Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
TSB has raised its 2 year fixed mortgage rate to 4.15%, from 3.99%. But it is still well below the main banks for this term who are all at 4.35%.
TERM DEPOSIT RATE CHANGES
None today so far.
GLIMMER?
The interest.co.nz home loan affordability report update shows there is a glimmer of hope for first home buyers as prices drop at the bottom of the market in January.
EYES ON THE PRIZE
Heartland Group Holdings posted an + 8% interim profit rise in the half year to December, and eyes growth in home loan book towards $1 bln of lending. Meanwhile, overall lending rose +14% in the latest period.
BNZ INCREASING LOW DEPOSIT LENDING
BNZ says from March 1 it'll be increasing, in a limited way, the number of customers who can access lending with less than a 20% deposit. A spokesman won't give specific details, saying; " We can’t give specific numbers but what we can say is that low equity lending won’t be at the same volumes it was, so we urge customers to talk to us about their options." He also says BNZ continues to lend on new build homes with a 10% deposit, and is constantly monitoring lending policies to comply with the loan-to-value ratio restrictions set by the Reserve Bank.
ASB, WESTPAC NOT INCREASING LOW DEPOSIT LENDING
Westpac says it continues to not accept home loan applications from borrowers with less than a 20% deposit, having stopped doing so on November 18. A Westpac spokesman says the bank has honoured all existing high loan-to-value ratio (LVR) pre-approvals over summer. The spokesman says Westpac is looking to start supporting high-LVR borrowers again in the near future, and is working through the details.
An ASB spokeswoman says the bank continues a "pause" on its new low equity lending applications, but existing pre-approvals and home lending aren't affected. On Monday we reported ANZ and Kiwibank have stepped up low deposit lending after clamping down in November.
BANKS LOSE ...
Credit card balances outstanding continue to fall. They are down -6.2% in the year to January, now below $6 bln, and the lowest January since 2013. "Worse" (for banks), now only 51.7% of all balances incur interest, the lowest level ever since this series started more than 20 years ago. Banks are facing lower balances and lower on interest at the same time.
VISA & MASTERCARD WIN
Meanwhile, transactions going through credit card accounts is rising. It is up +5.2% in year and the fourth consecutive month of increases.
FROM REGULATOR TO FRAUD BUSTER
Karen Chang is to leave the Financial Markets Authority to become the new chief executive of the Serious Fraud Office
MPC APPOINTMENTS
Grant Robertson has announced that Bob Buckle and Peter Harris have been reappointed as external members of the Reserve Bank of New Zealand’s Monetary Policy Committee (MPC). In addition, the Reserve Bank’s Assistant Governor/General Manager Money Group Karen Silk has been appointed as an internal member of the MPC for a five year term from 16 May 2022. The Manager of Central Banking Analytics at the Reserve Bank Adam Richardson has been appointed as an internal member for a six month term from 11 March 2022, while they look for a permanent chief economist appointment.
LOCAL PANDEMIC UPDATE
In NSW, there has been 8,752 new community cases reported yesterday, a big jump back to prior levels, now with 101,551 active locally-acquired cases, and another 14 daily deaths. There are now 1,293 in hospital there and holding. In Victoria they reported 6,786 more new infections yesterday. There are now 45,278 active cases in that state - and there were also 14 daily deaths there. Queensland is reporting 5,586 new cases and 5 more deaths. In South Australia, new cases have fallen to 1217 yesterday and X more deaths. The ACT has 583 new cases and no deaths, and Tasmania 820 new cases and no deaths. Overall in Australia, more than 24,000 new cases have been reported so far today although not all counts are in yet. In New Zealand, there were 15 cases stopped at the border, plus 2,846 new cases reported in the community, another new record.
GOLD UP
In early Asian trading, gold is now at US$1905 and up +US$10 from this time yesterday.
EQUITIES GENERALLY WEAKER
The NZX50 is up a minor +0.1% in late afternoon trade. However, the ASX200 is down -0.9% in early afternoon trade. Tokyo has opened down another -1.7%, Hong Kong has opened down -1.9%, and Shanghai is down -0.8% in its opening trades. It is a long holiday weekend in the US, so Wall Street won't open until tomorrow NZT. But the S&P500 futures are now down -1.6% today, presumably on the building Ukraine sovereignty breach. NASDAQ futures are down more than -2%.
SWAPS RETREAT AGAIN
We don't have today's closing swap rates yet. They are likely to have fallen back today. The 90 day bank bill rate is up +2 bps at 1.25%. The Australian Govt ten year benchmark bond rate is down -1 bp from yesterday to 2.19%. The China Govt 10yr is up +2 bps at 2.85%. The New Zealand Govt 10 year bond rate is now at 2.72% (down -4 bps from this time yesterday) and now just above the earlier RBNZ fix for that 10yr rate at 2.71% (down -7 bps). The US Govt ten year is now at 1.86%, a sharpish -7 bps fall on the Ukraine invasion.
NZ DOLLAR HOLDS FIRM
The Kiwi dollar is marginally firmer from this time yesterday, now at 67.1 USc. Against the Aussie we are little-changed at 93.2 AUc. Against the euro we are firm at 59.3 euro cents. That means the TWI-5 is marginally firmer at 71.5.
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BITCOIN FALLS
Bitcoin is down again, now at US$37,147 and -5.3% lower than this time yesterday. Volatility over the past 24 hours has been high at just on +/- 3.6%.
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42 Comments
now only 51.7% of all balances incur interest (on credit cards)
Sad to see that there is still more than half the population who doesn't pay their credit card balance in full every month. We need to include finance (or budgeting if it's a less scary word) as a subject at school level
Have we seen peak everything
Makes me think of Blip.
https://www.bookdepository.com/Blip-Christopher-O-Clugston/9781644380680
If you want a good read, then Lady Deborah Chamber QC writes a column in the Herald this evening to me is the most profound and accurate description of the predicament that this government has inflicted on New Zealand. It explains how bureaucracy can defy High Court rulings. It explains how the government can ignore the bill of rights that Sir Geoffrey Palmer himself was instrumental in legislating. Folk this column is vital to all of us and thank god New Zealand still possesses the intellect, sincerity and capability to come forward and put it there, fair square centre of the table. Lady Deborah, take a bow!
Was looking at the January 2021 peak so perhaps should have said 13 months to be exact!
I don't think we have hit that high since then, although I guess there was another head/peak in Sep/Oct last year.
Makes me wonder how long we might have to wait to break through that January 2021 peak. 5 years? 10 years? 20 years? Especially if we are moving into a higher rate environment.
Yes and NZX 50 down 10% the last 12 months.
Yes, but the NZ50 relative to GDP is at a factor closer to 1, whereas the housing stock value is closer to 5.
Kiwis don't really give a rats about the NZ50. The whole country has quintupled down on the property bubble.
You have been warned that this may not end well.
Yeah that is crazy...going to be such a drag on the economy going forward.
Regarding the NZX 50....it should have more importance in peoples minds but of course we're property manics. As i posted above, I wonder if/when we will revisit the Jan 2021 peak? Will it be 5 years, 10 years, 30 years? Especially if we are moving into a higher inflation environment.....or an uncontrolled debt default/deflationary environment. Either way, I think it could be a long time before we see those highs hit once more (although who the hell knows what the RBNZ will pull to further destroy the value of the NZD).
I'm not too concerned about having money in the NZX50 as local valuations have mostly avoided the worst excesses of the tech bubble (with the exception of the MFB post-IPO flop.)
As stated on the annual predictions thread I said the S&P500 would end the year lower than it started, that's still my conviction.
The US Govt ten year is now at 1.86%, a sharpish -7 bps fall on the Ukraine invasion.
A senior US administration official said more sanctions would imposed on Tuesday and would be proportionate to Russian steps overnight. It was unclear however if the deployment of “peacekeeping forces” in the Moscow-backed enclaves would be seen by Washington as an invasion. The official pointed out that Russian forces had been acting covertly in the area for eight years. Link
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