Pricing intentions fell 7 points to 35, cost expectations fell from 73 to 69, and inflation expectations eased from 3.6% to 3.5%.
ANZ said while the first-quarter gross domestic product was (barely) respectable, the signals for the second quarter are extremely weak.
“We have pencilled in a small decline at this early stage.
“Both cost expectations and pricing intentions have now fallen off the plateau they were stuck on for 8-9 months, and inflation expectations also continue to steadily decline.”
ANZ-Roy Morgan Consumer Confidence eased 2 points in June – “at 83, confidence is miles below the 20-year average of 114”.
ANZ said the survey showed inflation expectations bounced from 3.8% back up to 4.2%. Expected house price inflation ticked up from 3.2% to 3.4%.
“Households’ inflation expectations are volatile but continue to trend lower,” said ANZ chief economist Sharon Zollner.
Shane Solly, portfolio manager with Harbour Asset Management, said bond yields went up in the United States and this set the tone for softer markets.
He said there was no surprise that business confidence in New Zealand has come down again but inflation expectation has fallen and the heat may be coming out of the inflation cycle.
“Is it time for the Reserve Bank to loosen its monetary policy? Or will it continue to administer its medicine? That’s the challenge for the bank.”
Solly said the latest company outlooks are cautious but they are saying things are not getting any worse, which is helpful in the current economic environment.
“It’s an important sign that maybe we are getting to the bottom of the cycle.”
Auckland International Airport was down 20.5c or 2.62% to $7.63; Mainfreight declined $1.05 to $67.63; Meridian Energy shed 20.5c or 3.16% to $6.29; Skellerup fell 18c or 4.57% to $3.76; Fletcher Building decreased 6c or 2.08% to $2.83; and a2 Milk was down 11c to $7.10.
In the retirement village sector, Summerset Group decreased 22c or 2.26% to $9.50; Ryman Healthcare declined 15c or 4.04% to $3.56; and Arvida Group fell 5c or 5.1% to 93c.
In the interest rate-sensitive property sector, Goodman Trust declined 5c or 2.43% to $2.01; Precinct decreased 3c or 2.62% to $1.115; and Investore was up 3c or 3% to $1.03.
Mercury Energy was down 14.5c or 2.16% to $6.565 after completing its $350m capital bonds issue carrying an interest rate of 6.42% a year. The bonds will be issued on July 11 and the first reset date is July 11, 2029.
Genesis Energy, up 2c to $2.19, has downgraded its operating earnings (ebitdaf) for the 2025 financial year to $460m, from $500m. Genesis said the reduced gas supply from the Kupe field is expected to result in higher generation costs due to increased use of higher-cost solid fuel, such as coal.
Genesis is independently verifying the Kupe reserves and expects the field-wide proved and probable reserves will be revised down by about 80 petajoule equivalents.
Port of Tauranga was down 16c or 3.28% to $4.72. Majority shareholder Bay of Plenty Regional Council is planning to sell down its 54.1% stake to a minimum 28%.
Other decliners were Chorus down 10.5c to $7.69; Gentrack shedding 13c to $10.25; Sky TV decreasing 5c or 2.08% to $2.35; Green Cross Health falling 3c or 4.05% to 71c; Radius Residential Care easing 1.2c or 6.12% to 18.4c; and Synlait Milk down a further 1.5c or 6.25% to 22.5c.
Rakon increased 3c or 4.48% to 70c after announcing its second contract to supply oscillator subsystems for a new commercial low Earth orbit satellite constellation.
Other gainers were SkyCity up 6c or 4.29% to $1.46; Winton Land increasing 4c or 2.06% to $1.98; PGG Wrightson improving 8c or 4.79% to $1.75; Scales Corp adding 11c or 3.15% to $3.60; and Pacific Edge adding 0.006c or 6.67% to 9.6c.
