Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
ASB has been the next major bank to raise floating rates. More here. First Credit Union also raised rates.
TERM DEPOSIT RATE CHANGES
ASB also raised some savings account offer rates.
EFFECTIVE HIKE
GEM Finance (Latitude) has changed its interest rates for personal loans, leaving the carded (and "From" advertised) minimums unchanged, but raising their carded maximums by for "secured" loans by +4.0% from 18.99% to 22.99%, and for unsecured lending by +2.0% from 22.99% to 24.99% pa.
FALLING
The January merchandise trade deficit rose to -$1.1 bln, nearly double what it was in January 2021, and treble what it was in January 2020. Dairy exports became more dominant accounting for 34% of all exports compared to 27% for the full year to January. China is becoming less dominant, taking less than 30% of our exports in January, below the full year average of 32%.
RISING
In the December quarter, retail sales were +8.8% higher than the same quarter in 2020 and +14% higher than in the same quarter in 2019. There were some big winners including online sales, recreation, hardware, clothing, pharmacies, and vehicles (hence the larger trade deficit). The losers were tourism, hospo, liquor, and department stores - on a year-on-year basis.
STABLE
S&P says it expects New Zealand's fiscal deficits to narrow materially in fiscal 2023 as the economy recovers from a lockdown in Auckland in early fiscal 2022. This should ease pressure on New Zealand's debt trajectory, they say. That have affirmed the rating at AA+/Stable, just one upgrade below AAA, although an outlook upgrade would probably come first. (Moody's rates NZ Aaa.)
PRESSURE EASING
More than 15,000 migrant workers and their families have become NZ residents so far under new visa scheme. Meanwhile, Immigration NZ has moved to ease the strain on medical centres that process medical certificates for migrants.
EASIER TO GET SUPPORT
And the Government has loosened the criteria for the new Covid Support Payment so more businesses are eligible. Under this scheme they now expect to payout about $750 mln in support.
ALMOST TOUCHING $100 BLN
New data from the RBNZ (T43) values the total KiwiSaver balances at $94.7 bln as at December. That is up +21.3% in a year (much of which is the additional savings from members). It seems clear that, absent a significant equity risk pullback, these balances should nearly hit $100 bln by March 2022. 45% of these funds are invested in New Zealand, 55% offshore.
PUBLIC POLICY SUCCESS
In January 2021 new residential lending totaled $6.4 bln, up from $4.7 bln in January 2020. But in January 2022, new residential lending was $4.6 bln recording some CCCFA pullback. But despite the broker and bank complaints, it hasn't contracted as much as feared. The 2021 levels were frothy, so the 2022 lending at 2020 levels looks like more sensible activity. FHB levels in January 2022 are -8% lower than 2020. Investor levels on the same basis are -15% lower. For owner-occupiers, they are up +6% in 2022 from 2020. There seems little basis for the Minister to cave on the regulatory settings (just so mortgage brokers can keep their Porsches).
WHEAT PRICES AIMING HIGH
Global wheat prices are well on their way to equaling the infamous 2008 (brief) spike.
DAIRY PRICE SHIFT UP
Next Wednesday (NZT) there will be another dairy auction. The derivates market suggests GDT prices will rise again, with WMP priced at a +6.5% rise at present and SMP priced at a +2.25% rise. A few days ago these two gains were +4% and +2%.
CARBON PRICE STEPS BACK
Over the past week, the NZU carbon price has fallen back by -$5 to $80.75/NZU
LOCAL PANDEMIC UPDATE
In NSW, there has been 7,583 new community cases reported yesterday, now with 99,234 active locally-acquired cases, and another 6 daily deaths. There are now 1,211 in hospital there and holding stubbornly. In Victoria they reported 6,580 more new infections yesterday. There are now 41,125 active cases in that state - and there were 11 daily deaths there. Queensland is reporting 5,440 new cases and 7 more deaths. In South Australia, new cases have risen to 1735 yesterday and X more deaths. The ACT has 946 new cases and no deaths, and Tasmania 851 new cases and one death. Overall in Australia, about 23,000 new cases have been reported so far today although not all counts are in yet. In New Zealand, there were 19 cases stopped at the border, plus 12,011 (not a typo, includes positive RATs) new cases reported in the community, yet another new record, and doubling daily.
GOLD UP
In early Asian trading, gold is now at US$1918 and up +US$5 from this time yesterday. But it is now up +US$14 from the New York close a few hours ago, and down -US$18 from the afternoon London close. The morning London fix pegged it at US$1968/oz so it is a long way down from that.
EQUITIES MIXED
Believe it or not, the S&P500 ended its Wall Street session up (yes, up) +1.5%. They had a holiday on Monday, so for the three days till the end of Thursday trade, they are down 'only' -1.4% for the week so far. Tokyo has opened down -1.6% and heading for a weekly drop of -2.7%. Hong Kong has opened up +0.2% but down -4.8% for the week so far. And Shanghai is up +0.9% at its open but down -0.8% for the week. The ASX200 is down marginally and heading for a -3.2% weekly drop. The NZX50 is up +1.4% in late trade, heading for a weekly -2.0% fall.
SWAPS RISE AGAIN 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 again. The 90 day bank bill rate is unchanged at 1.24%. The Australian Govt ten year benchmark bond rate is up +2 bps from yesterday to 2.24%. The China Govt 10yr is down -1 bps at 2.82%. The New Zealand Govt 10 year bond rate is now at 2.82% (up +1 bp from this time yesterday) and still just above the earlier RBNZ fix for that 10yr rate at 2.81% (down -3 bps). The US Govt ten year is now at 1.98%, a +2 bps rise from this time yesterday.
NZ DOLLAR LOWER
The Kiwi dollar is lower than this time yesterday, now at 66.9 USc and down by more than -½c. Against the Aussie we are little-changed at 93.6 AUc. Against the euro we are also little-changed at 59.7 euro cents. That means the TWI-5 is lower at 71.8.
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BITCOIN VOLATILITY EXTREME
Bitcoin has risen back today, now at US$38,321 and +4.1% higher than this time yesterday. Volatility over the past 24 hours has been extreme at just on +/- 7.7%.
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30 Comments
The ol' rat poison bounced back with a vengeance with quite big volume buying in Asia. With all the threats of cutting Russian off from SWIFT, the Western ruling elite is demonstrating that they're in control of the monetary system. While it may look all very clever and powerful, you have to wonder when people will start to take notice that they can cut "anyone" off in a heartbeat. From a contrarian perspective, this could serve to enhance the value of digital assets.
Also noted that Russia's gold reserves are estimated at about 2,300 tonnes, up from about 900 tonnes since 2012 (Gold Council data).
Ardern, Robbo, Treasury, RBNZ are probably befuddled why Russia is accumulating gold.
I think you're reading too much into it. Atm it's just trading like a tech stock.
You're possibly right. Some are also saying that some of the smartest people in the world are exiting into their own economy with Bitcoin. An economy that they won't be allowed to exit from but also will serve as a capital base.
I remembered he mentioned something like "It’s easier to cool an overheated economy than it is to fire up a frozen one", but now he is saying "much of inflation is being driven by forces outside of New Zealand's control"? Where is his credibility as RBNZ governor?
He's right - for once.
Although he wouldn't have been right if he said that in September last year.
Domestic demand-side inflationary pressures started dissipating late last year, and continues to do so.
This time last year I would have said it was 60% domestic and 40% imported, now I would say it's 30% domestic and 70% imported.
Yea that's a hell of a ruling. I'm not sure about the logic behind the risk to staff/others not being the same in terms of whether you're vaccinated or not, but the idea that a small number of people being caught out by a mandate proves it isn't needed at all is probably going to be the subject of some considerable of debate.
I think the mandates would have held more sway if
a) the vaccine had a much larger impact on reducing transmission, and
b) if the industries (Health, Police, Education) weren't already massively shortstaffed.
edit:
c) if they didn't allow covid positive healthcare workers back to work. I mean the logic on that one defies belief.
Justice Cooke is an extremely able jurist, formerly as a barrister, QC and at times prosecutor. Both the MIQ & mandates are on shaky ground in context of NZ’s Human Rights and both were hastily and poorly legislated. This the government has always known. This is why all the numerous high court actions challenging MIQ were settled before proceedings commenced by granting MIQ space to the plaintiff(s.) This is why the government asked for a three week adjournment to delay any judgement until they could announce MIQ would be winding down. Without exception my contacts in legal circles agree the government has been acting illegally all along in prosecuting these provisions. This is not unusual the Government and its agencies, especially the MoH, believe they are above any rulings by the judiciary. No government has ever had the arrogance to act as such before in NZ’s history.
Perfect opportunity for the government to walk back the mandates (now that the "damage is done" metaphorically speaking, and we've got as high of a vax rate as we'll ever get, on top of Omicron making a mockery of the vax pass system).
Stand up at the podium, declare that you made the decision to impose a mandate with the best of intentions and concern for public health, thank the public for diligently complying, but proclaim you are a government of laws and you respect the court's decision - and as such will be rolling back the mandate (starting with allowing people back into their jobs, e.g. teachers, police, border workers etc).
No worries about anybody potentially taking legal action against you, as you can just pull a lockdown v1 and retroactively change the law if needed.
The government gets to look good, those affected by the mandate can hopefully get their jobs back, and you've solved the protest problem. To quote Del Boy Trotter, "everyone's a winner, lovely jubbly"
Sure, there is that last 5ish percent of the population who aren't vaxxed, but they will never be convinced short of holding them down and forcing them to do it. This court ruling is a gift from the gods if the government wants to turn it into good PR and spin.
NYMEX Crude Oil WTI Apr '22 (CLJ22)
I used to trade this contract in NY for a European central bank in addition to my UST trading duties - the dealer who remains a personal friend made $6million over a 3 month period straight off the bat - beginners luck. His normal duties were bullion trading. I was also part of a team that unloaded their sovereign gold holdings at a later date.
Dear World Leaders – you have failed me
I write as a global citizen which I believe we all are. You have failed me.
I expected so much more from you after the invasion of Ukraine, but you have not delivered. You are charged with failing to keep the peace and looking after all global citizens.
I expected you to demonstrate. Not remonstrate. You raised your eyebrows when you should have raised your weapons. While protecting your own citizens, for now, you are risking longer term peace within your own countries and the world.
I expected confiscations of assets. Not freezing of assets to be unfrozen through the course of time. You have the powers to confiscate. Do not waste it waiting for a more serious breach of world peace because it may mean nothing at that time. Now it means something so act.
I expected you to be SWIFT in your condemnation. Instead other minor organisations have sped past you – UEFA (moves champions league final), EBC (Eurovision ban), F1 (cancels round) – as you sit on your hands. The same ones you should be using to bear arms.
If now is not the time to act when is? Ask yourselves that question as you watch innocent people perish in the hope that the international community will see this breach for what it really is…. One giant step backward for humanity.
Sincerely hoping you do the right thing
Global citizen #14081963
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