful ones.
The relative price stability that characterised oil, in particular Brent, in the first half of 2014 has been shaken of late by unexpectedly severe sectarian turmoil in Iraq. However, with Iraqi exports largely unaffected, prices have now eased somewhat.
The relative price stability that characterised Brent and Tapis in the first half of 2014 has been shaken of late by unexpectedly severe sectarian turmoil in Iraq. After Mosul fell on 10 June, Brent jumped 4% in a week and broke through $115 per barrel by 19 June.
Dairy farmers are encouraged to review budgets and timing for any capital expenditure plans off the back of opening dairy price forecasts. NAB’s Neil Findlay says these plus this financial year’s stronger finish should support the confidence that’s been returning to southern producers.
Supported by still-low bond yields and more positive economic data from China and the US, global equity markets maintained their upward trend in May to close higher in general. However, commodities markets were more mixed.
The Australian project finance market is widely considered a world leader when it comes to assessing the financing of greenfield development risk. Michael Clarke looks at how mining/resource project financing may be a helpful paradigm for financing large-scale greenfield agri developments.
Bulk commodity markets recorded another relatively weak month –with iron ore prices continuing to ease (falling below US$100 a tonne), thermal coal prices remaining weak, while metallurgical coal eased higher –away from particularly low levels.
Tensions between the Ukraine and Russia have been less disruptive than a month ago, reducing market volatility and bringing down gold’s risk premium –allowing gold markets to refocus attention on macroeconomic drivers. Reasonably positive economic data out of the US.
In the past month, US natural gas prices moderated slightly on milder weather, but remained around 13% more than the same time last year on extremely low inventories. In contrast, the slide in European gas prices continued in May on low heating demand.
Ninety three percent of Australia’s annual grain crop is grown under dryland conditions. Southern Panel Chair of the Grains Research and Development Corporation, explains how national and international research is helping farmers in this challenging environment.
There are signs of stabilisation in the growth in the US and China: the US Fed proceeded with another US$10 billion cut in their monthly quantitative easing program to US$45 billion, while Chinese industrial activity gained some support from a series of targeted stimulus policies.
Economic data confirmed slower global growth in Q1, but more timely indicators are looking a little more promising. Japan is a major exception where a recent consumption tax hike is having a distortionary effect. US tapered QE again, but market implications appeared relatively muted.
Trends for bulk commodity prices were mixed in April, with relative stability (at very weak levels) for both thermal and metallurgical coal, while iron ore briefly recovered from the low levels in March, before retreating again.
Economic data confirmed slower global growth in Q1, but more timely indicators are looking a little more promising. Japan is a major exception where a recent consumption tax hike is having a distortionary effect. US tapered QE again, but market implications appeared relatively muted.
Globally, commodity markets experienced heightened volatility in March, with the concerns of a slowdown in China and its first domestic bond default triggering some investor risk aversion.
Patrick Vizzone, Regional Head of Food & Agribusiness, Asia, Institutional Banking reflects on how the outcomes of last November’s Third Plenary Session of China’s Communist Party’s Central Committee may shape the Australian agriculture sector.
Australia’s role in securing the food, water and supply chains of Asia will be dependent on our ability to embrace change and innovation. Dr. Ken Henry looks at the opportunities that exist for Australian businesses in the Asian century.
Prices for most industrial metals have moved lower in response to growth concerns in China and uncertainty over the unwinding of commodity financing deals. However, supply side events are supporting prices for Nickel in particular.
Economic data was mixed over the past month, but the impact from severe weather on advanced economies appears to be abating. Partial indicators suggest China’s economy has continued to slow. US tapered QE again and markets remain volatile as they try to discern Fed direction.
Since mid-January, several idiosyncratic factors, such as the ramping up of takeaway capacity by the Keystone XL Pipeline, better US economic data and unseasonably cold weather, have propped West Texas Intermediate (WTI) prices relative to Tapis and Brent.
Global equity and commodity markets exhibited increased volatility in the past month, caused by heightened geopolitical tensions in Ukraine, adverse weather events in the US and news of a slowing Chinese economy. December quarter GDP result for Australia was close to trend.
In the past few months, US natural gas prices have staged some gravity defying movements, fuelled by unusually strong heating demand from the most extreme winter conditions affecting the US in about a quarter of the century.
Global upturn hampered by severe winter weather conditions in the northern hemisphere. Emerging markets (including China) showing signs of a slowdown, although Chinese trade and credit data have been robust.
The average price of gold rose by around 1½% in January and has lifted a further 4½% in February to date, the first consecutive rise since late 2012. Prices have been volatile of late, but are currently trading at around $1,330 per ounce.
Australia is on track to be the third largest exporter of raw cotton in the world in 2013-14, with forecasts of just under one million tonnes according to the latest Rural Commodities Wrap. The AUD is forecast to track lower which should provide further benefits to exporters.
Bulk commodity prices softened in January, driven by the end of the restocking phase and seasonally weak steel production - which contributed to weaker demand trends for coal and iron ore. Expanding rail freight capacity in China could impact the country’s demand for seaborne coal
There’s been a lot for Aussie businesses to talk about so far in 2014 - from weather predictions to our reading habits. Here’s a selection of recent business insights to help you uncover the opportunities across all business sectors in 2014.
The global economy capped off 2013 on a strong note, with monthly measures of global industrial output and trade indicators picking up to finally be consistent with the more buoyant message that the advanced economy business surveys have been signalling since late 2012.
The limp performance of metals and bulk commodities over the past couple of years has resembled a unicycle rather than the superbike of previous years. According to Simon Wright of The Economist, the 2014 outlook for demand is rosier and commodity prices should start climbing once again.
Global upturn continues with advanced economies seeing faster recovery after prolonged weakness post 2008/09 recession. Chinese and Indian economies faring better with no slowing in former and activity picking-up in the latter.
Some of the world’s fastest-growing economies in 2014 will be in Africa. Since 2001, Africa’s GDP has expanded more quickly each year than the global average. In the past decade, only the block of developing Asian economies, led by China, has grown faster than Africa.
New Year is the perfect time to be considering and reviewing your strategies for the year and putting your plans in place to make the most of opportunities. Our message to farmers is that if they’re ready for more in 2014, we’re here and ready for them.
Companies in the industrial raw materials sector are facing a new era. For years, miners of resources such as iron ore, base metals and coal enjoyed a boom driven by incredible demand from China and other emerging markets that were urbanising and investing heavily in infrastructure.
There are strong opportunities for Australian agribusinesses as key Asian markets are increasingly demanding high quality, safe and healthy food.
Average oil prices fell for the second consecutive month in November. In addition to the bearish sentiment in the crude oil futures market, oil prices have generally returned to be more aligned with the reality of fundamentals where ample supplies, have served to weigh on prices.
November’s Third Plenum unveiled a wide ranging reform agenda from China’s Government. Proposed deregulation would increase free market influence and could support a stronger medium term growth profile for the economy.
Metals prices remain well below peaks recorded earlier in the year but have been relatively range bound, fluctuating with the ebbs and flows of economic news. As usual, news relating to US Fed policy and the Chinese economy has been particularly relevant.
Global growth remains at a moderate sub-trend pace and it’s expected to pick up to slightly below trend in 2014. However, NAB business conditions remain weak and forward indicators deteriorated slightly. There are still no signs of a recovery in non-mining investment.
It’s a season of stark contrast for Aussie wheat growers, with those in the west and south set for a bumper season while those in the east are doing it tough. International factors are also placing downward pressure on prices, with Canada producing one of its biggest wheat crops on record.
US natural gas prices showed significant volatility in the lead-up to the US government shutdown, but trended higher in September and October overall in anticipation of winter heating demand. British natural gas prices also tracked higher in the past two months.
In October, indicators of global economic activity were mixed, casting some doubt over signs of recovery in the advanced economies. The upturn is still under way, but the pace of industrial growth and business sentiment in some big advanced economies has stopped improving.
The average price of gold eased by around 2½% in October, though the daily spot price generally strengthened over the second half of the month and is currently trading at around $1,340 per ounce. Gold is set to record its first annual price decline since 2000.
Global bond yields fell in September from the US Fed surprise decision not to initiate the tapering of its quantitative easing program. Meanwhile, commodity markets weakened further. The strong pace in the economic recovery in big advanced economies evident in the first half of the year
In September, overall demand for commodities gained support from progress in the global economic recovery. Positive data from major economies is adding to confidence that the recovery in the big advanced economies is currently on track.
Global financial markets rallied strongly when US Federal Open Market Committee (FOMC) defied market expectations of a modest tapering and decided to leave retain the status quo on the pace of asset purchases.
The NAB Quarterly Business Survey showed a marginal deterioration in overall business conditions in the June quarter, with the level remaining close to four year lows. All states experienced difficult conditions in the quarter.
More positive news on the major economies has provided a slight boost to most commodity prices in August, with the long awaited rotation of global growth towards the big advanced economies seemingly underway. Global manufacturing activity also appears to have gained momentum.
Oil prices strengthened in July, reflecting heightened concerns over the security of supply with the violent unrest in Egypt, an uptick in Asian crude demand due to improved margins, as well as ramped up refinery runs and tight supply.
Metals prices remain well below peaks recorded earlier in the year but have seen some support recently from more upbeat economic data, particularly from the large advanced economies, although China is showing early signs of stabilising as well.
The price of gold fell by a notable 4.3% in July, but has stabilised more recently, recovering by a modest 2.8% over August to date. Spot gold is currently around $1,380 an ounce. The price of gold will certainly record its first annual decline since 2000.
Post-farmgate agribusiness conditions rebounded in the June quarter to be mildly positive but confidence fell marginally. Customer demand remains the single most significant constraint to businesses’ future profitability. Expectations for capex plans surged to the highest in two years.
Global equity markets recovered earlier losses as it became clear that central banks would not rapidly turn off their monetary easing, although we still expect the US Federal Reserve to start tapering in the coming few weeks.
Global equity markets have come under downward pressure, but the latest data on activity is slightly more positive. Business sentiment about current conditions has picked up in advanced economies and growth in global industrial output is faster.
Global financial markets have taken a dive at the suggestions of the US Federal Reserve scaling back quantitative easing soon and the drying up of new stimulus initiatives by the Japanese government.
Overall, the heightened volatility in global financial markets associated with central bank decisions in the US and China has weighed on commodity prices. The slowdown in the Chinese economy is also gaining traction in markets and further weakens demand prospects.
Expectations for the US Federal Reserve to begin tapering its $85 billion in monthly debt buying this year, a rising US dollar and a slowing Chinese economy have sent ripples through the gold market. The price of gold is now heading for its first annual decline since 2000.
Bulk commodity prices remain under pressure from mounting concerns over the China growth outlook. Nevertheless, iron ore is receiving some support from tentative restocking activity, while a margin squeeze in the coal market could suggest that prices are approaching their bottom.
David Brett, NAB's Head of Agribusiness for Northern Australia, says it’s been a solid year for Australia's 1,500 cotton farms.Driven by a more positive global economic outlook, Australia looks set to export a record 1.1 million tonnes of cotton this financial year.
Economic activity in China appears to have slowed further during the month of May, although the moderation in growth continues to occur at a gradual pace - keeping concerns of a hard-landing at bay. Nevertheless, hopes of a meaningful acceleration in growth this year have faded.
US natural gas prices trend higher on rising exporting prospects and forecasted warmer-than-average temperatures in the upcoming summer. British natural gas prices have returned to more normal levels as supply pressures ameliorate from restored Qatari deliveries and Norwegian production.
Commodity markets have been mixed but overall sentiment remains bearish reflecting soft economic data in most regions. However, signs of improvement in the US economy could help to support commodity demand, but the effect on market expectations for Fed stimulus will create headwinds.
The Bureau of Resources and Energy Economics’ (BREE) latest biannual update on the state of mining, infrastructure and processing facilities projects in Australia has provided further evidence that the peak in mining investment is quickly approaching.
With the exception of dairy, the prices of most other agricultural commodities have headed south this month. In April, the Rural Commodity Index rose marginally USD terms by 0.8% while fell by 2% in AUD terms. This month, lamb is our commodity in focus.
This year’s budget contains a number of negatives for the resources sector. NAB’s Group Chief Economist, Alan Oster, looks at where the government has targeted it’s efforts including impacts to exploration and many mining and energy programs.
Chinese partial economic indicators were largely in line with expectations in April. However, we are yet to see signs that real activity is significantly picking up. We continue to expect growth of 8% in 2013, although risks remain skewed to the downside.
Commodity markets remain bearish following disappointing global economic data outcomes in the US, China, and Europe. However, weaker growth has increased expectations for policy stimulus.
The gold price fell by 6.6% over April. Recent gold demand appears to have fallen sharply on news of soft US inflation, slowing Chinese growth as well as fears that highly indebted European countries like Cyprus may resort to selling gold reserves.
The improvement in metals prices seen over the second half of 2012 has been completely unwound, largely due to a lack of physical demand and market concerns over the outlook for demand. In aggregate, base metal prices were 5% lower over March and down more than 10% over the year.
Global financial markets are digesting latest Euro-zone crisis (Cyprus) where bank depositors are being forced to take losses. Pre-crisis global financial markets had been on a strong rally, especially against the background of still sluggish economic performance in the…
Commodity markets have turned bearish again following softer than expected economic data outcomes and concerns over a government crack down on Chinese real estate. The Cyprus banking crisis has also dampened confidence, while the terms of the EU bailout, and subsequent rhetoric has …
Oil prices weaken in March, reflecting European crisis fears following Cyprus deal, a recovery in North Sea oil production and a return of South Sudan oil exports. Most notable declines were recorded for Brent and Tapis oil. Global oil demand forecasts for 2013 revised down reflecting …
The recent rally in bulk commodity prices has stalled with both coal and iron ore prices giving back some of their recent gains; average monthly prices declined in March. Global steel production has continued to grow at a good pace in recent months, driven by increasing Chinese …
The disparity between business conditions that became increasingly pronounced following the GFC has narrowed over recent quarters; however, the convergence of conditions readings largely reflects a weakening in previously stronger performing industries and regions, suggesting…
The recent capex and exploration expectations data suggest that mining investment may be approaching a turning point. A decline is inevitable: the question is when and how fast. On the basis of past engineering construction commencements, there are reasons to believe …
Global and domestic financial markets have continued to improve as confidence in the global economic outlook firms. Strong underlying fundamentals of the US economy and signs of recovery in China have encouraged a more bullish market outlook. Commodity markets are less buoyant.
Once again, movements in commodity prices have been dominated by events in China and growing speculation over the timed withdrawal of QE stimulus by the US Fed. With market participants on the sidelines throughout most of February due to many of the Asian economies celebrating the …
This month in Agribusiness View, we have an in-depth talk with food producer Maggie Beer, hear about Asia’s growing demand for milk and dairy products, and learn how grain growers can manage their risk. We also give you a new view on women in the agricultural industry.
Grain growers who have done their homework will usually get opportunities through the year to lock in price spikes above $300 per tonne and hopefully healthy margins. NAB’s Director of Commodities, Business Markets believes preparation is the key aspect of managing risk for grain growers
Financial and commodity markets have generally strengthened recently, following the last minute agreement to hold off the US fiscal cliff. Signs of strengthening in China’s manufacturing sector has also provided some confidence about the outlook for global growth.
The Australian economy appears to have stumbled into the December quarter. For agricultural commodities, markets have been fairly mixed over the past month. Grains prices have softened a little on expected demand rationing while sugar and cotton remain subdued.
China’s meteoric rise to becoming one of the world’s economic superpowers has redefined global economic growth, specifically, the fundamental drivers of commodity markets. China’s advancement has had significant ramifications for commodity exporting economies, including Australia.
The post farm gate agribusiness conditions index posted a decent turnaround following a very weak June quarter. Driving the result was an increase across the three key components that make up the index, with the sharpest turnaround being trading conditions.
Australian farmers are experiencing price volatility, so how can hedging help them take advantage of boosted demand for Australian exports following the US drought? NAB’s Head of Agribusiness for Business Markets, Rod Fraser, explains.
China’s strong import program is one of several global factors colliding to underpin wheat prices through the end of the year and into 2013, according to the latest Rural Commodities Wrap, which this month focuses on wheat. NAB estimates the crop will come in at 20.6 million tonnes
The gold price rose by a spectacular 7 per cent over September. Some of the strength has subsequently been unwound, with the gold price easing to around US$1,710 per ounce in early November. We have lifted our forecasts a little
Bulk commodity prices have been mixed recently with coal prices generally stabilising around recent lows, while iron ore prices have performed surprisingly well, supported by recent signs of improvement in the Chinese economy. Growth in global crude steel production remains subdued
Metals prices received a significant boost over September, following a suite of policy stimulus announcements by some of the major central banks. In aggregate, base metal prices rose by 10 per cent over September but were 7 per cent lower than levels one year earlier.
Oil prices weaken in October but remain quite high. Attention now shifting towards the Asian economies, which have surprised markets on the downside in recent months. Near-term forecasts lifted on geo-political risk, 2013 forecasts left unchanged.
Over September, minerals and energy prices have been assisted higher by central bank monetary easing and various other stimulus measures taken by policy makers around the world. Bad news has become good, and good news has become ‘bad’ for markets.
NAB’s Corporate Finance Insights reports utilise our expertise across a range of industry sectors to explore current issues, present forward looking views and opportunities for growth and progression. The report is published four times a year and explores topical issues facing Australian Corporates. Welcome to the May 2012 edition of Corporate Finance Insights. In this […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Global growth weighed down by weakness in big developed economies, emerging markets also slowing Australian farm sector mixed but likely to benefit from US drought, which could add around $6 billion in export incomes to the […]
US natural gas lift on winding down inventories (after seasonal adjustment), and increased consumption due to shift away from coal to gas in electricity generation for summer European prices weaken as increased Russian supplies, soft demand and reduced arbitrage opportunities to Asia see more LNG enter European natural gas market Prices in Asia Pacific surge […]
London 2012 Olympics upon us but the boost to gold demand from Australian athletes still quite limited. The gold price eased by 0.4 per cent over July, and following a rally late last week, has fallen back to around US$1,590 per ounce. It is difficult to know what direction the gold price will take in […]
Bulk commodity prices have fallen noticeably in response to poor demand for steel and electricity, and improving supplies of the commodities. Both coal and iron ore prices have fallen to around their lowest levels since late 2009, consistent with Chinese GDP growth which slowed to its lowest rate in over three years in the June […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month.
Commentary and forecasts on key non rural commodities - minerals and energy.
In aggregate, base metal prices fell by 4 per cent over May and were 19 per cent lower than levels one year earlier. Currently, prices for most base metals are below their May averages. Metals prices have been volatile as a result of events in Europe and growth concerns in China and the US. Relief […]
Oil prices continue to soften on ongoing concerns surrounding the Euro-zone, Spanish bond yields rising above 7 per cent and softening US and Chinese economic activity Oil price forecasts revised down, reflecting ongoing market concerns surrounding the Euro-zone, weaker growth forecasts for the US and China and easing supply-side concerns Global crude oil market loosening […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Global agricultural commodity prices come under pressure as European concerns sees heightened financial market volatility Australian poultry industry on firm footing, buoyed by rising productivity and solid growth in per capita consumption Decline in domestic pig meat […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Global agricultural commodity prices under pressure from resumption of ‘risk-off’ attitude pervading financial markets Australian wheat crop of 26.1 million tonnes predicted on good subsoil moisture, but acreage lost to canola Wheat prices […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month.
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Agricultural commodity prices easing further on increased production, AUD impact on livestock markets Sluggish global consumption growth, increased competition from South America and South Africa impacting Australian wine exports Domestically, Australian wines under increasing pressure from rising import […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Agricultural commodities hit record levels in 2011, to ease in 2012 on massive production response. But considerable risk remains based on weather and Euro-zone debt crisis. Prices for agricultural commodities managed to pick up significantly in 2011, […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Agricultural commodities weakening on Euro sovereign debt crisis, rising production prospects Wool prices hit by weakening demand prospects, but still relatively high Australian wool production to rise 3.1 per cent in 2011-12 but exports to remain […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month.
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. • Commodity prices weaken on risk-off attitude hitting global markets, but fundamentals still point to solid prices for agricultural commodities • Sugar prices set to weaken as solid crops in India, EU and Russia come online […]
The NAB Rural Commodities Wrap focuses on some of the key economic activity that occurred in the Agribusiness sector during the month. Australian wheat crop downgraded to 21.8 million on dryness in northern NSW, Queensland Beef prices to fall in near term on weakness in Japan, US and high AUD but recover in medium term on tight global […]
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