Latest / Best of Business / Remy Morgan: Milford Asset Management expert on the market reactions to the RBNZ leaving the OCR on hold

Transcript

Remy Morgan: Milford Asset Management expert on the market reactions to the RBNZ leaving the OCR on hold · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from news Talk zed be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: Let's go check in with the markets now Milfinasset Management.
• 0:19
  Speaker 2: Remy Morgan's with us Hi Remy Hi Rian. So, RBNZ
• 0:23
  Speaker 2: obviously holding today is expected. How's the market reacting?
• 0:28
  Speaker 3: Yeah, for going into the announcement today, the market was
• 0:31
  Speaker 3: pricing very low odds of a rate card at this meeting,
• 0:34
  Speaker 3: and in the statement it was clear that the RBNZ
• 0:37
  Speaker 3: does still expect to lower the ocr further, which is
• 0:40
  Speaker 3: consistent with what they outlined in May. Now post the statement,
• 0:44
  Speaker 3: there was actually a bit of volatility in the market
• 0:46
  Speaker 3: with New Zealand dollar swap rates and the currency moving
• 0:49
  Speaker 3: a little higher initially, but these moves they quickly unwound
• 0:53
  Speaker 3: and then they settled sort of roughly where you'd expect,
• 0:55
  Speaker 3: given there were no real surprises.
• 0:59
  Speaker 2: And what is the market expecting from here?
• 1:02
  Speaker 3: Yeah, So the interest rate market, it's pricing roughly a
• 1:05
  Speaker 3: two out of three chance of a cut in August
• 1:08
  Speaker 3: and at least one four cut by Christmas, and that's
• 1:11
  Speaker 3: not too dissimilar to what it was thinking going into
• 1:14
  Speaker 3: the announcement today. And it's currently expecting around one and
• 1:18
  Speaker 3: a half to two further cuts from here in total,
• 1:21
  Speaker 3: and that will see the end of the interest rate
• 1:23
  Speaker 3: cutting cycle bottoming out it just under three percent. But
• 1:27
  Speaker 3: whether these market views will change or not will really
• 1:31
  Speaker 3: depend on where the domestic data lands and policy developments offshore.
• 1:36
  Speaker 2: Remy Trump's all over the place on tariffs at the moment,
• 1:38
  Speaker 2: but has deadline self impostedline of ninth July technically expires
• 1:42
  Speaker 2: overnight tonight our time. How market's looking, Yeah.
• 1:46
  Speaker 3: So you'll recall back in April, following the initial announcement,
• 1:49
  Speaker 3: we saw global indices like the S and P five
• 1:52
  Speaker 3: hundred dropped significantly, But over the last ninety days we've
• 1:55
  Speaker 3: seen a lot of recovery and new highs reached. Now
• 1:59
  Speaker 3: already this week we've seen Trump releasing some of his
• 2:02
  Speaker 3: tariff plans, but with a first of August implementation, and
• 2:06
  Speaker 3: we've seen global equities edge down on sentiment, but only
• 2:10
  Speaker 3: very slightly. And maybe one area to call out specifically
• 2:13
  Speaker 3: is US pharmaceutical stocks. So they did pair back on
• 2:17
  Speaker 3: some prior gains, and that was because there was some
• 2:19
  Speaker 3: news overnight that they could be facing up to two
• 2:22
  Speaker 3: hundred percent tariffs on their products manufactured outside of the US,
• 2:27
  Speaker 3: but it wasn't a major negative reaction, and that's likely
• 2:29
  Speaker 3: because those specific tariffs would have quite some time before
• 2:33
  Speaker 3: they would potentially be implemented. So I think that I
• 2:37
  Speaker 3: think things could still be a bit choppy, but global
• 2:40
  Speaker 3: equity markets have held up reasonably well so far amongst
• 2:43
  Speaker 3: all of the noise.
• 2:43
  Speaker 2: I certainly have Remy appreciate that update. Thank you very much,
• 2:46
  Speaker 2: Remy Morgan, Milford Asset Management.
• 2:48
  Speaker 1: For more from News talks'd b listen live on air
• 2:52
  Speaker 1: or online, and keep our shows with you wherever you
• 2:54
  Speaker 1: go with our podcasts on iHeartRadio