Latest / Best of Business / Shane Solly: Harbour Asset Management expert on the Asia-Pacific market reactions to the Middle East conflict

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Shane Solly: Harbour Asset Management expert on the Asia-Pacific market reactions to the Middle East conflict · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
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• 0:16
  Speaker 2: Shane Solly, Harbour Asset Management's with me.
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  Speaker 1: Hey, Shane.
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  Speaker 2: Evening, Heather. How have the markets in our part of
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  Speaker 2: the world reacted to what's going on in the Middle East?
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  Speaker 1: Yeah, so the Brent oil price, it's gone up about 1.5%
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  Speaker 1: to $ 97. 70 after this tit-for-tat strikes between Iran and the
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  Speaker 1: US over the weekend. It hasn't actually slowed the Asia-Pac
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  Speaker 1: markets down. The MSCI, Asia-Pacific share market, It's up 1% today,
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  Speaker 1: led by strength in the Korean semiconductor chip manufacturers. The
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  Speaker 1: big reason why they've gone up is because OpenAI, one
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  Speaker 1: of these big foundational models, is launching a new model
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  Speaker 1: called GPT-6. Got the market excited about potential boosting demand
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  Speaker 1: for AI computing power. Closer to home, New Zealand share
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  Speaker 1: market down 0.2%. A little bit of weakness in Fisher &
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  Speaker 1: Barclay Healthcare and Brazil and Auckland Airport. Tonight, we had
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  Speaker 1: the U.S. share market close, so there'll be a bit
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  Speaker 1: of a delay on the reaction in the U.S. to
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  Speaker 1: the Iran-U.S. situation kickoff.
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  Speaker 2: All right. Now, I see Trump wants some Fed cuts.
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  Speaker 2: Is there actually a case for the cuts?
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  Speaker 1: The short answer is no. The economic data, it's just
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  Speaker 1: too hot. On Friday, we had a very strong non-farm
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  Speaker 1: payroll number out in the U.S. Market had been picking
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  Speaker 1: to be 55,000 people get a job. It was actually 162,000.
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  Speaker 1: Unemployment rate in the U.S. is at 4.1%. It's just
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  Speaker 1: making it very hard for a rate cut. In fact,
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  Speaker 1: expectations or bits on a September rate hike come through.
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  Speaker 1: This week, we've got US producer price inflation, a European
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  Speaker 1: Central Bank rate hike, and US consumer price inflation out.
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  Speaker 1: It's going to make a pretty rough tone for rate
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  Speaker 1: markets later this week, that's for sure.
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  Speaker 2: Now, are we seeing some signs we might have a
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  Speaker 2: recovery underway?
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  Speaker 1: Yeah, look, I think we are seeing some grinding numbers
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  Speaker 1: coming through. It's not even going less bad. It's starting
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  Speaker 1: to look positive. Tomorrow, we've got NZ manufacturing activity data out.
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  Speaker 1: And then later in the week on Friday, we've got
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  Speaker 1: the businesses on performance and manufacturing index data out. I
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  Speaker 1: think it's a bit of a flip of the coin
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  Speaker 1: here that if the data is better, then it certainly
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  Speaker 1: reminds us the economy is quite resilient. If it's not,
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  Speaker 1: if it's a bit weak, then it's going to take
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  Speaker 1: some pressure away from the RBNZ to hike rates significantly. Tomorrow,
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  Speaker 1: we've also got Westpac Consumer Confidence and NAB Business Confidence
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  Speaker 1: out in Aussie. That's important because that economy has been warm.
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  Speaker 1: It's actually starting to slow a bit. Look, I think,
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  Speaker 1: you know, early days, companies we've been talking to are
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  Speaker 1: suggesting things are still a bit tough. They're being cautious,
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  Speaker 1: but they're being cautiously optimistic, mainly because they're getting their
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  Speaker 1: costs under control here. So, you know, certainly there's a
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  Speaker 1: little bit of optimism starting to creep in out there.
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  Speaker 2: Yeah, good stuff. I'm so pleased to hear it. Shane,
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  Speaker 2: thanks very much, mate. Shane Solly, Harbour Asset Management. Heather,
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