December 16, 2025 • 8 mins
Tom Shallard looks at another decline in the GDT but he says its not panic stations yet.
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Episode Transcript
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Speaker 1 (00:01):
Argue the must financial segment with Craig's Investment Partners in Gore.
This information is general in nature and it's not financial advice.
Craig's Investment Partner's limited financial Advice provider disclosure statement can
be found at craigsip dot com.
Speaker 2 (00:19):
Tom Sallard from Craig's Investment Partners joins me once again.
I'm the muster Craig Craig Tom.
Speaker 3 (00:25):
Good afternoon, Andy. I don't think that's the first time
you've done that either.
Speaker 2 (00:30):
Two days Togo. How's it been the Craig's IP lately.
Anyway you guys would be like retsap drain pipes or
has things started the settle?
Speaker 3 (00:38):
Oh no, I look pretty busy Andy, heading into Christmas.
I think like everyone in Southland, particularly the farmers. G
it's a busy time a year, all right. But we're
in a new building and yeah, it's a very nice change.
Speaker 2 (00:52):
It's a really nice building. Now you're just obviously you're
just beside the roundabout beside New World then in the.
Speaker 3 (00:57):
Context and their signage went up last week and you
can't miss it.
Speaker 2 (01:01):
Yeah, sticks out o. The Paverbia looks fantastic as well. Now,
Global Markets to coin Sean Fitzpatrick, has been a game
of two halves.
Speaker 3 (01:08):
It has, it has if you look at the year
in review, it's most certainly been a game of two halves.
And while the year has been quite a volatile one,
with the first half notably choppy as we've discussed throughout
the course of the year, the second half's been really
quite strong and global indices are looking to end the
(01:31):
year well above the one prior. So, just for context,
on that global front, the S and B five hundreds
up year to date close to sixteen percent, with the
nastak up closer to twenty percent. So yeah, very very strong,
strong global market, very pleasing, and yeah, long mat continue
(01:52):
into twenty twenty six.
Speaker 2 (01:54):
So what effects are we seeing by terris as such
on markets.
Speaker 3 (01:59):
I'd say tariffs in the latter half of the year
have had very little to niel impact on the markets.
They are starting to have a bit of effect on
the US economy, but we'll need to wait for a
bit more data in the new year to see what
if any color materializes from that.
Speaker 2 (02:20):
So generally we seem to be tracking pretty good considering
all these issues that were seeing around Ukraine, the Middle
East and the likes.
Speaker 3 (02:28):
Yeah, the labor market looks a bit weak in the
States and their inflations probably running a bit hot, so
there are some risks there, But on the whole, yeah,
the market has looked past that now.
Speaker 2 (02:43):
The Reserve Bank as well appearing to have signaled the
end of the easing cycles. So good chance and there
to go and lock some interest rates.
Speaker 4 (02:51):
Yeah.
Speaker 3 (02:52):
No, So while they didn't quite come out and say that,
it was certainly a sense from the Reserve banks commentary
fortnite ago. Really the interest was on what if anything
they would save for next year. Would they leave the
door wide open for a rate cut in February, would
(03:12):
they even leave it ajar In the end it was
probably neither. There really is just a sliver of a
chance of a further rate cut in the new year.
And after that commentary, the market being a forward locking beast,
the three, four and five year swap rates have risen
quite dramatically actually over the last three weeks, up about
(03:36):
forty basis points. So that's why you're seeing a bit
of commentary in the media about WISTPAC or A and
Z raising their raising their interest rates, which you know,
at first glance can can look quite counterintuitive given you
know where the cash rate is, but those longer, longer
dated rates are priced from the from the swap market.
Speaker 2 (03:58):
So what we see with a wistpac there was more
or less it's more of a clickbade headline. Almost would
you say.
Speaker 3 (04:05):
Well, know that the rate increases are very very real
in that three, four and five year space. They're passing
on their increased wholesale funding cost to their clients. So
those four point nine to nine five year fixed residential
rates that have been in the market for a number
of weeks, you know, may no longer be so I
(04:27):
think the carded rates are probably in the mid fives
now for that longer dated, longer dated stuff.
Speaker 2 (04:34):
Now, the GDP report for the September sector due out.
Speaker 3 (04:38):
Tomorrow tomorrow at quarter to eleven, which is quite exciting
and we're really hoping for some good news heading into
heading into the year end, especially with the economy seemed
to fall into somewhat of a pothole midway through the year.
But look the rbn Z forecast, we think it's quite
(05:00):
so mystic. They're sitting around an increase of a forecast
increased of point four percent for the quarter. We think
it could almost be double that close tower point eight
percent quarter on quarter. So yeah, we're looking forward to
hopefully a good strong beat tomorrow and the market will
(05:21):
react positively to that. And I guess that's another reason
why we we we think that the end of the
using cycle is here. You know, if the if the
economy is stronger than the Reserve Bank has forecast, that
would likely signal the bottom and that quantitive easing cycle.
Speaker 2 (05:41):
Do you expect more positive news regarding the economy next year?
Speaker 4 (05:45):
I would expect so yes.
Speaker 3 (05:47):
I think there is actually a really decent chance that
the economy will beat some of the forecasts that the
reserve banks publish.
Speaker 2 (05:53):
Well, there's been a lot of knee jerk reaction as
well recently regarding data too.
Speaker 4 (05:57):
Yeap, No, that's that's right.
Speaker 3 (05:59):
The the point nine percent recession in the economy at
the mid part of the year essentially led to the
fifty basis point cut and then we've got some quite
mixed messaging at the at the last bank meeting, which
as an ideal for markets, and that's why we've seen
(06:20):
the increase cost of wholesale funding and those swap rates.
Speaker 2 (06:25):
Right, let's look at agra commodities a GDT once again
the ninth drop in a row. I mean, Jesus like
supporting the stags a couple of seasons ago. Nine drops
in a row.
Speaker 4 (06:34):
It's not nice to watch, yeh.
Speaker 3 (06:37):
So look, the final dairy option of the year was
another poor one, and unfortunately there is nine on the trot.
So prices were down four point four percent in US
dollar terms local currency here the keyweed down. The prices
were down five point four percent. So look, it is
(06:58):
starting to get to a point where we think that
analysts will need to revise forecasts.
Speaker 4 (07:03):
I wouldn't be surprised if.
Speaker 3 (07:06):
They were revised in the coming days, if not by
the day's end. I mean, the midpoint possibly has to
go close to nine dollars now, Andy.
Speaker 2 (07:18):
But there's no need to panic forgetting the dairy sector.
Speaker 3 (07:21):
I don't think so, Andy. It's really a story of
supply or over supply. Demands still there, although we've passed
a peak on the production curve for the season. But yeah, globally,
supply is still very strong and that's supported by an
oversupply of cheap cereal and feed and the global market.
Speaker 2 (07:46):
And finally are positive to finish the year. And long
may this continue. Red meat suppliers, namely Chit Cocky's doing
the weaning at the moment, getting some fantastic prices, putting
the lambs on the track.
Speaker 4 (07:57):
It's epic, isn't it, Andy? It is really good to see.
Speaker 3 (08:01):
And yeah, there's a smile on I would say every
sheep farmer that I've been talking to, and long may
it continue.
Speaker 2 (08:09):
So when do you guys finish up for Christmas? Around there?
Speaker 3 (08:11):
At Craigs we technically are open for business anytime the
market's open, so just close for the public holidays. We
will have cover over that period for anyone that wants
to transact business.
Speaker 2 (08:25):
And if somebody wants to get in touch with you guys,
how do they do it.
Speaker 3 (08:28):
We're now at one Eric Street, Gore, opposite the New
World or cragsip dot com.
Speaker 2 (08:34):
Good on your time and you enjoy the festive season.
Speaker 3 (08:37):
Brilliant, Thanks Andy.
Speaker 2 (08:41):
Tom Shellard his name is in Craig, but he works
for Craig's Investment Partners One Eric Street, so that is
the address opposite the New World. Less face it works
on Gore works on landmarks around town. Right. Jason Hannigan's
up next to Tago pet foods. This is the master
Argue the must financial segment with Craig's Investment Partners in Gore.
This information is general in nature and it's not financial advice.
Craig's Investment Partner's limited financial Advice provider disclosure statement can
be found at craigsip dot com.
Speaker 2 (00:19):
Tom Sallard from Craig's Investment Partners joins me once again.
I'm the muster Craig Craig Tom.
Speaker 3 (00:25):
Good afternoon, Andy. I don't think that's the first time
you've done that either.
Speaker 2 (00:30):
Two days Togo. How's it been the Craig's IP lately.
Anyway you guys would be like retsap drain pipes or
has things started the settle?
Speaker 3 (00:38):
Oh no, I look pretty busy Andy, heading into Christmas.
I think like everyone in Southland, particularly the farmers. G
it's a busy time a year, all right. But we're
in a new building and yeah, it's a very nice change.
Speaker 2 (00:52):
It's a really nice building. Now you're just obviously you're
just beside the roundabout beside New World then in the.
Speaker 3 (00:57):
Context and their signage went up last week and you
can't miss it.
Speaker 2 (01:01):
Yeah, sticks out o. The Paverbia looks fantastic as well. Now,
Global Markets to coin Sean Fitzpatrick, has been a game
of two halves.
Speaker 3 (01:08):
It has, it has if you look at the year
in review, it's most certainly been a game of two halves.
And while the year has been quite a volatile one,
with the first half notably choppy as we've discussed throughout
the course of the year, the second half's been really
quite strong and global indices are looking to end the
(01:31):
year well above the one prior. So, just for context,
on that global front, the S and B five hundreds
up year to date close to sixteen percent, with the
nastak up closer to twenty percent. So yeah, very very strong,
strong global market, very pleasing, and yeah, long mat continue
(01:52):
into twenty twenty six.
Speaker 2 (01:54):
So what effects are we seeing by terris as such
on markets.
Speaker 3 (01:59):
I'd say tariffs in the latter half of the year
have had very little to niel impact on the markets.
They are starting to have a bit of effect on
the US economy, but we'll need to wait for a
bit more data in the new year to see what
if any color materializes from that.
Speaker 2 (02:20):
So generally we seem to be tracking pretty good considering
all these issues that were seeing around Ukraine, the Middle
East and the likes.
Speaker 3 (02:28):
Yeah, the labor market looks a bit weak in the
States and their inflations probably running a bit hot, so
there are some risks there, But on the whole, yeah,
the market has looked past that now.
Speaker 2 (02:43):
The Reserve Bank as well appearing to have signaled the
end of the easing cycles. So good chance and there
to go and lock some interest rates.
Speaker 4 (02:51):
Yeah.
Speaker 3 (02:52):
No, So while they didn't quite come out and say that,
it was certainly a sense from the Reserve banks commentary
fortnite ago. Really the interest was on what if anything
they would save for next year. Would they leave the
door wide open for a rate cut in February, would
(03:12):
they even leave it ajar In the end it was
probably neither. There really is just a sliver of a
chance of a further rate cut in the new year.
And after that commentary, the market being a forward locking beast,
the three, four and five year swap rates have risen
quite dramatically actually over the last three weeks, up about
(03:36):
forty basis points. So that's why you're seeing a bit
of commentary in the media about WISTPAC or A and
Z raising their raising their interest rates, which you know,
at first glance can can look quite counterintuitive given you
know where the cash rate is, but those longer, longer
dated rates are priced from the from the swap market.
Speaker 2 (03:58):
So what we see with a wistpac there was more
or less it's more of a clickbade headline. Almost would
you say.
Speaker 3 (04:05):
Well, know that the rate increases are very very real
in that three, four and five year space. They're passing
on their increased wholesale funding cost to their clients. So
those four point nine to nine five year fixed residential
rates that have been in the market for a number
of weeks, you know, may no longer be so I
(04:27):
think the carded rates are probably in the mid fives
now for that longer dated, longer dated stuff.
Speaker 2 (04:34):
Now, the GDP report for the September sector due out.
Speaker 3 (04:38):
Tomorrow tomorrow at quarter to eleven, which is quite exciting
and we're really hoping for some good news heading into
heading into the year end, especially with the economy seemed
to fall into somewhat of a pothole midway through the year.
But look the rbn Z forecast, we think it's quite
(05:00):
so mystic. They're sitting around an increase of a forecast
increased of point four percent for the quarter. We think
it could almost be double that close tower point eight
percent quarter on quarter. So yeah, we're looking forward to
hopefully a good strong beat tomorrow and the market will
(05:21):
react positively to that. And I guess that's another reason
why we we we think that the end of the
using cycle is here. You know, if the if the
economy is stronger than the Reserve Bank has forecast, that
would likely signal the bottom and that quantitive easing cycle.
Speaker 2 (05:41):
Do you expect more positive news regarding the economy next year?
Speaker 4 (05:45):
I would expect so yes.
Speaker 3 (05:47):
I think there is actually a really decent chance that
the economy will beat some of the forecasts that the
reserve banks publish.
Speaker 2 (05:53):
Well, there's been a lot of knee jerk reaction as
well recently regarding data too.
Speaker 4 (05:57):
Yeap, No, that's that's right.
Speaker 3 (05:59):
The the point nine percent recession in the economy at
the mid part of the year essentially led to the
fifty basis point cut and then we've got some quite
mixed messaging at the at the last bank meeting, which
as an ideal for markets, and that's why we've seen
(06:20):
the increase cost of wholesale funding and those swap rates.
Speaker 2 (06:25):
Right, let's look at agra commodities a GDT once again
the ninth drop in a row. I mean, Jesus like
supporting the stags a couple of seasons ago. Nine drops
in a row.
Speaker 4 (06:34):
It's not nice to watch, yeh.
Speaker 3 (06:37):
So look, the final dairy option of the year was
another poor one, and unfortunately there is nine on the trot.
So prices were down four point four percent in US
dollar terms local currency here the keyweed down. The prices
were down five point four percent. So look, it is
(06:58):
starting to get to a point where we think that
analysts will need to revise forecasts.
Speaker 4 (07:03):
I wouldn't be surprised if.
Speaker 3 (07:06):
They were revised in the coming days, if not by
the day's end. I mean, the midpoint possibly has to
go close to nine dollars now, Andy.
Speaker 2 (07:18):
But there's no need to panic forgetting the dairy sector.
Speaker 3 (07:21):
I don't think so, Andy. It's really a story of
supply or over supply. Demands still there, although we've passed
a peak on the production curve for the season. But yeah, globally,
supply is still very strong and that's supported by an
oversupply of cheap cereal and feed and the global market.
Speaker 2 (07:46):
And finally are positive to finish the year. And long
may this continue. Red meat suppliers, namely Chit Cocky's doing
the weaning at the moment, getting some fantastic prices, putting
the lambs on the track.
Speaker 4 (07:57):
It's epic, isn't it, Andy? It is really good to see.
Speaker 3 (08:01):
And yeah, there's a smile on I would say every
sheep farmer that I've been talking to, and long may
it continue.
Speaker 2 (08:09):
So when do you guys finish up for Christmas? Around there?
Speaker 3 (08:11):
At Craigs we technically are open for business anytime the
market's open, so just close for the public holidays. We
will have cover over that period for anyone that wants
to transact business.
Speaker 2 (08:25):
And if somebody wants to get in touch with you guys,
how do they do it.
Speaker 3 (08:28):
We're now at one Eric Street, Gore, opposite the New
World or cragsip dot com.
Speaker 2 (08:34):
Good on your time and you enjoy the festive season.
Speaker 3 (08:37):
Brilliant, Thanks Andy.
Speaker 2 (08:41):
Tom Shellard his name is in Craig, but he works
for Craig's Investment Partners One Eric Street, so that is
the address opposite the New World. Less face it works
on Gore works on landmarks around town. Right. Jason Hannigan's
up next to Tago pet foods. This is the master
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