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Speaker 1: Hither the Commerce Commission will do absolutely nothing. The fuel

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Speaker 1: companies pull this truck every single time that oil price

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Speaker 1: is spike. Then there's the public complaints on talkback for

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Speaker 1: a few weeks, and then eventually we all move move on.

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Speaker 1: I'm disgruntled, but submissive. I agree, and it's going to

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Speaker 1: play out the way it always has. But they will

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Speaker 1: probably be a little bit more careful in rocketing the

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Speaker 1: price up because everybody's watching so closely at the minute. Anyway,

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Speaker 1: that's what i'd like to think. And on that very subject,

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Speaker 1: we have Shane Solly, Harbor Asset Management with US high Shane, Okay,

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Speaker 1: where's the oil price at now? How does this compare

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Speaker 1: with previous events?

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Speaker 2: Yeah, look, it's really moving quite quickly. So today it's

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Speaker 2: closing about one hundred and fifteen dollars per barrel. That's

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Speaker 2: for Brent, up sixty percent from the twenty seventh of February,

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Speaker 2: which is the day before they're strucks. Last time we

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Speaker 2: saways Heather was back in twenty ten, twenty fourteen, which

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Speaker 2: is the hour of spring disruptions. Difference this time around

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Speaker 2: is these are the attacks on refineries. Are seeing an

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Speaker 2: increase in gas prices and crackspreads. It's the cost of

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Speaker 2: turning a barrel of the world into you feel for example,

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Speaker 2: it's about ten times up, so quite a widening. Normally

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Speaker 2: we see the worst early on until we see the

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Speaker 2: scope and the breadth of the disruption. But look, it's

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Speaker 2: nobody's interests for the straits of home is to be closed.

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Speaker 2: But they are. They affectively are. So we expect to

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Speaker 2: see a bit of a demand and supply response. Historically

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Speaker 2: about one hundred dollars a barrel. We start to see

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Speaker 2: demand turning off, and we also start to see the

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Speaker 2: US releasing some of its strategic reserves. So look, it's

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Speaker 2: going to be pretty dynamic. But how high energy prices go,

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Speaker 2: how long they stay elevated, that will impact the global economy,

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Speaker 2: central bank policy responses, and how investment markets go. At

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Speaker 2: the moment, people are taking the negative view.

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Speaker 1: Okay, talk me through what you're seeing in the capital markets.

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Speaker 2: So long term bond yards that doesn't get talked about

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Speaker 2: a lot. This is the like ten year government bond yards.

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Speaker 2: In the US, they've gone up by zero point two

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Speaker 2: percent to about four point one. Here in New Zealand

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Speaker 2: they're up about zero point three five percent to four

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Speaker 2: point seven percent. That means we're all paying a bit

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Speaker 2: more for borrowing, so the cost of borrowing money has

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Speaker 2: gone up for particularly businesses and consumers. At the time,

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Speaker 2: shere markets actually have been relatively the risk hasn't come

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Speaker 2: through quite as much. US S and P five hundred

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Speaker 2: down two percent from its pre strike price, but the

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Speaker 2: futures of a night here that they're looking like they're

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Speaker 2: going to be down about two percent. We've seen some

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Speaker 2: really big moves in other markets that are sort of

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Speaker 2: secondary markets. The career market, for example, is down eighteen percent.

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Speaker 2: Japanese market down twelve percent from before that pre strike level.

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Speaker 2: They're both very oil intensive importers, so they're more exposed.

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Speaker 2: Europe down about seven Locally. Here in zeal we're about

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Speaker 2: four point six percent down from that pre strike level.

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Speaker 2: Today a bit of a soft day, down three point

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Speaker 2: one percent, led by weakness and companies like Fishing and

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Speaker 2: Bugle health Care and A two which have been strong

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Speaker 2: performance before this, and then travels sensitive companies like Upen

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Speaker 2: Airport and binds companies like and for two and gin Talis.

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Speaker 2: But New Zealand we tend to be a little less

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Speaker 2: volatile and more defensive, so not surprising to see us

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Speaker 2: do less bad.

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Speaker 1: Yeah, hey, thank you very much. Shane has always appreciate

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Speaker 1: your time. Mate. That's Shane Solly of Harbor Asset Management.

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