Friday 16th May 2025

Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.

We made the call to our listeners, what would you like to ask NAB CEO Andrew Irvine? This week Phil puts your questions directly to him, with topics ranging from the health of the global economy, this week’s RBA decision and NAB’s earnings results, not forgetting the perennial concern about housing affordability. Some of your questions were forthright. How do we fix the wealth gap? Why is NAB’s P/E ratio so much lower than CommBank’s? Are banks too reliant on housing loans? It was a frank discussion, that we look forward to repeating soon.

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Friday 23rd May 2025

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US bond yields rose higher still this session, before retracing their steps. Interestingly they started falling after the House passed the Big Beautiful Tax Bill, even though that is expected to add significantly to the US government deficit, which is seen as one of the reasons for the rise in bond yields in the first place. Does this mean US bond yields could continue their upward trajectory? NAB’s a Ken Crompton says it’s not unusual to see a reassessment after the sharp response to yesterday’s weak 20-year bond auction. The PMIs for Europe and thew US didn’t carry any major surprises, but weaker than expected for Germany. Yet the German IFO showed sentiment from companies is improving. Today retail data is the focus, for New Zealand, the UK and Canada. Phil and Ken also discuss the NZ budget and Andrew Hauser’s speech last night at the Lowy Institute in Sydney.

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Thursday 22nd May 2025

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There was another weak bond auction in the US overnight, pushing yields ever higher. NAB’s Tapas Strickland says there is a risk premium being applied to US bonds, from concerns over tariffs and, perhaps more significantly, rising government debt. The Big Beautiful Bill could add significantly to the government’s debt at a time when the balance of trade is deteriorating. Phil asks, should we be worried? Also today, a bigger than expected increase in UK CPI, but how much of it is down to one-off impacts? Today, the New Zealand Budget and US and European PMIs give a suggestion of which economies are taking the biggest hit from Trump’s tariffs.

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Weednesday 21st May 2025

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Bond yields fell significantly in Australia yesterday after the RBA’s rate cut. NAB’s Sally Auld says markets were divided as to what the central bank would do - some even thought they would keep rates on hold. NAB made the call for a 50bp cut, whereas ultimately it was just 25bp, but Sally says she feels somewhat vindicated because the board did discuss a larger move down. Phil asks whether by the year end we could see a situation where the RBA has moved markedly lower, whilst the Fed, faced with persistence inflation, has to keep rates higher. Alongside Aussie bond yields, Japanese yields were the other big mover, although their yields were moving higher after a disappointing 20-year auction. It’s also a session that’s seen an end to the rally in US stocks. The S&P didn’t quite make it to a bull run. UK inflation will rise today, but mainly because April was a nasty month for bill shock from utility companies.

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Tuesday 20th May 2025

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Fairly tepid moves across equities, bonds and currencies today with very little data and not much in the way of big announcements. The Deal of the Day probably goes to the UK and EU, who have agreed to less in the way of checks and bureaucracy for British food exports, in exchange for prolonged access to UK fishing waters. It also facilitates European spending with the UK Defence sector, something that might be important as nothing concrete came out the Trump-Putin phone call today. The RBA is expected to cut between 25bp (market consensus) and 50bp (NAB’s call), whilst Fed speakers are increasingly downplaying the idea of any cuts in the US before September at the earliest. NAB’s Taylor Nugent joins Phil to talk through the day’s moves and news.

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Monday 19th May 2025

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There’s a lot of talk going on right now and resident Trump is at the centre of most of it. Phil talks to NAB’s Ray Attrill about a plethora of negotiations that could influence markets this week. First, the Trump call to Putin, followed by a call to Zelensky. Can he break the deadlock? There are also negotiations going on with the EU. Documents have reportedly changed hands, and JD Vance met with Ursula von der Leyen and Italian Prime Minister Giorgia Meloni on Sunday. It might be in the nick of time, because Treasury Secretary Scott Bessent said on Sunday that tariff levels will go back to April 2nd levels to those countries that haven’t negotiated with the US in good faith. And in the US, where Republicans have voted against the Big Beautiful Tax Bill, the spending committee is meeting now to plan a way through the standoff. On Friday markets reacted to the cut to Moody’s US credit ratings, although Ray says it’s really of little consequence. And locally, the focus is on the RBA tomorrow, and just how big a cut will they make?

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Friday 16th May 2025

Please note this communication is not a research report and has not been prepared by NAB Research analysts. Read the full disclaimer here.

It’s been a frantic week of deal making by the US President. Was this always part of the plan? To create a destabilising set of circumstances that whets the appetite for deals with the US? Phil asks Michael Feller whether that was the plan all along and, if so, are we over the worst of uncertainty, and should investors be planning for a renewed emphasis on global growth?

Michael is chief strategist at Geopolitical Strategy in Sydney, who advise firms about navigating environments just like this. He’s a former finance journalist, investment strategist and spent many years in government, as a diplomat in Singapore, as senior adviser to Malcolm Turnbull, and director of the Department of Foreigner Affairs and Trade.

Phil asks him, how should investors position themselves in a world dominated with tariff talk, but also riddled with geopolitical unrest, from Israel and Iran to Russia and Ukraine, and this last week, India and Pakistan? And should we prepare for a more multipolar world? That’s something that was emerging, says Michael, well before Trump returned to the White House.

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Friday 16th May 2025

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Softer retail sales and slower growth in produce prices has upped expectations for the speed of Fed cuts this year, pushing bond yields lower today. It’s been a curious session, with NAB’s Ray Attrill saying equities, bonds and the dollar seem to be acting independent of each other. Oil is also forging its own path, driven down by expectations that President Trump will forge a deal with Iran which could see them adding to the global supply pool sometime soon. They also discuss yesterday’s Australian employment numbers and why we might have been bit optimistic to expect a 50bp cut by the RBA next week. But never say never.

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