On Point

The key event on the domestic calendar will be the latest Official Cash Rate (OCR) decision from the Reserve Bank of New Zealand. Another 0.25% hike is widely expected, which would take the OCR to 2.75%. This will also see the release of a fresh Monetary Policy Statement, which means a new set of forecasts for growth, inflation and the path of the OCR.

There’s just ten weeks until the New Zealand election, and things are getting interesting. The rise of the Opportunity Party in the polls has added another layer of uncertainty to the range of potential outcomes. So much so that prediction markets and some Australian bookmakers now have Labour as the favourite to lead the next government. How have financial markets typically reacted to elections in the past?

It was a highly eventful week across financial markets, with equity markets mixed and long bond yields rising further. The S&P 500 index broke a three-week winning streak while the local NZX 50 posted its third consecutive weekly rise. Central banks will be in focus this week, with the annual symposium in Jackson Hole taking place from Thursday through Saturday. The corporate calendar will also be busy everywhere, with plenty of local results due as well as the latest earnings release from NVIDIA in the US.

There’s lots of nervousness about sharemarket valuationsat the moment. That’s understandable, especially regarding the US market which has more than tripled in value since the end of 2018. How should investors be thinking about valuations right now, and is it a good time to put capital towork?

We'll get a raft of local releases this week, with Selected Price Indexes and the Performance of Services Index for July due Monday, before the results of a dairy auction on Wednesday. However, the main event will be the earnings season which ramps up in a big way on the NZX. We're hoping for some solid results, while outlook commentaries will be in focus to help gauge the state of the broader economy and the health of our listed corporates.