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VIDEO COMMENTS

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WORLDVIEW
28 April 2025 

Bevan Graham

The past week saw a further example of financial markets proving to be a strong discipline on bad ideas as the US President pondered the termination of the Chair of the Federal Reserve.  This week see’s the first release of some April data that will be vigorously analysed for any early signs of reaction to the Liberation Day tariffs.

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WORLDVIEW
7 April 2025 

Bevan Graham

Markets have given an emphatic thumbs down to President Trump’s tariff tactics.  The next phase is how various countries respond.  Negotiation seems the favoured response of many with reports indicating up to 50 countries are lining up to do just that.  In the meantime, the Fed is between a rock and a hard place.  

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WORLDVIEW
1 April 2025 

Bevan Graham

There are a few things to keep an eye on this week, though most attention will be focussed on “Liberation Day” in the US on Wednesday. That’s the day we are expecting (hoping?) for greater clarity on the extent of US tariffs. All will soon be revealed.

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WORLDVIEW
17 March 2025 

Bevan Graham

NZ GDP and Balance of Payments data are both scheduled for release this week. GDP is expected to show a modest increase, confirming the September quarter of last year as the bottom of the recession. It will take a while yet to feel like a real recovery. The current account deficit is expected to improve, but at around -6.0% of GDP, there is no room for complacency with respect to our external accounts.

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WORLDVIEW
3 March 2025 

Bevan Graham

We are starting to see some of the big quarterly data that will feed into Q4 GDP data which is scheduled for release later this month.  On balance we expect the quarter to manage a small positive growth number, marking the September quarter of last year as the bottom of the recession.  But with the unemployment rate still set to rise a bit further, it’s not until the second half of this year that we expect to see more solid growth numbers.

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WORLDVIEW
17 February 2025 

Bevan Graham

Both the RBNZ and the RBA meet this week and are expected to deliver interest rate cuts.  Expect the RBA to cut 25bp but with the statement likely to be hawkish.  The RBNZ is expected to cut the OCR by 50bp and is likely to flag further, more cautious cuts in the period ahead.

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WORLDVIEW
3 February 2025 

Bevan Graham

President Trump has fired the first salvo in what seems destined to become a long and costly trade war.  No one will win from tariffs, as history has repeatedly shown.  Here at home December quarter labour market data is scheduled for release.  Wage data will be critical to the inflation and interest rate outlook.

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WORLDVIEW
10 December 2024

Greg Fleming

Asset markets were strong in November post-US election, and now await monetary policy clues from this week's US November inflation report, heading into the pre-Christmas Fed. meeting.

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WORLDVIEW
22 November 2024

Bevan Graham

The most likely outcome of next week’s monetary policy decision from the RBNZ is a 50bp reduction in the Official Cash Rate to 4.25%.  If that ends up being wrong, the next most likely outcome is a 25bp reduction.

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WORLDVIEW
30 October 2024

Bevan Graham

It’s a big 10 days ahead for the US.  The Federal Reserve meets next week and there is a plethora of critical data out before then to add fuel to the monetary policy debate.  And let’s not forget the election is the day before the Fed meeting starts, which will likely have them deliberating the implications of a new President – or perhaps a result that is still uncertain.

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WORLDVIEW
10 October 2024

Greg Fleming

September delivered positive returns from both equities and bonds, as investors responded positively to central bank easings.
Global Infrastructure and Real Estate were notably strong in the September Quarter. US Third Quarter earnings season could test the optimists.
The RBNZ cut the Official Cash Rate -0.5% this week, to 4.75%.

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WORLDVIEW
14 April 2025 

Bevan Graham

The easiest prediction for this week is there will be more US tariff noise.  Whether that noise is good, bad or indifferent for markets is harder to predict.  Also watch out for the NZ CPI and US retail sales.  The latter might give us a gauge of the extent to which lower consumer confidence is impacting actual spending.

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WORLDVIEW
3 April 2025 

Greg Fleming

The Trump Administration revealed a harsher suite of tariff measures than markets had expected today, triggering more equity volatility and supporting more defensively-positioned portfolios.

Prices for US consumers and businesses are set to rise as importers pass through imposts.

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WORLDVIEW
24 March 2025 

Bevan Graham

Uncertainty remains the dominant economic and market theme of 2025.  That was reflected in the decisions of all three of the major central banks who met last week.  The US Federal Reserve, the Bank of Japan and the Bank of England all met and all did nothing, citing elevated uncertainty, especially with respect to US tariff policy.  That concern has driven a convergence of global growth concerns and inflation risks, that have combined to bring equity markets lower. But central banks are unlikely to do anything until there is greater certainty on the outlook for growth and inflation.

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WORLDVIEW
10 March 2025 

Bevan Graham

Tariff policy uncertainty remains high and is damaging both consumer and business sentiment. Fed Chair Jerome Powell has said that despite elevated levels of uncertainty, the US economy continues to be in a good place. That’s true for now, but if the uncertainty persists, it could be just as damaging as the tariffs themselves. But it is the inflation consequences of the whole of Trump’s policy agenda that matters most to the Fed and the outlook for interest rates.

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WORLDVIEW
24 February 2025 

Bevan Graham

Latest PMI data out of the US showed the extent to US businesses are concerned about tariffs and rising costs.  The challenge for the Fed is they can’t respond to lower growth if inflation is rising.  Turning to this week, Q4 retail sales data for NZ is expected to show a modest increase, supporting our view the recession bottomed out in the final quarter of last year.

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WORLDVIEW
11 February 2025 

Bevan Graham

US inflation data out this week is largely irrelevant as the Fed contemplates what lies ahead in the form of tariffs and their inflationary consequences.  That being the case, recent signs of a surge in inflation expectations will have not gone unnoticed.  Here at home forecasters will be firming up their expectations for next week’s RBNZ Monetary Policy Statement where a 50bp seems in the can.  What they signal comes after that will be of most interest.

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WORLDVIEW
20 December 2024

Bevan Graham

This week’s NZ GDP data incorporated significant upward revisions to history that means the recession has come later and been deeper than previously reported but has left the level of GDP in broadly the same place. 

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WORLDVIEW
29 November 2024

Bevan Graham

Another super-sized interest rate cut from the RBNZ this week with the Bank reducing the OCR by 50bp to 4.25%.  They flagged a further 50bp cut in February, so that seems a sensible starting assumption.  However, if the economy pans out the way we think it will, there may not be much more to come after that.

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WORLDVIEW
5 November 2024

Greg Fleming

Markets are keenly awaiting both the results of the US Elections this week, and another Federal Reserve Rate cut.
Caution was evident in October and may persist this month, as risks of disappointment abound.

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WORLDVIEW
18 October 2024

Bevan Graham

Latest NZ inflation data supports the case for another 50bp cut in the Official Cash Rate next month.  Further cuts are likely into 2025 but at a more measured pace.

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WORLDVIEW
3 October 2024

Bevan Graham

It’s the proverbial line ball call whether the RBNZ cuts by 25 or 50 basis points at its Monetary Policy Review next week.  Path of least disappointment is to assume 25, but don’t be surprised if they do 50.  There is, in our view, a potentially stronger case for a 50bp cut at the November Monetary Policy Statement.

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