Markets, Mystics, & Mayhem | The name is Bond, US Bond. The canary in the coal mine.

Añadido: 2026-05-19

[00:00:00]Even if we get the wall or the middlely situation resolved in the short term, the lag effect, >> yeah, >> is going to take time. And that's the hard thing that I sort of, you know, I struggled to grapple with is that when we had those green shoots this year and things were looking, you know, the fix in 26 JK, >> um, this is, >> yeah, this will play out for longer [music] than we think. And what that means for the currencies is is still not clear. um and what it means for industries and that's why we get back to September >> somewhere around September October you have a clearer idea a better picture and what should and what you should be doing >> because I'm thinking about it now we're in May uh 6 months from now is December so even if this was to resolve if that's if my calculations are correct [laughter] um but even yeah if this was to resolve tomorrow we're still going to have the flow on impacts for the rest of the Yeah, Kyoto and welcome [music] to Markets, Mystics, and Mayhem, a weekly podcast with Kiwi Bank's economics team alongside the occasional special guest.

[00:01:12]We'll delve into the data, decipher policy decisions, monitor the markets, and analyze the issues impacting [music] the Kiwi economy. Let's get into it. All right, Kyoto, and welcome to another week, another episode. This week is it's kind of special. We've got our head of financial markets in and we're [music] going to talk about all things markets, all things mystics, all things well, bit of mayhem out there as well, uh, like there is every week. Um, so it's a it's a jam-packed, uh, episode today. Um, we're going to cover a lot, but first, we better introduce our guest. Yeah, I suppose we should. Tim, >> Alex, >> uh Tim Alford, as Jared has mentioned, is the head of the financial markets team here at Kiwi Bank, and he is here to tell us what's happening in markets, what has been going on, Tim.

[00:02:09]>> Great. Oh, thanks, JK. And thanks, uh, thanks Alex. Um, I joined Kiwi Bank about a year ago. Um, and that has gone incredibly quickly. Um you know it's been an interesting and fascinating period of time to be in financial markets um given all the volatility we're seeing in you know in FX and and interest rates um not just in New Zealand but obviously globally as well.

[00:02:32]So you know absolutely fantastic time um my background is been in financial markets and in various risk roles um with a very much a focus on foreign exchange and interest rates um and helping customers manage that and what it might mean for them and all their hing requirements as well. Um in my current role leading financial markets um it's really about connecting with the customers and what does it mean for them um with a lot of our customers from the export and import community. So really just navigating them around of what it means. Um you know I guess at the end of the day financial markets is a relatively simple business. Um and you know it's all about helping the the the exporters and imports importers navigate that. So yeah. So, how do you do that? I mean, we've got quite a tumultuous time right now. You got importers and exporters coming to you.

[00:03:25]>> Well, how do you sum up financial markets at the moment? It does feel um at the moment it's a bit like a game of tug and war. Um uh you know, where no one's really falling over, but everyone's getting very tired.

[00:03:37]>> Yeah. You know, what is >> what does it mean? It all just seems weak about um what does that mean for the exporters at the moment? the exporters have um are experiencing you know a lower currency is helping um but again they've got that volatility volatility to consider as well on the importer side there's still the risks that we see currency still going a lot lower as well so a lot of our time with our good friends in economics and then various people were just discussing what does that mean and what does the outlook um mean for us all um obviously on one hand we've got the reserve bank doing what they're doing but it's this global markets that sort of dictates the direction where we're heading So what are global markets I guess telling you?

[00:04:16]What are they doing at the moment >> from a New Zealand dollar point of view?

[00:04:20]>> Yeah.

[00:04:20]>> Um so the new with New Zealand dollar at the moment we're very much in that range of either we're at 55 cents to the US or 60 cents to the US. As the Middle East um situation continues, the risk is probably more skewed that we head towards 55 cents. And as things hopefully pan out, then we're sort of the way I view it is we're targeting towards more 60 cents. Um, but you know, this has been a tough year for a lot of uh companies within New Zealand. Um I know you had a saying last last year JK that was you know fixed in 26 and there was a lot of green shoots and a lot of good things were were ahead of us in 2026 and this war in the Middle East situation >> has really sort of put a bit of a dent on that. So um yeah hopefully things work out but at the moment we're >> still in unch uncharted territories or uncertain times. So um yeah >> I I think you're right. I think tired, frustrated, these sorts of words, uh, I think sum up the customer base. I mean, we get to travel around and do a bit of, uh, do a bit of presenting to customers.

[00:05:30]And you're right, we came into this year optimistic.

[00:05:33]>> Like, this is going to be the year interest rates have been lowered to where they should be. Uh, there's going to be a recovery and then we've had this, you know, another sucker punch to the guts in terms of this war. And um you know what's that doing to our economic outlook?

[00:05:52]>> Not good. [laughter] Well, I think we've been saying the same thing for several weeks now is that >> it's putting so much pressure on businesses and also consumers who are already backed up against the wall >> before the crisis uh broke out because of the cost of living crisis we've had domestically. It's all just sort of culminated in this really difficult and uncomfortable position. Um, and I think that segus really nicely into talking a little bit about what can be done about it. And on our minds is uh the OCR decision.

[00:06:27]>> Yeah. Next week. Um, >> I was really curious to hear what Tim's take is on the OCR and what the Reserve Bank might do, should do, and do those two things differ in your opinion?

[00:06:41]>> Yeah, it's a good question and that's certainly a lot of everyone's mind at the moment. Um and you know it's not always the case with financial markets versus economics. Um but certainly um everyone in the financial markets team and broader is very supportive of JK and the wider economics view um uh out there. Um you know it is an interesting time. Uh there's only so much that the Reserve Bank can do. um they have certain tools to um for demand driven inflation but it's not clear what they can do on the supply driven inflation side of it.

[00:07:18]>> Yeah.

[00:07:18]>> So you know >> I think there's a the question sort of has to be asked um what type of inflation are we going to be seeing?

[00:07:27]It's a difference between what we saw over co with demand versus supply. Um, I certainly think raising interest rates in this point in time is not going to unclog the supply chains.

[00:07:40]>> It's not going to end wars and it certainly is not going to refuel your oil uh reserves.

[00:07:46]>> So, I do think that we will get a better understanding about what potentially Q2 and Q3 CPI data will give us. And for me, I think May, June, July is probably a bit early for that. And we'll get a better understanding of that data come September. So I just personally think that whilst the Reserve Bank is very focused on the inflation, I think they also play a role in the economic recovery as well.

[00:08:18]>> Yes.

[00:08:19]>> I think with all that tied in, you get to September, you're going to get a better understanding of what >> what we are facing. Um, and so that's that's certainly a view for me.

[00:08:29]>> Yeah, >> I think you summed it up beautifully.

[00:08:32]Um, you know, that's our call as well, right? We'd like to see a little bit more data. I mean, we know the inflation's coming through. We can see it's at the petrol pump.

[00:08:41]>> Uh, it's hitting us right now in the second quarter. For me, it's about what what does that second what does that second quarter roll over into? What's the third quarter look like? What's the fourth quarter look like? um before we can get a real handle on you know whether these inflation pressures are are persistent.

[00:08:59]>> Yeah. What are your what are your thoughts on the timing >> for the Reserve Bank?

[00:09:04]>> Yeah.

[00:09:04]>> Um well the getting the timing is so I we agree that it's a September October.

[00:09:11]Yes. Interest rates they look as though they will go higher at some point but it's just the next two or three months I just can't see that personally. Um so yeah I'm I'm a very much said before let's get September October out of the way understand what's in front of us and then react. Um >> I do think um the Reserve Bank at the moment is very has been very clear with their rhetoric around um where they want to be. I do think they will see getting inflation back to that middle part of the band of 2%. Um but I don't think see them being very um I don't see them doing that up front. I think they want to see and take the time. It's a bit like a super tech. You just can't change something in day one. You've got to wait a period of time >> and then get it back. We used to have very, you know, constructive inflation targets around 2%. Let's get back to that. But that'll take time.

[00:10:02]>> I think that's a great analogy. Yeah.

[00:10:04]Like turning around an economy and moving such a huge it's it's like Yeah.

[00:10:11]moving a huge oil tanker. It takes time.

[00:10:13]You've got to you can't just swivel it from left to right. on a dime.

[00:10:18]>> Um, and you got to think about what the currents are doing and and everything else.

[00:10:23]>> Correct.

[00:10:24]>> So, yeah, I like that. I'm going to steal that maybe for our next weekly.

[00:10:27][laughter] >> Good.

[00:10:28]>> The super tank. Yeah.

[00:10:30]>> Yeah.

[00:10:31]Um, and we also had the survey of inflation expectations come out last week and that really um I think solidifies what you've just said because inflation expectations over the long run uh they're down at around what 2.5% Jared was that right?

[00:10:50]>> Yeah, a little bit lower in the longer end I think but yeah still still a little bit above where the Reserve Bank wants it to be.

[00:10:56]>> They they like those longer term you know flat too. But given what's happening in the short end, I think, you know, it's very fair for inflation expectations to rise and we know that as inflation falls back down, expectations fall back down uh with it. So, I'm not too concerned about the about the survey. Um, as you say, it shows everything you need to know, right?

[00:11:18]Inflation is going to be high over the next year and then it'll it'll kick back down towards 2% over the over the later years. So, yeah, not too worried about that. Um I I am worried that you know the central bank will find itself in a situation where the market's 100% priced.

[00:11:35]>> Three of the big four banks are calling for a rate hike in July. And I just wonder if that becomes self-fulfilling.

[00:11:44]>> That certainly is the risk. Um but again, you know, things that we were talking about before. Um it's that whole thing around sort of the supply demand and what people are facing now. Um and we certainly saw that some of the implications when the Reserve Bank of Australia hiked their interest rates.

[00:12:01]What impact that has um especially when people are sort of really suffering out there.

[00:12:06]>> Yeah.

[00:12:06]>> And as you said JK before I mean when we're seeing that you know the customs at the moment they're they're extremely resilient. Um but they're also got to be somewhat philosophical of the outlook.

[00:12:21]Um and there are things you know they are starting to think about how their business looks over the next 6 months to a year. Um some of the the um some of their things that they have on their books has been deferred for a slight period of time be it 3 months or 6 months. So all those things are coming into question and to be hiking interest rates at the moment to add that on top of everything else going on I just can't see it.

[00:12:46]>> It's not helpful.

[00:12:47]>> It's not help.

[00:12:47]>> It's not going to help at all.

[00:12:48]>> It's not helping at all. So um you know but so a lot of businesses are rethinking about how they might be looking at certain things like contracts over the next 6 months or or a year and can they be thinking differently about how their business is going to operate.

[00:13:01]So they're certainly doing it tough but very resilient. Um >> and I'm just not so sure higher interest rates is going to achieve that will help that. M >> and I I was chatting to one of our customers down in Wellington last week.

[00:13:15]um and you know they're quite a large importer of of you know some product and and then a massive exporter of what what they produce and you know they're looking at both sides um of that and I was talking to them about um uh you know shipping costs and how the shipping freight index doesn't seem to have lifted that much and it's like well that that might be because they don't have the levies these new levies that are being lumped on top.

[00:13:42]>> Yeah. M um so the data is showing that you know shipping cost is up a little bit but actually there's these levies and stuff that are all new and and I mentioned the levies because we spoke to a construction company a couple of weeks ago we've spoken to a few and these levies seem to be applied to a lot of contracts now having these diesel uh levies in them. So that there is a lot of cost there that's trying to be passed on. But then equally these clients are telling us when you're hitting the end consumer there's just a very very >> restricted uh ability to pay those high prices. And that's the thing and it's interesting when um you know these things globally these events occur you start learning a lot of um other antidotes or something about um you various things and you know even reading and I didn't actually realize this but you know something around 30% of fertilizer that is imported to New Zealand also comes out of the straight of Hermas.

[00:14:45]>> Yes. Yes.

[00:14:46]>> And I found I something I didn't appreciate. So it's not just oil that's having the impact. it's other products that are coming through >> and what impacts that's going to have on the net New Zealand companies and how that plays out because even if >> packaging is another part of that story >> kind of thing. So >> putting all that into into you know what we have to think about and what that means for our customers and for a lot of New Zealanders. Um it comes back to that interest rate story as well. It >> does. Yeah. And um even if we get the wall or the Middle situation resolved in the short term, the lag effect, >> yeah, >> is going to take time. And that's the hard thing that I sort of, you know, I struggle to grapple with is that when we had those green shoots this year and things were looking, you know, the fix in 26 JK, >> this is, yeah, this will play out for longer than we think. and what that means for the currencies is is still not clear. um and what it means for industries and that's why we get back to September >> somewhere around September October >> you have a clearer idea a better picture on what should and what you should be doing >> because I'm thinking about it now we're in May uh 6 months from now is December so even if this was to resolve if that's if my calculations are correct um but even yeah if this was to resolve tomorrow we're still going to have the flow on impacts for the rest of the year >> yeah correct and And if we're starting to see a bit of an uptick in, you know, consumer confidence and business confidence at the start of 2027, >> I'm now starting to think, would that be the right time to start hiking the OCR just as businesses are starting once again to try to get their footing?

[00:16:33]>> No.

[00:16:34]>> Um, >> no. I I was in Wellington last week and it was a bit of gallows humor >> that developed, right? I said exactly that. So, you know, our best case scenario is that, you know, oil prices go sideways for a while, things get resolved, and we still spend a good 6 months figuring, you know, exactly where oil settles and all of that. Uh, and I said, uh, you know, sorry, but I I was being upbeat for 26. Can I delay that to to 27?

[00:17:03]>> 27.

[00:17:03]>> Um, and you could just see everyone in the crowd just like, yeah, you know, this is the mindset. This is this is what we've been going through. So 2023 things were getting tough. 2024 we recorded a bad recession. We thought we were getting out of it in 25 and we fell back into a recession. So that was worse than 2024. So that's that's a double dip recession over 2 years. Then then that key that bloody Kiwi Bank economist stood up in front of me and he said I'm optimistic for 26. And here we are [laughter] optimistic for 27.

[00:17:42]>> Are we gonna look back on this video in uh 27 and say Jared again?

[00:17:48]>> Why? Why? [laughter] >> No, I sure do hope not.

[00:17:52]>> Um >> but I mean there's some signals in markets are there are there rates? Are there are there levels? Are there things that you're looking at and going, "Oh, this is this is interesting." I think um and it's something we talked about last week JK was about if you think about the situation in the Middle East um globally FX markets by and large have have been sort of you know been okay if you compare to events we've seen historically FX markets by and large have been have been stable to a degree US bond rates like the US 10ear has effectively been around 430 and has been stable So the the financial markets globally haven't really reacted in a way that I we a lot of people we thought they would do.

[00:18:45]>> We have seen some um some reduction of US risk assets going into other markets but by and large US or the global FX and interest rate markets have pretty much been pretty much been stable. What we have seen on Friday is it's the US. So I always thought right, you know, >> if you start to see the US bond market, especially the 10year, the US go above 450%. Yes.

[00:19:10]>> Or you start seeing the 30-year go above 5%.

[00:19:14]>> Yes.

[00:19:14]>> That will start to have some reaction to how global markets are going to start reacting to what's been going on, especially the Middle East. And so it'd be interesting how this plays out this week, but certainly the bond market is starting to tell us something that what is it actually going to mean for long term for funding and various things. So >> yeah, for me having us 30 year above 5% um is quite a telling tale as well with the US tenure going across and we started to see that feed through to >> um to the currency markets. we start getting a bit US dollar strength, >> but the rise in bond markets will start to steepen the US and global yield curves.

[00:19:59]>> That could also start to put a bit of a dent in the equity performance that we've seen over the last couple of months.

[00:20:05]>> Yes.

[00:20:05]>> So whether or not that plays out, but certainly for me, the bond market is starting to tell us something.

[00:20:10]>> Yeah.

[00:20:10]>> And how that plays out over the next two weeks will be quite interesting because they are quite key levels for what we see. Um, in the same token, we've now got a 13-year low of Kiwi Aussie Cross.

[00:20:22]>> Yeah.

[00:20:23]>> Which to me is staggering. Um, however, that is a combination of local data and broader risk um, uh, adversion.

[00:20:32]But what so I think people in the US are still investing quite heavily in the US.

[00:20:36]I think they always will, but they're just changing some of their risk assets out of US. And when they do that, they'll support things like Asia, Europe, and Australasia. Right.

[00:20:46]>> And so when they start investing into Australasia, given the size of the Australian market, that will support Aussie dollar more than it would New Zealand dollar. Yeah.

[00:20:54]So I just think so I'm not saying people are moving out of US, they're just sort of just changing where their risk profiles might be.

[00:21:00]>> Yeah.

[00:21:01]>> Allocating what you're saying. So even though we're on a 13-year low, um there still is some risk that we see a lower cross, even though this long-term view, but in the at the moment, if people are going to favor Australia dollar over New Zealand dollar, that could play out over the next couple of months.

[00:21:21]>> So there's still some risk to a lower cross if we see that play out.

[00:21:24]>> Yeah, I love how you brought all that back to the US 10 year. It's the first number I look at every morning. Up, down, sideways. it gives you exactly what you need to know. So the the fact that the US 10s have broken like that I thought was quite quite interesting cuz it's broken out of a range >> um >> if it continues then I'll start you know flagging that as a bit of a bit of a concern but yeah the fact that it popped >> and that was the thing we've sat around 430 in the US 10 year for the last few months and yeah >> when I was thinking last week about what I was going to talk about today >> one of the risks was a break of 450 in the 10 and and 5% in the 30 year >> um and so it's interesting that did it on Friday night. But I think that is a bit of a indicator, global indicator to what we're seeing um and how um how the US markets react and what Trump does with that would be interesting over the next couple of weeks. So yeah, >> and I I think it's worth mentioning that for for people who don't play in financial markets as much as we do, basically that the US curve, the US bond market is the most liquid, most prestigious, most well recognized, most liquid again. Um, so when you see their curve move, it it puts pressure on all other curves. So we're we're nothing more than a spread to the US and at the moment we're trading below US yields. So you know that should be having an impact on the currency but um you know has the currencyy's held up quite well as you say.

[00:22:51]>> Mhm.

[00:22:52]>> Um where we are seeing that interest rate differential really play out is you got much higher Australian rates. The RBA is hiking. RBNZ not hiking yet. So that interest rate differential really did help push the Kiwi down uh against the Aussie. And I was talking to a bunch of um exporters or quasi exporters and and that this morning um and that really has helped uh you know their their business particularly if you if you're exporting heavy into Australia. You've just your products just gone on sale. Um and it's not a Brisco sale. It's a real sale. It's good 20% off. [sighs] >> So >> yeah. Yeah. It'll be interesting interesting how it plays out. But we're again we're in such uncharted territory at the moment. Um and obviously you know we certainly hope it all ends well but as you mentioned before Alex you know this will have a lag effect >> and what that means for global economies, New Zealand economies, New Zealand businesses. Um you know we that'll play out over the next few months. Yeah.

[00:23:59]>> Would you go as far as to say that this is this could be a canary in the coal mine kind of >> the bond market?

[00:24:05]>> Yeah, >> I think so. I think so. Um, you know, I do think that's going to have a will play a role, probably put a dent in the recent equity moves that we've seen.

[00:24:18]Um, >> they've been going pretty well.

[00:24:20]>> Yeah. And yeah, but I absolutely absolutely I do.

[00:24:26]>> Yeah, I do. Well, I mean, that's scary in one in one way. It's good that we're looking at it and that we've got experts like you really reading into into the numbers.

[00:24:39]>> And I really wonder what that means for your customers and the customer impacts.

[00:24:47]>> Well, I don't want to use the theory of the sheep theory, but [sighs] I will use it. Um because New Zealand is a small country, >> we are we can control only certain things like Reserve Bank of uh New Zealand here can control interest rates which is the 0 to2ear part. There's only so much we can do with the currency. So we are extremely reliant on the what happens with the US dollar and obviously what happens with the euro and the Australian dollar as well but more so with the US. So our customers will be impacted on the global events and that will dictate.

[00:25:25]>> So when I talk about the the sheep theory, everyone you know the sheep will love to follow. We will follow to a degree what happens in the US. So if you see higher steeper yield curves in the US, our curves will naturally probably follow as well. So um and the US dollar strength and weaknesses we will tend to follow. So >> yeah.

[00:25:46]Yeah, because I hear Jared talking about how exporters are feeling a little bit better when the Aussie US cross is a little bit weaker. Um, so yeah, that's interesting. I've never heard of the sheep theory. Um, that's >> Well, you were going to talk about nachos and tacos, so I thought I'd throw in.

[00:26:04]>> What are your thoughts on a taco?

[00:26:07]>> On the nacho or the taco?

[00:26:09]>> Start with Start with the taco.

[00:26:11]>> Start with taco. Yeah, we're more familiar with taco. Natur is new.

[00:26:15]>> Well, we've just said before that is is this canary in the coal mine as you said with the bomb market. Will that test and push the taco theory to see how he will react because all of a sudden with US 30-year above 5% there's a different interest rate funding the whole funding game changes.

[00:26:35]>> So will this be enough? Will that put a dent in the equity market? So, um, yeah, the taco trade may come out. Who knows?

[00:26:44]>> Interesting.

[00:26:45]>> Who knows? But you've gone nachos.

[00:26:47]You've gone nachos, right?

[00:26:48]>> Yeah.

[00:26:48]>> Yeah, we have gone nachos. So, >> but the the I think there needs to be stress for a taco. And this is what we've been saying that, you know, equity markets just aren't stressed. But if they get stressed, >> then then he, you know, the likelihood of a of a taco comes comes back. I think there's only one number that that man knows and it's the S&P 500.

[00:27:10]>> Correct.

[00:27:11]>> Um so if it starts falling then Yeah.

[00:27:13]>> Yep. Yep. totally.

[00:27:14]>> But the Nacho that's oh it's what I want to hear now.

[00:27:18]>> Yeah. And what is it again? Not a chance of hormuz opening. So I've had to learn that since last week. Um >> it's a good one. I like that.

[00:27:28]>> It is a good one. So what are the odds do you think of the straightup? This is a really difficult question. We don't know the answer to this. Obviously, nobody knows. But what are your what are your thinking? What's your thinking?

[00:27:41]>> Like everyone else, I think um you know, I think we've learned a lot from this that you know, the world is very reliant on a lot of product that comes through that straight. Um so, you know, certainly sooner than later is better or people are going to have to rethink about how they how they do things or start looking at things. So, yeah.

[00:28:04]It's hard to know, but sooner than later it's going to be better.

[00:28:07]>> One thing I don't think we've talked about much, I don't think we've talked about it on the podcast very much, but uh we haven't talked about gas prices because we've so focused on oil >> um because that feels well to me anyway, I feel like I can understand oil markets uh a little bit better. Gas markets I struggle to get my head around. But one thing that I've been reading about is how um helium is one of the key gases that goes into production of um especially these big AI uh machines and the computer chips and everything that's needed. I need to read more.

[00:28:44]>> [snorts] >> uh but I've been looking into that and because of the straight of Hormuz being closed and especially because of the attack on the Paris uh gas field in UAE I think it is the ability for especially a lot of these tech and AI companies to source helium to start manufacturing or continue manufacturing their machines has been reduced.

[00:29:12]So, do you think that will also feed into because a lot of what's pushing the S&P 500 in these markets up is a bit of an AI bubble, at least in my opinion.

[00:29:26]So, do you think the gas market, this is a difficult question. I didn't warn him about this in advance. Um, yeah. Do you think the AI bubble's going to uh pop?

[00:29:37]Um, I can't talk to gas or helium. Um, as much as sometimes they're nice to, you know, at a party to um, but no. Um, [laughter] we might have to cut that one. Um, the so AI, if I bring if I think about AI, so there's probably two things. I think AI is definitely here to stay. Um, and there's two parts to AI that I think about is that there's going to be a lot of money spent, especially in the US companies, on AI.

[00:30:10]>> Um, and what that means for valuations going forward will be interesting. I think companies that have worked out how to use AI early will succeed probably quicker than others >> through the power of AI. Um, but I also think a lot of globally that the dividends that have now been paid out through AI, especially in the US, have probably got to start going more global.

[00:30:35]So, how does Europe or Asia or other parts of the world start thinking about AI and how they so I think that'll be you especially in the Europe zone. Um so I think AI is going to has quite a major um it'll play quite a major role in how we sort of start thinking about the expansion in Europe and in Asia and various things how it reflects to helium or gas I'm not 100% sure but um I think that's why I'm broadly positive on countries like Europe going forward but how will they adopt AI into their framework work. Um, and second, I think if you look about infrastructure, especially around defense, >> so given what we've seen over the last year through the NATO, through what's been going on in the Middle East, I think a lot more defense spending will be brought forward especially in countries like Europe. So for that if I think about AI um infrastructure within Europe if I think about defense spending coming forward especially into places like Europe that will favor ultimately probably Euro dollar over time it'll probably also favor a lot of the um things like your mid and small caps um like in the stock market within Europe as well. So um right here right now I'm broadly positive Europe >> but a lot of it's based on AI. So I don't know if I really answered your question on on helium or gas but um I think that's yeah I think that's how it's going to play out >> and that's what's good about a difficult question and get an interesting answer either way.

[00:32:13]>> Yeah that's very interesting >> but you know the world has changed in that essence in that sense. Um so things will change in the sense and that's why you know I think Europe um will play quite a big role especially in that defense spending and in AI type generation.

[00:32:31]>> So what is the Kiwi Euro doing and what's that trade looking like? Do you have you looked at the numbers this morning?

[00:32:37]>> I haven't looked this morning but um but again you know Kiwi Euro has uh was trading below 50 cents uh probably you know for the last three to four years.

[00:32:46]Um, so that's come down in it slows.

[00:32:48]That's probably mean more a factor of Kiwi finding some strength against Europe given the situation. It's euro weakness more. But over the next I would think over the next six months Europe is probably still vulnerable.

[00:33:00]>> Um, not quite sure what they're going to do with their interest rates. But certainly from a um a longer term over the next 6 months to a year again you once we start looking at defense spending and AI type generation being put into Europe that should be positive Euro but that's again that's in six months time 6 months to a year.

[00:33:20]>> Yeah. Long-term view.

[00:33:22]>> Yeah.

[00:33:24]Very good. Very good indeed.

[00:33:26]>> Feel like I learned a lot.

[00:33:27]>> Yeah. So did I. [laughter] anything um anything you'd like to end with?

[00:33:33]>> No, but just um thanks for having and thanks for having me. Um as I said before, it's been a year um my first year at Kiwi Bank has gone incredibly quickly and it's >> good to have you on board.

[00:33:42]>> Um uh you know, I love what Kiwi Bank stands for um and where where it's heading. So um yeah, again, thanks for having me and and uh yeah, I've enjoyed it. It's been fun.

[00:33:53]>> It's a pleasure to have you. If you're a small to medium size business, even large business, you know, you get access to uh financial market traders and experts uh who'll help you through the turmoil. They'll help you hedge your currency. They'll play around with your interest rates. You'll get the full service. So, thanks for coming on, Tim.

[00:34:15]Cave brought it. It's been fun. Thanks, Alex.

[00:34:17]>> Thank you.

[00:34:18]>> And uh am I wrapping up?

[00:34:21]>> Yeah, >> we're done.

[00:34:23]>> [laughter] >> You've been tuned into This is Kiwi Economics, Markets, Mystics, and Mayhem.

[00:34:33]We'll be back next week for more analysis and insights.

[00:34:37]>> Any views or information shared in this podcast, while given in good faith, aren't necessarily the views of Kiwi Bank.