Shane Solly: Harbour Asset Management expert on investors calling for US rate cuts after weak payrolls report

Recent US payrolls data has indicated the economy is slowing, and it's sparked concern among investors.

Economists are calling on the US Federal Reserve to lower interest rates  at its September 16-17 meeting, in what would be its first reduction in nine months.

Harbour Asset Management's Shane Solly explained further.

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Episode Transcript

Speaker 1 (00:00):
Shane Sally Harbor Asset Management is with us. Hello, Shane
Ill read. So the US non farm payrolls data was
a bit weak on Friday. Had the markets react?

Speaker 2 (00:08):
Yeah? Look, it doesn't sound very exciting, but it's quite
a meaningful with this. The US non fun payrolls, well,
they're just twenty two thousand job ads in August, means
the US jobless rates up to four point three percent.
It's another sign that the US Federal Reserve needs to
get on with rate cuts. Now, how did the markets react? Us?
Make pretty flat down a little bit down point three,
But the big move there was in bond yields. These

(00:31):
long term government bond yards fell, and that's telling us
that the market starting to expect rate cuts and think
in fact, we're seeing up to three rate cuts from
the U Central Bank price and we're extually sill two
year agavement bonds fall to three point five to two percent,
which is the lowescence twenty twenty two. Locally here today
we've seen our two year bond years down as well.

(00:51):
We're down to two ninety six, so below three percent,
and the New Zealand shimak wears up almost four zero
point four percent yet we've been great if it was
four percent, to tell you.

Speaker 1 (01:03):
Yeah, more like a tenth of it. Hey, what about
the Chinese economic data that also wasn't that that flash?

Speaker 2 (01:09):
Yeah? Look, we will continue to see some soft data
coming out of China. That August export and import data,
they were below expectations, just showing us that this Chinese
manufacturing machine is slowing down what we are seeing. On
the other hand, here there is Chinese regulators talking about
simulating economy. There's some reports about policies to support consumption
in the form of tourism, culture, lifestyle. There's some opening

(01:32):
up of the taps and residential property market. Sin's in
that's the third largest city in China, approximately seventy and
a half million people are They're going to remove home
purchase restrictions, so meaning people without local household registration you
can buy a house. Quite a meaningful change. We've seen
in Shanghai, for example, where we've seen similar changes. The
house prices have actually increased sort of seven to eight

(01:54):
percent month on month, So that's quite an important signal
we're trying to really get that Chinese economy going. And
then a final point, mister G. President G is comm
out announcing that China will drive trade and investment liberalization.
So he's of a pushback maybe to some of these
global tariff barriers that are coming through.

Speaker 1 (02:10):
What about the stuff that's been happening here locally.

Speaker 2 (02:13):
Yeah, Today we saw a couple of interesting corporate announcements.
Tourism Holdings announced that's the recreational van higher company. When
you're doing a trip around South Onland, you're renting one
of their great vans. They have made the hard call
and they're going to reset their Australian retail business. They're
going to basically change the models to using the type
of vans conciding the brand, and they're going to reduce
the inventary levels. Also, they're going to close some branches

(02:36):
in Sydney and Brisbane, some of their sales branches, not
their rental branches, the places with their cell vans. Share
prices up slight the other day and we saw Investor,
which is a property company mainly with retail real estate
by the Silverdale retailers, from its current Strive property one
hundred and forteen million dollars and they're always going to

(02:57):
raise sixty two and a half million via subordinated convened.
It's pretty flat on both those stocks on the day,
so yeah, we're seeing a little bit of activity coming
up in the market here.

Speaker 1 (03:05):
Good stuff, hey Shane, thanks as always appreciate it, Shane
Soally Harborresset Management. For more from Hither Duplessy Allen Drive,
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