Remy Morgan: Milford Asset Management spokesperson on the market reactions to the latest OCR cut

The Reserve Bank cut the Official Cash Rate by 25 basis points to 3.25 percent.

The markets had already priced a rates cut in - but there was some uncertainty emerging after the announcement took place. 

Milford Asset Management's Remy Morgan explains further.

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Episode Transcript

Speaker 1 (00:00):
With me.

Speaker 2 (00:00):
Now is Remy Morgan Milford Asset Management. Hey, Remy hi Heaver?
How has the world or how has the world reacted?
Just how has the markets reacted to the ocr.

Speaker 1 (00:11):
Yeah, So the twenty five basis point cut today that
was fully priced and by the market going into today.
But following the announcement, we saw the market slightly lower
some of its future interest rate cut expectations. Now, while
the RBNZ lowered its own forward expectation to roughly what
was in line with what the market had been pricing

(00:31):
going into the meeting, it did imply a slightly slower
pace of interest rate cuts. And what was surprising was
that one committee member actually voted to hold at this
meeting rather than cut, So that might also explain some
of the market's reduced expectations. Yeah.

Speaker 2 (00:46):
The thing that we heard about a lot from the
Reserve Bank is uncertainty because there was just so much
going on globally. What impact does this having.

Speaker 1 (00:54):
Yeah, So, like you say, there's a lot of uncertainty
going on around US policy and what this means for
glowbal economies. And we've seen a lot of volatility in
global financial markets over the past few months. So even
with lower boring rates in New Zealand, this uncertainty offshore
could see a delay in investment and consumption decisions domestically

(01:14):
and that can impact near term growth. And so that's
something that the rbnzaid considered in depth at today's statement
and they will need to continue to monitor that.

Speaker 2 (01:23):
Hey, pretty amazing result from Fisher and Pikeal Healthcare. What's
the market reaction to that then?

Speaker 1 (01:29):
Yeah, So Fisher and Pikeal Healthcare, it's one that's always
very closely followed by the New Zealand market. So, as
you said, result was very strong. This year's revenue was
up sixteen percent first last year net profit up forty
three percent. The forward profit guidance for next year was
also solid enough, despite some tariff noise, so another ten
percent growth at the midpoint expected for next year. But

(01:52):
despite the solid result, the market expectations were a little
bit higher, so that meant the stock actually closed down
four point four five percent on the day.

Speaker 2 (02:01):
Remy, it's good to talk to you. Thank you for that, mate.
That's Remy Morgan Milford ASIC Management. For more from Hither
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