Latest / Best of Business / Brad Olsen: Infometrics Principal Economist on the economic implications of the ongoing crisis in the Middle East

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Brad Olsen: Infometrics Principal Economist on the economic implications of the ongoing crisis in the Middle East · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalks'd be follow this
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  Speaker 2: Now. The flare up in the Middle East could have
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  Speaker 2: financial implications for New Zealand petrol prices, interest rates, Can
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  Speaker 2: we save for balances? Could all we hit Infirmetric's chief
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  Speaker 2: executive Brad Olsen.
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  Speaker 3: Is with us now, Hi, Brad, good evening.
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  Speaker 2: I would imagine your biggest concern is inflation.
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  Speaker 3: It is for the moment, although so far I think
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  Speaker 3: the uncertainty is still meaning that we're worried, but it's
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  Speaker 3: not as direct so far. The likes of Brent crude
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  Speaker 3: oil prices spike thirteen percent today, but that was an
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  Speaker 3: early trading. That increase is now halved, with Brent only
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  Speaker 3: up just over six percent on the latest figures I'm
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  Speaker 3: looking at. So there has been a more muted sort
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  Speaker 3: of push higher in oil prices. People have been wondering
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  Speaker 3: about one hundred dollars a barrel and we haven't. You know,
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  Speaker 3: at the moment, the figures have only just breached eighteen
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  Speaker 3: and have then pulled back a bit, so this does
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  Speaker 3: seem to be a more limited fall out so far. Yes,
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  Speaker 3: there's concerns around the Strait of Hormuz and everything else,
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  Speaker 3: But so far energy infrastructure hasn't been directly attacked, and
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  Speaker 3: I think everyone's just trying to sort of wait things
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  Speaker 3: out and see how long it will go. Other parts
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  Speaker 3: of the economy, though still at a bit more risk.
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  Speaker 3: The likes of Enzix fifty down I think er point
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  Speaker 3: seventy five percent today, just not really a feeling amongst
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  Speaker 3: traders that there's a great amount of growth opportunity out there.
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  Speaker 3: And when we see US markets open tomorrow would be
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  Speaker 3: expecting a similar sort of pullback and the likes of stocks,
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  Speaker 3: but sort of those other purchases that people often flop
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  Speaker 3: to for a bit of a safe haven, like gold,
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  Speaker 3: well they look like they've got a bit more potential.
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  Speaker 3: So a lot that we're trying to watch at the moment,
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  Speaker 3: but a lot of uncertainty still coming out of the
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  Speaker 3: Middle East.
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  Speaker 2: Yeah, so half of thirteen is roughly about six, which
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  Speaker 2: is what the oil prices have gone up by. Do
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  Speaker 2: we know what that means that the petrol pump.
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  Speaker 3: For US, Well, I guess, given how much it's sort
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  Speaker 3: of flicked around, even just within today, I'd be disappointed
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  Speaker 3: if you saw oil companies, the retailers here in New
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  Speaker 3: Zealand lift pump prices too quickly because all of this,
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  Speaker 3: you know, could will have operated away a little bit quicker.
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  Speaker 3: I'd expect that you might see over the course of
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  Speaker 3: this week a little bit more pressure coming on domestic prices.
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  Speaker 3: But again I think that you know, traders and the
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  Speaker 3: oil companies will need to be a little bit careful.
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  Speaker 3: Looking through some of the figures shows that international traders
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  Speaker 3: are thinking that there's sort of a three month impact here,
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  Speaker 3: so you know, changing things across the board and expecting
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  Speaker 3: fuel prices to be higher for you know, the next
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  Speaker 3: year is very much over the top. For now, I
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  Speaker 3: think it's probably a bit more sensible to sort of
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  Speaker 3: just hold things for the next week and then assess
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  Speaker 3: where where we get to. I mean, this is still
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  Speaker 3: a volatile situation, but yes, a bit more pressure. And
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  Speaker 3: of course that's coming at a time when tradable overseas
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  Speaker 3: based inflation had already been pitching up. The Reserve Bank's
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  Speaker 3: already got inflation out the top of the target ban.
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  Speaker 3: They are worried about these sort of pressures, but equally
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  Speaker 3: you'd hope that they'd look through a geopolitical event like
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  Speaker 3: this where they couldn't look through it as much. Is
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  Speaker 3: if not only households were being hit with those higher
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  Speaker 3: fuel prices if they go up, but also if transport
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  Speaker 3: costs around the country go up, and that would mean
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  Speaker 3: that every other product that has to get moved by
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  Speaker 3: road or ship or eything else would increase too. So
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  Speaker 3: some indirect effects that we're watching and waiting on. I mean,
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  Speaker 3: you've also got travel disruptions with airlines, You've got trade
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  Speaker 3: disruptions with about three billion dollars worth of exports from
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  Speaker 3: New Zealand that go up into the Gulf. So a
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  Speaker 3: lot of moving parts. But for the minute, I do
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  Speaker 3: think that everyone probably needs to keep their wits about
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  Speaker 3: them rather than reacting violently to these changes.
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  Speaker 2: Right, so you need to mediate this. Ben text earlier
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  Speaker 2: and said you've got to pull all your key we
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  Speaker 2: saver out of high risk and put it into cash,
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  Speaker 2: and then Phil said, nah, don't do that because if
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  Speaker 2: you do that, then when the upswing happens, you're going
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  Speaker 2: to miss out on all the games.
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  Speaker 3: So what do you think, Well, look, if you wanted
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  Speaker 3: to put it to move it out of high risk strategy,
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  Speaker 3: you've got to do that before the risk comes through.
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  Speaker 3: If you're going to change it only once the market's
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  Speaker 3: open and they've already sort of you know, dropped away,
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  Speaker 3: then you're just locking in the loss. I think it
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  Speaker 3: comes down to risk tolerance. Like if you were looking
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  Speaker 3: to use your key we saver for I don't know,
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  Speaker 3: the likes of retirement or to buy a house or something,
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  Speaker 3: then you probably weren't or or maybe shouldn't have had
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  Speaker 3: it in such a high risk sort of moveable position
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  Speaker 3: in the first place. Personally, as someone who's not looking
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  Speaker 3: to touch the key we saver for probably thirty plus years,
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  Speaker 3: I'm not going to look back and go, ah, remember
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  Speaker 3: in March twenty twenty six when things change around because
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  Speaker 3: of that conflict, I'm probably just not going to look
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  Speaker 3: at my key we save for the next couple of weeks.
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  Speaker 3: So if you're worried about your key we saver, go
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  Speaker 3: and take some advice rather than making some rash action.
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  Speaker 3: If you're worried about it, you probably should have been
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  Speaker 3: worried about it before all of this came up, and
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  Speaker 3: now's the second best opportunity to have a chat with
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  Speaker 3: someone to get that advice. But I do worry. I
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  Speaker 3: mean hither you remember the likes to start a COVID
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  Speaker 3: when Mark It's you know, absolutely dropped out. People made
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  Speaker 3: huge changes to the key we saver. Three months later
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  Speaker 3: it all came back and a lot of people went, damn,
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  Speaker 3: I lost that and I listed it and now I've
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  Speaker 3: locked in a loss.
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  Speaker 2: Do you know what such a good point that you make, Brad?
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  Speaker 2: As always, thank you mate, look after yourself. Brad Olson
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  Speaker 2: infor Metric's chief executive.
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