Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
No changes to report today.
TERM DEPOSIT/SAVINGS RATE CHANGES
SBS Bank has launched a 6.5% term deposit rate for a six month term. More here.
BORROWING FREELY FOR CARS, HOME APPLIANCES
Consumer credit monitor Equifax said that December quarter demand for personal loans (for primarily cars and large home appliances) rose more than +16% from the same quarter in 2022. They saw mortgage demand up +3.8% over the same period.
SUNCORP SHINES
The other large Aussie insurer active in the local market, Suncorp, has reported stellar premium growth in New Zealand, up +19.6%. But profits in this market were lower due to faster rising claims. Profits in Australia leapt. Suncorp's strength is in consumer insurance (home, contents, car). In New Zealand it operates the brands Vero, AA Insurance, and Asteron Life. More here.
BIG ANZ PREF SHARE ISSUE COMING
ANZ is another bank 'wanting'/'needing' to bolster its capital - without asking for more support from its parent. So it is planning an offer of up to $250 mln "with the ability to accept unlimited oversubscriptions" of perpetual preference shares to New Zealand investors. (Usually these are heavily oversubscribed.) They will constitute additional Tier 1 Capital for ANZ’s regulatory capital requirements. These perpetual preference shares will remain on issue indefinitely and won't mature in the way a normal bond does. They are expected to have a credit rating of BBB from S&P which is lower than the bank's institution AA- credit rating. BBB is just two notches above a junk rating. AA- is seven notches above.
SFO PROBES DASSET
Failed Auckland cryptocurrency exchange Dasset is under Serious Fraud Office investigation. More here.
NZSF GETS NEW CHAIRMAN
The NZ Super Fund will get a new Chair of the Board, replacing Catherine Drayton. John Williamson will take over the role, having been a board member since 2016. He is a former CEO of ACG Education and Hellaby Holdings.
$20K TO START
Very dry weather and growing drought conditions in part of the South Island have triggered the start of emergency funding for farmer support services. This is only a small start however.
SWAP RATES ON HOLD
Wholesale swap rates will probably be little-changed today. However, the key reaction will come at the close. Our chart below records the final positions. The 90 day bank bill rate is down -1 bp at 5.72%. The Australian 10 year bond yield is down -4 bps from this morning at 4.11%. The China 10 year bond rate is little-changed at 2.42% and still near a record low. And the NZ Government 10 year bond rate is down -4 bps to 4.88%, while the earlier RBNZ fixing was at 4.84% and down -1 bp from Friday. The UST 10 year yield is now at 4.23% and down -2 bps from this morning. The UST 2yr is now up to just under 4.68% and so that key inversion is now out sharply from Friday to -45 bps.
EQUITY WINNERS & LOSERS
The NZX50 has opened its week down -0.3% in late trade today. The ASX200 was higher but is essentially unchanged now in early afternoon trade. Tokyo has opened up +0.5% (and observers are now on Nikkei225 40,000 watch). Hong Kong has opened down -0.2%. Shanghai has also opened down -0.2%. Singapore is down nearly -0.7% at their open. The S&P500 futures suggest Wall Street will open little-changed from where they closed last week.
OIL SOFTISH
Oil prices are -50 USc lower than this morning, now just on US$76/bbl in the US while the international Brent price is still at just over US$80.50/bbl.
GOLD SLIPS
In early Asian trade, gold is now at US$2030/oz and down -US$5 from this morning.
NZD RETREATS
The Kiwi dollar has retreated more than -¼c from this morning, now at 61.7 USc. Against the Aussie we are also soft at 94.1 AUc. Against the euro we have dipped to 57 euro cents. That means the TWI-5 is now at 71 today.
BITCOIN FIRMS SLIGHTLY
The bitcoin price has firmed slightly today, now at US$51,699 and up a minor +0.8% from this morning's open. There's been low volatility over the past 24 hours of just over +/- 0.6%. Also, see this.
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This soil moisture chart is animated here.
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104 Comments
Labour has a problem now with one of lts coalition partners that has become very unpalitable with the majority of New Zealanders in the last 2 years. Hard to see how Labour can downplay their existence without offending them. I cant see an easy solution at present.
From the always interesting Mark Tanner in China (interest dot co contributor) on gold demand among young Chinese and its integration with culture.
Once considered an 'outdated item' exclusively for the elderly, gold is now sparking a frenzy among Chinese young people.
Since 2023, the price of gold in China has been on the rise. In January 2024, the basic price of gold reached ¥480 per gram with retail prices of major gold brands exceeding ¥600. The enthusiasm of young people for purchasing gold jewellery continues to rise unabated. On the first day of pre-sale for Double 11 in 2023, the GMV of gold products increased by over 250% froma. year earlier. On Xiaohongshu/RED, there are nearly 10 million related posts, discussing the price trend of gold and sharing experiences of buying gold. This consumer demand saw China supersede India as the top gold-importing country last year
https://chinaskinny.com/blog/why-gold-exploding-chinese-consumers
Imagine it is 2028. Bitcoin is hovering around USD500K. People will be waiting for it to drop to 30K to make their move.
The main thesis at the moment is about supply. Currently, ETF demand for BTC is approx 12x than mining supply coming on to the market. And the diamond hands holding existing supply are not selling.
The next Bitcoin halving is expected to occur in April 2024, when the number of blocks hits 740,000, and the block reward will fall from 6.25 to 3.125 bitcoins.
Think of that like the supply being cut in half.
One has to make up their own mind what this potentially means.
Ah so it's heading to be worth $500k in 2028 hyperinflation dollars? Crap, I'm going to need to sink hundreds of thousands of 2024 dollars into it to make it worthwhile now.
Do as you please. Probably better to have got exposure before Blackrock but that's kind of hindsight now.
What I like about Gold is that central banks hold it as a reserve, unlike BTC. In a worldwide meltdown event it's hard to see the different central manks maintaining a functioning blockchain network for something they have no share in and may dirsupt there ability to rebase new currencies on? Ben Bernanke always said, the last play in the playbook is to devalue the USD against Gold as they have a lot of gold....
Sure they could ban personal gold holdings (queue more boating accidents).
I love the creation of BTC as an alternative but feel that the central banks will shut it down if it threatens them, or the catholic church etc.... (insert WEF or other mad conspiracy theories here....)
I love the creation of BTC as an alternative but feel that the central banks will shut it down if it threatens them
Central banks do not really have the authority or ability to shut BTC down. And it would be quite difficult to achieve. You're talking a dystopic world where the Adrian Orr equivalent will be operating from a bunker. Home invasions will be commonplace.
The biggest threat to gold at the moment is demand from countries outside the Fed's swap nation club.
What would happen to the price of Bitcoin if the Government made distribution an offense? Sure shutting down BTC would be difficult, but all it would take is a few police "sting operations" or enticement of the public to be whistleblowers to make it unpalatable to use
Oh, you're using your saved up BTC to buy a house? S&P agreement all drawn up. Womp womp seller decides to throw you under the bus for a kick back. Maybe you use BTC to make smaller purchases....and you come across a retailer also wants a kick back. Sounds pretty crazy, but is it in the realms of impossibility?
What if the people currently buying Bitcoin go broke?
As in, the funding for Bitcoin has only existed in an era of cheap money looking for places to go. If things turn into bad mama-jamma like the majority of economists seem certain, how can so many more cash poor people still buy Bitcoin?
I was asking you. There's hundreds of millions of bitcoin collectors, many of which have been awash with cheap money throughout the 2010s and 20s, looking for a place to put it. Supposedly we're heading for economic Armageddon, so many of these people are going to turn into sellers, not buyers.
Blackrock likely aren't going anywhere, but their interest in Bitcoin is motivated by far different reasons than the average collector.
Doesn't owning a large amount of Bitcoin put one or one's loved ones at risk of kidnapping? All the bad guys need are those private keys.
Might be easier for you to get a couple of mates and / or puppets and do a Michael Hill store job. What would you do with these private keys? Auction them on a dark website?
It's a curious answer to a genuine question. You answer as if I am wanting to do this rather than being concerned about the danger. We all know crypto currency values can be large and are used by criminal organisations because it is hard to trace and retrieve. What's wrong with you? Hyper sensitive to anything even slightly negative concerning the crypto currency ponzi.
We all know crypto currency values can be large and are used by criminal organisations because it is hard to trace. What's wrong with you?
On the contrary, BTC is relatively easy to trace and any old normie will not have the chops to kidnap someone, take their coins, and be unidentifiable. Let's say you access someone's wallet and transfer BTC to your own wallet that you've set up. If you think that you're untrackable, you're wrong. Some of the largest hacks in history - including Mt Gox and Bitfinex - were traced and people identified.
So what makes you think a gang of suburbanites in Nu Zillun are going to pull off a crypto kidnapping? That's why I think you'd have a better chance of robbing MHJ and stashing your loot in a hole in the ground.
It is banned and restricted in some countries. Doesn't mean that the bans and restrictions are enforced.
https://cryptonews.com/guides/countries-in-which-bitcoin-is-banned-or-l…
I think in general Tether is used more widely for criminal activities. It's value is obviously more stable and there are many more exchanges happy to ignore AML rules. All cryptos are traceable in the sense that you can identify which wallets they move between, and depending on the exchange used the wallet holder's identity can sometimes be released through subpoena. Perhaps the next step will be some kind of secondary exchange system where the coins don't change wallets.
All cryptos are traceable in the sense that you can identify which wallets they move between, and depending on the exchange used the wallet holder's identity can sometimes be released through subpoena.
Depends on the jurisdiction. For ex, to register on a Japanese exchange, you go through a full KYC. You have to disclose where assets are being transferred to, even if moving off the exchange for self custody.
The Japan Travel Rule (for AML) is advanced and strict.
https://asia.nikkei.com/Spotlight/Cryptocurrencies/Japan-crypto-exchang…
No longer do we invest in good businesses, instead we try to invest in assets before everyone else does, then pull our money at the top and watch it collapse.
Gold ETFs are a "business" for JPM, etc - clipping the ticket. A relatively small business stream for them but a 'nice little earner.' What's more, they get to suppress the price on behalf of the Western govts and central banks.
JPMorgan to pay $920 million for manipulating precious metals, treasury market
https://www.reuters.com/article/jp-morgan-spoofing-penalty-idINKBN26K32…
Shaken, not stirred!
Every bond line - https://youtu.be/wa7U9uHl0Zc
https://www.chinadaily.com.cn/a/202402/13/WS65caa268a3104efcbdaeabb2.ht…
"The young population aged between 25 and 34 became the main force of gold consumption, with their proportion up from 16 percent to 59 percent in 2023. In the future, consumers under the age of 25 will become new major gold buyers, said the association."
I'm in Hawkes Bay and that soil moisture map is starting to annoy me. Very light drizzle today that barely colours the ground is the first precipitation we've seen in weeks.
Grass in the grazing paddocks is hanging in there, but only just. Cropping paddocks are between seasons so devoid of anything but weeds, and solid enough that vehicles don't leave a mark.
Rain please.
Hi GC
It would seem to me having dry paddocks in summer is a fairly obvious risk in the business. Why not make provision by storing water during the wet times (eg winter) for use when it’s dry? (Or perhaps you already do).
Climate change is only going to turbocharge this, so should be making plans already. Not wishing an end to the summer on the rest of us!
It’s not mean. I just find it curious that the agricultural sector seem to get such an unquestioned free ride - too wet, too dry, earthquakes, floods, volcanoes whatever don’t worry we the NZ taxpayer will backstop you.
Despite the public having to pay “world market prices” (which actually costs a lot more in NZ to buy).
Whatever happened to prudent risk management? Private insurance?
Why do we have private profits but social costs?
Sigh. So many assumptions. Please point me to my free ride.
Some seasons are wet, some are dry. We keep producing regardless, just less some years than others. It's a begrudgingly accepted part of farming. We have never received any kind of subsidy. We are net tax payers by many tens of thousands of dollars, as farming is not my only profession. You'd be surprised how diverse many farming operations are.
We have millions of dollars of property, machinery, and liability insurance, and crop insurance is cooperatively provided.
It's a good thing urban dwellers never ask for help after disasters.
You seem angry at the rural sector. We wouldn't blame you for boycotting everything we produce.
The Beehive has announced more support in the last few days: https://www.beehive.govt.nz/release/dry-weather-triggers-extra-support-…
They also announced another $40 million for commercial properties in Hawkes Bay recently, on top of the earlier ~$78 million. That's quite some commercial subsidies given to for-profit businesses. Also earlier droughts and floods had their support findable through google.
Agree that welfare handouts for residential property are obscene too though. $780 million in direct handouts for residential property owners affected by Auckland floods recently, on top of the huge amount of taxpayer welfare handouts to property owners via South Response.
It seems rugged individualism is more for the poors, too often - perhaps especially when politicians are heavily invested in residential and rural land.
Get used to it - the physics says this isn't so much the 'new norm', as a phase we're moving through. A progression.
To give some scale (pun intended) to that, fish are migrating AWAY from the Equator (to find the temperature/habitat they're suited to) at the rate of 5-10 km per year. Think that through...
I have mostly forest, East coast but the main island. I'm looking at water storage, partly for plant-retention and partly for fire-fighting. We've known for a long time that East-coast drys were coming.
Exactly why we're planning the pond (dam really), to collect runoff from the nearby hills that currently just passes through. A lot of thought going into water management to try and smooth the seasonal differences. We have a reasonable number of trees but plan to put in several hundred more. Also nurturing self-sown saplings as we figure they're already used to the environment.
Solar on the menu when funds provide, maybe seasonal micro hydro if at all possible too but with flat land that might be difficult. Diversity and resilience is the aim.
Pretty big news today concerning Ryman and their Takapuna site. I think it says a lot more about the state of the Auckland property market than Ryman.
To stop work with all those sunk costs shows you how uneconomic it is to build at the moment.
https://ground.news/article/ryman-hits-pause-on-120m-plans-for-takapuna-site
Ryman doesn’t have a guaranteed supply of elderly to fill their units.
Starting in about 10 years, the great die off of the elderly shall commence. The youngest boomer (1959) turns 65 this year. They will die within the next 30 years.
The boomer bulge at the top of the population pyramid is disproportionately larger than their replacement (because boomers didn’t have enough kids) so on current trends for every 3 boomers than die, there is just 1 replacement coming through. I can’t imagine the boomers children want the hassle of managing their parents 27 rental properties, so they will most likely go on the market.
so long term, Ryman villages (and summerset etc) will end up being relatively empty.
probably why National are so keen to let immigrants bring in their parents to continue the great fleecing that Ryman et al need to carry on doing.
The boomers had a decent amount of kids, the Millennials. Generation X which sits in between is smaller.
Average age of entry into retirement homes is mid to late 70s, so retirement villages are still 10 years from peak boomer.
The 40-50 year outlook is not great though.
Boomers had 1.7 kids on average. Those are the gen X kids.
gen x have 1.2 kids on average those are the millenials.
millenials are only now just starting to have kids. Insufficient data to show their average birth rate as the bulk of them are only 24 this year.
the silent generation had 2.6 kids on average. Those are the boomers.
so your theory doesn’t stack up. boomers didn’t have enough kids to replace them, and their kids couldn’t afford to have kids so I expect in 10-15 years there will be a lot of vacant houses and more available for sale unless National screw up the Immigration settings as they are likely to do considering they screw up everything else.
These generations are defined in 15-20 year periods. Gen X bred Gen Z, not millennials (although there's a tiny overlap). Look at the age distribution in the population, there's more millennials than Gen X.
Our governments irrespective of whether they're team Red or Blue are going to pump immigration. Like has been done in NZ since it's founding.
Been banging on about it every week on here HM 2.00 in wellsford for diesel and 1.99 in waitomo back of beyond, FFS its 2.35 most of north shore ITS A RIP OFF, if I lived in Warkworth I would be filling 200L drums as needed from Wellsford, its about 19km... Everytime I go through Hampton downs I fill up, this AKL surcharge is a complete rip off. Its a 10c levy Plus GST as why not F you while you are there 15% for nothing a tax on a levy....
does not add up buttercup......
I've been eagerly awaiting it for 4 years, thought at the end of January things were feeling quiet, then within two weeks', another year or so's work has come in the door.
The group home builders are stuffed. Independent builders seem fine. Commercial seems pretty solid, possibly less tenders doing the rounds.
I'm not really up for disclosing that as a)not interested in doxxing myself and b) not that inclined to promote too many other townies moving here.
But there's a pretty decent shortfall of manual labour, and it helps in business if you're not doing the same as most of your competitors.
Aussies construction sector has been feeling it worse than here, for longer
Engineering consultancies are cutting staff in their commercial construction operations as activity slows, with businesses hit hardest in Melbourne
https://www.afr.com/property/commercial/engineers-cut-staff-as-commerci…
Official figures show that construction was the sector with the highest quarterly average of redundancies between November 2022 and August 2023.
https://www.linkedin.com/news/story/redundancies-on-the-rise-5854756/
Perth is probably an outlier, let's hope Chinese demand picks up sometime soon.
✈️👍✔️
in Melbourne, where the loss of planned Commonwealth Games work is worsening a slowdown in the privately funded market.
you missed a bit it was always other peoples money employing these guys.....
Most of Queensland's been in a slump for a year or so.
The same story is playing out basically everywhere - because everywhere is reading from the same playbook. It's actually worse in Aussie, because alongside cost blowouts, they had even more demand bought on by the government injecting construction stimulus as early COVID relief. Way more crowds have already gone belly up there.
So what? Engineering is the profession that designs the world’s infrastructure and built environment. They don’t pretend to be developers. You make it sound like providing a professional service is somehow inferior to developers. Having worked a long time in consulting engineering around the world I don’t agree - it’s the developers who are far more likely to be shonky…
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