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Below trend growth to continue
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
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
Online retail sales grew strongly in October, following on from a rebound in September.
Industry participants are exploring a range of different approaches to support Australia’s infrastructure needs as the economy faces into a higher inflationary environment.
The Aussie dollar came within kissing distance of 66 US cents on Friday
Global inflation slowed in September, including a softening in advanced economy inflation to its lowest level since September 2021. For Australia, we have revised up our forecasts for growth and inflation (in the near-term) while lowering our expected peak in the unemployment rate.
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 […]
Global growth resilient in Q3 but set to slow going into 2024
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.
Australia needs a vast amount of capital to build out the utility-scale wind and solar projects to power a net-zero future by 2050. NAB’s Executive, Specialised Finance, Andrew Smith and Executive, Capital Markets, Sarah Samson explore potential debt funding options in market.
Growth outlook upgraded but 4.6% rate peak ahead
The NAB board member and Queensland University of Technology chancellor reveals what drives her passion for social change and equity as special guest at the inaugural NAB Women in Funds and Infrastructure networking event.
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.
Bond-fuelled lending to support near-term growth but challenges remain unaddressed
Our monthly transaction data showed a fall in spending in October across a number of categories including retail as well as a range of services sectors.
NAB’s digital claims solution has enabled a system of fast, transparent payments for healthcare practitioners, government schemes and the communities they support.
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.
Confidence remains low despite healthy conditions
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
Growth holding up but subdued year ahead
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.
Welcome to NAB’s regular newsletter on the Sustainable Finance market from an Australasian perspective.
Oil prices down again as demand pessimism deepens
The inflation figures surprised on the upside in October leading many pundits to believe there will be a rate hike on Melbourne Cup Day. At this webinar we will discuss the RBA decision on the first Tuesday in November and what this means for interest rates.
Quiet data wise, but some notable moves in markets.
NAB expects follow up hike in February 2024
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.
Despite everything happening in the world, the AUD’s October trading range was extraordinarily low.
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.
There was a broad-based rebound in online retail sales in September
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.
The AUD experienced a volatile month in September spending some time above USD 0.6500 before testing levels below 0.6300 in the early part of October.
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
Labour costs rise as price inflation remains elevated
Global inflation again picked up in August. A key contributor to recent inflation trends has been energy prices, with oil prices increasing since June. For Australia, our forecasts are unchanged. Recent data all point to continued resilience but the ongoing pass through of higher rates and high inflation still suggest consumption growth will soften in H2 2023.
China’s third quarter growth beat expectations; 2023 forecast edges back above target
Higher US yields and 'risk-off' tone see AUD's hard-fought gains undone
Inflation yet to be defeated – policy rates could stay high for longer
Strong US retail sales sees yields rocket – 10yr yield +14bps to 4.84%
Growth to remain subdued, but avoid a major downturn
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 […]
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.
Our monthly transaction data continues to suggest spending has been resilient, with growth in September following on from fairly strong nominal growth in prior months.
Lower US bond yields and softer US dollar lift AUD back above 0.64
Cost pressures ease amid resilience in activity
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 AUD/USD’s 1.9 cents range in September was the narrowest since the 1.74 cents October 2019 range. Still, the USD was in the driving seat, fuelled by “higher for longer” Fed messaging.
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 […]
It’s the same story again today – equities hurting, the US dollar higher and bond yields reaching 16 hear highs. What’s changed today is a sharp rise in oil prices. NAB’s Tapas Strickland says there’s a great deal of nervousness that supplies in the US have been destocked too far, down to levels last seen in 2014
US equity and FX markets have for once pushed the bond market vigilantes out of the spotlight, albeit the weakness in stocks and strength in the USD doubtless owes something to the lagged impact of the earlier run up in Treasury yields to post 2007 highs
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.
Global inflation was higher in July, although this uptick was not broad based – concentrated in a few key emerging markets. For Australia, our forecasts for GDP growth have strengthened marginally, reflecting a slightly stronger than expected result for Q2.
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.
Central banks may be at their peaks, but energy prices pose a risk to disinflation trend
Bond markets are a little feisty ahead of the FOMC meeting tomorrow. NAB’s Taylor Nugent says a hold is still expected tomorrow but there are more signs that inflation isn’t beaten yet.
Growth to remain subdued despite signs of resilience
US equities start the new week in a sedated manner while European counterparts record sharp declines. Front end yields have a led a bear flattening of the UST curve and the USD is a tad softer
The Fed isn’t the only central bank making a call this week. There’s also that expected hike from the Bank of England, plus the central banks of Japan, Switzerland, Sweden and Norway.
Transition targets underpinned by science-based standards are helping to drive opportunities for issuers and investors globally as sustainable finance markets continue to evolve.
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 […]
This week we delve into the latest national accounts figures on consumer spending to try to assess just how weak consumer spending is.
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
Employment index rises as resilience continues
One of Australia’s most successful executives gives some inside tips at NAB’s Women in Property Finance industry networking event and reveals the biggest intellectual challenge of her post-Mirvac life.
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.
NAB is working with insurers to help build knowledge and resilience in the face of extreme weather events and volatility arising from climate change.
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
The AUD have an ‘average’ August in terms of its monthly hi-lo range, albeit it fell to a near 10-month beneath 64 cents
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.
Powell affirmed the Fed will ‘keep at it’ on inflation, but what else happened at Jackson Hole? In the weekly, we pull out some of the key insights, including on the outlook for government debt and the ‘friendshoring’ dynamic.
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.
The latest major bank profit reporting/trading updates suggesting households so far by and large are managing the transition to higher interest rates.
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
Hopes have been raised of a soft landing for the global economy, although a number of headwinds remain. For Australia, our forecasts for GDP growth have strengthened marginally but we continue to expect growth to be well below trend in 2023 and 2024 as the impact of rate rises flows through.
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, […]
Recent US CPI prints have shown good progress on disinflation. In this Weekly, we look at where those gains have occurred, and what to be careful of when drawing implications for Australia
Soft landing hopes rise but headwinds remain
Having credible, science-based transition plans will be crucial for organisations to help direct and unlock capital flows on the road to net zero.
A stark contrast Tuesday between strong US retail sales and very weak China data
Soft start to Q3 signals a growing chance that China could miss its annual growth target
Flat consumption in Q2 with one more rate rise left
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%
Carbon markets have a role to play in the transition to a net zero economy, especially when seeking to meet and beat Australia’s interim targets this decade.
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.
Our monthly transaction data showed a surprisingly positive result for July, with spending still holding up.
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.
Conditions still above average despite warning signs.
AMW – Some favourable signs for inflation in Australian capacity use figures but labour market still very tight
We examine the aggregate and disaggregated measures of capacity utilisation in the NAB Business Surveys in greater detail in this week’s Australian Markets Weekly.
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
Very slow growth likely across the states in 2023-24
RBA on hold for now but one more rise still likely
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.
US, China and local inflation news drove much of the AUD volatility in July
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
Organisations can build on today’s climate transition work to better identify the risks and opportunities nature-based assets provide as new reporting standards come into play.
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’.
NAB Online Retail Sales Index growth contracted in June.
Calling a US recession has been a bit like “Waiting for Godot”, the title of the 1953 play by Samuel Beckett.
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
Igneo Infrastructure Partners strategy to achieve net zero by 2050
We're optimistic about playing a key funding role in future projects.
Credible data and climate-related financial disclosure will play a critical role in transitioning the nation to net zero.
Rebuilding an industry with multiple moving parts.
On Torrens Island near Adelaide, the nation’s biggest decarbonisation project is gathering momentum.
The road to decarbonising Commercial Real Estate.
Weak European PMIs have seen yields fall, though moves in US Treasuries retraced latter in the day.
Transgrid Chief Executive, Brett Redman, accepts there is no alternative but to press harder on the transition accelerator.
US equities closed the week little changed with the S&P 500 in consolidation mode ahead of a new week that includes the FOMC meeting and a busy earnings calendar. UST were little changed and the USD continued its recovery.
US yields higher with Jobless Claims lower than expected
Our forecasts for the global economy are largely unchanged this month we expect growth of around 2.8% in 2023 before slowing to 2.7% in 2024. For Australia, we continue to expect quarterly GDP growth to be flat over the next three quarters, with growth of just 0.5% over 2023 and 0.9% in 2024 as the impact of rate rises flows through.
Supply issues easing but labour still hard to find
Another bond rally, this time in the UK with inflation coming in softer than expected.
China’s weak Q2 growth presages weaker global growth
Central bankers globally seem to have switched to a more measured tone recently. Overnight tapas
A slow second half, but persistent inflation
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.
China’s recovery lost momentum in Q2 and the outlook for the second half remains cloudy
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.
Any significant change to global supply chains will take time
Yields tumbled and risk assets soared as US CPI came in much softer than expected
Our monthly transaction data showed a broadly flat result for June, with a lift in hospitality spending but a fall in retail.
We expect Q2 CPI next Wednesday (26 July) to show little sequential progress reducing underlying inflation even as y/y rates move lower
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.
Conditions still above average despite warning signs
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.
This week we consider tomorrow’s RBA board meeting, but also US data releases that are likely to be more relevant for how the US economy and labour markets develop over the next 6-12 months.
The AUD/USD price action in June was a story of two halves. Soft US data and a cash rate hike by the RBA helped propel the currency to an intra-month high of 69c, but then concerns over China’s growth outlook and better than expected US data releases weighed in the second half of the month.
Friday capped a risk positive end to the week and the month of June with softer US economic data releases treated as good news. Weaker US consumer spending and inflation boosted US equities with gains over 1%, US Treasury yields traded lower after the data release and the USD closed the week broadly weaker.
The string of positive US data surprises continued overnight with a big drop in Jobless claims and a decent upward revision to Q1 GDP. US Treasuries led a jump in core global bond yields and US equities closed in the green, unperturbed by the move up in yields. Positive US data surprises help the USD reverse earlier losses, but the AUD/USD held its ground aided by yesterday’s stronger than expected retail sales figures.
Fed, ECB, BoE heads reiterate hawkish views; BoJ reiterates dovish stance
Our NAB Online Retail Sales Index grew rapidly this month, following on from very subdued growth over the past two months.
A series of NAB-led deals involving major telcos and private capital from infrastructure investors points the way to effectively monetising undervalued assets for growth.
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
After relatively robust growth in Q1, global activity looks set to slow in the near term. For Australia, we are seeing increasing signs that activity is slowing sharply after a very strong period of growth in 2022.
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
Global growth set to slow as monetary policy bites
Australia’s population growth has surged over the past year. The surprise has been how quickly it has rebounded after borders were re-opened from November 2021.
Soft risk sentiment overall last night which was mostly China driven.
4.6% rate peak as recessionary forces gather
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
Fed pauses in June, but another hike is likely
Weakness in domestic demand led to underperformance in May
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.
Jamie Bonic, Head of FX Investor Sales APAC, and Ray Attrill, Head of FX Research, joined ASFA to discuss the launch of NAB’s Super FX hedging survey.
In today’s Weekly, we delve into Australia’s productivity and labour cost data given the RBA’s recent focus on these metrics, and explain why timely signals on the inflation outlook may be better found elsewhere.
Fed pauses as expected but ‘dot plot’ adds two, not one, more rate rises to 2023
Is China finding new markets for its exports?
Our monthly transaction data showed a small rise in spending in May (in seasonally adjusted terms), driven by discretionary spending.
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.
Cash rate likely to hit 4.6% as narrow path sinks
Worrying signs of a slowing in activity
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 RBA Board is ‘Finely Balanced’ at the moment and we consider future meetings ‘live’. What does the Interest Rates pathway in the back half of 2023 & how can NAB Markets support commercial borrowers in managing this risk?
The BoC shocked markets overnight, hiking by 25bps to 4.75%.
A soft start to 2023
The growing wave of digital transformation in finance is helping solve today’s key corporate treasury challenges by leveraging the latest developments in data analytics, artificial intelligence and machine learning
In our latest Weekly, Taylor Nugent explores the impact of pandemic swings in population and housing demand to explain the current acute rental market tightness and rapidly increasing rents, as well as when these pressure may ease
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
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 fell below 65 cents in May, in doing so re-establishing a more ‘normal’ monthly trading range after two months of highly compressed volatility.
The AUD had fallen to a new post November 2022 following more disappointing China data
Activity – and inflation – resilience continues
NAB presents detailed insights into superannuation investment behaviours and trends in our comprehensive survey of Australian Superannuation Funds undertaken every two years and opening again for 2023.
The Markets Economics team looks at the progress rebalancing supply and demand in Australia and find that Australia is likely to lag the progress being made in the US on rents, energy and wages/services.
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
NAB Online Retail Sales Index was flat in month-on-month in April, after a mild contraction in March.
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.
In this Weekly, we delve into last week’s WPI data in more detail and discuss the risks to wages projections and the RBA's outlook
A quiet start to the week with little in the way of significant market moves.
Reports of a property rebound appear premature
In this Weekly we explore two key US themes we are tracking closely for the trajectory of rates and inflation, in both Australia and the US
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.
Global economic data point to a bounce in growth in Q1, with China providing around 40% of this total. For Australia, we continue to expect growth to be well below trend at 0.7% and 1.2% in 2023 and 2024 respectively – though we have reverted to our previous expected rate call of a peak of around 4.1% and see a material risk that rates reach 4.35%.
Positive soundbites from Biden and McCarthy give hope a debt deal can be reached.
Global growth set to slow from robust Q1 results
Base effects inflate growth in April; still waiting on demand to recover
A flurry of global economic data but relatively modest market movements.
Rates to pass 4% with economy to slow in response
A quiet start to the week with little in the way of new news or top-tier data.
Cash rate likely to pass 4% in the coming months
Markets were spoked on Friday by an unexpected rise in US consumer inafltion expectations
The Bank of England raised rates by 25bp as expected, while softer data out of China and the US weighed on risk sentiment
Markets are showing relief that the key US CPI release overnight was not higher than expected
Markets are treading water as we await the outcome from the Biden-McCarthy debt ceiling meeting and the US CPI data release tonight. US and EU equities have ended the day lower while core yields have edged a little bit higher. Fiscal updates revealed contrasting AU and NZ fortunes while cautiousness in the air has favoured the USD.
Our monthly transaction data showed another small fall in spending in April (in seasonally adjusted terms), largely driven by discretionary services categories.
The Australian budget Tuesday night is likely to feature a small surplus for the current financial year...
US and EU equities have closed with modest gains while core yields extended Friday’s rise. The Fed Senior Loan Officer revealed a modest deterioration in lending standards alongside a drop in demand for loans, so no evidence of an imminent credit crunch. The USD is little changed with NZD leading a modest outperformance by pro-growth currencies.