WEBVTT - Hamish Pepper: The US dollar is weakening 0:00:05.761 --> 0:00:09.721 You're listening to the Weekend Collective podcast from News Talks. 0:00:34.241 --> 0:00:37.321 And welcome back to the Weekend Collective for well, welcome 0:00:37.361 --> 0:00:39.241 in of you if you have just joined us. By 0:00:39.281 --> 0:00:42.041 the way, of course, there was an illuminating conversation we 0:00:42.081 --> 0:00:45.841 had with Caitlin Presley from Unity Studios just around the 0:00:45.841 --> 0:00:48.401 public health. If you missed any of it and you 0:00:48.441 --> 0:00:51.361 want to go back, there are lots of interesting calls 0:00:51.401 --> 0:00:54.121 and good bits of advice there. Go and check out 0:00:54.121 --> 0:00:57.241 our podcast. Look for the Weekend Collective on iHeartRadio and 0:00:57.281 --> 0:01:00.201 News talksb Dot covered and said. Also for politics, we 0:01:00.361 --> 0:01:04.081 had Jeffrey Miller, who's a geopolitical analyst on the recent 0:01:04.121 --> 0:01:08.961 moved moved from the States to bomb those nuclear bunkers 0:01:09.001 --> 0:01:11.081 and Iran and Jeffrey's take on it as well, so 0:01:11.121 --> 0:01:13.281 he getsquent some quite strong comments on it as well. 0:01:13.601 --> 0:01:15.881 And we also chatted to the head of the head 0:01:15.881 --> 0:01:18.681 of the President of the Tourism Council and the Cook 0:01:18.681 --> 0:01:21.601 Islands around what's going on with Mark Brown and the 0:01:21.601 --> 0:01:23.761 Cook Islands and the money that's been suspended from New 0:01:23.841 --> 0:01:26.761 Zealand as well. So an illuminating couple of hours. Go 0:01:26.881 --> 0:01:30.401 check out our podcast again. And news talks at b Dot, 0:01:30.401 --> 0:01:35.041 Codter and Zaid right now though new new topic smart money, 0:01:35.201 --> 0:01:40.041 and to join us. He is a fixed income gosh. 0:01:40.081 --> 0:01:43.761 I always struggle with that fixed income and currency strategist. 0:01:44.241 --> 0:01:47.041 And his name is Hamish Pep Gosh. I'm all over 0:01:47.041 --> 0:01:49.561 the place, Hamish Pepper. Hello, God, I'll just shut up 0:01:49.561 --> 0:01:50.161 and introduce it. 0:01:50.961 --> 0:01:52.041 Should I take over? Tom? 0:01:56.521 --> 0:01:57.761 I'm good mate. How you been doing? 0:01:58.401 --> 0:02:01.041 Yeah? Good. We've had a big weekend. We were we 0:02:01.081 --> 0:02:03.801 were tramping with our two young girls who are five 0:02:03.841 --> 0:02:06.521 and seven, and the Low North Island. It was great fun. 0:02:06.641 --> 0:02:07.241 Oh lovely. 0:02:07.881 --> 0:02:09.081 I thought you were going to say we had a 0:02:09.081 --> 0:02:10.201 big week and it was something to do with the 0:02:10.201 --> 0:02:12.681 money markets, but you've simply just had it. Was that too, 0:02:13.321 --> 0:02:14.761 You've had a mataiki weekend. 0:02:15.441 --> 0:02:16.921 Yeah. I came out of the bush and read the 0:02:16.921 --> 0:02:21.881 headlines that Trump had struck Rhan and thought, gee, okay, 0:02:21.881 --> 0:02:24.481 I better get my be to get my sort of 0:02:24.481 --> 0:02:27.041 thoughts together for the show in case you know we 0:02:27.361 --> 0:02:27.801 go there. 0:02:28.081 --> 0:02:31.601 Well, I suspect now that you've you've mentioned it, we're 0:02:31.601 --> 0:02:33.081 going to go there. I think we're going to go there. 0:02:33.081 --> 0:02:35.121 It's like that Mighty Pith that was like what was it? 0:02:35.401 --> 0:02:38.001 Faulty tiers. Don't mention the more war. I mentioned it once, 0:02:38.041 --> 0:02:41.121 but I think I got away with it actually, So 0:02:42.041 --> 0:02:44.441 actually we're lucky with the tramping weather though my daughter 0:02:44.481 --> 0:02:46.441 has in fact having them caught up with it. Yep, 0:02:46.521 --> 0:02:49.521 she's just on the Duke of Edinburgh overnight tramp where 0:02:49.561 --> 0:02:51.601 they went to ring a Toto. But they were allowed 0:02:51.601 --> 0:02:54.201 to switch their phones on to send photos this morning 0:02:54.401 --> 0:02:58.761 at about seven o'clock and oh what weather for tramping 0:02:58.841 --> 0:03:00.801 really just fantastic. 0:03:01.441 --> 0:03:05.761 Absolutely, yeah. We had these beautiful views of Mount a 0:03:05.841 --> 0:03:09.321 pay who mount not a hooey and when we went 0:03:09.401 --> 0:03:12.441 in on the Friday we couldn't see either of them. 0:03:12.841 --> 0:03:15.721 And then yeah, fantastic last couple of days. So yeah, 0:03:15.841 --> 0:03:16.921 really special. 0:03:16.801 --> 0:03:19.321 Excellent, good stuff. And that's thank you for touching on that. 0:03:19.321 --> 0:03:21.681 That's it's nice to take our head out of the 0:03:21.681 --> 0:03:23.921 financial weeds for a moment before we dive straight back 0:03:23.961 --> 0:03:28.441 and before we get onto talking about because it is 0:03:28.481 --> 0:03:32.081 going to be a big deal what's happened in the 0:03:31.881 --> 0:03:34.441 in the Middle East, right, and we will I think 0:03:34.481 --> 0:03:36.121 we'll have to dig on that, even though it's just 0:03:36.121 --> 0:03:38.921 a recently developing story. I'm sure you'd be able to 0:03:38.921 --> 0:03:39.681 give us some insights. 0:03:39.721 --> 0:03:40.201 But let's go. 0:03:41.001 --> 0:03:44.761 Let's have a look back on you guys at track. 0:03:45.041 --> 0:03:47.921 What's how things have been going where farmers have had 0:03:47.921 --> 0:03:49.961 good news on the farm gaate milk prices and dairy 0:03:49.961 --> 0:03:52.721 price and things like that. We've just had the we've 0:03:52.881 --> 0:03:56.921 just had the Field Days massive event. How what do 0:03:57.001 --> 0:04:02.201 we know about the spending confidence of farmers in particularly? 0:04:02.201 --> 0:04:03.721 How did the Field Days go? Do you have much 0:04:03.721 --> 0:04:04.681 of a handle on that stuff. 0:04:05.481 --> 0:04:08.441 Yeah, it was a fantastic event. We were there for 0:04:08.921 --> 0:04:12.841 three days, hosted by ben Z and of course we're 0:04:12.681 --> 0:04:16.281 the manager for the Kiwi Saver and the private wealth 0:04:16.721 --> 0:04:21.121 money for them, so we got to see it from 0:04:21.321 --> 0:04:24.721 their point of view. They were a regular vendor there 0:04:25.161 --> 0:04:28.681 and just you know, one hundred thousand people through those 0:04:28.721 --> 0:04:32.201 four days, and I've got a real sense of that 0:04:32.281 --> 0:04:34.921 part of the economy, which, as you say, has had 0:04:34.921 --> 0:04:38.201 a really good last year season for the dairy farmers, 0:04:38.681 --> 0:04:42.001 you know, the best ever. But I think there's still 0:04:42.001 --> 0:04:44.721 a degree of caution there are spending more than they 0:04:44.721 --> 0:04:47.361 were last year, but last year they had a season 0:04:47.441 --> 0:04:51.361 which wasn't nearly as good, and I think there's still 0:04:51.521 --> 0:04:54.081 a bit of memory of that that the good times 0:04:54.081 --> 0:04:57.081 don't last forever, and so I think they'll probably want 0:04:57.161 --> 0:05:00.761 to see what Fonterra actually forecasting, which is another season 0:05:00.801 --> 0:05:04.321 of good milk prices, and that might be something which 0:05:04.361 --> 0:05:06.601 then a bit more more spending. 0:05:07.001 --> 0:05:08.841 So what do we know about what they actually did spend? 0:05:08.841 --> 0:05:10.801 You said they spent more, and I think that that 0:05:10.921 --> 0:05:14.001 was the headline that just cuts across, isn't it? A 0:05:14.081 --> 0:05:17.081 lot farmers are and I assume that they've just been 0:05:17.121 --> 0:05:19.201 a big spend up because you know, they're spending more 0:05:19.201 --> 0:05:21.921 than last year, but it was the room for improvement perhaps, 0:05:22.001 --> 0:05:24.881 and maybe it's not as far as it could be. 0:05:25.681 --> 0:05:28.041 Yeah, exactly. So I mean you don't, as far as 0:05:28.081 --> 0:05:31.361 I know, you don't get sort official data from the vendors, 0:05:32.001 --> 0:05:34.921 you know, aggregated up for field days. So what we 0:05:35.001 --> 0:05:37.161 did was we went around and asked, you know, the 0:05:37.161 --> 0:05:40.321 individual vendors. I think I spoke to more than a dozen, 0:05:40.601 --> 0:05:44.321 and the common story was sales were up on last year, 0:05:44.401 --> 0:05:48.761 but not record levels, so an improvement but not the 0:05:48.801 --> 0:05:53.241 best they'd seen. And it does kind of it's corroborating 0:05:53.281 --> 0:05:56.161 what we're seeing in the aggregate data, which is, you know, 0:05:56.161 --> 0:06:00.921 if you think about for the dairy sector, they probably 0:06:00.961 --> 0:06:03.441 had a boost in terms of revenue. That's between four 0:06:03.441 --> 0:06:08.841 and five billion dollars. What the lending data is saying 0:06:08.881 --> 0:06:11.361 for the sector is a portion of that has gone 0:06:11.441 --> 0:06:14.761 to pay down debt. And what the data is telling 0:06:14.841 --> 0:06:17.681 us from the deposit side of the banking system is 0:06:17.681 --> 0:06:22.441 that cash balances have increased in the agricultural sector, and 0:06:22.481 --> 0:06:24.881 so that leaves there is some left which has been spent, 0:06:25.001 --> 0:06:27.281 and that kind of you know, fits the field Day's story. 0:06:27.281 --> 0:06:30.601 But there's a bit of caution there still within the 0:06:31.521 --> 0:06:32.641 within that rural sector. 0:06:33.481 --> 0:06:36.001 So when you say four or five billion dollars, that's 0:06:36.001 --> 0:06:42.041 an extra earnings. So what can you give us some 0:06:42.121 --> 0:06:44.721 context for that? Of course, if that was the American 0:06:44.841 --> 0:06:47.121 dairy industry, you might say that doesn't sound like very much. 0:06:47.161 --> 0:06:49.001 But for us, how much is it? 0:06:49.801 --> 0:06:53.201 Yeah? I mean four or five billion is significant. You know, 0:06:53.241 --> 0:06:57.041 if you think about one metric could be the amount 0:06:57.201 --> 0:07:01.841 the dollar amount of exports each year that dairy represents, 0:07:01.881 --> 0:07:06.721 which is around that twenty billion kind of mark, so, 0:07:07.441 --> 0:07:11.081 you know, which puts it at about five percent of GDP. 0:07:11.281 --> 0:07:15.361 So these numbers are meaningful, and I think what we're 0:07:15.401 --> 0:07:19.721 seeing though is that the translation into the economy. You know. So, 0:07:19.761 --> 0:07:21.681 I think what many of us are hoping for is 0:07:21.681 --> 0:07:24.601 that the external sector can lead our recovery, you know, 0:07:24.601 --> 0:07:29.321 which has been hasn't really begun in a vigorous way. 0:07:29.361 --> 0:07:33.201 You would say it's been fairly soft in some areas. 0:07:34.561 --> 0:07:36.841 But the way that we could perhaps see that accelerators. 0:07:36.881 --> 0:07:40.521 You see more comfort from the external sector, not just 0:07:40.601 --> 0:07:44.721 dairy right, you know, the beef shedding beef as well. 0:07:45.121 --> 0:07:47.601 If they feel a bit more comfortable going out buying tractors, 0:07:48.841 --> 0:07:50.481 you know, you don't even have to be as extreme 0:07:50.561 --> 0:07:52.641 as saying buying boats and jet skis and things like that, 0:07:52.721 --> 0:07:56.241 but more of it can feed into the economy, then 0:07:56.281 --> 0:07:59.561 there is the ability for that to then generate a 0:07:59.721 --> 0:08:02.361 more robust recovery or a faster recovery than the one 0:08:02.361 --> 0:08:02.961 that we're seeing. 0:08:03.281 --> 0:08:06.561 So at the moment, it is just we want that. 0:08:06.681 --> 0:08:09.041 Do you think that the rural community of farming communities 0:08:09.041 --> 0:08:12.521 that want to see just more good news before they 0:08:12.561 --> 0:08:14.441 really start to open their wallets in a meaning in 0:08:14.441 --> 0:08:17.241 a way that really impacts the economy. 0:08:18.001 --> 0:08:21.281 Yeah, I think, Look, you know, these these people that 0:08:21.681 --> 0:08:24.601 you know, they're aware of what's going on, globally. You know, 0:08:24.681 --> 0:08:28.441 they're probably more aware than most of us about what's 0:08:28.481 --> 0:08:33.561 happening with tariffs, the risks that there are between you know, 0:08:33.601 --> 0:08:37.361 your two largest economies in the world having a trade war, 0:08:37.441 --> 0:08:41.081 the US and China, and one of those China being 0:08:41.321 --> 0:08:45.161 our largest export destination. So there's a real awareness of 0:08:45.241 --> 0:08:49.481 the ability for that to escalate and for global growth 0:08:49.761 --> 0:08:53.561 to then weaken and therefore demand for our exports to 0:08:53.881 --> 0:08:56.521 come off. So I think that that's in the piece. 0:08:56.921 --> 0:08:59.201 And then there's also an awareness of the exchange rate. 0:08:59.281 --> 0:09:03.561 Right the Kei we dollar hasn't probably been doing what 0:09:03.761 --> 0:09:07.081 maybe it normally would when you have an event like 0:09:08.081 --> 0:09:13.801 you know, the the Trump tariffs, where generally risk sentiment deteriorates, 0:09:14.441 --> 0:09:18.321 Usually our currency in that environment would appreciate and that 0:09:18.361 --> 0:09:23.161 would make the global value of our exports go up 0:09:23.321 --> 0:09:25.521 in New Zealand dollar terms. Now that hasn't happened, and 0:09:25.561 --> 0:09:28.321 there's an awareness of that. Our exchange rates actually appreciated 0:09:28.841 --> 0:09:31.401 against the US dollars. So that's been at the margin, 0:09:31.481 --> 0:09:33.921 something which has taken a little bit of the shine 0:09:33.961 --> 0:09:36.481 off those high global prices. 0:09:37.121 --> 0:09:40.121 Why is that, Well, this is the thing. 0:09:39.961 --> 0:09:45.761 You probably heard people questioning perhaps the status of the 0:09:45.881 --> 0:09:51.521 US dollarting got dropped to a triple A something rather 0:09:51.561 --> 0:09:54.761 than quadruple or so, I can't remember yet, have to. Yeah, 0:09:54.801 --> 0:09:58.121 they lost their triple A rating recently, and that was 0:09:58.161 --> 0:10:01.721 a reflection of some of the policies that I mean, 0:10:02.441 --> 0:10:05.801 this goes back, you know, prior to that, you know, 0:10:05.841 --> 0:10:09.121 the US was on a trajectory in terms of the 0:10:09.121 --> 0:10:13.721 government debt. Yeah, that it was accumulating, which was not 0:10:14.481 --> 0:10:19.761 looking particularly sustainable. So it was just increasing somewhat exponentially 0:10:20.001 --> 0:10:22.961 in terms of the forecast that people would make for it. 0:10:23.681 --> 0:10:26.801 But I think the accelerator to that has been some 0:10:26.841 --> 0:10:31.001 of Trump's actions. For example, the way he's behaved with 0:10:32.001 --> 0:10:36.041 the chair of the Federal Reserve, the Reserve Bank of 0:10:36.041 --> 0:10:39.081 New Zealand equivalent. You know, some of the things that 0:10:39.441 --> 0:10:41.921 he's said to Jerome Powell, who is the fair chair, 0:10:42.121 --> 0:10:45.801 or about him, started to get people to question the 0:10:45.841 --> 0:10:48.321 degree to which the central Bank is going to remain 0:10:48.441 --> 0:10:50.641 independent from government, because that's super important. 0:10:51.681 --> 0:10:54.241 Yeah. Actually, gosh, there's I'll tell you what the elephant 0:10:54.241 --> 0:10:56.881 in the room is. Of course, what's just happened in 0:10:56.921 --> 0:11:01.961 the last twenty four hours, but which we'll get into 0:11:01.961 --> 0:11:05.641 I think it's unavoidable. Okay, Yeah, so America is bond 0:11:06.081 --> 0:11:09.201 Iran and now there's a whole lot of uncertainty around that. 0:11:09.561 --> 0:11:12.921 What does that do to the level of communication the 0:11:12.921 --> 0:11:14.881 folks at Harvar Asset Management on what's going on in 0:11:14.961 --> 0:11:17.401 the markets? Do you guys all get on the blowerlike, 0:11:17.441 --> 0:11:18.281 have you seen the news? 0:11:19.281 --> 0:11:21.921 Yeah, We've got a sort of a team's chat which 0:11:22.161 --> 0:11:25.601 those among the investment teams are part of and will 0:11:25.681 --> 0:11:29.281 share thoughts on what we think it means and what 0:11:29.361 --> 0:11:33.521 could possibly happen. Tomorrow when our market opens will be 0:11:33.561 --> 0:11:37.681 the first market globally to open and try and respond 0:11:38.201 --> 0:11:42.361 to the news, because it's happened after the US markets 0:11:42.401 --> 0:11:44.601 have closed. And I suppose we've got a bit of 0:11:44.641 --> 0:11:48.921 a test case in terms of the lead up to this, 0:11:49.041 --> 0:11:53.361 which was Israel launching their attack on Iran, and we 0:11:53.401 --> 0:11:57.161 saw the biggest response was really oil prices. That's where 0:11:57.161 --> 0:12:01.161 the market worries most that one Iran is a contributor 0:12:01.201 --> 0:12:04.281 to the global supply of oil, but it also controls 0:12:04.321 --> 0:12:07.681 a pathway for which a lot of exports from the 0:12:07.681 --> 0:12:10.001 Middle East come to the rest of the world, and 0:12:10.041 --> 0:12:13.561 so oil prices prior to this event were already up 0:12:13.561 --> 0:12:18.481 about ten percent in response to the Israeli actions, and 0:12:18.561 --> 0:12:21.001 so I think, you know, the base case would be absorbed. 0:12:21.321 --> 0:12:24.441 You mean, the drama of this recent development. It's not 0:12:24.521 --> 0:12:25.121 out of the blue. 0:12:25.161 --> 0:12:31.161 You mean, well, we have seen how markets respond or 0:12:31.281 --> 0:12:37.481 responded to Israel's attacks. Now we've got the US involved, 0:12:37.481 --> 0:12:40.001 which is definitely an escalation. I don't think anybody would 0:12:40.081 --> 0:12:44.561 argue that it's not. And you know, I think I 0:12:44.601 --> 0:12:48.561 think the logic would be those moves we saw in 0:12:48.641 --> 0:12:51.241 terms of higher oil prices and risk sentiment, you know, 0:12:51.321 --> 0:12:56.521 investor sentiment being heard by those developments. You know that 0:12:56.521 --> 0:13:01.281 that's a pretty sensible thing to assume will be a 0:13:01.321 --> 0:13:04.601 feature of the week. But the difficulty will be, you know, 0:13:04.681 --> 0:13:08.361 our market down here having to sort of, you know, 0:13:08.401 --> 0:13:10.801 come up with just how large moves should be. And 0:13:11.201 --> 0:13:13.801 you know that's that's where probably it'll be a bit 0:13:13.801 --> 0:13:16.401 of a holding pattern until the bigger markets come in. 0:13:16.561 --> 0:13:19.561 If I wanted to indulge the conspiracy part of my brain. 0:13:19.681 --> 0:13:25.281 Not conspiracy, I just mean but the I almost wonder 0:13:25.321 --> 0:13:29.721 whether the timing of the strikes is done in a 0:13:29.761 --> 0:13:33.321 way where the markets have a day to get used 0:13:33.361 --> 0:13:35.281 to it rather than doing it in the middle of 0:13:35.321 --> 0:13:38.721 the markets trading where everything goes whoop boom, up and down. 0:13:39.161 --> 0:13:42.281 I mean, that's that's a pointless sort of observation. But 0:13:42.321 --> 0:13:45.001 there's part of me that wonders if there is some 0:13:45.041 --> 0:13:47.321 sort of method in the timing of it from the 0:13:47.321 --> 0:13:51.121 financial stability point of view? Am I just barking mad? 0:13:54.441 --> 0:13:57.801 Yeah? I mean I think it's hard when you're dealing 0:13:58.001 --> 0:14:01.481 with a president like Trump, who you know, you would 0:14:01.481 --> 0:14:03.321 have said last week and it was towards the end 0:14:03.321 --> 0:14:04.801 of last week that he said that he would take 0:14:04.881 --> 0:14:09.081 THENX fortnite to consider, you know, whether to strike around 0:14:09.201 --> 0:14:10.601 or not, and then he's done it just you know, 0:14:10.881 --> 0:14:14.521 a day or two later, you know whether it's planned 0:14:14.561 --> 0:14:17.961 outside of market hours. I mean, at the end of 0:14:18.001 --> 0:14:21.561 the day, markets will respond no matter when it happens. 0:14:22.921 --> 0:14:26.001 And I think the difficulty I think, like I said, 0:14:26.041 --> 0:14:29.161 for our market, and then it will be Australia to 0:14:29.641 --> 0:14:33.121 try and make its assessment as well before Asia opens 0:14:34.321 --> 0:14:37.241 in London and so on. As like I was saying, 0:14:37.401 --> 0:14:41.081 just you know, how much should things move and do 0:14:41.121 --> 0:14:44.201 you even get the direction right? For example, when the 0:14:44.401 --> 0:14:48.161 Israeli strikes happened, we had interest rates in the US 0:14:49.041 --> 0:14:52.121 initially fell, you know, that was the biggest market that 0:14:52.161 --> 0:14:54.121 was open at the time, and then people thought, oh, 0:14:54.121 --> 0:14:57.441 hold on, oil prices are going up. Actually maybe there's 0:14:57.481 --> 0:14:59.601 a bit of inflation that comes with this, So well, 0:14:59.601 --> 0:15:02.201 we can't take interest rates too too low, because you know, 0:15:02.321 --> 0:15:04.041 that will just add to the inflation problem. So they 0:15:04.081 --> 0:15:08.081 went back sickly to where they started. So it's a 0:15:08.081 --> 0:15:10.881 complicated thing. But at the end of the day, I 0:15:10.881 --> 0:15:13.001 think the oil price channel is the one that will 0:15:13.001 --> 0:15:15.521 be focused on, and probably for a lot of central 0:15:15.561 --> 0:15:17.561 banks that's not going to be a welcome thing to 0:15:17.641 --> 0:15:20.761 have meaningfully higher oil prices when you've just got on 0:15:20.841 --> 0:15:24.281 top or you're still getting on top of inflation. You know, 0:15:24.321 --> 0:15:25.641 it's not the greatest thing. 0:15:25.761 --> 0:15:27.961 Yeah, we love your calls as well. I went hundred 0:15:27.961 --> 0:15:30.921 eighty t and eighty And actually when we framed this 0:15:31.001 --> 0:15:35.921 conversation was before the recent developments in the Middle East, 0:15:35.921 --> 0:15:39.001 but it was a look at the looking at the 0:15:39.321 --> 0:15:42.361 spending up at field days, but how there's still a 0:15:42.361 --> 0:15:45.241 bit of room for people to be confident that they're 0:15:45.281 --> 0:15:47.921 going to spend again. And actually just be curious from 0:15:47.961 --> 0:15:52.281 you if you're listening, how confident are you with spending 0:15:52.321 --> 0:15:55.081 money these days? Because people are still feeling the sort 0:15:55.121 --> 0:15:58.441 of delayed response to inflation we see while the farmers 0:15:58.441 --> 0:16:02.361 eating a good result at the in global exports, of course, 0:16:02.361 --> 0:16:05.401 we're paying a lot for milk and dairy and people 0:16:05.441 --> 0:16:07.881 feel that. So what would it take for you to 0:16:08.001 --> 0:16:11.401 feel confident in spending again, either for yourself or for 0:16:11.441 --> 0:16:12.881 your business. Give us a call on that on eight 0:16:12.961 --> 0:16:14.601 hundred eighty ten and eighty or if you've got any 0:16:14.681 --> 0:16:18.081 questions for Hamish Hamish Pepper from Harbor Asset Management. He's 0:16:18.081 --> 0:16:21.681 a fixed income and a currency strategist, so I'm going 0:16:21.721 --> 0:16:24.321 to dig into questions around what the currency is going 0:16:24.361 --> 0:16:27.281 to do as a result of the recent news as well. 0:16:27.481 --> 0:16:30.441 But what are you looking for to decide that it's 0:16:30.481 --> 0:16:32.041 okay to spend again? And do you look at these 0:16:32.041 --> 0:16:36.961 global developments and these what's happening with America and the 0:16:37.041 --> 0:16:40.361 uncertainty around that is a time to keep your purse closed? 0:16:40.481 --> 0:16:42.361 I don't know. We're going to explore that more with 0:16:42.401 --> 0:16:45.201 Hamish Pepper Harbor Asset Management will be back with us 0:16:45.481 --> 0:16:47.321 in just a moment. But you know the number, it's 0:16:47.321 --> 0:16:49.281 O eight hundred eighty ten eighty for your reckons as well. 0:16:49.321 --> 0:16:51.561 It's twenty three past five. Are you worried about funding 0:16:51.601 --> 0:16:54.361 a comfortable retirement? Well, you're not alone. The cost of 0:16:54.401 --> 0:16:56.441 living crisis is heading home for a lot of people, 0:16:56.481 --> 0:16:58.961 so it's no surprise that people are looking for ways 0:16:58.961 --> 0:17:01.081 to make the most of their savings and get a 0:17:01.121 --> 0:17:03.481 little bit more income to supplement their New Zealand super 0:17:03.921 --> 0:17:06.681 One interesting solution is to invest in an income fund 0:17:07.281 --> 0:17:10.561 like the Harbor Income Fund. It works by holding a 0:17:10.601 --> 0:17:14.201 mix of interest paying securities and shares that have been 0:17:14.241 --> 0:17:16.881 designed to generate a steady and sustainable income no matter 0:17:16.961 --> 0:17:21.241 the market. Harbor Income Fund is actively managed and currently 0:17:21.281 --> 0:17:24.121 it pays a distribution of four point five percent per 0:17:24.161 --> 0:17:27.521 annum after fees and taxes paid out in monthly installments. 0:17:27.521 --> 0:17:30.241 To find out more about Harbor's Income Fund, just head 0:17:30.281 --> 0:17:33.481 to their website or speak with your financial advisor. This 0:17:33.601 --> 0:17:36.801 is not intended as personalized advice. The Product Disclosure Statement 0:17:36.841 --> 0:17:40.561 for Harbor Investment Funds issued by Harbor Asset Management is 0:17:40.601 --> 0:17:45.441 available available at Harbor Asset dot co dot Nz. 0:17:46.641 --> 0:17:50.481 Parentech, Property, Politics plus Money, Health and the week's debates. 0:17:50.641 --> 0:17:54.281 It's all on the Weekend Collective with Tim Beverage US 0:17:54.361 --> 0:17:55.001 talk Zevvy. 0:17:56.081 --> 0:17:58.801 Yes, and we are with Hamish Peppery's fixed income and 0:17:58.841 --> 0:18:04.721 currency strategist with Harbor Asset Management. Hey, Hamish. So for 0:18:04.761 --> 0:18:07.961 those of people who are following global events and think, oh, 0:18:08.001 --> 0:18:11.761 this is not good, you can't actually now that the 0:18:11.801 --> 0:18:15.121 event has happened, is there any reaction people can make 0:18:15.161 --> 0:18:18.121 with regards to currency or investments or it just happens 0:18:18.121 --> 0:18:20.641 at lightning pace as soon as the market's open bingo 0:18:21.401 --> 0:18:23.881 too late for you to to You needed to predict 0:18:23.961 --> 0:18:25.321 this to do anything about it, didn't you? 0:18:26.241 --> 0:18:29.601 Yeah, I think I think largely tim I mean, I 0:18:29.601 --> 0:18:32.081 think there will still be that dynamic that I described 0:18:32.721 --> 0:18:35.641 earlier that you know, we are a small market. But 0:18:35.681 --> 0:18:38.601 it's not to say that, you know, those people who 0:18:38.601 --> 0:18:42.561 are in other centers won't be awake and trading in 0:18:42.721 --> 0:18:44.801 our time zone. You know, they'll wake up in the 0:18:44.841 --> 0:18:47.161 middle of the night to try and do exactly as 0:18:47.201 --> 0:18:51.401 you describe, maybe get positions on or take positions off. So, 0:18:52.001 --> 0:18:55.121 but the difficulty can be I think just the amount 0:18:55.161 --> 0:18:57.641 of liquidity that's in markets at that time. You're not 0:18:57.681 --> 0:19:00.241 going to have the same as you would more in 0:19:00.281 --> 0:19:03.601 the middle of our day into our afternoon and evening. 0:19:03.681 --> 0:19:06.681 But yeah, I mean it's entry. What we'll be observing 0:19:06.721 --> 0:19:11.081 tomorrow morning will be the market trying to find you know, 0:19:11.201 --> 0:19:14.201 the appropriate clearing price. And so, you know, when you 0:19:14.241 --> 0:19:18.721 think about the currency markets, usually in these instances, usually 0:19:18.761 --> 0:19:22.961 the US dollar would be strengthening because it would be 0:19:23.521 --> 0:19:26.801 the safe haven currency, the currency that people would go 0:19:26.881 --> 0:19:29.401 to when they aren't sure, along with things like the 0:19:29.481 --> 0:19:36.241 Japanese yen and usually our currency and ones like it, 0:19:36.321 --> 0:19:39.761 like the Australian dollar, some emerging market currencies as well. 0:19:39.801 --> 0:19:43.561 For example, We're seen as more risky, and so people 0:19:43.601 --> 0:19:47.561 would want to sort of sell our currencies and buy 0:19:47.721 --> 0:19:49.321 buy the US dollar or the Japanese yen. 0:19:50.081 --> 0:19:53.401 I might not play out, you said that were just 0:19:53.401 --> 0:19:56.481 before I wanted to throw to dramatize it. You said, 0:19:56.561 --> 0:19:58.841 usually usually usually, And I was thinking, there's going to 0:19:58.881 --> 0:20:00.441 be a big hairy butt coming here. 0:20:02.281 --> 0:20:06.561 And and the hairy bt is that the US dollar 0:20:06.641 --> 0:20:14.081 is being questioned as that safe haven. You know, not outright, 0:20:14.361 --> 0:20:16.601 people are not throwing it out all together, but there 0:20:16.681 --> 0:20:21.081 is an impact that Trump is having that you know, 0:20:21.241 --> 0:20:26.001 their approach to debt and you know, not really doing 0:20:26.081 --> 0:20:29.841 much to contain it. Is having on people's you know, 0:20:29.961 --> 0:20:32.841 sort of appetite to hold it. So you know that 0:20:32.961 --> 0:20:37.201 the US dollar weakness that we touched on earlier is 0:20:37.241 --> 0:20:40.441 a reflection of those things. And so it's not always 0:20:40.481 --> 0:20:43.321 the case now that you see, you know, the US 0:20:43.361 --> 0:20:47.441 dollar strengthening in these environments. And indeed, you know, we 0:20:47.481 --> 0:20:51.241 talked about, you know, the reaction to Israel's strikes and 0:20:51.841 --> 0:20:54.601 there was a modest amount of US dollar strength but 0:20:54.721 --> 0:20:57.041 not not a lot, which I think speaks to some 0:20:57.081 --> 0:20:59.201 of those dynamics. Well, I guess it's. 0:20:59.401 --> 0:21:01.721 Look and look, people know that I don't really like 0:21:01.801 --> 0:21:04.321 Donald Trump very much, but he's not Everything he does 0:21:04.401 --> 0:21:07.321 is going to be the wrong decision. So, but is 0:21:07.361 --> 0:21:11.521 there I think it's a fair to say, without too 0:21:11.601 --> 0:21:15.681 much partisanship, that he is unpredictable. And I don't think 0:21:15.721 --> 0:21:18.161 that's a judgment whether you be a Democrat or a publican. 0:21:18.201 --> 0:21:22.481 But the guy is unpredictable. He's arguably persuadable depending on 0:21:22.521 --> 0:21:26.361 who's in his ear on things. Does that Does that 0:21:26.441 --> 0:21:31.321 have any impact on financial markets when it comes to 0:21:31.401 --> 0:21:35.481 the reaction to global potential, global conflict and stuff, and 0:21:35.881 --> 0:21:38.241 the US dollars positioning with everything. 0:21:39.081 --> 0:21:41.961 Yeah, the thing, I mean the thing that it has. 0:21:42.121 --> 0:21:45.361 So this is two parts I think to support your 0:21:45.361 --> 0:21:49.521 first point on that kind of unpredictable nature of you know, 0:21:49.721 --> 0:21:51.841 and it's not just Trump, it's the US administration. I 0:21:51.841 --> 0:21:55.801 think that you know, that is being reflected in these 0:21:55.921 --> 0:22:01.801 indices which go in scourur global media articles for words 0:22:02.361 --> 0:22:06.281 that are either uncertainty itself or associated with uncertainty, and 0:22:06.321 --> 0:22:09.401 then are coupled with economic policy. And so what we've 0:22:09.401 --> 0:22:12.641 seen in those indices is that even at a global level, 0:22:12.961 --> 0:22:16.041 we're at all time highs in terms of you know, 0:22:16.121 --> 0:22:18.601 that measure of uncertainty. So you've got a sort of 0:22:18.921 --> 0:22:22.201 it's being quantified by these measures, which is something we 0:22:22.761 --> 0:22:25.521 haven't been able to do as well in the past. 0:22:26.161 --> 0:22:28.201 We've been able to go back and back fill the past, 0:22:28.801 --> 0:22:30.881 but we didn't know in real time. It's just how 0:22:30.961 --> 0:22:34.921