Start your day with the Morning Call for the latest overnight key economic and market information straight from NAB’s team of expert market economists and strategists.
Jerome Powell pushed hard against inflation fears in his second day of testimonies in the US parliament overnight. NAB’s David de Garis says that’s helped equities and commodities show rises today, which has, in turn, helped the Aussie dollar rise closer to 80 cents.
The RBA might make up for the shortfall in RBA’s bond buying at the start of the week, says NAB’s Tapas Strickland on today’s Morning Call podcast. Powell says the US rise in yields was to do with strength of the recovery rather than inflation concerns.
Markets were disappointed by the RBA response to rising bond yields yesterday, says NAB’s Rodrigo Catril, creating a dramatic move up in yields. The Aussie also hit another multi-year high driven by rising commodity prices as reflation gather momentum.
The Aussie dollar is rising faster than anticipated, says NAB’s Ray Attrill as the reflation trade pushes commodities higher. Both the Aussie dollar and Sterling hit multi-year highs on Friday.
US equities fall in the US. NAB’s David de Garis says a rise in new jobless claims has acted as reminder of how sluggish the employment recovery is. Meanwhile the pound is gaining strength as markets wait to hear Boris Johnson’s escape plan from the UK’s lockdown.
Positive jobs numbers will add to the power of the reflation trade, whilst rising producer prices can add to those arguing inflation fears. Plus, NAB’s Gavin Friend gives us the latest from the FOMC minutes.
A positive vibe says NAB’s Rodrigo Catril, tempered by inflation concerns and higher yields. Treasury yields are now back around pre-pandemic levels.
Vaccine rollouts and lower case numbers have egged-on the reflation trade, even with the US on holiday. NAB’s Ray Attrill explains why Japan’s stronger than expected GDP has weakened the Yen and why rising oil prices are the fly in the ointment.
Bond yields are rising alongside equities. How long can that go on for? A question put to NAB’s Tapas Strickland on today’s Morning Call podcast.
Jerome Powell is not the only one talking down the speed of recovery. NAB’s Gavin Friend says the EU has downgraded its forecasts. And after a Biden-Xi phone call, don’t expect relations between the US and China to warm up in a hurry.
