NAB – The Morning Call · Markets accentuate the positive, but BoE now contemplating the negative

Markets accentuate the positive, but BoE contemplates the negative

Thursday 21st May 2020

It’s been another positive session, driving equities higher and giving another boost to the Australian dollar. NAB’s David de Garis says the Aussie’s rise is despite trade tensions with China, instead driven by the prevailing risk-on mood and the rising price of iron-ore. Markets largely ignored yesterday’s Australian retail sales numbers – we knew they were going to be bad – but there will be hope that we’ll see things turnaround a little in the PMI numbers due later for Europe, the UK and the US. UK gilt yields moved into negative territory today as the Bank of England governor admitted that negative interest rates were being ‘actively’ considered. And the FOMC minutes echoed the sombre tone adopted by Jerome Powell yesterday – the bounce back won’t be quick. 

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