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Speaker 1: Two twenty three, pass six on news talks, you'd be

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Speaker 1: the market at price in an eighty percent likelihood of

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Speaker 1: a fifty basis point cut to the OCI today, Caitlin

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Speaker 1: Parker from ILSE from Milton Asset Management as with US

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Speaker 1: A savning.

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Speaker 2: Yoda, Hi har are you?

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Speaker 1: Yeah, very well? Thanks. How did the market react to

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Speaker 1: the decision?

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Speaker 2: Yeah, look like you said once, it wasn't a short thing.

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Speaker 2: It wasn't a major surprise to the market. So initially

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Speaker 2: we saw interest rates move a bit leer on the

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Speaker 2: back of it. The two year hotel interest rate was

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Speaker 2: down at zero point one percent. Currency was also a

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Speaker 2: bit weaker, but it wasn't a significant move given largely expected.

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Speaker 2: And it was really in New Zealand shares where we

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Speaker 2: saw the biggest reaction in the day, you know, up

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Speaker 2: about one point seven five percent, and that's because they're

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Speaker 2: so yield, interest rates sensitives, and it really feels like

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Speaker 2: the share market was actually waiting for some proof of

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Speaker 2: this point five percent cut, unlike the currency and interest

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Speaker 2: rate markets, and we really saw the market rally on

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Speaker 2: the back of it. So, you know, companies, property companies

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Speaker 2: like Precinct and Key the Property Group to three percent,

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Speaker 2: retirement villages like Oceania up two and a half percent.

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Speaker 2: But ultimately, look, it was a one page statement and

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Speaker 2: the orbans that they really played it with straight back.

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Speaker 1: Yeah, you know, obviously the market was expecting things today.

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Speaker 1: But how much do you think that market pricing played

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Speaker 1: into the decision? Is there any way to note?

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Speaker 2: Its actually quite interesting. So Urbian Dead did mention in

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Speaker 2: that small statement that they did discuss both the point

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Speaker 2: twenty five percent cut and a point five percent cut,

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Speaker 2: and obviously they landed up the latter, and because that

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Speaker 2: was most consistent with maintaining low inslation while also seeking

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Speaker 2: to avoid unnecessary instability. So by that it's essentially a

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Speaker 2: small knowledge that the market was expecting that point five

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Speaker 2: percent cut though in order for them to avoid you know,

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Speaker 2: interest rates moving like largely lower on the back of

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Speaker 2: them delivering a lower rate cut, that it was somewhat

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Speaker 2: taken into their consideration.

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Speaker 1: Yeah, it's interesting because it's it's very much an inexact

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Speaker 1: science trying to get hit around how the man of

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Speaker 1: free pople see cooming he makes these calls. But interesting

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Speaker 1: to see that line, as you say in the commentary today,

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Speaker 1: so as the market still expecting another fifty basis point

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Speaker 1: cut in November or is twenty five more likely? Could

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Speaker 1: we even see a seventy five Yeah, look as.

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Speaker 2: It stands, it is and there was no four guidance

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Speaker 2: in that statement today. But I suppose on the flip side,

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Speaker 2: there was no pushback to the market curtently expecting another

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Speaker 2: point five percent cut in November. And the next cast

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Speaker 2: is really an inflation report that we'll get next week.

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Speaker 2: So I reckon if that even comes in a smidge

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Speaker 2: stronger than expectating expected, you could actually see the market

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Speaker 2: starting to price in a potential of a point seventy

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Speaker 2: five percent cut, right, you know the last time we

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Speaker 2: saw it cut bigger than point five percent was March

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Speaker 2: twenty twenty. But it really comes down to the orbans.

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Speaker 2: I believe that they have inflation under control, so any

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Speaker 2: worry of an inflatory threat coming back, it could actually

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Speaker 2: move the door open for a larger cut. And November

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Speaker 2: is the last meeting, right, so they're not going to

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Speaker 2: meet again after November until mid February, so that's a

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Speaker 2: long time. So you really could just if the data

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Speaker 2: proves that a larger cut is needed, because even where

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Speaker 2: we are in there. We're still in that restrictive territory.

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Speaker 2: So to get back to neutral, there's still a lot

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Speaker 2: of scope for interest right cuts to come.

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Speaker 1: So if we're wanting a seventy five basis point cut,

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Speaker 1: what number do we need to see next week and

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Speaker 1: the CPI data.

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Speaker 2: Is released, Oh look, larger and unexpected. And it also

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Speaker 2: will depend on the makeup as well, how much of

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Speaker 2: it is generated domestically, we'll really come into play.

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Speaker 1: Yeah, hey, thanks so much. That's yeah, thanks, Kaitlyn, appreciate it.

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Speaker 1: That is Caitlyn Parker.

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Speaker 2: news talks. It'd be from four pm weekdays, or follow

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