Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Kiwibank and BNZ both raised their floating rate today, completing the response by the big mortgage lenders. Kiwibank also raised fixed rates as well. Late on Friday, the Cooperative Bank raised rates too. More here. The Police Credit Union rates their rates too.
TERM DEPOSIT RATE CHANGES
Kiwibank raised savings account rates and term deposit rates. The Cooperative Bank also raised term deposit rates, as did Rabobank who also raised savings account rates.
CONFIDENCE CLOBBERED, INFLATION SOARS
According to the ANZ Business Confidence Survey, confidence has nosed dived in the early part of 2022. In addition to surging Omicron infections, businesses are grappling with a range of headwinds including shortages of staff and materials, as well as rising costs. Those conditions are squeezing profitability. If anything is 'positive' in this survey it is that Own Activity views are less problematic.
MORTGAGE DEBT UP LESS
January mortgage debt rose +$1.7 bln in January from the prior month, and is up +$30.2 bln in a year. But that year-on-year rise is actually the smallest in ten months. Still it is a +10% rise. The month-on-month rises is the smallest for a January since 2019.
BUSINESS LOAN APPETITE IMPROVES
Meanwhile, the debt appetite of businesses is rising. It was up +6.1% year-on-year, a two year high, to $123.8 bln.
CAN'T KEEP IT UP
After rising +1.8 bln in December from November, these same household term deposits rose only $191 mln in January. Maybe the recent resurgence in term deposits will be a fleeting thing?
SBS BANK OUTLINES BOND ISSUE
SBS Bank is seeking to borrow up to $150 million through an offer of five-year, unsecured, senior, fixed-rate bonds to both retail and institutional investors.
WESTPAC LIFE SALE COMPLETE
Westpac has completed the $400 million sale of Westpac Life to Fidelity Life. The deal will see Westpac distribute Fidelity products to its retail customers for the next 15 years.
AFFIRMATIVE DIVERSITY IS IN
There has been the appointment of three new members of the Financial Markets Authority Board, along with the reappointment of a current board member. Tokens are now important. "A range of factors, including ethnicity and age, were considered, with [Kendell] Flutey’s strong connection to Māori and young New Zealanders, as well as geography and knowledge, with [Steven] Bardy and [Mark] Weenink both having international experience and a wealth of industry knowledge. With the newest board members, the gender mix of the FMA Board will be five men and four women."
PRODUCER POWER
Fonterra is noting that milk production is all the main global exporting regions is down in January. For NZ the decline is -6.1%, in Australia -1.2%, the EU -0.8, and the USA -1.6%. This is likely to solidify the floor when the Wednesday dairy auction gets underway. Further, the EU and the USA are exporting a lot less. (They also noted that China's monthly imports are falling.)
MARKET LOST
Fonterra has suspended further sales to Russia, a market that takes about 1% of their product. Presumably getting paid now is an issue.
OPERATOR DOWN
Last week, the capitalisation of the NZX50 fell -1.8% to now be down by -1.5% from this time a year ago. Fisher & Paykel Healthcare (FPH, #1) fell -4.1% in the week. In fact only seven companies did not fall in this NZX50 set. The largest fall was by the market operator (NZX) itself, down -16.1% taking it down five places in the rank to #45. Other notable falls were by Pacific Edge (PEB, #35) down -9.6%, and Kathmandu (KMD, #31), down -6.5%. The overall capitalisation of the NZX50 is now $121 bln, or 35% of NZ GDP. A year ago it was 38% of GDP.
AUSSIE RETAIL HOLDS ON
An Australia, retail sales rose +1.8% in January from December and are +6.4% higher than a year ago. But these changes are "current prices", so inflation will account for much of the rise. Online and Department Store activity rose the most.
FINANCIAL STRESS EXTREME
The Russian ruble has just opened for trade this week. It was instantly down -30% on top of last week's -30% dump. It is now approaching 120 to the USD. It is hard to imagine Russia selling its hard assets to protect the value of its currency. Why would they give up real assets for their own wavering currency?
GOLD UP
In early Asian trading, gold is now at US$1909 and up +US$20 from where we opened this morning.
EQUITIES MIXED
The NZX50 is up a minor +0.5% in later afternoon trade. The ASX200 is up by +0.7 in early afternoon trade. Tokyo has opened up +0.2%, Hong Kong is down -0.3% and Shanghai is flat. The S&P500 futures suggests Wall Street will open -2.4% from where it closed at the end of last week.
SWAPS SLIP TODAY
We don't have today's closing swap rates yet. They are likely to have fallen somewhat today across the board. The 90 day bank bill rate is up +2 bps at 1.26%. The Australian Govt ten year benchmark bond rate is down -5 bps from this morning to 2.19%. The China Govt 10yr is unchanged at 2.80%. The New Zealand Govt 10 year bond rate is now at 2.77% (down -4 bps from this this morning) and the same as the earlier RBNZ fix for that 10yr rate at 2.77% (down -4 bps). The US Govt ten year is now at 1.92%, a -5 bps fall from where opened this morning.
NZ DOLLAR LOWER
The Kiwi dollar is lower by -½c from where we opened this morning and back to the level this time Friday, now at 66.9 USc. Against the Aussie we are lower at 93.2 AUc. Against the euro we are little-changed at 59.8 euro cents. That means the TWI-5 is lower at 71.7.
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BITCOIN LOWER
Bitcoin has fallen back today, now at US$37,785 and down -3.3% from the US$39,092 it opened at this morning. Volatility over the past 24 hours has been high at just on +/- 3.8%.
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59 Comments
I get why most will not be onboard with this because many pakeha have been just as locked out of these Board roles as Maori. Didn't go to the right school, golf club, yacht club etc. Much of this talk is symbolism and any changes perfunctory, you will be able to count on two hands the number of Maori directors appointed to NZX50 and Government entity Boards this year.
What a lazy ignorant comment, just another bitter non-achiever. How on earth can it be racist when arguing that a white female is chosen on merit and not quota?
the suggestion that any non-white male chosen is a quota selection is the very definition of racism - racist.
There's actually quite a lot of studies / science that has investigated what it means for up and coming generations to see people in roles of responsibility that represent diversity.
It is overwhelmingly positive and it does effect change that wouldn't happen without the initial shoe horning.
Diversity doesn't exist either because people don't see themselves there so don't aspire to it, or because those that are there seek to collaborate with people they understand and know, so keep people with different views and backgrounds they don't understand out, and this is often subconscious.
"Forcing" diversity works to address both issues, and Te Kooti is more or less right in his comments, although the has a certain way of delivering it. But you all do come across like a pack of entitled white males allergic to change. You should read more on the subject.
they should be left to look after themselves like all the vaccinated, they made a choice why should the taxpayer foot the bill for them, if they need a hospital bed they should have to sit in the queue behind the more needy ie cancer patients, people that need urgent medical care
After rising +1.8 bln in December from November, these same household term deposits rose only $191 mln in January. Maybe the recent resurgence in term deposits will be a fleeting thing?
Quick explanation is deferred December tax take. This is paid circa 15th January.
Vlad the invalid, both meanings, if his forces don’t start doing a whole lot better and/or get bogged down in guerrilla warfare, urban & elsewhere. Can’t tell me that in that sort of regime there are not opportunists, plotters & outright enemies ready to strike at any weakness or failure. Remember it was the Cuban Missile Crisis loss of face that did Khrushchev in, tout de suite. Maybe some soothsayer best tell him “ beware the ides of March!”
Russian President Vladimir Putin had been subjected to a series of sophomoric psychological profiles that trivialized Russian national concerns as little more than the psychotic whim of a troubled individual. The caricatures that emerged of the Russian state and its leadership colored the analysis of Russia’s oft-stated concerns over what it viewed as its legitimate national security. Link
Even if Russia wanted to it would be hard to sell their hard assets. My understanding is that by targeting the Russian central bank directly with sanctions to US and EU potentially tied up a lot of Russia‘s reserves.
Also - I’ve seen reports even Chinese banks don’t want anything to do with Russia.
‘BREAKING: Reuters reports that the Bank of China's Singapore division has 'stopped financing deals involving Russian oil and Russian companies'’
Its more complicated:
One more time, EURODOLLAR, not dollar. Been this way for a very, very long time. Offshore ledger money = banks* Not govts, not central banks. *recognizing these facts is not an endorsement, just an acknowledgement of how it works. Link
Re: SWIFT & sanctions. People seem to have the wrong idea about what it is and more importantly who controls it. We've been on a eurodollar NOT DOLLAR standard for half a century. Eurodollar not dollar. This is a categoric difference. Link
At the foot of the ZH piece is this gem from Dylan Grice, which also echoes David Goldman's take, that we are witnessing the strategic blunder of this century:
"never seen weaponization of money on this scale before…you only get to play the card once. china will make it a priority to need no USD before going for Taiwan. it’s a turning point in monetary history: the end of USD hegemony & the acceleration towards a bipolar monetary order".
Get ready to transact both with SWIFT and with CIPS.
And, Interesting scenario, what if Russia sells all its gas and oil to China, who acts as a wholesaler, takes what it needs for domestic consumption and retails the rest for CNY via CIPS, to a world that is left wondering wtf just happened. Bye bye sanctions. Hello, ticket clipping.
To add spice to the mix, retail the goodies with a Climate Tax added, because it's an Emergency.......
Who would be willing to bet that this and other scenarios have not already been war-gamed up the wazoo by our new overlords....
Im seeing news they’ve delayed the opening of the Moscow stock exchange to 3pm - not sure if that’s local time or not.
I don’t see how that will help.
Update: There will be an announcement at 1pm. What could they say that will stop the rout?
Update2: ‘BREAKING - The Russian central bank has ordered market players to reject foreign clients' bids to sell Russian securities from 0400 GMT on Monday, according to a central bank document seen by Reuters.
The bank did not reply to a Reuters request for comment.’
Update 3: The Russian central bank raised interest rates from 8% => 20% to defend the currency.
Now it’s a game of increasing numbers, NZ is set to face an ever escalating rise in daily numbers until it peaks at some future point. Same as just about every other nation, has faced. Let us all then hope that this proceeds similarly. What concerns me is the seeds of fear that the government & media have been sewing for two years and that might well produce some numbers of those that become panic stricken. Keep calm and carry on. So far so good.
The clearest sign yet that the whole thing is just theatre. Surely giving all returning Kiwis 3 RAT tests each on arrival would be far more effective, efficient, and safe than forcing a small minority of unvaccinated returnees into quarantine just to make a point.
I was watching a livestream of the protests, someone claimed that 3g caused Swine Flu, 4g caused Bird Flu, and now 5g causes Covid.
Another protester came along with an Electromagnetic Radiation Meter and held it up to a concrete block. Got a reading and claimed that the blocks were emitting EMF. A close up of the LCD screen on his uncalibrated device showed a reading of 0 on the upper half, and 0.15µT on the lower half.
The upper half displays EMF, the lower half displays Magnetic Field Strength. He was getting a reading of 0.15µT from Rebar. A regular kitchen kettle will give you a reading of around 15 to 20µT.
What's the difference between a dollar and a ruble?...
...About a dollar!
Presumably getting paid now is an issue.
SWIFT is only a message system. Russia can make cross-border payments without it but it will be slower, cost more and be more difficult for the bank.
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