Weaker PMIs from China are a concern, but lockdowns will constitute a chunk of that, says NAB’s Ray Attrill. Yet the Aussie dollar has risen, perhaps reflecting how much bad news had already been priced in.
It’ll be a quiet week says NAB’s Tapas Strickland as markets wait for non-farm payrolls on Friday. The long wait hasn’t stopped US equities reaching new highs again this morning, though.
The markets responded positively to Jerome Powell’s taper talk on Friday. NAB’s Rodrigo Catril gives us the take outs. And is Australia already in a recession? It’s close.
If mineral resources become increasingly scarce, what does that do for the broader economy? What will change our behaviour?
Market sentiment has taken a hit by explosions in Kabul, but NAB’s David de Garis says markets are still focused on the longer term expectations for US monetary policy ahead of Jerome Powell’s Jackson Hole speech tonight.
Thursday 26th August 2021
Market optimism continued overnight, with US equities again hitting new highs and commodities climbing sharply too. That’s helped the Aussie dollar again today. NAB’s Rodrigo Catril says the sentiment is being driven by infection rates starting to subside in the US. Phil Dobbie asks how fragile this optimism could be, if number were to rise again. The ECB’s Philip Lane painted a positive picture, suggesting the Delta variant won’t impact the European recovery story because fatalities and serious illness have being contained by the vaccine. He also indicated, whether through PEPP or another vehicle, they’ll be providing favourable financing conditions through to next March, at least. It’s very different to the direction being taken by the Fed, but more on that in tomorrow’s podcast.
Rising vaccine rates are leading to more global market optimism says NAB’s Tapas Strickland, as well as companies mandating vaccines for workers to drive the take-up.
Markets are paying attention to early signs of falling COVID case numbers in the US says NAB’s Rodrigo Catril, which has caused a big turnaround in market sentiment. Full authorisation of vaccines, beyond emergency use, has also helped.
One of the FOMC’s more hawkish members is suggested tapering could take longer. NAB’s Ray Attrill says that the prospect of the Fed continuing to provide $120 billion a month for longer wasn’t lost on the equity markets.
The Chinese growth story is something we have to watch from here and has been a big factor in the behaviour of markets in the last few days says NAB’s David de Garis.
