Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report today. Update: Somewhat unexpectedly, the Cooperative Bank has lowered (not a typo) some key home loan rates, effective on Monday, January 31, 2022. Their new one year fixed rates is very competitive, their new two year rate now matches ASB, and their new three year rate is now very competitive too.
TERM DEPOSIT RATE CHANGES
Heartland Bank raised most TD rates today. Their new long rates are little-different to the main banks, but their short term rates are now market-leading with the 3 month now at 1.25%, 6 months at 1.75%. They also raised their Direct Call account by +20 bps to 0.85%. SBS Bank also raised some TD rates.
NEW PENALTY SCAM WARNING
Westpac is warning customers to look out for a so-called “penalty scam” that is particularly targeting Chinese customers. They say if you receive such a phone call, just hang up immediately. Don’t feel pressured to comply with a request urgently. Any genuine business or government agency will give you time to pay outstanding invoices, bills or fees. If you get an urgent request to make a payment, contact the organisation using the contact details on their official website to confirm whether the request is genuine. Never share your online banking passwords. And "always be honest about what happened with your bank so that they can assist you and help keep your money safe".
YOU GAVE AT THE OFFICE (MORE THAN YOU REALISED)
In the seven months to November 2020 the Government has reported a -$8.4 bln deficit on an OBEGAL basis, -$12.4 bln deficit on a proper full accounting basis. Both a billions better than forecast. Part of the reason is that taxes being paid by individuals are rising very fast - in fact up +16% for the year to November compared to the same period in 2020. That is the fastest rise we have ever observed. Part of that is because most people are in paid employment and the labour force participation rate is high. Another part of that is bracket-creep. And another is that pay rates are rising quicker these days.
RISING MOMENTUM
Our monitoring of grocery prices shows they kicked off the year with even higher upward momentum than last year's peak. And it isn't just a NZ thing. The Aussie rise is even more pronounced.
SLOWING RISES
Average Auckland rents increased by +$17.10 a week last year but that is relatively low compared to the last 10 years.
STEADY AHEAD OF THE EXPECTED OMICRON STORM
The ANZ-Roy Morgan consumer confidence survey reports it was essentially unchanged in January from December. But the proportion of people who believe it is a good time to buy a major household item fell -4 points and is now negative. Inflation expectations drifted slightly higher to 5.8%. House price inflation expectations were unchanged at +5.3%.
CRUDE OIL PRICE HEADING UP
ANZ says crude producers are struggling to raise output as fast as demand. Traffic numbers in Europe are rebounding as Omicron case numbers start to decline. In the US, gasoline demand is only 4% below 2019 levels, which is a better outcome than expected in November. Jet fuel demand is the laggard. With supply constraints likely to be a feature of the oil market for a while, we see markets pricing in a sizeable risk premium. We have subsequently raised our short-term price target to US$95/bbl.
GETTING DRY
The extended dry weather is reducing inflows into the hydro lakes to unusually low levels, now well below long term averages. It isn't critical because the overall storage levels are still ok. But it is worth keeping an eye on this trend.
THE NORTH'S MONDAY HOLIDAY
Readers outside the north of the North Island should remember that it is a public holiday in the north on Monday, Anniversary weekend. (However, interest.co.nz will be operating close to 'normal' even though our main office is in the region.)
PPI UP
In Australia, inflation's march is stronger in their business sector. They posted a December producer price rise of +3.7%, up considerably from the September +2.9% and a 13 year high.
LOCAL PANDEMIC UPDATE
In NSW, there were 13,333 new community cases reported yesterday, a decrease from the prior day, now with 166,898 active locally-acquired cases, and 35 daily deaths again. There are now 2,722 in hospital there off their high. In Victoria they reported 12,777 more new infections yesterday. There are now 101,605 active cases in that state - and there were 39 more deaths there. Queensland is reporting 9,974 new cases and 18 more deaths. In South Australia, new cases have slipped to 1953 yesterday with 15 more deaths. The ACT has 734 new cases and one death, and Tasmania 584 new cases. Overall in Australia, about 39,000 new cases have been reported so far although not all counts are in yet. In New Zealand, there were 45 cases stopped at the border, plus 105 new cases reported in the community of which 15 were Omicron. There are 567 active cases in isolation, 90 of them with Omicron. For more on the Omicron plan from here, see this.
GOLD LOWER AGAIN
In early Asian trading, gold is at US$1799 and down -US$14 from this time yesterday.
EQUITIES REPRICING LOWER EVERYWHERE
Wall Street ended lower with the S&P500 down -0.5% and giving up early session gains. The tech-heavy NASDAQ was down -1.4%. Tokyo is in recovery mode today, up +1.9% in morning trade, but if it ends the week here it will have posted a weekly -2.2% loss. Hong Kong is down -1.0% in early trade heading for a heavy weekly fall of -4.5%. Shanghai is down -0.8% in their early trade and also heading for a heavy -4.0% weekly fall. (They will be closed Monday through Friday next week. Hong Kong will be closed Tuesday through Thursday.) The ASX200 is up +1.6% in early afternoon trade today, but even after that they will post a painful -5.6% weekly fall. The NZX50 is down 0.8% in late afternoon trade and heading for a -3.2% weekly retreat.
SWAPS ON HOLD
We don't have today's closing swap rates yet. They are likely to be a little softer. The 90 day bank bill rate is unchanged at 1.10%. The Australian Govt ten year benchmark bond rate is down -3 bps at 1.97%. The China Govt 10yr is up +1 bp at 2.74%. The New Zealand Govt 10 year bond rate is now at 2.62% (down -5 bps) and back slightly below the earlier RBNZ fix for that 10yr rate at 2.63% (down -3 bps). The US Govt ten year is now at 1.82% and down -4 bps.
NZ DOLLAR SOFTER AGAIN
The Kiwi dollar has fallen another -½c from this time yesterday to 65.8 USc. Against the Aussie we are holding at 93.5 AUc. Against the euro we are also holding at 59 euro cents. That means the TWI-5 is now just under 70.8 and lower.
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BITCOIN RISES
Bitcoin has risen today and is now at US$37,149 which is up +3.6% from this time yesterday. Volatility over the past 24 hours has been moderate at just under +/- 2.7%.
This soil moisture chart is animated here.
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51 Comments
Not sure about the peak but likely to be occasional deals as banks jostle for market share.
Does the Govt, RB, & banks want thousands of homeowners unable to pay their mortgage in 2022?
And let’s see how the government investigation into the government lawmaking goes!
https://www.nzherald.co.nz/nz/home-loans-minister-calls-for-investigati…
https://tradingeconomics.com/new-zealand/interest-rate
conventional wisdom of OCR 3% by 2023
Yes I remember alright. Of course he was trying to undo inflation from Cullen's Go for growth experiment with massive wasteful govt spending and Labours hiring spree of public servants on escalating wage increases that the private sector had to try and compete with.
Well, if you want to borrow money you may have to hand over your banking login and password.
Lenders want to see every cent you spend as borrowers can’t be trusted any more. And they want to see more than your printed statement which can be somewhat sanitised.
https://www.stuff.co.nz/business/127551214/shocking-business-practice-w…
Don't forget that if you live nearby the govt/ council will tax you for any property value increase.
If I lived nearby I would sell right now because to for most people, for commuting to work, they would not go where they want to go!!!
Then again who will be in power after the next election? Plus unfortunately Bridges is a "value uplift tax" fan as well.
But in a falling market, there would be no value uplift to tax. Unfortunately that may not stop them doing this abhorrent thing. (Dropped less than other houses....?)
The extended dry weather is reducing inflows into the hydro lakes to unusually low levels, now well below long term averages.
Very limited in additional places to dam, too, according to friends in waters management.
NIWA notes that drought-prone places including Auckland and Waikato are set to face more common drought events in the next 20 years due to the changing climate. If droughts hit both Auckland and Waikato, where does Auckland get its water from?
If central governments continue to rely on immigration as an economic panacea and pack hundreds of thousands more into Auckland, I wonder if they've any thought for how water security can be provided for a much larger population with less rain. (Central govt politicians are not famed for their long-term perspective, obviously...)
I've been running around in circles today trying to figure out how to transfer my Aussie Super to NZ. I've been tardy doing it, as I've been back in NZ for 7 years. But the funds have grown and in terms of the exchange rate it's a good time to do it.
However, the Super fund in Aus has sent me an 'Application for Benefit Payment(Super)' form, and it doesn't ask me for any Kiwisaver details. Rather, it asks me for bank account details.
I made it clear when I called that I was looking to transfer money from Aus to NZ, so that was clear. Indeed, the woman put me on hold for a few minutes to check with someone on the appropriate form. And I can't find any other forms on their website to do with transfers to Kiwisaver.
Also, when I contacted them two years, ago, but didn't action the transfer, they send me an older version of the same form.
Has anyone come across this before? I mean, I wouldn't mind getting the money transferred to a bank account so I can use it rather than getting locked away in Kiwisaver, although the account details they require are for an Aussie Bank (I still have an Aussie account so no issues there).
Any helpful advice would be appreciated!!
I'm going through the same process, had a go a few months ago but was so frustrating and gave up! You have reminded me so will have another go next week.
I contacted my Kiwisaver provider last time and they seemed to think they could somehow expediate the process so I might start with them?
It's hopeless Smudge!!! Running around in circles, with lack of information.
I'm tempted just to post the form back with my bank account details and 'try it on' in terms of maybe they will just pay direct into my bank account?
Then I could use some of it to pay some outstanding debt, and put the rest of it into Kiwisaver.
I transferred my Oz super to NZ super about 8 years ago (so bit of a vague memory).
In link below see "Transferring savings from your Australian super fund to a KiwiSaver scheme":
https://www.ato.gov.au/individuals/super/in-detail/withdrawing-and-usin…
So you seem to have done the right thing contacting your Oz super fund. But them asking for an Oz bank account instead of an NZ IRD number is indeed weird.
In this section of the above page: "Transferring ATO-held USM to your KiwiSaver scheme provider (KSP) or nominated financial institution" there is a link (transfer this money to your KiwiSaver scheme provider) to the following location, which I think is the path for you (it says "unclaimed $" but I would not let that put you off):
https://www.ato.gov.au/Individuals/Super/In-detail/ATO-held-USM-for-New…
Near the bottom there is a section called "Before you complete this application", and it's first link leads to the form I think you need. At the very bottom of the page is the ATO address to send the form to. The form is called "Application for transfer of ATO-held USM to New Zealand". I expect Option 1 is for you: "To have my ATO-held USM transferred to my KiwiSaver scheme provider"
Best of luck.
Housemouse,
I have recently transferred money from Australian super to a NZ bank account denominated in AUD - you can set that up at your NZ bank.
You will first need to satisfy the Oz Super people that you are entitled to withdraw it.
Then you will need to satisfy them that you are not money laundering. Cross country transfers are more bureaucratic than they used to be. They will need to see a copy of your passport.
To expedite matters I also got a letter from my bank to demonstrate that the transfer was indeed to the same person who held the account in Oz.
It took a little while over Xmas, and some to-ing and fro-ing when things were closed down over there, and dealing with a different person every time I rang them, but each new person would look at the online file of correspondence, and eventually the money arrived with the process taking about three weeks including the Xmas delay.
KeithW
There has been a notable lack of norwest rain in the mountains, linked to the specific La Nina conditions and high atmospheric pressures to the south of NZ. But I drove past Tekapo and Pukaki today and there is still plenty of water there. Indeed the water level is still somewhat high. One good norwest will change things.
KeithW
https://californianewstimes.com/climate-meeting-proposes-national-metha…
Hmm, this meeting may have occurred yesterday, methane is hotting up..
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