Air New Zealand/AIR

Air New Zealand (NZ airliner) doing a good job of reinforcing the “canary in the coal mine” signpost for the “NZ entering rates-induced recession” narrative.

Airliners, builders (Fletcher Building) and even gaming (SkyCity) all with downgrades, citing (in part) the weaker macro backdrop.

NZ tightened aggressively, higher and faster than the RBA, and so is a useful “across the pond” comparator. But it is also the high degree of similarity in housing markets that interests us, with NZ having similarly elevated house price valuation metrics (price-rent, price-income) with a large proportion of adjustable rate mortgages and a high level of household gearing.

As such we watch it closely for clues about how things might play out here.

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