“The next [Consumers Price Index/CPI] inflation update is in two weeks, and the market is pricing in a 50% probability, up from 40%, of another OCR hike at the next Reserve Bank meeting [on September 2].”
Reserve Bank Governor Anna Breman said the inflationary effects of the Middle East conflict had not completely abated. “We want to bring inflation back to target [1-3%] without causing unnecessary volatility and output.”
The bank said inflation may have peaked and economic growth was expected to resume in the September quarter. It was now predicting inflation at 3.9% in the June quarter and 3.3% in September, rather than 4.2% and 4.3%.
The New Zealand dollar strengthened against the American greenback, climbing from US56.7c to US57.06c.
The OCR rise followed the largest drop in two years for milk prices at the latest Global Dairy Trade. The average price was down 4.9% on top of the 2.8% fall at the previous auction.
Whole milk powder price was down 4.4% to US$3425 ($6034), skim milk powder fell 7%, butter declined 5%, cheddar fell 12.3%, and lactose dipped 3.6%. Butter milk powder increased 8.2% and mozzarella was up 3.8%.
Brent crude oil increased to US$76.17 a barrel after further strikes in Iran created more uncertainty for the peace agreement.
At home, the market was dragged down by Fisher and Paykel Healthcare falling $1.08 or 2.64% to $39.80, and Infratil declining 35c or 2.27% to $15.04.
Koreman-Smit said the rotation out of artificial intelligence (AI)-related stocks continued offshore, and maybe this weighed on Infratil despite the strong CDC Data Centre revaluation.
Freightways was down 25c or 1.79% to $13.75; Gentrack decreased 11c or 2.93% to $3.64; Goodman NZ shed 4c or 1.9% to $2.06; Enprise Group fell 5c or 11.11% to 40c; and Synlait Milk declined 2.5c or 6.41% to 36.5c.
NZX increased 4c or 2.76% to $1.49; Hallenstein Glasson gained 20c or 2% to $10.20; Scales Corp was up 17c or 2.62% to $6.66; Fletcher Building added 7c or 2.09% to $3.42; and Serko collected 4c or 2.76% to $1.49.
Channel Infrastructure gained 9c or 2.86% to $3.24 after opening more than 120 million litres of new fuel storage in three tanks at its Marsden Point energy precinct – 93 million litres of government diesel storage and 30 million litres of jet fuel for Z Energy.
Channel now has 400 million litres of tank capacity in use, an additional 350 million litres of storage available, and 45ha of consented land available for development.
Precinct Properties, up 0.005c to $1.04, received a draft decision from the fast-track panel approving the twin-tower Auckland Downtown development.
Stride Property, also up 0.005c to $1.155, told shareholders at its annual meeting that tax rule changes in Australia have resulted in investors there showing interest in New Zealand commercial property.
Stride, which has $3.3 billion of commercial property under management, confirmed it will be paying a cash dividend of 8c a share in the 2027 financial year.
Tāiko Critical Minerals increased 4.5c or 15.15% to 34c after completing a $7m capital raise at 25c a share. The money will be used to advance the West Coast Barrytown Minerals project through feasibility, fast-track consenting and Overseas Investment Office approval.
Santana Minerals was down 2c or 3.6% to 53.5c after earlier telling the market that high-grade gold intercepts were returned from infill drilling to close up drill hole spacing in the southern area of the Bendigo-Ophir project’s Rise and Shine deposit, where early-stage open pit mining is planned.
Online payroll firm PaySauce eased 1.5c or 5.36% to 26.5c after rising more than 6% the day before when it reported an 11% rise in processing fees to $1.9m for the first quarter ending June.
Customers increased 4% to 8756, the average processing fee revenue per customer increased 10%, and annual recurring revenue was up 8% to $9.5m.