Global oil prices have shot up again, with Donald Trump gunning for authority over the Strait of Hormuz.
The President's announced a naval blockade on Iranian ports, after peace talks collapsed in Pakistan yesterday.
Despite the ceasefire, he's looking at resuming strikes.
Harbour Asset Management expert Shane Solly explained further.
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Speaker 1 (00:00):
Shane Solly Harbor Asset Management is with us. Hello, Shane,
Hey either yees. So how did the markets react to
the US deciding that they're going to do the blockade.
Speaker 2 (00:08):
Yeah, we look suddenly as you called out there, the
will price was a key indicated there we're back up
above one hundred and one a barrel. It got worse. Obviously,
mister Trump's gone on and say that he's unconcerned with
their agents come back. I don't care they can come
back or not. I'm all fine. The details of the
blockade obviously, we don't know yet until it'sposed to supposed
to start Washington time, ten o'clock tonight. But we did
(00:29):
see the wider Asian markets down between sort of half
a percent and one percent. The US dollar up, gold
down bond yield, it's a little bit up again. So
we saw them drop last week after the cease fire,
and they've gone back to where they were. So really
we're seeing this market it's being very weary about the
residence and timing of the ceasefire. Tonight, the USh shear
(00:52):
market futures are shown. The market should be down about zero.
But look, if we go back to if there is
a realistic see fire, and we do get a de escalation,
even if it's a bit of a noisy de escalation.
Markets kind of position to go better. We've seen a
if we say stable geopolitical, better macro policies. Market investors
(01:13):
have really taken a lot of risk out. So we're
back to interesting that we'll see heather pretty choppy though.
Speaker 1 (01:17):
Yeah, it really is quite choppy. And then I see
A and Z and we've talked to Sharon Zolna of
A and Z about the saying that that there will
be three rate hikes this year. What do you make
of that?
Speaker 2 (01:26):
Yeah, look, I think it's about being pre emptive, so
taking the obviously as and saying, hey, look, take the medicine, now,
get a head, get new traue early, which means taking
this terminal rate special case rate to three percent by
October when we look at what the markets priced and
the market's actually priced, and more than that, we go
through the June next year. So it's about timing, whether
(01:47):
it happens earlier or later. What we know is a
real economy at the moment, it's struggling and sumarly absorbing,
and there's tightening, whether by the reserve bank and zone
hiking rates or the bank's actually front running the potential move.
We put that balloted to fuels. There's a bit of
pushing going out there in New Zealand economy. Today we
had the purchasing services next out and that wasn't great.
(02:08):
The performance as sivers indexestions there was down the forty six,
down from forty eight last month. So that's telling us
that really consume the sensitive part of the economy, accommodation,
cafes and so forth, is in the crunch already. Is
if you crank up those rates too quick, we're going
to see a company a country looking at a recession again.
Speaker 1 (02:26):
Now listen, this was interesting what happened today. Fontira sharholders
fund today and A two milk share prices went in
completely different directions today.
Speaker 2 (02:33):
What happened there, Yeah, big divergence. Fontira Sholders fund up
at nine point eight percent to six dollars fifteen A
two down twelve point four percent to nine eighty two.
So Fonterra appoint announced the appointment of the local Frontier
executive Richie Allen Coo and also confirmed this payout of
three point two bion dollars tomorrow that's going to help
people with bank accounts. So good announcement messed Allen's well
(02:56):
regarded and as a chiri, so people were worried about
somebody being dropped parachuted. And contrast A two can that
with quite a significant twenty twenty six fourcast downgrade, very
much driven by supply supply chain disruption. And given where
the A two ship price has been priced at quite
a high multiple, it's so sort of stop price the weaker.
The guidance is about ten to fourteen percent down. Quite
(03:19):
a lot of it is to do with product getting
into China, particularly through Chinese clearance, through testing, and some
of the costs associated with getting product and have gone up.
And a course since manufacturer partner sine Lay is having
a few problems to it. So you look the A
T ship price quite a sharp drop there. It's going
to have to show us that they've got product going
(03:40):
back into China as normal again before we perhaps see
that ships to sustained recovery.
Speaker 1 (03:45):
Yeah, hey, Shane, as always good to talk to you, mate,
look after yourself and we'll chat next week. That Shane
Solly Harbor Asset Management
Speaker 2 (03:51):
For more from hither Duplessy Allen Drive, Listen live to
news talks they'd be from four pm weekdays, or follow
the podcast on iHeartRadio
Shane Solly Harbor Asset Management is with us. Hello, Shane,
Hey either yees. So how did the markets react to
the US deciding that they're going to do the blockade.
Speaker 2 (00:08):
Yeah, we look suddenly as you called out there, the
will price was a key indicated there we're back up
above one hundred and one a barrel. It got worse. Obviously,
mister Trump's gone on and say that he's unconcerned with
their agents come back. I don't care they can come
back or not. I'm all fine. The details of the
blockade obviously, we don't know yet until it'sposed to supposed
to start Washington time, ten o'clock tonight. But we did
(00:29):
see the wider Asian markets down between sort of half
a percent and one percent. The US dollar up, gold
down bond yield, it's a little bit up again. So
we saw them drop last week after the cease fire,
and they've gone back to where they were. So really
we're seeing this market it's being very weary about the
residence and timing of the ceasefire. Tonight, the USh shear
(00:52):
market futures are shown. The market should be down about zero.
But look, if we go back to if there is
a realistic see fire, and we do get a de escalation,
even if it's a bit of a noisy de escalation.
Markets kind of position to go better. We've seen a
if we say stable geopolitical, better macro policies. Market investors
(01:13):
have really taken a lot of risk out. So we're
back to interesting that we'll see heather pretty choppy though.
Speaker 1 (01:17):
Yeah, it really is quite choppy. And then I see
A and Z and we've talked to Sharon Zolna of
A and Z about the saying that that there will
be three rate hikes this year. What do you make
of that?
Speaker 2 (01:26):
Yeah, look, I think it's about being pre emptive, so
taking the obviously as and saying, hey, look, take the medicine, now,
get a head, get new traue early, which means taking
this terminal rate special case rate to three percent by
October when we look at what the markets priced and
the market's actually priced, and more than that, we go
through the June next year. So it's about timing, whether
(01:47):
it happens earlier or later. What we know is a
real economy at the moment, it's struggling and sumarly absorbing,
and there's tightening, whether by the reserve bank and zone
hiking rates or the bank's actually front running the potential move.
We put that balloted to fuels. There's a bit of
pushing going out there in New Zealand economy. Today we
had the purchasing services next out and that wasn't great.
(02:08):
The performance as sivers indexestions there was down the forty six,
down from forty eight last month. So that's telling us
that really consume the sensitive part of the economy, accommodation,
cafes and so forth, is in the crunch already. Is
if you crank up those rates too quick, we're going
to see a company a country looking at a recession again.
Speaker 1 (02:26):
Now listen, this was interesting what happened today. Fontira sharholders
fund today and A two milk share prices went in
completely different directions today.
Speaker 2 (02:33):
What happened there, Yeah, big divergence. Fontira Sholders fund up
at nine point eight percent to six dollars fifteen A
two down twelve point four percent to nine eighty two.
So Fonterra appoint announced the appointment of the local Frontier
executive Richie Allen Coo and also confirmed this payout of
three point two bion dollars tomorrow that's going to help
people with bank accounts. So good announcement messed Allen's well
(02:56):
regarded and as a chiri, so people were worried about
somebody being dropped parachuted. And contrast A two can that
with quite a significant twenty twenty six fourcast downgrade, very
much driven by supply supply chain disruption. And given where
the A two ship price has been priced at quite
a high multiple, it's so sort of stop price the weaker.
The guidance is about ten to fourteen percent down. Quite
(03:19):
a lot of it is to do with product getting
into China, particularly through Chinese clearance, through testing, and some
of the costs associated with getting product and have gone up.
And a course since manufacturer partner sine Lay is having
a few problems to it. So you look the A
T ship price quite a sharp drop there. It's going
to have to show us that they've got product going
(03:40):
back into China as normal again before we perhaps see
that ships to sustained recovery.
Speaker 1 (03:45):
Yeah, hey, Shane, as always good to talk to you, mate,
look after yourself and we'll chat next week. That Shane
Solly Harbor Asset Management
Speaker 2 (03:51):
For more from hither Duplessy Allen Drive, Listen live to
news talks they'd be from four pm weekdays, or follow
the podcast on iHeartRadio
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