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Speaker 1: Welcome to Fear and Greed business news you can use today.

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Speaker 1: The Reserve Bank is set to lift interest rates next

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Speaker 1: week after inflation picks up, the Aussie dollar pushes beyond

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Speaker 1: seventy US cents, and Drone Shield's boss explains why he

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Speaker 1: had to sell fifty million dollars worth of shares. Class

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Speaker 1: National's leader David Little proud to face a leader ships

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Speaker 1: bill next week, and why oil is measured in barrels.

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Speaker 1: It is Thursday, the twenty ninth of January twenty twenty six. Oh,

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Speaker 1: Michael Thompson, and good morning, Sean Aylmer.

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Speaker 2: Morning, Michael.

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Speaker 3: We're not here just telling the news. We're informing people

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Speaker 3: important stuff like why is it a barrel of oil?

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Speaker 1: I already know that this is going to be something

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Speaker 1: where you were researching oil and he went down some

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Speaker 1: rabbit hole, and here we are with it with a

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Speaker 1: lesson today and I'm looking forward to it. The main

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Speaker 1: story this morning, though, Sean. The Reserve Bank is set

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Speaker 1: to lift interest rates next week after a disappointingly high

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Speaker 1: inflation reading for the December quarter, fueled by rising costs

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Speaker 1: for housing construction, for electricity and for food as well.

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Speaker 3: And you'll SEEPI figure came in at thirteen point eight

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Speaker 3: thirteen point eight percent.

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Speaker 2: Three point eight percent. Michael wouldn't want. Thirteen point eight.

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Speaker 3: Percent three point eight percent for the full twenty twenty

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Speaker 3: five year, up from three point two percent for the

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Speaker 3: year to September. That really wasn't unexpected, and clearly though

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Speaker 3: it's above the Reserve banks two to three percent target band.

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Speaker 3: What was more disappointing was at the trimmed mean rate

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Speaker 3: of inflation, which takes out all the volatile items closely

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Speaker 3: watched by the Reserve Bank. It rose to three point

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Speaker 3: three percent, which was above expectations. Inflationary pressures fairly broad based,

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Speaker 3: driven by essentials like housing and food put yesterday strong

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Speaker 3: inflation reading next to last week's solid employment market data,

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Speaker 3: and pretty much most economists out there reckon, you've got

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Speaker 3: a rate rise coming on Tuesday afternoon next week. Bond

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Speaker 3: markets have now priced in a seventy five percent of

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Speaker 3: a rate hike after the Reserve Bank Board meeting, which

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Speaker 3: I actually think is surprising that they haven't priced in

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Speaker 3: more and that might happen today.

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Speaker 1: It was interesting watching the data come through yesterday after

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Speaker 1: our resident economist Stephen couldculus in the week ahead on Monday.

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Speaker 1: It gave us a bit of an outline as to

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Speaker 1: what to look for just in the quarter, the quarterly figure,

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Speaker 1: the underlying figure of He said, if we get zero

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Speaker 1: point seven percent for the quarter, we'll avoid a rate hike.

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Speaker 1: Zero point eight percent, it might happen. Anything above, you

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Speaker 1: can expect it. And all of a sudden it came

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Speaker 1: it at zero point nine percent. Ouch.

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Speaker 2: Is it the.

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Speaker 1: Beginning of a run of higher interest rates? Do you think?

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Speaker 3: It's a great question, No real clear answer. Some have

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Speaker 3: called the rate hike or a rate hike next week

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Speaker 3: kind of like an insurance policy, an insurance tightening, just

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Speaker 3: to make sure the economy and inflation doesn't fire up

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Speaker 3: too much. Others expect at at least two, probably three

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Speaker 3: increases this cycle. Michael, the trend is not our friends

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Speaker 3: when it comes to prices at the moment, but that

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Speaker 3: doesn't mean they're spiraling out of control or anything like that.

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Speaker 3: The December quarter increases reflected much higher energy prices. Some

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Speaker 3: state rebates came off. That was a reason for one

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Speaker 3: of the reasons for a difference between the underlying and

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Speaker 3: the headline rates. There's also a seasonal increase in holiday

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Speaker 3: and travel prices. The ABS said that was in part

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Speaker 3: due to strong demand and lead up to Christmas in

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Speaker 3: the summer school holidays, which in turn reflected the crowds

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Speaker 3: for the ASHES test series. Other price rises in the

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Speaker 3: December quarter aren't necessarily long lasting, so beef and land

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Speaker 3: prices or higher on the back of increased demand overseas,

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Speaker 3: vegetable fruit prices or higher on the back of weather conditions.

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Speaker 3: When you're an economist, you can take a number and

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Speaker 3: read it any way you want. All in all, not

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Speaker 3: a great reading on inflation. The consensus view out there

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Speaker 3: is we're having a rate height next week.

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Speaker 1: Someone who has a really interesting take on this, Sean

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Speaker 1: is Warren Hogan, the economist from Judo Bank and Eco Economics,

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Speaker 1: And you're talking to him today after the show for

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Speaker 1: Fear and Greed Q and A. And he does not

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Speaker 1: hold back.

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Speaker 3: He doesn't hold back. He doesn't hold back on the

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Speaker 3: Reserve Bank, he doesn't hold back on the federal government,

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Speaker 3: he doesn't hold back on state governments. He basically thinks

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Speaker 3: that we're behind the curve here and we may need

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Speaker 3: a bunch of.

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Speaker 1: Rate rises, Yeah, starting with a big one next week,

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Speaker 1: So stick around for that's coming up later. How did

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Speaker 1: the equities market respond to this data?

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Speaker 3: Yesterday, Sean, the S and PA six two hundred was

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Speaker 3: in the green, but after the eleven thirty a m.

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Speaker 3: Announcement it fell pretty sharply. Eventually it closed down slightly

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Speaker 3: to eighty nine hundred and thirty four points.

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Speaker 2: Some of the worst performers.

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Speaker 3: Were interest rate sensitive stocks, things like Life three sixty,

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Speaker 3: the tracking group retailer zip Co by now pay lader

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Speaker 3: provider sorry by no parent laid to provider zip Co.

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Speaker 3: They were some of the worst performing stocks all in all.

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Speaker 3: Among the large caps CSL Wesheimer's Macquarie not so good

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Speaker 3: BHP would sign the gold diggers all pretty good.

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Speaker 1: Away from equities, Sean. The Aussie dollar, the humble Aussie dollar.

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Speaker 1: Here we go spying around seventy US since, thank you

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Speaker 1: very much, having hit a new three year high yesterday.

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Speaker 3: Not only about interest rates but also a weaker US dollar.

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Speaker 3: Wouldn't it be good if you're traveling to the US?

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Speaker 3: In fact, against the basket of currencies, the greenbacks trading

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Speaker 3: around a four year low. For example, it's at its

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Speaker 3: weakest point against the Euro and the UK pound since

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Speaker 3: mid twenty twenty one back to the Aussie dollar, though

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Speaker 3: Joe's the sixth most traded global currency according to the

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Speaker 3: Bank for International Settlements, And if you think of that,

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Speaker 3: that's pretty amazing.

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Speaker 2: So you got the US.

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Speaker 3: Dollar, Euro, Yen, the big three, British pound, Chinese ren mimbi,

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Speaker 3: and this Australian.

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Speaker 1: Dollar that's actually go to Australia.

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Speaker 2: Punch punching them by their way very much. Moderityes currency.

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Speaker 3: When commodity prices are high, the Aussie dollar appreciates. Also

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Speaker 3: there are for a few hours in the day. It's

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Speaker 3: one of the most traded currencies in the world because

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Speaker 3: our time zone sits between Europe and the US.

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Speaker 1: That is, oh god, you promised us at the start

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Speaker 1: of the show today that you were going to teach

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Speaker 1: teach a more just dribbling information.

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Speaker 3: Today's The other thing is where it's also a reserve currency.

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Speaker 3: So the US dollar is the great reserve currency, but

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Speaker 3: about two percent of global FX reserves are the Ausie dollars.

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Speaker 3: So people like to hold it not I mean, because

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Speaker 3: it's safe to hold. Just quickly also talking about safe

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Speaker 3: goal a new high yesterday more than fifty two hundred

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Speaker 3: US dollars and ounce incredible.

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Speaker 1: It's just ridiculous. That is just extraordinary. Okay, we've covered

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Speaker 1: a lot, a lot more still to come, including the

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Speaker 1: barrels topic Sean, where the education continues back in a

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Speaker 1: moment with the rest of the day's business news Sean.

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Speaker 1: Federal Nationals leader David Little Proud faces a leadership challenge

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Speaker 1: next week when Parliament resumes, with party MP Colin Boyce,

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Speaker 1: who's not exactly the most high profile from the National Party,

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Speaker 1: who had been rumored to be heading to one Nation

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Speaker 1: instead saying he's going to move a spill motion on Monday.

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Speaker 1: Maybe on his way out the door.

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Speaker 3: Boys announced his intention on scott News and not really

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Speaker 3: clear that he actually spoke to anyone about it, just

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Speaker 3: because on scott News that I'm going to have a

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Speaker 3: leadership challenge on Monday. Now Little Proud is likely to

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Speaker 3: get much more support than Boyce in the eighteen strong

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Speaker 3: party room, but it does show what's going on inside.

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Speaker 3: Boyce yesterday said the decision to leave the coalition was

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Speaker 3: political suicide, adding that the party was going over a

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Speaker 3: political cliff. Now, of course, last week Little Proud led

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Speaker 3: the split after Liberal leaders accepted the resignations of three

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Speaker 3: National Front benches after they breached cabinet solidarity by voting

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Speaker 3: against laws allowing the government to bannas in other hate groups.

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Speaker 3: The split occurred Susan Lee herself obviously. I mean she's

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Speaker 3: facing potential leadership threat Angus Taylor Andrew Hasty the too

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Speaker 3: likely to come up against her. That where Susan Ly

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Speaker 3: is actually benefiting is that I don't think the conservative

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Speaker 3: side of the Libs can decide whether they like Taylor

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Speaker 3: or Hasty.

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Speaker 2: So there's that issue.

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Speaker 3: Little Proud facing his own challenge on Monday now, but

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Speaker 3: he'll see that one.

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Speaker 1: Through, okay, basketcase.

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Speaker 3: Yeah, Actually, Michael, before we leave, did you see last

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Speaker 3: night our Prime Minister Anthony Albanezy in Team or Less

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Speaker 3: they agreeing to establish a new partnership for a new era.

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Speaker 2: There was lots of great plauds last night.

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Speaker 3: It's all about economic security, economic relations, cooperation.

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Speaker 2: You know.

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Speaker 3: China is kind of I was gonna say, infiltrating, that's

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Speaker 3: an unfair word. Its influence is creeping in a lot

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Speaker 3: of Southeast Asian nations in Australia is making a real

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Speaker 3: effort to tie up our relations.

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Speaker 1: Yeah, yeah, shoring up our position in the Pacific right

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Speaker 1: because we are a power in this area. But China

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Speaker 1: has been doing an awful lot in order to really

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Speaker 1: establish its own place here. And it was great those

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Speaker 1: photos last night of Anthony Albanezi and Janana Gouzmau. It

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Speaker 1: was great, great to see great.

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Speaker 3: I'm only saying that because you can pronounce his name,

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Speaker 3: and you know, for well, I couldn't avoided it.

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Speaker 1: Yeah, just dropping it in there, Sean. We butchered so

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Speaker 1: many pronunciations on this podcast. It's nice to actually get

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Speaker 1: one right.

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Speaker 3: I was doing, you say, Michael Thompson, I'm like you really.

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Speaker 1: Saying every day. I wonder whether I'm saying Alma correctly,

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Speaker 1: but anyway, Yeah, it's a hard one. Oil and gas

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Speaker 1: giant Woodside Sean reported record output in twenty twenty five,

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Speaker 1: but has flagged a drop in production as the group's

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Speaker 1: searches for a new CEO.

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Speaker 3: Former boss Mago O'Neil left last month. They head up BHP.

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Speaker 3: Last year, Woodside produced.

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Speaker 2: One night, hang On, Hang On BHP. I've done it again,

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Speaker 2: haven't IVPVP.

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Speaker 1: It's a very important h in the middle that changes

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Speaker 1: the story entirely.

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Speaker 3: Okay, So Meganel gone to VP Woodside last year produced

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Speaker 3: the equivalent of one hundred and ninety nine million barrels

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Speaker 3: of oil and gas a day. That's more than five

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Speaker 3: hundred thousand barrels a day. On my account, that'll be

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Speaker 3: about one hundred and eighty.

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Speaker 2: Million this year.

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Speaker 3: That's because it's Pluto LNG joint venture is closing for

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Speaker 3: about five weeks later in the year. However, this is

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Speaker 3: where I started going down. I thought, Wow, five hundred

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Speaker 3: thousand barrels equivalent of oil and gas. It's just hard

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Speaker 3: to get your mind. And then I thought, why a barrel?

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Speaker 3: Couldn't you have some bigger unit? So who came up

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Speaker 3: with a barrel as a unit of measurement for crude?

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Speaker 3: So in the early eighteen sixties in the US, particularly

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Speaker 3: around Pennsylvania, Okay, all sorts of containers were used to

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Speaker 3: transport oil, normally done on wagons and boats. But actually

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Speaker 3: getting the containers was a bit of a problem.

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Speaker 2: You know, you have to build them, create them, and.

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Speaker 3: They preferred to actually reuse lots of containers that they

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Speaker 3: already had, and what they had Irish whiskey containers, whiskey barrels,

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Speaker 3: and they thought We've got a lot of those whiskey barrels.

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Speaker 2: Let's just fill them up with oil.

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Speaker 3: And they did that sat in Pennsylvania. It turned out

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Speaker 3: that a barrel in Irish whiskey barrel in Pennsylvania was

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Speaker 3: forty two gallons, which is about one hundred and sixty liters. Yeah,

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Speaker 3: and that has forever been the measurement of oil. Because

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Speaker 3: they had a bunch of whiskey barrels hanging around Pennsylvania.

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Speaker 1: That is awesome. That is a great piece of trivia.

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Speaker 1: I was I didn't know where you were going to

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Speaker 1: go with that just then when he said that they

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Speaker 1: had a whole bunch of different containers they were using. Instantly,

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Speaker 1: I'm thinking kind of tupleware, baft all this kind of stuff.

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Speaker 1: We could have ended up with anything. Barrels feels like

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Speaker 1: a nice sensible place to land. So yeah, good one,

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Speaker 1: Thank you for sharing. Sean Drone Shield's chief executive Oleg

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Speaker 1: Vaughnick yesterday said that he sold almost fifty million dollars

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Speaker 1: worth of stock last year to cover a tax bill

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Speaker 1: and to secure his financial future.

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Speaker 3: So we needed to backtrack on the sale. He sold

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Speaker 3: fourteen point eight million shares over several sessions in November

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Speaker 3: now he'd been granted them and then.

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Speaker 2: He basically immediately sold them.

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Speaker 3: It triggered a massive sell off of drone shield share

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Speaker 3: price down about thirty percent one session. Not helping was

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Speaker 3: the fact that the chair, Peter James, sold about twelve

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Speaker 3: point five million worth of share, so massive sell down,

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Speaker 3: the share selling, the chair selling. As a result, share

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Speaker 3: price down thirty percent. Everyone's saying, why are you selling?

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Speaker 3: What's going on? At the time, Varneck said his job

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Speaker 3: running a company that manufactured shields from drone tax came

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Speaker 3: with risks to his life, particularly since the company's technology

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Speaker 3: was used by Ukraine's war against Russia. Yesterday, he kind

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Speaker 3: of came out with a perhaps a better reason why.

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Speaker 3: He said he needed to sell stock to cover a

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Speaker 3: twenty five million dollar tax burden, which would have been

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Speaker 3: the fact that these shares had been realized. So that's

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Speaker 3: so there's twenty five to fifty. He also renovated his house.

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Speaker 1: I'm sorry here also.

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Speaker 3: And he did say he needed to secure his finance future,

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Speaker 3: but he said how the price of the house renovation

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Speaker 3: went out of control, which I think a.

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Speaker 1: Lot of anyone who's renovated would be able to understand that.

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Speaker 1: Understand that, we understand that. But this is not old.

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Speaker 3: He and his mother, he's got a great story. He

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Speaker 3: came out from Russia when he was fifteen as an

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Speaker 3: immigrant to.

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Speaker 2: Christ Chanson in New Zealand, lived in public house.

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Speaker 3: He was as gone on to be incredibly successful, see

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Speaker 3: in particular of drone shield which has.

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Speaker 2: Done really well.

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Speaker 3: But as renovations he didn't really keep an eye costs clar.

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Speaker 1: That is a great story. Turning to international news, now,

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Speaker 1: Wall Street is putting pressure on US President Donald Trump

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Speaker 1: to de escalate the crisis in Minnesota, with Apple Chief

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Speaker 1: executive Tim Cook becoming the latest executive to weigh in

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Speaker 1: on the killing of a nurse by federal agents on

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Speaker 1: the weekend.

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Speaker 3: Cook told his employees that he's heartbroken by the events

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Speaker 3: and called for calm and the de escalation of the situation.

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Speaker 3: The longtime CEO added that he discussed the matter with

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Speaker 3: President Donald Trump earlier this week. According to Bloomberg, he

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Speaker 3: had come under fire by employees, customers, and Apple watches

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Speaker 3: for attending a White House screening of a documentary on

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Speaker 3: First Lady Milania on the evening of the shooting. And

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Speaker 3: I suppose in a sense. It was a bit of

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Speaker 3: a response to that. For his part, Donald Trump has

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Speaker 3: used similar language. Yesterday he said he was also looking

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Speaker 3: to de escalate what's going on in Minnesota.

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Speaker 1: Okay. Up next Sean is Fear and Greed Q and

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Speaker 1: A with Warren Hogan from Eco Economics. It is a

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Speaker 1: must listen today for anyone interested in what is going

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Speaker 1: on in the economy, what to expect next week from

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Speaker 1: the Reserve Bank? Is that fair?

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Speaker 2: I think so. Absolutely.

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Speaker 1: Up next in the Fear and Greed playlist on your

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Speaker 1: podcast platform or at Fearangreed dot com dot au, which

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Speaker 1: is also where you sign up for the rather fetching

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Speaker 1: Fear and Greed daily newsletter.

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Speaker 2: Fetching a newsletter that's fetching.

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Speaker 1: As a ripper of a read. I'll put a link

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Speaker 1: in the show notes. Thank you very much, Sean.

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Speaker 2: Thanks Michael.

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Speaker 1: It's Thursday, the twenty ninth of January twenty twenty six.

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Speaker 1: Make sure you're following the podcast and please join us

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Speaker 1: online on LinkedIn, Instagram, x TikTok and Facebook. I'm Michael Thompson.

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Speaker 1: That was Fear and Greed. Have a great day.