Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
ANZ kicked off the floating rate increases after yesterday's OCR rise, taking their main floating rate to 5.04%. More here. On the other hand, Westpac has raised its floating rate by only +15 bps, but that takes it to 5.24%. China Construction Bank raised theirs to 3.95%. Bank of China raised most of their fixed rates.
TERM DEPOSIT RATE CHANGES
ANZ also increased some savings account rates, also following the OCR rise. Westpac raised their bonus saver by +15 bps.
CREAMING IT
Fonterra raised its milk payout forecast again today, taking the midpoint to $9.60/kgMS, a new record high, and indicating a $14 bln payout to its farmer suppliers for the current season.
LENDING GROWS FASTER THAN PROFITS
Kiwibank reported lending growth up 20% for the half year, driven by the strong housing market and solid demand, and profit growth up[ +16% to $64 mln.
SELLER OFFERS UP, HAMMER SALES LOW
Nationwide, house auction numbers were up last week (to 386 from under 300) but the national auction hammer success rate held steady at 41%. The specialised Auckland CBD apartment market remains very subdued.
VIVIER IN LIQUIDATION
The unregulated New Zealand banking services provider Vivier and Company Ltd was placed into liquidation on Thursday at the High Court in Christchurch. Damien Grant and Gregory Sherriff of Waterstone Insolvency were appointed liquidators. The liquidation comes at the behest of Mubashir Qasim, trustee of the FKC Private Trust, who is seeking to recover about $2.3 million in principal and interest following an investment with Vivier in 2019. There's more on Vivier here.
MARKET HAS TURNED
'The housing boom has ended,' Westpac economists declared, with price falls now the order of the day.
MAJOR LIQUIDITY STRESS
Air New Zealand (AIR, #33) said it has now drawn down $760 mln in borrowings from the Government as it continues to burn cash. It anticipates a loss for the year of over $800 mln, and is planning a capital raising soon. How keen will their major shareholder be?
NEW MORE TOLERANT PHASE
New Zealand to move to phase 3 of Omicron response plan at 11:59pm Thursday (tonight). That will mean only confirmed cases & their household contacts must isolate.
INCOMES RISE FASTER THAN INFLATION
In a very large 16,000 sample used in the 2021 Household Economic Survey that dives deep into household budgets (I know because I was a participant in an earlier year), these results were released today. It showed average annual household income (gross) increased from $105,701 to $110,451 (up +4.5%), average annual household equivalised disposable income (after tax and transfer payments) increased from $47,727 to $50,164 (up +5.1%), average weekly housing costs increased +2.5% from $340.00 to $348.60, total mortgage payments were unchanged while for those paying rent, the average weekly spend on rent increased +5.4%, from $372.30 to $392.30. In the year to June 2021 (the same as the HES), the CPI rose +3.3%.
MISSED THE TARGET, LEAVING 35,700 EXTRA CHILDREN IN POVERTY
Stats NZ released the June 2021 child poverty data update today. At that date, almost 14% of (156,700) lived in households with less than 50% of the median equivalised disposable household income before deducting housing costs. This was a decrease over three years from almost 17% (183,400 children) in the year ended June 2018. The intermediate target of a reduction to 10.5% (121,000) for this measure was not met.
LATEST BOND TENDER UPDATE
Treasury's Debt Management Office tendered two $100 mln bonds today. The May 2032 one brought out 29 bidders who bid $260 mln and 13 won something, at an average yield of 2.81% pa, up from 2.74% two weeks ago. The April 2037 bond attracted 28 bidders who bid $295 mln, but only 4 bidders won anything at an average of 3.02%, up from 2.96% last time.
TAME PAY INCREASE
In Australia, average full-time weekly earnings rose only +2.1% in the year to November 2021.
LOCAL PANDEMIC UPDATE
In NSW, there has been 8,271 new community cases reported yesterday, now with 99,851 active locally-acquired cases, and another 12 daily deaths. There are now 1,211 in hospital there and holding stubbornly. In Victoria they reported 6,715 more new infections yesterday. There are now 41,257 active cases in that state - and there were also 16 daily deaths there. Queensland is reporting 6,094 new cases and 8 more deaths. In South Australia, new cases have risen to 1958 yesterday and no more deaths. The ACT has 946 new cases and no deaths, and Tasmania 842 new cases and no deaths. Overall in Australia, about 25,000 new cases have been reported so far today although not all counts are in yet. In New Zealand, there were 8 cases stopped at the border, plus 6137 (not a typo, includes positive RATs) new cases reported in the community, yet another new record.
GOLD UP
In early Asian trading, gold is now at US$1913 and up +US$9 from this time yesterday.
EQUITIES FALL SHARPLY
The S&P500 ended down -1.8% in its Wednesday session after growing selloff. Tokyo is down more than -1.0% after their one-day holiday. Hong Kong has opened down -1.8%. Shanghai has opened down -0.3%. The ASX200 is down -2.7% in early afternoon trade in a very big selloff and accentuating the afterhours Wall Street concerns about the Ukraine invasion. The NZX50 is down -1.5% late in the session, in sympathy.
SWAPS RISE TODAY
We don't have today's closing swap rates yet. They are likely to have risen again today but only by a few bps mostly at the short end (2yr +5 bps). The 90 day bank bill rate is down -2 bps at 1.24%. The Australian Govt ten year benchmark bond rate is down -4 bps from yesterday to 2.22%. The China Govt 10yr is down -2 bps at 2.83%. The New Zealand Govt 10 year bond rate is now at 2.81% (down -3 bps from this time yesterday) and now just above the earlier RBNZ fix for that 10yr rate at 2.84% (up +9 bps). The US Govt ten year is now at 1.96%, a +2 bps rise.
NZ DOLLAR SOFTISH
The Kiwi dollar is marginally lower this time yesterday, now at 67.5 USc. Against the Aussie we are unchanged at 93.7 AUc. Against the euro we are firm by almost +½c again, now at 59.8 euro cents. That means the TWI-5 is firmer at 72 and little-changed in a day.
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BITCOIN SLIPS
Bitcoin is lower today, now at US$36,810 and -3.4% lower than this time yesterday. Volatility over the past 24 hours has been high at just on +/- 3.4%.
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87 Comments
The West Will Ignore Putin’s Weary Anger At Its Peril. | The Daily Blog
an interesting perspective from Chris Trotter suggesting that history is on Putins side & the West have only themselves to blame
This is the worst possible outcome for most of us. Already challenging times ahead with covid, inflation, supply shortages, asset bubbles and the start of a rate cycle. The sanctions will hurt everyone and we will be lucky if the US stops at sanctions.
On a positive note for the first time ever I have found some common ground with Trotter, anything is possible.
Putin is playing Ukraine like Hitler played Czechoslovakia, commencing with the Sudetenland. Unless the “allies” are prepared to act, let’s say more aggressively than UK PM Chamberlain, Ukraine is destined to be absorbed back into Russia. Hitler’s bluff. Putin’s bluff. What will be the difference, if any? Stakes are high. Over in the Far East, China observes with high interest. Weighs up its opportunities, on offer. Nepal, Bhutan, even Mongolia but more likely in the same scenario Putin has created, vassal Nth Korea is pushed into Sth Korea. The rats are getting amongst the chickens aren’t they.
“An attack on the German Ruhr area through Belgium and Holland was in the process of being forestalled by the Wehrmacht, whose advance into Luxembourg, Holland and Belgium was essential to ensure the neutrality of these countries with all the Reich’s military means of power.” Thus quoth Nazi Foreign Minister, Von Ribbentrop, Berlin 05.00 hours May 10 1940. Sounds rather familiar doesn’t it. What Putin says has as much concern to the truth, as to what Hitler’s words did.
You think Putin was telling the truth when he said all this talk of an invasion was western hysteria?
"Kremlin spokesman Dmitry Peskov dismissed claims that Russia was preparing an incursion.
"This hysteria is being intentionally whipped up," Peskov told state television in remarks broadcast on Sunday.
"We are being accused of some sort of unusual military activity on our territory by those who brought in their troops from across the ocean," he added, pointing to the US."
Sure NATO has expanded & likely Sweden & Finland will expand it even further. What is different here is that this is, for the first time, old Soviet territory being proposed & Russia believes it was given assurances that these were not to be even considered as candidates. Putin is hardly likely to be amused to see what was once a buffer likely being removed. Already NATO, Turkey, Baltic States are hard up against his border. So yes agree 1939/40 is history but my comment is more about those same tactics now being employed, replayed towards a strategic end.
Go ask the Estonians if they would like to be in the Russian or Nato sphere? They are sovereign countries and should be free to choose whos bed they get into. If Putin wants to rollback Nato expansion, invading your neighbours is the wrong move. You think Poland wants to leave Nato now?
That’s different. Estonia, Latvia, Lithuania were ceded to Russia by Sweden in the 18th century. Post WW1 along with Finland they became independent states. Led by Estonia they then had to fight off the Bolsheviks to remain as such. WW2 saw them swamped by the Nazis one way & then the Soviets on the way back. But they subsequently resumed independence along with a reduced Finland. That is none of those four nations were ever part of the USSR. On the other hand, Ukraine was part of the USSR until the dissolution that Gorbachev failed to stop. Additionally those three Baltic States along with Poland are now in NATO, under that umbrella.
Yes that was the Warsaw Pact wasn’t it. Including Poland, Rumania, Hungary, Czechoslovakia. The latter two you will recall were invaded by the Soviets to bring them to heel. All of those now too in NATO but none of them ever in the USSR. That is the difference. That is where Putin has drawn his line in the sand. The west has really dropped Ukraine in it, by advancing them in brinkmanship, but leaving them exposed. In other words if you promote the risk of joining NATO then it is disingenuous not to then offer the protection of NATO. Not only has Putin stared them down, he has called their bluff as soon as he had shored up his security by an alliance with China, economically, militarily. Sound familiar. Here we go again. What did Adolf do before he moved on Poland, that is the non aggression pact with The Soviet Union.
Latvia, Estonia, and Lithuania, like Ukraine, were all part of the USSR
https://en.wikipedia.org/wiki/Republics_of_the_Soviet_Union
You're probably thinking of the Russian Imperial Empire.
President Joe Biden has no plans to deploy American troops to fight Russians in Ukraine, the White House said, doubling down on the previous assertions by US officials that Washington won’t go to war with Moscow. “That is not a decision the president is going to make. We are not going to be in a war with Russia or putting military troops on the ground fighting Russia,” White House press secretary Jen Psaki told reporters on Wednesday. When repeatedly grilled by a reporter if there is a chance the US military’s boots would land on the Ukrainian soil if Russia moves to claim “all” of Kiev’s territory, Psaki reiterated: “I don’t know how many more times I can say it. There is no scenario – the president is not sending US troops to fight in Ukraine against Russia.” Link
Our Foreign Minister Mahuta is in Paris. Just three hours flight time. What a stroke of luck for world affairs in crisis. She has announced already, that a “significant step’” has been taken to call in and berate the Russian ambassador. Now opportune to finish it up undoubtedly.
"I don’t know how many more times I can say it. There is no scenario – the president is not sending US troops to fight in Ukraine against Russia.”
That was a green light for Putin, and a colossal own goal for Biden, rather like April Glaspies's famous green light to Saddam.
Smells of appeasement.
I'm rather worried lying KGB thug Putin will not stop with Ukraine; he has basically threatened to nuke anyone that he chooses, banking on the West not wanting to start a nuclear war over each European country he nobbles..Could be the flaw in "mutually assured destruction"
As Bush would say, "don't misunderestimate me" ;don't underestimate this modern Hitler, who felt he had so little time left in this world to go down in history; Putin is older.
Yeah it kind of makes you puke when the USA gets on TV or even the UN and starts going on about the casualties already in the Ukraine. USA went into Iraq under totally false pretenses or you could call it the biggest false flag operation in history and couple of hundred thousand civilians got killed and nobody batted an eyelid.
Didn’t the US back neo nazis to overthrow the Ukrainian government in a 2014 Coup? Putin annexed Crimea in reaction to this. There has been a proxy war in Ukraine for the past 8 years. Not sure how tolerant the US would be if Russia did the same on their doorstep. I just feel really sorry for the civilians caught up in these Cold War games. One good thing about Trump was that there were no wars started during his presidency.
Would suggest that Trump, possibly unbeknown to himself, had great strength in unpredictability. Just what might he do in a fit of pique after a bad round of golf. The out of the blue hard air strike on a Syrian air base, chemical weapons seemingly, did serve some notice of that in terms of consequences that might fly in.
It’s hard to know who to trust. The UK and USA used non existent weapons of mass destruction as a pretext to invade Iraq. Russia claims to be acting in self defence in Ukraine. No one will win from a large conflict apart from the weapons manufacturers. Hopefully there are some peace brokers in all of this.
"New Zealand to move to phase 3 of Omicron response plan at 11:59pm Thursday (tonight). That will mean only confirmed cases & their household contacts must isolate." AND anyone fully vaccinated arriving from Oz/overseas.
Domestic cases today = over 6000 cases
International cases today = 8 (0.13% of total cases today)
Blanket border isolation on arrival is clearly a hypocritic virtue signalling nonsense entirely aimed at spinning the Govts political "we're protecting you" message.
I wish we had a comedian like Fred Dagg around today. I see a great skit here.
"We were at Level 1, but now it's a red traffic light, phase 3 - are you keeping up?"
"Please keep using the QR code covid tracking system, but the data is so great now, you may not be contacted unless you are at an important place of interest".
"Unless you are feeling REALLY unwell, please don't get tested as your test may not be processed in time".
TL:DR - you're on your own, good luck
Actually,
- The NZ50 is down 2.39% at this very moment and still sinking.
- The NZD is being sold off again (@0.6725) and we're back at where we started before the optimistic buy post-RBNZ announcement yesterday.
- Bitcoin is down 7.63% since the day began for NZ and looks like it has still a long way to go.
- WTI F/M is USD $94.54 up 2.68% - looks like the dream of $100/bbl is within reach!
- If Barfoot and Thompson's numbers are right, we may see a double digit growth in median prices for Auckland this month provided the next few days forges ahead.
Oil and real estate are the shinning stars in turbulent times like these- outperforming every asset including cash.
Don't suggest he's useless.
Putin just started to bomb Ukraine at this very moment.
Evening news may get exciting but probably the local TV will censored the blood and gore.
He has certainly scared the shit out of Ukraine's allies - where are they after selling arms to them?
This bozo must want to send an Australian destroyer into the Black Sea.
The west stood back and watched in Syria – it must not do the same in Ukraine
My oil stocks are up ~30% in the last quarter, while NZ real estate has been heading downhill. Also looking like a ~10% yield on the oil stocks this year, higher next year if oil prices stay this high.
I'd feel a lot more confident there than leveraged into NZ property. But of course diversity is great - no one knows what's around the corner.
There will be plenty of bargain stocks to be had out there. In a couple of days the NZX will zoom up again. It's been doing this all year. whenever there's an 'event' of any nature the day traders sell off hoping the amateurs will follow suit which they inevitably do; a day or two later they buy back in at the lower prices. I'd be surprised if this is any different.
Probably Moldova as well unfortunately.
News footage is showing Ukrainian people fleeing cities ahead of the invading Russian forces. The EU will need a plan here to conduit refugees westwards. There seems little fighting so far but they probably stand the best chance of mounting a defense west of the Dnieper river if they can blow the bridges. Then they can concentrate forces on the invasion force from Belarus. The Russians have a large numerical advantage, they can't fight them everywhere and all at once.
Frankly, China and Russia see the west as weak. The squabbling, protests, the blame games, identity politics, disrespect for law or institutions, etc. This is time for them to make a move to expand borders. I just didn't think it would be so soon. I'm sure China is watching with interest, maybe next they will send a few peace keepers to Taiwan? Sanctions won't work nor military action. They have got the west by the short and curly's
Don't want to pretend I'm a Nostradamus or anything, but as 'Fritz' I did say about 3 years ago some sort of world event (military, economic or both) would happen in 2022 that would bring economies down.
Spooky.
Will be interesting to see if this pushes interest rates up more, or less...
But much more importantly - thoughts with the people in Ukraine
True, but Russia is a paradox. Consider the following:
Two powerful countries, France (Napoleon) and Germany (Nazis) got their fingers severely burnt attempting to invade Russia.
More recently, Russia (a powerful country) got its fingers burnt attempting to invade two very primitive small countries Chechnya and Afghanistan.
It should be remembered that when the Nazis invaded Russia in 1941 the Ukrainians, Latvians, Lithuanians, and Estonians collaborated enthusiastically with the Nazis in murdering any Jews and Communist officials that they came across.
Trump is a great admirer of Putin. The protesters in Wellington are now acting like Trump and Putin puppets.
If anyone loses a loved one in the present Omicron flareup, don't be surprised if that someone draws a bead on one of the leaders of the protesters. I would like to see middle NZders organize some physical opposition to this scum.....much like the farmers did during the 1951 Auckland watersiders' strike.
Just choked on my new electricity prices. Inflation at 6%, yeah right!
Charge Type | Current Prices (excl. GST) | New Prices (excl. GST) | Percentage Increase
Daily - c/day | 78.023 | 98.824 | 26.7%
Anytime - c/kWh | 24.472 | 26.472 | 8.2%
Controlled - c/kWh | 24.406 | 26.472 | 8.5%
Remember how Putin visited Xi just before the Ukraine crisis?
What's the bet they have a little agreement that goes something like this as a proposal from Putin:
If you support me with the invasion of Ukraine, I will support you with an invasion of Taiwan. The West won't want to fight a war on two fronts so will likely sit both situations out. But if they attack me for attacking Ukraine, can you send me some of your stuff? In exchange, we will build a gas pipeline...
"INCOMES RISE FASTER THAN INFLATION"
You sure? Your report says that incomes for the year are up 4.5%. But the current inflation rate was just recorded as 5.9%...
Also we are trying to build a new house. 1 year ago we were quoted for $3000 per sqm. Today we were requoted at $4500, for exactly the same house. Looks like building costs have gone up 50% in a year. Likely we can't afford this now... and our household sits in the top 5% of income. If the high paid can't afford to build... who the hell is able to?
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