The Morning Call

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.

US Inflation rises and surprises, everything is in play

US inflation is up to 9.1% yoy – more than expected. The Fed’s Raphael Bostic has said everything was in play” when it comes to the July rate rise. NAB’s David de Garis says you don’t need to be a genius to figure out what he means, given 100 seems to be the new 75.

Freaking out over inflation

Wednesday 13th July 2022

There’s no let-up when it comes to the downward expectations around the health of the global economy. US bond yields inverted further, suggesting a heightening of recession expectations. Oil prices fell sharply lower, suggesting demand is expected to fall further. US small business owners who expect conditions to improve in the next six months fell to minus 54%, the lowest in half a century. The confidence in the German ZEW survey hit a 10-year low yesterday. The NAB business survey also showed business optimism falling sharply. And NAB’s Gavin Friend reckons the prospect of an energy crisis in Europe is the real danger that is not yet fully reflected in market pricing. What will turn all this around? Central banks think a race to higher rates will fix the problem, with the Bank of Canada and RBNZ trying to outdo each other today on who can rate the fastest. So, imagine the reaction if US CPI numbers come out higher than expected today.

China flares up, Putin flexes more, US Dollar pushes higher

China is locking down again, just as new loans increase. That suggests the economy will bounce back strongly, says NAB’s Tapas Strickland, if and when they stop pursuing their zero Covid policy.

Healthy jobs data bad news for the economy

If markets were hoping for weaker jobs data from the US on Friday would mean the Fed could ease off on the hikes, they’d be disappointed. NAB’s Ray Attrill talks through the numbers that were pretty close to expectations, but still drew a market response.

A glimmer of hope, except for Boris

Boris is leaving, with the UK in a caretaker government at a crucial time. NAB’s Gavin Friend says a replacement will have to be found quickly. Meanwhile, there’s been more positive sentiment in markets globally – we search for reasons in today’s Morning Call podcast.

Significant risk, still?

The FOMC minutes have markets inflation fears rising. And take a look at the job openings, says NAB’s Ray Attrill. The labour market in the US is still very tight, so there’s no suggestion of the Fed easing their path of rate rises anytime soon.

Oil Dives, Bonds Rally as Recession Fears grow

It’s hard to make sense of market price action overnight says NAB’s Skye Master, except for concerns around gas shortages in Europe. The Euro is close to parity – as predicted by the NAB FX strategists.

Australia, faring better than most, but big hike still expected

The RBA is expected to lift interest rates by 50 basis points today, says NAB’s Tapas Strickland. The biggest sign of concern about the state of the global economy is how German trade has slipped into a sizeable deficit.

Independence Day: Recession Resurgence

NAB’s Rodrigo Catril says the ISM manufacturing read on Friday has added to recession fears, lowering bond yields further still. But equity markets seem less concerned, for now.

And back to recession fears

Bond yields fall as recession fears grow after weak personal spending numbers from the US. But NAB’s Tapas Strickland says it is being met with any signs of a sustained fall in inflation. So, just how far do central banks need to go?

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