Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Westpac has now raised their carded fixed rate offers by between +10 and +20 bps across the board.
TERM DEPOSIT RATE CHANGES
Westpac has also raised TD rate offers by +10 bps for most terms of two years and less ASB has raised some savings account rates, but only by +5 bps. First Credit Union, and Gold Band Finance have raised term deposit rates by more substantial margins. Xceda Finance (ex Asset Finance) has raised some rates too.
UNCERTAINTY INHIBITS RECOVERY
Employment rose over the whole country in January with the strong outcome raising hopes of rising economic activity in an expanding labour market which should fuel demand. But that data is unlikely to be sustained in February as people self isolate and firms pull back hiring as Omicron spreads across the country. The pervasive mood to self-isolate in the face of Omicron will hurt the recovery. NZIER also warned today that fast-rising uncertainty will hamper the local recovery.
EMIGRATION IMMINENT?
ANZ economists say a significant drain of people out of the country could put pressure on the housing market and have ramifications for RBNZ monetary policy.
DIVESTED BUT STILL CROSS SELLING
Westpac said it had completed the sale of its life insurance unit to Fidelity for $400 mln. The sale involves moving 50 staff and 150,000 customers to Fidelity. Fidelity funded the acquisition by taking on Ngāi Tahu Holdings as a new cornerstone equity investor. They now have a "strategic alliance partner in Westpac".
UP +2.2% IN A YEAR
There are now 4.2 mln people with life insurance in the country, up +92,000 in 2021, according to the industry lobby group the Financial Services Council.
CENSURED
The FMA has has censured CTRL Investments for contravening the conditions of its derivatives issuer licence. CTRL offers trade in contracts for difference. Although it is based here it is beneficially owned by two individuals in London, England via an Isle of Man tax haven.
MORE CORPORATE BONDS
Genesis Energy (GNE, #22) is in the bond market for up to $125 mln of 6-year fixed-rate unsecured, unsubordinated green bonds. They will be priced at a minimum of 4% or 1.05% to 1.20% above the swap rate on Friday, which yesterday was 3.0025%. They are guaranteed under Genesis's negative pledge deed. The funds will be used to to finance or refinance renewable energy assets.
RESHORING
NZ Post has acquired Fliway Group, extending its parcels business into larger items and broadening its logistics and supply chain capability. Fliway is one of the largest fully integrated logistics providers in New Zealand and specialises in the delivery of items that are typically too big to be carried by courier networks but are still transported as individual items rather than in bulk. It is headquartered in Auckland and employs over 400 people. Flyway is currently in logistics hell and unable to meet all its delivery promises. NZ Post acquired Fliway from Yang Kee Group, a Singaporean logistics enterprise who purchased it in 2018 from New Zealand owners.
SCRAP METAL NOW?
There were no coins minted in 2021, according the the latest RBNZ update. And it seem unlikely there ever will be again. There are $20 mln worth of coin "in circulation", a euphemism for "lost in a drawer somewhere".
UKRAINE STRUGGLES TO HOLD ON
Ukraine is buckling as Russia pours more troops and firepower into their invasion.
SMALL AS IT IS, IT IS EXPANDING
Both the official and unofficial PMIs were out for China today, and both recorded minor gains, but sufficient to take them from a stall to a marginal expansion. Their services PMI is little changed too, and still in a tepid expansion.
EYES ON THE GDT
The next Global Dairy Trade auction Wednesday morning is expected to show a strong, positive market shift again, building on the prior three events. The derivatives market is expecting WMP to gain more than 6%.
INVESTORS OUT IN FORCE
In Australia, mortgage lending to investors rose to a record high in January. And at 33% of all new housing lending (except refis) that proportion is back at a four hear high. (The record high was in 2015 when it hit 46%.) Currently New Zealand lending to investors accounts for just 17%. The NZ proportion peaked at 35% in mid 2016.
AWAITING LOWE
Eyes are on the RBA policy update at 4:30 this afternoon. Signals that rate changes might come earlier have been expected at this meeting, but Ukraine might hold them back.
GOLD DOWN
In early Asian trading, gold is now at US$1904 and down -US$5 from where we opened this morning.
EQUITIES MOSTLY HIGHER
Wall Street ended its Monday session down just -0.2% which was much better than earlier in the days' trading. Tokyo has opened up a very strong +1.7%. Hong Kong is flat at their open, constrained by a city-wide lockdown imposed from Beijing officials to test everyone in the city for Omicron. Shanghai is up +0.5% at its open today. The ASX200 is up +1.6% in early afternoon trade there. The NZX50 is also up +1.6% near its close
SWAPS SLIP AGAIN TODAY
We don't have today's closing swap rates yet. They are likely to have fallen again today across the board as a risk off mood settles in. But the 90 day bank bill rate jumped +7 bps at 1.26%. The Australian Govt ten year benchmark bond rate is down -2 bps from this time yesterday to 2.17%. The China Govt 10yr is little-changed at 2.81%. The New Zealand Govt 10 year bond rate is now at 2.76% (down -1 bp) and now above the earlier RBNZ fix for that 10yr rate at 2.73% (down -4 bps). The US Govt ten year is now at 1.86%, a -6 bps fall from this time yesterday.
NZ DOLLAR HIGHER
The Kiwi dollar is much higher than this time yesterday, now at 67.6 USc and up +¾c from then. Against the Aussie we are little-changed at 93.1 AUc. Against the euro we are up at 60.3 euro cents. That means the TWI-5 is higher by +60 bps at 72.3.
Appreciate this coverage? Support us and go ad-free. Find out how.
BITCOIN LEAPS
Bitcoin has shifted to a strong rising trend, now at US$43,288 and up almost +15% from this time yesterday. Volatility over the past 24 hours has been extreme at just on +/- 8.9%.
This soil moisture chart is animated here.
Keep ahead of upcoming events by following our Economic Calendar here ».
Daily exchange rates
Select chart tabs
31 Comments
The RBNZ know very well that the NZ housing Ponzi is in a very fragile state and that the emigration that is going to happen will, together with consistently rising interest rates for the short and medium term, finally break the back of the housing bubble, unfortunately with resulting issues of financial stability.
They will try to manage a sustained but controlled decrease in house prices, but they know that this might easily turn into an almighty rout. In the current situation, I would not touch residential housing "investment" with a barge pole.
RBNZ need not worry, the government of the day will replace Kiwis with migrants by a factor greater than 1, like it always does.
Labour's another broken promise of raising skill eligibility criteria for resident visas and instead reopening applications under the existing settings so we can have tens of thousands slipping through the cracks before we shut the door.
https://www.stuff.co.nz/business/127920703/resident-visa-applicants-fru…
The linked slide just says 4.2m covers so must be multiple policies. I think I would be counted at least three times there - southern cross health insurance overlaps with it and think that would be included, the life insurance provided by my employer and my own seperate cover.
Don't forget that every mortgage has a life policy on each borrower for the mortgage. From memory, even car and motorbike loans have life insurance policies to cover the borrower's death. So the number could actually be the number of life policies out there, not the number of people insured. Just checked the link. That is actually the case. The article is mistaken. So every adult in NZ could easily have 2 or 3 life policies on them.
Ukraine is #4, and Russia is #18, in the Chainalysis crypto adoption index. https://blog.chainalysis.com/.../2021-global-crypto.../
Unless they own significant foreign assets, mainly it is the Russians who are long things like gold and bitcoin that have maintained their wealth in a somewhat liquid form.
Bitcoin has shifted to a strong rising trend, now at US$43,288 and up almost +15% from this time yesterday.
We witnessed a short squeeze on the ol' rat poison.
But let's try to give this some perspective, Russian people have not been just screwed by Putin but also by the Western ruling elite. Their monetary savings have been decimated. If you don't have any sympathy, you're a sociopath.
That being said, the RBNZ and the NZ govt have also been screwing over the younger demogs and disenfranchised through their monetary debasement and bubble economics. It's just not as brutal.
Incorrect. Contrary to common believe among the plebs you DON'T want high volume on a breakout because that means lots of people are selling into the pump. Selling is no good because it means those sellers think the price is high and want to rebuy lower.. You want a low volume breakout where price melts up with few sellers.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.