Friday 7th March 2025

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It’s a difficult high wire act for the ECB right now. They have cut rates as inflation comes down, but they have also forecast less growth. But, Phil suggests, it’s a strange scenario to be cutting rates whilst yields are pushing markedly higher on the back of a sharp rise in government spending. NAB’s Gavin Friend says the uncertainty of USA tariffs could also hit growth, but the experience in North America shows there’s no guarantees. They’re on, then they’re off. Meanwhile a blowout in US imports as Canadian exporters in particular sought to move goods over the border before tariffs hit. Today the focus is on non-farm payrolls. Will they show any impacts from DOGE and which direction are wages moving now?

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Thursday 6th March 2025

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German bund prices have seen the biggest single day fall since the collapse of the Berlin Wall, pushing 10 year yields up30bp. It’s a similar story all over Europe, whilst movement in the US has been relatively tame. NAB’s Taylor Nugent says it is all on the back of extra spending on defence and infrastructure in German, outside the limits of their discal brake. It’s all happening ahead of an expected cut by the ECB later on. Market moves were less pronounced all round in the US – equities have rebounded, helped later in the session as rumours of some backtracking on the 25% tariffs on Canada and Mexico turned to reality. There’s also discussion on Australia’s GDP yesterday and yesterday’s US Services ISM.

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Wednesday 5th March 2025

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Financial Services Guide | Information on our services - NAB

It has been an alarming 24 hours. The US has applied tariffs on Mexico and Canada, added to those already applied to China, and pulled funding for Ukraine’s war effort. Share markets have responded the world over, but not as much in the US as you might expect. NAB’s Ray Attrill says the response has been stronger in Europe, presumably on the realisation that Trump’s word should now be taken literally. The impact of a trade war -with China, Canada and Mexico all likely to retaliate, is obvious. Prices will rise and demand will fall. Markets have taken the inevitable economic slowdown as a reason for the Fed to cut more and sooner - but Ray thinks it’ll be hard to cut in such an inflationary environment. Meanwhile, the US President is forcing Europe to come together, with Germany announcing new defence spending and Europe allowing members to go beyond their fiscal limits for military spending.

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