Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
None announced today. Update: NBS have raised both floating (up +50 bps) and fixed rates (up +25 and +30 bps).
TERM DEPOSIT RATE CHANGES
Xceda Finance (ex Asset Finance) and IBCB both raised term deposit rates again today.
SELLERS NOT MEETING MARKET
The cooling Auckland housing market has resulted in fewer sales and lower prices for transaction at Auckland's largest realtor, Barfoot & Thompson. In fact their February sales volume was lower than their January sales volume, a very unusual shift. Their median selling price is down -$117,500 from its November peak. Their lower sales now means that at 4385, this is the highest number of listed properties they have for sale at month end in nearly three years.
PERVERSE INCENTIVES?
New car sales fell -12% in February from a year ago to 7680 new cars. There were 689 pure electric vehicles (mostly Teslas), 388 PHEV’s and 1020 hybrid vehicles sold for the month, giving them a market share of 27% in February. SUV sales rose to 78% share, almost a record high (Some SUVs are PHEVs). Sales of double-cab utes boomed in the month, helping propel commercial vehicle sales up more than +13% year-on-year. That is because buyers are rushing to get 'real' double-cab utes before the green feebate system comes into effect on April 1, 2022.
FAST-RISING TAX TAKE RISES EVEN FASTER IN JANUARY
Lower financial market values has increased the Crown Account's January deficit, but the change from December isn't huge. But although spending is rising fast, the Government's tax take from workers is rising equally fast, up +17.6% year-on-year, the fastest increase ever recorded. The average per month over the past three months now exceeds $4.4 bl/month.
COMMODITY PRICES RISE
Consistent with the global trends, the ANZ commodity index rate again, and to yet another new record high. Dairy and aluminium let the way, with will be no surprise to regular readers. The overall index is up +20% in USD terms, up +29% in NZD terms in a year. Dairy makes up 41% of this index, aluminium 4%.
YIELDS RISE ONLY MARGINALLY
Almost $600 ml was bid today in 55 bids for the tender of $200 mln of NZ Government bonds, in two tranches. The $100 mln April 2027 had nine winners who won at 2.65%, up very marginally from the 2.64% two weeks ago. The $100 mln May 2051 bond was won by 20 of 25 bidders who got an average yield of 3.19%, which was marginally higher than the 3.16% two weeks ago.
INVESTMENT BOYCOTT
The NZ Super Fund and ACC investment funds have dumped some Russian investments. They are making a vurture from this, but it is more to do with the MSCI removing Russian shares from its widely-tracked emerging markets index.
HOLDING IN ITS TWISTED STATE
Household median net worth increased in 2021 from 2015 but distribution remains steady: higher-wealth households still hold the lion's share of overall wealth and are growing it through property, says Stats NZ. But their share isn't actually increasing, and neither is their any progress to leveling out wealth distribution. Every household cohort is rising at the same rate.
BACK UP
Australia's merchandise trade surplus rose to almost AU$13 bln in January and near a record high again (the record was +AU$13.3 bln in July 2021). Their exports began 2022 on a strong note, as commodity prices found a second wind. The Russian invasion and resulting boycotts won't hurt Australia's trade performance.
BACK DOWN
But building consents retreated sharply in January in Australia. The total number of dwellings approved fell -28% in seasonally adjusted terms in January, following an almost +10% rise in December. Omicron is getting the blame for the sharpness of the retreat. Approvals for houses are the weakest, less so for multi unit dwellings.
NO CHANGE
The RBNZ released its dashboard data today, allowing detailed comparison between registered banks. We will have more on what it reveals over the next few days, but the main bank net interest margins moved little. Of the ones that did, Kiwibank more fractionally lower, Westpac moved fractionally higher over the quarter to December 31, 2021.
GOLD LOWER
In early Asian trading, gold is now at US$1931/oz and down -US$10 from this time yesterday after that sharp rise.
EQUITIES RISE AGAIN
Wall Street ended its Wednesday session up +1.9% and more than making up the prior day's fall. Tokyo has opened up +0.7%. Hong Kong is up +0.5% at their open. Shanghai is up +0.3% at its open today. The ASX200 is up +0.6% in early afternoon trade there. The NZX50 is up +0.8% near its close
SWAPS HIGHER
We don't have today's closing swap rates yet. They are likely to be firmer. (Update: They weren't. They ended marginally lower.) The 90 day bank bill rate is up +2 bps to 1.34%. The Australian Govt ten year benchmark bond rate is up +5 bps from this time yesterday to 2.15%. The China Govt 10yr is up +1 bp at 2.85%. The New Zealand Govt 10 year bond rate is now at 2.78% (unchanged) and now below the earlier RBNZ fix for that 10yr rate at 2.80% (up +11 bps). The US Govt ten year is now at 1.85%, a +10 bps rise from this time yesterday.
NZ DOLLAR LITTLE-CHANGED
The Kiwi dollar is little-changed than this time yesterday, now at 67.7 USc. Against the Aussie we are softish at 93 AUc. Against the euro we are up slightly at 61 euro cents. That means the TWI-5 is little-changed at 72.5.
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BITCOIN STABLE
Bitcoin is down a minor -0.5% today, now at US$43,838. Volatility over the past 24 hours has been moderate at just on +/- 2.2%.
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57 Comments
Also the Georgian Dream today applied to join the EU. While i was in Georgia there was a peaceful democratic transition of power from the pro-usa, lets-join-the-eu Saakashvili to the pro-russia lets-be-a-bridge-between-east-and-west Georgian Dream. Oh how quickly times have changed.
I wonder if Georgians watch the news?
Haha, just kidding.
Problem with all these ex Soviet block countries is, corruption is a way of life. Unfortunately the public are conditioned to it and expect little else from leadership. Ukraine was looking to move away from the mafia kinship, but it's always difficult to leave the clan. It can mean part of your favourite horse sharing your bed, being set in the concrete foundation of a building site, or being fried with thermobaric ordinance.
https://foreignpolicy.com/2021/08/20/georgia-russia-belarus-putin-turns-back-on-west/
But although spending is rising fast, the Government's tax take from workers is rising equally fast, up +17.6% year-on-year, the fastest increase ever recorded. The average per month over the past three months now exceeds $4.4 bl/month.
Probably worth noting what tax receipts tell us about corporate profits. To quote the Treasury report:
"Corporate tax revenue was $2.6 billion (34.8%).. up on last year, mainly owing to an increase in taxable profits through the 2021 income tax year and forecast growth in taxable profits for the 2022 income tax year."
So, anyone noticed anything about the price of things that might help explain these huge increases in corporate profits?
CDC quietly drop universal contact tracing as a thing. Like our anti mandate protest a bit of history revision going on.
"Universal case investigation and contact tracing are not recommended for COVID-19."
https://www.cdc.gov/coronavirus/2019-ncov/php/contact-tracing/contact-t…
Is it history revision, or just changing guidance in changed circumstances? The link shows the rationale - one significant change being the emergence of Omicron making contract tracing unfeasible and ineffective.
Certainly had it's place earlier in the pandemic and was a major reason NZ had so many months of complete freedom.
Just history revision. Similar when the CDC dropped the word "immunity" from their vaccine definition - once the cat was out of the bag that the rushed mRNA therapy didn't stop transmission of covid - as initially claimed by everyone from Fauci to Jacinda. Are you in favour of dropping the "vaccine" passport now it is now longer relevant in the Omicron era?
"Professor Cyrille Cohen is head of Immunology at Bar Ilan University and a member of the advisory committee for vaccines for the Israeli Government. In a wide-ranging and forthright interview, the Professor tells Freddie Sayers:
- The Green Pass / vaccine passport concept is no longer relevant in the Omicron era and should be phased out (he expects it to be in short order in Israel)
- He and his colleagues were surprised and disappointed that the vaccines did not prevent transmission, as they had originally hoped"
https://unherd.com/thepost/israeli-vaccine-chief-we-have-made-mistakes/
Yes, happy to drop vaccine passports now that Omicron is endemic. Like contract tracing, they were a good idea with previous variants but their benefits are much reduced with Omicron while the negatives remain the same.
When the situation changes, our responses should change. This does seem to be happening, but with rather a large lag.
Yes, however it has been a stupidly large lag time after time. Lag in detecting the actions which are needed, lag in delivering them and lag in removing them when they are no longer needed.
Pretty much every decision this govt makes has that signature problem.
These lags have caused distrust, distrust lead to annoyance and then anger, anger lead to protests ala Wellington.
All that was done well, despite a fair amount that wasn’t, has nonetheless bought NZ to the inevitable reality of a widespread covid outbreak. Whether by design or good fortune though, omicron so far, has presented far less danger than its predecessors did to other nations. Alls well that ends well then?
We've played a blinder. Stamped the disease out while it was still poorly understood and thought to be more dangerous than it turned out to be. Spent most of the pandemic with closed borders and a free population while the rest of the world experimented with the right strategies, treatments and vaccines. Achieved extremely high vaccination rates in the population such that Delta which rampaged through the world barely set up shop here, and we're now in great shape to take on the least dangerous variant, with the full benefit of the world's experience.
We've played a blinder. Stamped the disease out while it was still poorly understood and thought to be more dangerous than it turned out to be.
This is an insane take. We didn't stamp the disease out, we ran and hid from it at a time when we knew full well how little risk it posed to anyone outside of a relatively small group of high-risk individuals.
We sold this response to the public through constant fearmongering, such as defining COVID-19 hospitalisations and deaths in such a way as to inflate the figures as much as possible.
We're only now just starting to see the consequences of such an unneccessarily heavy-handed response.
"A blinder"? Really?
Care to name a similar country that did a better job? Most of the pandemic, we didn't even have any hospitalization or deaths to overinflate - we partied while the world was locked down.
We can have different priorities, for sure, and I am not saying we did a perfect job, but in the circumstances I believe our overall performance has been very good.
I guess the real picture will come clear over the coming years as we see the damage done to business, the economy, families, depression and anxiety (and possibly suicide) stats. I know of one suicide right after lockdowns ended after being stuck in the house with wife and kids. Can I say that was the cause or that it wouldn't have happened regardless - of course not with 100% certainty. But I do wonder how many other similar circumstances there have been where our hard lockdowns were enough to push a few people over the edge.
Sure less people may have died from COVID than other countries, but we are yet to really get the full picture on how much damage was sustained in that process.
Don’t for a moment accept that there was a deliberate strategy in place, something like let’s shut up shop and wait until a less bogey bogeyman comes along and then let it loose. The fact that the government opened up with Australia, when Delta (not yet named) was up to 150k cases in India and rising fast, says to me the government had little idea about what would happen next. Sure NZ partied in that first year, remember full rugby stadiums etc, but twelve months later it was the other way round, the rest of the world was partying.
That's true, will take time to truly unpick the compromises made. I haven't seen any evidence of increased suicides, but wouldn't be surprised to see impacts from delayed medical treatments and diagnostics.
The real question is, was our medical system impacted worse than countries that treated the disease differently? I suspect countries like the US and UK would have had similarly impacted medical systems with covid preoccupying them for so long.
IO the really sad thing is the real damage will never be known because it will be spread out over years and simply not documented and even if it is you will not be able to directly attribute it to Covid and the lockdowns. Many, many people are going to be directly affected and the cost of the lives that were "Saved" be it probably only for a matter of a few years will be incredibly high. Our initial response to Covid was actually to slow by 2 or 3 weeks but then we totally over did the response after that. This Labour government will be long gone but their actions will still be felt.
I've heard others concerned about suicides due to our pandemic response, and I'm sorry to hear that someone you know took their own life.
At a nationwide level our suicide rates haven't increased since the start of the pandemic, in fact they are down marginally:
https://coronialservices.justice.govt.nz/assets/Uploads/Chief-Coroner-r…
USA death rate per million=2931
NZ 11
Data from Worldometer
We have done about 266 times better dear Chebbo, despite MOH blunders.; because the punters in NZ have been sensible , courteous and followed the science, with the exception of the few who believe they know better than everyone else.
And economically no worse, possibly as the money we have saved by not travelling has outweighed the loss of tourism to an extent.
The thing is though, strictly from personal contact, old friends & family in for example UK, USA, Australia, Canada, Singapore none of them are dismayed or reeling around in shock about the extremes of fatalities that supposedly have brought their civilisation to its knees. Those nations and others, are hardly stricken in continual mourning are they. Have taken it on the chin and got on with it. Guess Nz could not contemplate that prospect. Don’t have a wailing wall.
If we choose to measure success in terms of deaths, cases, and vaccination rates, then we've done better than anywhere else in the world.
The problem is that measuring success like this is a bit like measuring environmental impact at the exhaust pipe; it completely ignores the vast bulk of the issue.
And economically no worse
Oh you have got to be kidding.
Barfoot Auctioneer "get rid of those lattes and Netflix"
Getting nasty because no one's wanting their overpriced shitbox.
Holding in it's twisted state.
"while those at retirement age (65-74 years) had a healthy $433,000."
That's substantially less than the value of the average house. Does that mean most are retiring without a debt free house as is generally assumed?
Edit.
I Reread it and that figure is individual wealth, so it's better but would still infer less than half retire debt free. Infact if it follows the general pattern of the stats shown it would be closer to less than 1/3.
Yes wondered on that one too. Is the norm now that most retiree households have little more income than firstly the pension & secondly modest savings invested? Therefore all else that s available is equity in the family home, hence the fast growing market in reverse mortgages.
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