The Morning Call Podcast – July 2017
Five factors impacting the US dollar right now
Monday 31st July 2017
Although GDP data on Friday displayed growth in the US economy, the figures weren’t as strong as had been envisaged, weakening the US dollar further. Today on the Morning Call Phil Dobbie and Rodrigo Catril go through five factors influencing the US dollar right now – from the data and Fed speak, through to US politics and international affairs. Plus, a quick look at data out today that could influence the markets.
Dollar rises, equities slide, border tax revolt and glacial move to healthcare bill
Friday 28th July 2017
There’s further signs that President Trump’s tax agenda is in disarray. House speaker Ryan has thrown is support behind Republicans opposed to a border tax, whilst votes on the healthcare bill could continue long into Friday night in Washington. Phil Dobbie asks NAB’s David de Garis what does all this uncertainty mean for the dollar? We’ve seen it slide in recent days, but overnight it was back on the climb, with equities taking a tumble. And tonight, GDP figures will be keenly watched for further evidence of the health – or otherwise – of the US economy.
Just how soon is ‘relatively soon’ in Fed speak?
Thursday 27th July 2017
The US Federal reserve made their rate announcement this morning. The fact that there is no change on rates came as no surprise to anyone, but they talked about easing their stimulus program “relatively soon”. Phil Dobbie talks to NAB’s Rodrigo Catril about the swift reaction, which has seen a sharp fall in the US dollar. They also look at the day ahead, including import and export prices for Australia and trade balance figures in the US. And the Aussie dollar hits 80 US cents.
Saudi’s make cuts; senate votes for health debate; German business euphoric
Wednesday 26th July 2017
Brace yourself for a busy day after an eventful night. Cuts promised by Saudi Arabia have sent the oil price three percent higher, whilst the Germany IFO survey was more positive than expected – German businesses are brimming with confidence. Phil Dobbie looks ahead to the rest of the day with the NAB’s David de Garis. We have Australia’s CPI figures for Q2, as well as words from the RBA’s Philip Lowe and, of course, the FOMC decision and commentary early tomorrow morning.
All quiet on the Russian front; Trump spruiks health bill; oil rises
Tuesday 25th July 2017
There’s been an eerie silence on the markets as the Russian probe continues in Washington. Jared Kushner has denied any wrongdoing, with Donald Trump Jnr next in the firing line on Wednesday. Phil Dobbie talks to NAB’s Rodrigo Catril about a quiet trading night and asks if it could all change if President Trump secures the votes for his repeal of Obamacare tomorrow. Also, some signs of weakness in the Euro economy, and oil back on the up, but for how long?
Will the dollar keep falling, and the Aussie keep rising?
Monday 24th July, 2017
The US dollar seems to be suffering from the uncertainty of the Trump presidency, which prompted a rise for the Aussie dollar last week. Except on Friday, when the US dollar continued its fall, but the Aussie also fell after the RBA’s Guy Debelle hinted that an interest rise wasn’t on the cards anytime soon. On today’s Morning Call Phil Dobbie asks NAB’s Ray Attrill how long that stance can continue if the falling US dollar keeps upward pressure on the Aussie dollar.
Draghi cagey, Euro soars, pound sinks, Trump net tightens
Friday 21st July 2017
Even though, in his talk overnight, Mario Draghi said little about the ECB winding down its stimulus program, the Euro climbed markedly, sending the pound into a spin and knocking a chunk out of the US dollar. As Phil Dobbie suggests to the NAB’s David de Garis, imagine if he had said something definitive. This morning they also look at UK retail figures, yesterday’s Aussie jobs data and the latest palaver on the Trump-Russia thing.
ECB and BoJ decisions today; the Aussie close to 80 US cents
Thursday 20th July 2017
The Aussie dollar is nudging closer to 80 US cents. Phil Dobbie asks the NAB’s Ray Attrill whether it could push higher over the next couple of days. Will it, for example, be influenced by decisions from the Bank of Japan and the ECB? Neither are expected to move rates, but what will they have to say on easing their stimulus measures. Governor Kuroda could well be downgrading Japan’s inflation target, indicating QE is here to stay, no matter what other central banks decide to do.
Washington gridlocked; UK inflation nosedives; Aussie spirals upwards
Wednesday 19th July 2017
It’s RIP for President Trump’s healthcare bill. Phil Dobbie talks to NAB’s Rodrigo Catril about the impact the Washington gridlock is having on the US currency and bond yields. Inflation in the UK fell back more than expected, hitting the pound, but is it a short term blip or the end of an upward trend? And the Aussie dollar has been the best performing major currency – will we pass the 80 US cent mark anytime soon?
Aussie slides; Brexit cabinet divided; what next for the Fed?
Tuesday 18th July
After a boost on the back of poor US retail sales and inflation figures on Friday, the Aussie dollar has fallen back a little. Phil Dobbie asks NAB’s David de Garis whether that means it’s gone as far as it can for now, given the support you’d expect from strong Chinese data and a healthy rise in iron ore prices. We also ask just how important those inflation figures were for the Fed? With time to sleep on it, what’s the expectation of a rate hike before the end of the year. And we look at continued confusion in the UK ahead of CPI figures tonight.
US inflation puts the kibosh on a rate rise; Aussie soars
Monday 17th July 2017
The US economy showed a couple of signs of weakness on Friday. Whilst the President tweets about the record price of equities and strong industrial production, he seems to have missed the drop in the value of the dollar on the back of lower than expected inflation and retail sales figures. Does this rule out another rate rise this year? Phil Dobbie puts the question to NAB’s Ray Attrill, as well as discussing the impact on the Aussie dollar, now at its highest level since May 2015. But will it stay there?
Budgets, Beef and Bastille Day
Friday 14th July 2017
Today, Phil Dobbie talks to NAB’s David de Garis about President Trump’s visit to France. His meeting with his new best friend, President Macron, has diverted his tweets away from the Congressional Budget Office’s conclusion that the White House plan won’t deliver a balanced budget by 2027. Meanwhile, could the President’s tweet about beef signify a more productive relationship with China and end speculation of tariffs? All that, and why the Aussie and Kiwi dollars seem to be performing so well right now.
Yellen shows caution, the Loonie reacts and UK surprises
Thursday 13th July 2017
Janet Yellen chose her words carefully during her testimony overnight, but the market still reacted. Phil Dobbie looks at the response with the NAB’s Ray Attrill, who also explains why there was a marked reaction from the Bank of Canada doing exactly what everyone expected – pushing interest rates up a quarter of a percent. And Britain has some good news at last, but perhaps not enough to compensate for Andy Murray’s hip injury!
Red hot emails, a beige book and Canada set to press the green button
Wednesday 12th July 2017
Okay, we’re absolutely sure that interest rates don’t rise when someone presses a green button, but you get the idea. On today’s edition of the Morning Call Phil Dobbie asks the NAB’s Rodrigo Catril how the market will react if the Bank of Canada doesn’t raise rates tonight. Plus, markets have reacted to Donald Trump Jnr’s involvement in email exchanges with Russia over the US election, and the pound has been hit thanks to a bit of Ricardian theory from the Bank of England. Also, Janet Yellen will talk to the House Panel tonight, and the Fed releases its Beige book. And will we see the gap between Australian business and consumer confidence widen even further today?
All of a sudden, nothing happened
Tuesday 11th July 2017
On today’s podcast Phil Dobbie likens the overnight markets to the life of Ralph Melish. Monty Python fans will know what we’re talking about. For the rest listen in to the explanation as he and the NAB’s David de Garis talk through a night in which nothing happened. With little data to speak of, could today be more of the same, or is it the calm before the storm. Janet Yellen speaks to the Senate tomorrow and the Bank of England’s Andy Haldane talks this evening – will he suggest a rate rise isn’t such a good idea after all?
What will Trump do next, after the G19 plus one?
Monday 10th July 2017
Phil Dobbie asks the NAB’s Ray Attrill two big questions on The Morning Call today. After a slew of poor data from the UK, weak wage growth in the US on Friday and a high proportion of part-time jobs in Canada, will central banks be as keen to lift interest rates? Plus, with the G20 out the way, was there enough commitment to resolving steel-dumping to prevent President Trump from tackling the issue unilaterally. Amongst the big things to look out for – what will Trump do next, and what will Janet Yellen say to the House and Senate this week.
European bond sell-off; equities fall; and what will Trump say and do?
Friday 7th July, 2017
A busy night! The selloff in European government bonds picked up from last week, and gained some momentum. At one stage, the yields on German bunds were up 10 basis points. Phil Dobbie talks to NAB economist Tapas Strickland about the ECB minutes, the source of this action, as well as what’s behind falls in the equity markets, ahead of the G20 and Trump’s meetings with various world leaders, Vladamir Putin included. Normally a summit like this is unlikely to have a big impact on markets, but perhaps it will be different this time round. Oh, and US non-farm payrolls tonight.
Oil dips, Europe scores, Fed pontificates
Thursday 6th July 2017
Last week’s oil rally came to a screeching halt overnight, with West Texas Intermediate dropping more than 4 percent to just over $45 a barrel. Phil Dobbie talks to NAB’s Ray Attrill about the impact of the fall, what we can read from the FOMC minutes overnight and the continued rise of the European economy with positive PMI figures. A different story, as usual lately, for the UK.
Kim’s missile creates movement on a slow news day
Wednesday 5th July 2017
If Kim Jong Un hadn’t fired a missile into the Sea of Japan, it would have been a very quiet overnight session. As it was, the reaction was relatively short lived. Phil Dobbie asks NAB’s David de Garis whether we can expect a more sustained market reaction if and when tensions in the region ramp up. Meanwhile, the major currency showing the most movement over the last 24 hours was the Aussie dollar. Find out why in this edition of The Morning Call podcast.
Manufacturing boost in US and Europe; Abe’s bad hair day
Tuesday 4th July, 2017
The US dollar performed well overnight ahead of the Independence Day holiday, thanks to very positive manufacturing data. NAB’s Rodrigo Catril talks through overnight news with Phil Dobbie, including the rise in the dollar, positive manufacturing PMIs from Europe and less than impressive results from the UK. They also look at the RBA decision today and the surprise results in the election for the Tokyo Metro Assembly.
A week of hard facts and steely resolve
Monday 3rd July 2017
After a week where markets were driven largely by central bank sentiment, we can at last rely on some hard data this week, leading up to the US non-farms payroll on Friday. Sadly, as Ray Attrill explains to Phil Dobbie on this morning’s Morning Call, any hope of a more stable environment could be obliterated on Friday if the Trump administration imposes a hefty import tariff on Chinese steel – or steel from Europe, Brazil and Canada for that matter. Could this be the trigger for a trade war?