Lister said the kiwi was the big story. On the trade-weighted index, the dollar was at its lowest level since 2011.
This month the kiwi has fallen 5% against the yen, 3% against the American greenback, 2.5% against the Australian, and 2% against the euro and British pound.
“A weak kiwi is good for exporters and those stocks with international earnings were strong. But it’s problematic for inflation as the weak dollar pushes up the cost of imports.
“There’s general talk now that the official cash rate (OCR) will have to increase a little more than people would have otherwise thought.”
More rate hikes expected
ANZ Research has pencilled in three rate hikes by the Reserve Bank of New Zealand (RBNZ) – in October, February and March, taking OCR to a peak of 3.5%. “Then the track flatlines.”
ANZ said the change to its forecast reflected higher oil prices, a lower exchange rate, and a better starting point for the economy than the RBNZ assumed.
“This is the (OCR) track that balances upside and downside risks to medium-term inflation. It certainly does not mean downside risks have gone away. The higher oil price means both upside risks to inflation and downside risks to growth have intensified.
“The recent surge in fuel prices raises the odds of second and third-round spillovers across the CPI basket. While the RBNZ is already expecting non-tradable inflation to accelerate, we think there are decent odds the oil shock will spill over into core inflation measures over coming quarters,” ANZ said.
Lister said the global economy has weathered the fuel shock better than expected. “The oil price has come off its highs but is still higher than what investors want it to be in the $80-$90 zone.”
Brent Crude was trading at US$102 a barrel after reaching $109 last week.
Exporters lead sharemarket gains
At home, export companies a2 Milk increased 36c or 4.47% to $8.41; Skellerup was up 26c or 3.51% to $7.66; Mainfreight gained $1.63 or 2.5% to $66.71; Delegat Group added 10c or 2.22% to $4.60; and Fisher and Paykel Healthcare was up 40c to $44.55.
Dairy giant Fonterra increased its forecast farmgate milk price midpoint for the 2026-27 season to $9.50 per kgMS, from $9.25 because of an improvement in global commodity prices.
Fonterra Co-operative’s share price was up 4c to $4.68 and Fonterra Shareholders’ Fund gained 11c to $8.26.
Vulcan Steel rose 37c or 5.83% to $6.72; Contact Energy added 18c or 2.08% to $8.85; Ryman Healthcare gained 6.5c or 3.27% to $2.05; and Serko improved 4c or 3.33% to $1.24.
Spark gained 6c or 3.05% to $2.03; T&G Global rose 9c or 4.09% to $2.29; Sky TV added 10c or 2.98% to $3.46; Green Cross Health increased 10c or 5.1% to $2.06; and Air New Zealand gained 1c or 2.5% to 41c.
In the property sector, Vital Healthcare Trust declined 7.5c or 3.91% to $1.845; Precinct Properties was down 3.5c or 3.5% to 96.5c; and Investore decreased 2c or 1.9% to $1.03.
In the retail sector, Briscoe gained 8c or 1.78% to $4.58, and Hallenstein Glasson was up 14c to $12.90. My Food Bag improved 1.5c or 5.26% to 30c.
Fletcher Building was down 6c to $3.62; Port of Tauranga declined 24c or 2.92% to $7.99; Napier Port decreased 7c or 1.89% to $3.63; and Winton Land shed 3c or 2.63% to $1.11.
Tower, up $0.005 to $1.97, has renewed its reinsurance programme for full year 2027 at competitive rates across its home, motor, boat and commercial portfolios.
Catastrophe upper limit increased to $970m, from $915m, and Tower estimates the reinsurance premium expense will represent 9.5% of gross written premiums, down from 10.6% in the 2026 financial year.
Private Land and Property Fund, unchanged at $1.228, has written down the value of four vineyards in the Awatere Valley near Blenheim by $7.84m, representing a 3.9% decrease in the net asset value to $1.235.
Private Land said lower demand for vineyard assets, reduced grape returns, tighter financing conditions and ongoing uncertainty within the wine industry have resulted in lower vineyard values across the Marlborough region.
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