Welcome to our first of these daily summaries in 2022. Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report today.
TERM DEPOSIT RATE CHANGES
For the first rate rise of 2022, BNZ has raised three key term deposit rates to market-leading levels or close to them. More here.
LOCKED BORDERS, LITTLE INFLOW
Migration flows are back in positive territory but the numbers are tiny. However the number of NZ citizens returning to this country long-term continues to decline.
A BRIGHTER NOTE
The local factory PMI improved in December after underwhelming in November. It lifted to 53.7 from 51.2. This continues the PMI’s recent oscillation around its long-term average of 53, following the heavy knock it took in August last year when it fell to 39.9 (as Delta appeared in the community along with associated restrictions). Production and Employment sub-indexes were positive, although staff shortages are serious and supply-chain issues are equally so. The bottom line however is that this survey is more positive than the NZIER's QSBO.
PAY MORE IN HOPE IT WILL WORK BETTER
New higher fees for the livestock trace-and-track system, NAIT, are proposed. This will take the NAIT tag levy from 90 cents to $1.35 and the slaughter levy from 50 cents to $1.77 after they were set almost eight years ago. Fed Farmers supports the increase if the result delivers much better accuracy and usability. Because the Government mandates its use, they are putting up 35% of the increase needed.
SKY HIGH MEDIAN MULTIPLES
We updated our Median Multiple data today for most New Zealand cities, up to December 2021. It recorded a small slip from the record high November level (when house prices were 9.5 times household incomes on a national basis, 12.8 times for Auckland.) Regular readers will know that we don't rate the Median Multiple metric as a good proxy for housing affordability because it misses both taxes and interest rates, both of which can have a huge influence on affordability. Look out for our Home Loan Affordability metric, due out over the weekend. That is a much more nuanced proxy.
LOCAL PANDEMIC UPDATE
In NSW, there were 15,153 new community cases reported yesterday, a big fall, now with 259,132 active locally-acquired cases, but a record high 46 daily deaths. There are now 2,743 in hospital there and the deaths are the reason it didn't jump more. In Victoria they reported 18,167 more new infections yesterday, also a fall. There are now 252,399 active cases in that state - and there were 20 more deaths. Queensland is reporting 16,031 new cases and 13 more deaths. In South Australia, new cases have slipped to 3,777 yesterday with no more deaths. The ACT has 892 new cases and Tasmania 866 new cases. Overall in Australia, 64,009 new cases have been reported so far although not all counts are in yet. In New Zealand, there were 44 cases stopped at the border, plus 23 new cases in the community. There are 488 active cases in isolation, a fall. Still only one person is in ICU with Covid at present. Omicron is being detected in the community, but in tiny numbers so far.
GOLD SOFT
In early Asian trading, gold is at US$1837 and down -US$2 from this time yesterday.
EQUITIES MOSTLY SHARPLY LOWER
Wall Street fell another -1.1% on the S&P500 today, in a building sell-off and is -3.9% lower than where it started the week after the long holiday weekend. Netflix's earnings warning is getting an outsized reaction. Tokyo is down -1.5% in opening trade today and down -3.5% for the week so far. Hong Kong is down -0.5% in early trade today but still up +1.8% for the week to date, while Shanghai is also down -0.5% in opening trade today, and looking at a only a +0.4% gain for the week. The ASX200 is down -1.5% in early afternoon trade, down -2.2% for the week. The NZX50 is down another -0.9% in later trade today and heading for a -3.2% weekly loss.
SWAPS RISE
We don't have today's closing swap rates yet. They are likely to be lower. The 90 day bank bill rate is unchanged at 1.08%. The Australian Govt ten year benchmark bond rate is down a sharp -10 bps at 1.90%. The China Govt 10yr is little-changed at 2.74%. The New Zealand Govt 10 year bond rate is now at 2.52% and down -9 bps and sharply below the earlier RBNZ fix for that 10yr rate at 2.57% (down -3 bps). The US Govt ten year is now at 1.77% and down -7 bps.
NZ DOLLAR DEVALUED
The Kiwi dollar is lower at 67.3 USc and a -½c fall from this time yesterday. Against the Aussie we are also -½c softer at 93.5 AUc. Against the euro we are also down -½c at 59.5 euro cents. That means the TWI-5 is now just over 71.7 and down -50 bps. We started the week at 72.4 so today's drop caps a weekly devaluation of almost -1%.
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BITCOIN SLUMPS
The bitcoin price is now at US$39,836 and down by -4.6% from this time yesterday. Intra-day it is more than this because from this morning it had risen sharply. It's peak was US$68,990 in November 2021. Volatility over the past 24 hours has been very high at just over +/- 4.6%.
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77 Comments
The bitcoin price is now at US$39,836 and down by -4.6% from this time yesterday.
Would love to see how Crypto fans start gushing out to buy the vapourware dip to store their value. (Like Omnicron, BTC=0.)
The NZ50 is also having a mountainous slide with 2 years of gains completely wiped- would love to hear what the stocks experts think in the commentary.
Almost all Kiwisaver will suffer a substantial haircut from being heavily weighted in US and NZ equities and with the Labour government mandating all Kiwisavers be in the "balanced" funds by default last year; it is a job well done in providing liquidity to the rest of the market looking for the exit.
In my opinion, this is just the beginning of a downtrend; a good sign for some and ominous for others- depending on your positions.
Yep, just sitting over here stacking more cheap sats! this crab market is great for accumulating <3
Long term people, lengthen your time horizons.
And do some basic maths guys. There is no way the FED can ever stop printing money to prop up the USD ponzi system, they will choose inflation over raising rates.
The world needs a hard money. Anyone who understands that, appreciates that Bitcoin is engineered to be the hardest money ever created, and doesn’t have the short time horizon of a 5 year old.
“If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.”
- Satoshi Nakamoto
If you purchased today at 38k and it when up to 70k in four years you would have made 32k not 2k if you purchased at 68k.this is not hard to understand. the other thing is you don’t know if it will still have any value in 4 years in which case you would only lost 38k instead of 68k.
If you purchased today at 38k and it when up to 70k in four years you would have made 32k not 2k if you purchased at 68k.this is not hard to understand. the other thing is you don’t know if it will still have any value in 4 years in which case you would only lost 38k instead of 68k.
What if you had bought at 1k, 2k, 3k, 4k, 5k,.........up to 70k? Where would you be today?
No a this moment people who purchased at 20k would still have profit on paper unlike the people who purchased at 68k not hard to understand.remember you have not made anything till you sell.
You could have bought at 68K and still have gains greater than investment. Depends on your strategy. Markets don't work on everyone buying at the peak.
So you think you can predict the price direction of BTC? Really? You're either trolling or trolling.
Absolutely no one has and real ability to predict what's going to happen to cryptos with 100% certainty. They are to new and there is no long term history to use for assuming corolation.
I personally view it as a growth oriented tech stock, so it will continue to suffer as rates rise.
Happy to debate the long term business case. That's the part I'm just not a believer on.
Just so you can get a visual idea of what Dollar Cost Averaging looks like:
https://www.tradingview.com/x/fDKzMryC/
https://www.newshub.co.nz/home/money/2022/01/asb-predicts-annual-inflat…
Not to worry Inflation is transitory....am I correct Mr Robertson or ask Mr Orr.
Total crypto market 1.85 trillion if everyone wants money out quickly it’s like a old fashioned bank run but the doors on crypto do not close should be interesting.
Incorrect. Bitcoin is not held by banks nor exchanges. The bulk of Bitcoin is in the custody of owners or custodians. It's very different.
This is what crypto fans don’t understand. The paper price of their holding is set by the last transaction. The vast majority of BTC purchases were at much lower levels. Add in the Tether fraud (discounted BTC purchases for insiders, essentially) and the amount of fiat held by the exchanges is tiny compared to the theoretical value of the crypto. Most likely outcome - in a serious downturn, the exchanges close down and escape to Grenada while they still have some of their customers’ fiat.
Yes. People use exchanges to exchange between crypto and fiat. But the amount of money that has entered the exchanges is far smaller than the nominal value of the crypto that customers expect to be able to exchange for fiat at some point so they can actually use it. So when there’s a panic and people want to liquidate their crypto holdings, either the price of crypto deflates precipitously or the exchange just shuts up shop and leave with their customers’ money (which, hilariously, their terms and conditions allow them to do).
Then there’s the whole Tether situation, which is fascinating. Too long to go into here, but there’s plenty of info available online. Basically an extraordinary fraud hiding in plain sight… but crypto fans will insist that a company run by known fraudsters, found guilty in court of lying about central elements of their business model, who have failed to deliver any real external audits ever, are definitely telling the truth, because… who would ever lie just because they have the opportunity to print money?
"Regular readers will know that we don't rate the Median Multiple metric as a good proxy for housing affordability because it misses both taxes and interest rates, both of which can have a huge influence on affordability."
When the ratio is approaching 13 times median there is no confusion about affordability
Yeah, the risk of rising rates often doesn't get a mention when affordability is discussed. Apparently all most people care about is the monthly repayment, as calculated now for a 30 year mortgage. Too crazy optimistic for me to go by with so much debt sloshing about.
Don't mess with Serbian pride. Aussies will learn their lesson.
https://www.reuters.com/business/retail-consumer/serbian-government-rev…
Our PM, ever popular Jacinda Arden, response always has been that waiting for advise or has been advised....CAN SOMEONE ASK HER WHAT SHE HAS TO SAY ON THIS ADVISE FROM WHO :
https://www.newshub.co.nz/home/politics/2022/01/world-health-organisati…
Or it does not suit her so is rubbish to be ignored.
You answered your own question: "who is the bigger clown".
Our government have been pretty bloody good with Covid. Maybe a little too much on the cautious side (which has frustrated me several times), but I think caution is the kiwi way (and hence their voters mandate).
I think Bloomfield has got it right almost every time, but the government has had to take into account the "experts" who think every time is a good time for a lockdown.
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