Shane Solly: Harbour Asset Management spokesperson on whether the OCR will cut rates in August

Stats NZ  recently reported annual inflation increased to 2.7 percent in the three months to the end of June, and it's sparked concerns among experts.

Economists had all been expecting annual inflation would be recorded at 2.8 percent or 2.9 percent - close to the Reserve Bank's 3 percent target band.

Harbour Asset Management spokesperson Shane Solly revealed what this could mean for the economy going forward.

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Episode Transcript

Speaker 1 (00:00):
With US.

Speaker 2 (00:00):
Now we have Shane Solely of Harbor Asset Management evening Shane, Hello,
so what do you reckon with the inflation? We got
that OCR cut Lockton for next month.

Speaker 1 (00:09):
Yeah, I look at the data out today. It certainly
puts a bit of pressure back on reserve bank rate
cut in August. I think when we look at the
central bankers around the world, they're all watching to see
what tariff it's due to inflation, so they're all a
bit weary about cutting an advance there. But you know,
this inflation data we're seeing here and usy on is
certainly putting an official rate cut back on the table

(00:30):
for August, so I think we shall be thinking about that.
In fact, the market today moved to now procing in
an eighty five percent chance of a cut in August.
That was up from seventy percent four year today's data change,
and markets liked it. We saw two years what breaks
many people. That's used by a lot of banks to
sit interest rates. They fell by zero point six percent,

(00:50):
not a lot, I know, but it's down to three
fifteen and the New yealer Shire market was up almost
zero point six percent today and that was led up
by some of our heavyweights BUK health Care, uk An
Airport A two. So yeah, generally up more positive tone
and capital markets.

Speaker 2 (01:05):
Okay, what do you think about that update from Contact Energy?

Speaker 1 (01:10):
Yeah, so Contact Energy got a good solid operating update
for the June month and importantly they're talking about better hydrology.
So more more the rain that we've all been having
to deal with is found any of the dams and
sexually helped Contact. They've looked like they've come out with
a better twelve months result than the market was expecting.
The result reflects a bit of geffmal generation last year,

(01:34):
obviously at low hydro, but really importantly for New Zealand
the system wide controlled hydro stories or the dams, they're
full and that should just keep a cap on the
risks around power aullages and certainly you know spike e
electricity prices. So that's good, it's good for New Zealand.

Speaker 2 (01:49):
Hey, run me through what you've seen with the New
Zealand company management teams buying and selling shares in the companies.

Speaker 1 (01:55):
Yeah. Look, in the last few days we've seen a
couple of interesting announcements. The management of the retire and
an HQ company Ryman obviously been under pressure in the
last year or so, they've stepped up. I been buying
a lot of shares. You know, there's a bit of
a positive signal in terms of the company emerging from
what's been a pretty challenging period of time. On the
other side, we saw online travel company Circo CEO. He's

(02:15):
saw a little bit of stock first time in a
long time, so he hasn't tended to sell stock. Tax
obligations either, unfortunately, but he's got to pay the tax.
He's got long tem as interested and he's got to
pay the tax bill. On either side. Not unusual, we
do see it often, but you know, just a little
bit of a you know, he's taking some money to
pay that hard tax bill.

Speaker 2 (02:35):
All right. So the US company earning season has started
for the second quarter. How's it going.

Speaker 1 (02:39):
Yeah, look, last week with a little bit inconclusive, which
sounds weird, but you know, we had the big banks
come out and they were okay. Things like Netflix, it
was okay, but the results, the share prices after is
were not particularly strong, and that just you know, might
have been a surprise to many. We've had a strong
market going into this, and what we need is these
earnings numbers to and they haven't quite done that yet.

(03:02):
So when we think about how tough the world has
been in the last twelve months, the one thing that stands
out as profit margins have been pretty good over there.
This week, we're getting a bunch of technology stocks coming out,
so certainly they'll need to be good numbers to keep
that market going, and we've certainly seen just a little
bit of heat come out of that US market.

Speaker 2 (03:20):
Shot two, good stuff, Shane, Thanks so much, Shane, Solly
Harbor Asset Management.

Speaker 1 (03:24):
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