Auckland Airport next up in earnings season; oil jumps on US-Iran fears

Auckland International Airport is next up in the domestic earnings season with the country’s major gateway expected to deliver a robust first half as international visitors return to New Zealand’s shores.

That comes as oil prices shot up amid fears of military action if the US and Iran fail to reach a deal on the Middle Eastern nation’s nuclear aspirations after US vice president JD Vance said offers haven’t met his bottom line.

Those tensions drove gains among defence companies such as Rheinmetall, BAE Systems and Thales as European markets rallied, while investors’ appetite for big tech was revived on Wall Street in the latest chip deal between Nvidia and Meta Platforms.

And the kiwi dollar fell further against the greenback after the Reserve Bank’s straight bat yesterday cooled market expectations on how quickly the central bank will start lifting the official cash rate, with governor Anna Breman due to appear before Parliament’s finance and expenditure select committee today.

Smooth landing

New Zealand’s earnings season resumes a heady pace today with Auckland International Airport the main event. Analysts expect the country’s major gateway will post a small increase in first-half earnings, matching the growth in passenger numbers going through the hub.

Other companies reporting locally include SkyCity Entertainment Group, with the casino operator seen as being at the bottom of the cycle, and Vital Healthcare Property Trust, which is internalising its management contract.

Australian futures are pointing to a 0.6% gain for the S&P/ASX 200 index, following stronger lead from Wall Street as Nvidia and Meta Platforms signed a new chip supply deal, reviving investors’ appetite for big tech companies. The Nasdaq Composite was up 1.4% in late trading, while the Dow Jones Industrial Average gained 0.7%.

Across the Atlantic, European stock markets were buoyed by defence contractors such as Germany’s Rheinmetall and France’s Thales as peace talks between Ukraine and Russia ended without a resolution and amid fears the US and Iran will turn to military measures if they can’t reach an agreement on the Middle Eastern nation’s military programme.

The UK’s BAE Systems gained after signalling strong sales growth through this year.

The FTSE 100 rose 1.2% and Germany’s DAX gained 1.1%, while France’s CAC 40 advanced 0.8%.

Deal or no deal

Brent crude oil futures jumped 4.1% to US$70.19 a barrel at 7am in Auckland amid reports that the US and Iran could resort to military action if their nuclear talks fall through, with US vice president JD Vance this week saying offers he received fell short of his bottom line.

Gold futures were also higher, rising 2.3% to US$5,019 an ounce.

The kiwi dollar extended its decline through the Northern Hemisphere session, trading at 59.86 US cents at 7am in Auckland from 59.99 cents yesterday, after the Reserve Bank’s monetary policy statement cooled market expectations for a rate hike in September.

The central bank kept the official cash rate at 2.25%, with its forecast indicating an increase would be more likely to come in the December meeting.

“No one expected the bank to embrace market pricing for a more protracted tightening cycle beginning later this year and the statement and tone was broadly as expected by local economists, resulting in no changes in views on the outlook for monetary policy,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “Forthcoming data on the economy will determine the timing and scale of the forthcoming tightening cycle and the RBNZ’s views are highly conditional on a set of assumptions that are subject to change.”

Governor Anna Breman started doing the media rounds today and will appear before Parliament’s finance and expenditure committee this morning.

No major local data are scheduled for today, while the Treasury’s Debt Management unit will hold its weekly bond auction, with $450 million of notes on offer.

Reporting by Paul McBeth. Image from Curious News.