What happened Wednesday

Business / news

A review of things you need to know before you go home on Wednesday; minor rate changes, major pandemic changes, major pressure on households, big cost for QE bonds, swaps up further, NZD firms again, & more

23rd Mar 22, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes so far. Update: SBS Bank has raised most of its fixed rates today/

TERM DEPOSIT RATE CHANGES
SBS Bank has raised term deposit rates today.

EASING UP
The Government has announced some significant relaxation in our pandemic rules. Gathering limits will be loosened from this weekend. Vaccine passes and some mandates to be removed from April 5. (But it seems likely most people will shift there sooner.)

HOUSEHOLD BUDGETS TO BE CRIMPED
ASB economists see a -$15 bln hit to local household budgets this year, with housing costs spiking +8%. They estimate average household living costs will rise by $150 per week from here - that is almost $8000 in a year if sustained.

ANOTHER GREEN-WASHED BOND
A- rated Spark Finance has launched a new $100 mln 6½ year "sustainability-linked unsecured, unsubordinated medium term bond issue". It will be priced at 4.37% pa.

UNEXPECTED EXTRA SERVICING COST
[Revised] The Treasury has put a $5 bln price tag on the Reserve Bank's QE program in its 2022 Investment Statement. When the RBNZ launched the bond-buying program in 2020, the Treasury thought the premium the RBNZ would pay, buying the bonds on the secondary market, would be offset by the program lowering the government's overall debt servicing costs. However, with interest rates rising faster than expected, this hasn't materialised, and the Treasury now expects the program to come at a net cost of $5 bln.

LOTS OF FRAUD AROUND
More than 10% of all Australians experienced one or more types of personal fraud in 2020-21 according to an official survey. That is more than 2.1 mln people there. The survey asked about experiences of personal fraud including card fraud, identity theft, and selected types of scams.

GOLD DOWN
In early Asian trading, gold is down -US$14 from this time yesterday at just under US$1920/oz.

EQUITIES MIXED AGAIN
The S&P500 ended their Tuesday session up +1.1% and holding the mid-morning gains for the rest of the day. Tokyo has opened today up +2.2% on top of yesterday's good rise. Hong Kong has started up +0.6% and heading for a 3 week high. Shanghai has started their session little-changed. The ASX200 is up +0.4% in early afternoon trade. But the NZX50 is down -1.0% in late trade with chunky losses for FPH (-7.3%) and FBU (-1.4%) wrecking today's session.

SWAP ELEVATOR STILL GOING UP
We don't have today's closing swap rates yet. They are likely to have risen sharply today, maybe by another +4 bps across the curve. The 90 day bank bill rate is unchanged at 1.58%. The Australian Govt ten year benchmark bond rate is up +8 bps at 2.79% from this this time yesterday. The China Govt 10yr is up +1 bp at 2.85%. The New Zealand Govt 10 year bond rate is now at 3.36% (up +6 bps) and still higher than the earlier RBNZ fix for that 10yr rate at 3.34% (up +7 bps). The US Govt ten year is now at 2.42% and up another +10 bps from this time yesterday.

NZ DOLLAR TURNS HIGHER
The Kiwi dollar is now at 69.6 USc and up more than -¾c than at this time yesterday. Against the Aussie we are up at 93.4 AUc. Against the euro we are up more than +½c at 63.1 euro cents. That means the TWI-5 is now just over 74.8 and a +70 bps rise in the last 24 hours.

BITCOIN UP
Bitcoin is up +2.3% from this time yesterday, now at US$42,107. Volatility over the past 24 hours has been moderate at just over +/- 2.7%.

This soil moisture chart is animated here.

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Source: RBNZ

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67 Comments

by J.C. | 23rd Mar 22, 4:08pm 1648004895

ASB economists see a -$15 bln hit to local household budgets this year, with housing costs spiking +8%. They estimate average household living costs will rise by $150 per week from here - that is almost $8000 in a year if sustained.

This is all share of wallet to be "lost" in consumption. Based on my professional experience, the first to be hit will be the 'nice to have' products on the supermarket shelves. All the crafty, cottage-like businesses are going to find it tough.

by Room319 | 23rd Mar 22, 4:27pm 1648006037

The first to be hit will be takeaways etc,then New World,then Countdown with the happy recipient of all the extra trade being the owners of the big yellow and black sheds.

by waymad | 23rd Mar 22, 9:15pm 1648023347

Obs from partner who volunteers at the local op shop. Lots of customers buying clothes, can't keep them on the racks.....and them customers include upper middle class types. Points to some shifts in buying patterns.

by sit23 | 23rd Mar 22, 9:27pm 1648024036

The big yellow and black sheds are run by a NZ owned co-op. All the profits are returned to the shop owners who buy off the co-op. On a level playing field the Aussie owned company, which coincidentally also owns K-Mart and Bunnings, cannot compete. I cannot understand why anyone would buy off a more expensive foreign owned outfit. I have been involved in many businesses, however, where the shareholders and other directors work out the correct thing to do, and then do the opposite. That can be the only reason for supporting these foreign owned businesses. But takeaways will be okay. People will still go out if they are poorer than they were, but will just go cheaper. So all restaurant patrons will just go down one or two layers of expensiveness. McDonalds was invented as a place for poor people to go out for a feed. But that appears to have changed from my infrequent visits. Last time I had to fight my way past crowds of people gathered round big screenie things to get to the counter and put my order in with the kid there. Luckily I have a proper locally owned fish and chip shop around the corner from home for normal takeaways. If there actually is such a thing.

by Independent_Observer | 23rd Mar 22, 4:10pm 1648005007

For anyone looking for an inflation hedge, the FOOD exchange traded fund from the ASX might be an option.

Share price is currently very bullish. Has exposure to global agriculture/fertiliser/producers etc.

Not financial advice, just an option for anyone looking for a liquid way of having some protection against inflation vs cash savings and diversifying assets.

by J.C. | 23rd Mar 22, 4:29pm 1648006141

Cheers for that. Might add it with the uranium ETFs.

by Independent_Observer | 23rd Mar 22, 4:33pm 1648006380

No problem - are there uranium ETF's from ASX worth looking at or further abroad?

by GregF | 23rd Mar 22, 5:58pm 1648011523

Global X Uranium ETF on NYSE via Sharsies. I have some.

Or, if you prefer a little super-speccy - Elevate Uranium Ltd (also via Sharsies) on the ASX.

by Independent_Observer | 23rd Mar 22, 6:28pm 1648013313

Thanks - will take a look.

by J.C. | 23rd Mar 22, 7:18pm 1648016315

URA and UUUU. Both available on ASX (definitely) and through Sharesies (I think).

by Snow | 23rd Mar 22, 4:32pm 1648006325

Did the same with the OOO ETF on the ASX.

by False economies | 23rd Mar 22, 5:20pm 1648009209

by Zack Brando | 23rd Mar 22, 8:33pm 1648020783

A couple of years ago I was thinking of Mosaic (fertilizer company) but didn't pull-the-trigger. I do like an ETF though. I'll chuck a few dollars at it so it appears in my portfolio - no harm in tracking it I guess.

by Justa comment | 23rd Mar 22, 4:11pm 1648005064

Lots of properties in Auckland now being listed with a price. I believe when the march numbers are published in April, a 100k drop in the Auck median from 1.2 to 1.1 or less will be confirmed.

by gnx | 23rd Mar 22, 5:07pm 1648008454

Yep.... it will be a interesting day when it goes back under a mill!

eight weeks??

by Pat.T | 23rd Mar 22, 5:24pm 1648009445

Time for the grim reaper to start adjusting asset prices DOWN.

The party is coming to an end.

Cash will be KING.

by EdwardD | 23rd Mar 22, 5:43pm 1648010594

I wish that was happening in the SI

by Nifty1 | 23rd Mar 22, 4:21pm 1648005676

Vaccine passes may be used again in the future if circumstances change, including if a new variant emerges.
Businesses can continue to use vaccine passes if they wish.
People are encouraged to keep vaccine passes on their phones.

No doubt people are going to get caught out by that odd establishment that will demand a vaccine pass - why not just drop it everywhere!?

How long is this going to last too? They seem clear there could be another variant.

by Noncents | 23rd Mar 22, 4:29pm 1648006162

Clear as mud. The difference in Traffic lights, is now just mask wearing. Mostly, many, encouraged. But it's ok, the unvaxxed teachers can go back to work now....

I mean was it really worth terminating people (i.e. permanently removing from the job) for ~3 months. Careers, relationships, and more have been ruined. Should have just stood them down on covid pay for the duration. Would have diffused much of the animosity.

But hey, at least our overstated deaths with covid are less than everyone elses overstated deaths with covid. So we win, right?

by Baywatch | 23rd Mar 22, 4:44pm 1648007076

I dint think its about winning..rather managing a pandamic which NZ is looking like it has done very well.

by Noncents | 23rd Mar 22, 4:48pm 1648007319

Kind of my point - how do you define very well?

Basing solely off some meaningless mortality stats we have excelled. Basing it off the wider impact to society. I would say less so. The real impacts wont become apparent for years to come.

by Hardly | 23rd Mar 22, 7:05pm 1648015521

Meaningless mortality stats????

So deaths don’t matter now?

by Dale Smith | 23rd Mar 22, 7:17pm 1648016243

The good news is apparently we are over 2,000 deaths in credit from where we normally would be, ie 2,000 more people are alive than what would have normally died, so nothing to worry about until we use these credits up.

by profile | 23rd Mar 22, 7:45pm 1648017908

More like a 2000 death deficit. No lives were saved - that is just team $55 million BS. We have been in excess death for the past 18 months.

https://mpidr.shinyapps.io/stmortality/

by Jonny.Foe | 23rd Mar 22, 8:30pm 1648020658

Nonsense. You have to pick a spurious baseline / reference method to demonstrate anything that looks like excess. Any robust measurement (age standardised mortality etc) shows between 2,000 and 2,500 lower deaths.

by profile | 23rd Mar 22, 11:17pm 1648030626

What is spurious about https://mpidr.shinyapps.io/stmortality/ ? I didn't pick the baseline or reference method so not sure what your point is. Quite evident that we have been in excess death these past 18 months. Perhaps click on the link and have a look for yourself?

Given median age of death with covid is higher than average life expectancy in the UK/Oz etc. so age standardisation data for NZ may not give you the answer you are looking for. Perhaps deferred mortality might be a better angle for you?

https://www.health.gov.au/resources/publications/coronavirus-covid-19-a…

by Yvil | 23rd Mar 22, 7:47pm 1648018054

Yes meaningless Covid mortality rates because:

- if you die from a car crash and happened to be positive, you're a Covid death.

- if you die from cancer and happen to be positive, you're a covid death

- if you die from any cause at all and you have Covid, which many have in NZ, you're added to the meaningless Covid deaths numbers

by Noncents | 23rd Mar 22, 8:34pm 1648020885

Worse than that. They are not just active cases, but positive at any point within the last 28 days.

Using WHO guidelines I can confidently assert that 95% of deaths in the last month (About 2,200 in NZ alone) were deaths with vaccine.

by chebbo | 23rd Mar 22, 9:20pm 1648023624

It's even worse than that. According to the Australian Bureau of Statistics' definition, which is the one used by NZ's MoH, it only needs to be a suspected case of COVID-19. The deceased never even needed to have tested positive.

The whole thing is completely insane.

by Hamish | 23rd Mar 22, 4:52pm 1648007572

But Noncents raises a really important question. Because what has changed in those few months when so much damage has been done to individuals, communities, society?

Vaccination rates went up by what?

ICU capacity went up by what?

What's the cost/benefit?

by sit23 | 23rd Mar 22, 9:38pm 1648024729

Apparently vaccinations cost $40 each, and $45 to the innoculator. $85. Multiplied by however many we did. I cost the taxpayers $170. Crikey.

by Waikatohome | 23rd Mar 22, 5:06pm 1648008361

Looking at the hospitalisation stats from the government. It looks as though unvaccinated are over represented in hospital, as you would expect (19% of cases from 5% of population), but so are the boosted. A similar percentage of boosted (37%) and double jabbed (34%) are in hospital yet a lower percentage of the population is boosted (61.7%) than double jabbed (95%) Am I reading this right?

by Albert2020 | 23rd Mar 22, 5:26pm 1648009590

My understanding is your chance of ending up in hospital with serious illness is no different between 2 or 3 jabs. You also have to weed out the demographics of who are getting boosters? Are they the more vulnerable?

by Mr_Jolly | 23rd Mar 22, 7:28pm 1648016926

You have your 5% wrong. Only 84% of the total population have had a jab. So the 19% looks pretty similar to 16%. Remember that Bloomfield recently admitted that only 20% of hospital numbers are in fact net new due to covid.

by Mr_Jolly | 23rd Mar 22, 7:35pm 1648017328

And according to todays MoH numbers only 17% covid hospital numbers are unvax. It's almost like the vaccine doesn't actually make any difference.

by sit23 | 23rd Mar 22, 9:41pm 1648024868

Queenstown was 101.6% jabbed at one stage. Then it was reported later as over 99%. Must have been rounding or something. A substantial number of my friends have not been jabbed, and seem to be in good health.

by MisterB | 23rd Mar 22, 4:59pm 1648007991

Given the overlap between anti-mandaters and conspiracy theorists, I'm not sure I want those who deny the value of a vax to be teaching moldable minds like my children. Just saying.

by Dale Smith | 23rd Mar 22, 7:13pm 1648015985

Well, we let people who believe in none, one, many Gods, vote for a different party than ourselves, identify differently than ourselves, so I'm not sure what your objection is?

After all, if what they are teaching is math, 2 + 2 = 4 irrespective of anything else you may think.

by sit23 | 23rd Mar 22, 9:45pm 1648025118

Exactly. I got my kids' teachers to teach them the facts, and I teach them the opinions. I am not interested in teachers' opinions. That is why we have to have concrete syllabuses (syllabi?) to stop that happening. And so we know what we are up against when our kids bring home rubbish that teachers have given them as facts.

by Noncents | 23rd Mar 22, 9:16pm 1648023414

The refusal to get one specific vaccine in no way diminishes an individuals ability to teach a child, treat a wound, or arrest a murderer.

by Nzdan | 24th Mar 22, 5:29am 1648052995

No, but it can be a red flag. It's when they turn up to protests and start hurling bricks at police that it becomes evident they're unfit to teach.

by GV 27 | 24th Mar 22, 6:23am 1648056201

Given teachers are going to be teaching NZ history from now on, I'd be very concerned about the framing from that from people prone imported alt-right hysteria and conspiracy theories.

I'm also not super confident I'd like hospitals to be staffed by people who think they have some sort innate right to spread disease amongst vulnerable people.... seem kind of like it might not be the best career for them.

As far as Law and Order goes, we've probably reached the stage where beggars can't be choosers, but per the recent ruling there was an extremely small number of police in this position anyway.

by kpnuts | 23rd Mar 22, 6:20pm 1648012826

does not help us in healthcare - currently laying off admittedly a small number of healthy staff double vacced but who have drawn the line at boosters - especially with talk of a fourth shot shortly -- but its ok - i can bring back household contacts with a rat test - or even covid positive staff into the workplace -- total madness that - and those staff are never coming back already leaving our shores for Aussie and teh EU -- to carry on tehir careers!

by JimboJones | 23rd Mar 22, 7:05pm 1648015547

Do you want to be treated by someone who doesn’t believe in vaccination?

by Foxglove. | 23rd Mar 22, 8:05pm 1648019144

kpn, glad you have weathered the storm so far. hope you still have some hair & ceiling panels left. the one thing that shines indisputably from this covid episode is firstly how ill prepared NZ was and secondly how pathetic and abysmal our bureaucracy was in rising to the challenge. Not the front line staff at all, but the shiny arses. You know how Airline pilots are paid so much so as to be the saviour in that mid air emergency. Instead in my opinion we had an obdurate, arrogant and incompetent lot in HQ directing matters about which they were operationally clueless. Something has to be done but this government is now dismantling the front line and substituting it with even more power in this same Wellington lot.

by Hardly | 23rd Mar 22, 7:04pm 1648015479

Probably saved 6,000+ lives so yes.

by Whatwillhappen | 23rd Mar 22, 5:38pm 1648010329

Deltacron is a thing. Think delta with the infectivity of omicron, only tempered by high levels of natural immunity overseas.

I'm thinking I will walk out of places asking for my vaccine pass on principle:

1. That they asked for them at the counter after you've been in line with everyone breathing on the food made a joke of the whole thing

2. The government says they are no longer needed. I accepted it (grudgingly) when it was a blanket thing, now it's optional I can vote with my feet.

by Baywatch | 23rd Mar 22, 6:04pm 1648011868

I doubt those businesses you walk out off will miss you and your high levels of natural immunity

by GV 27 | 24th Mar 22, 6:25am 1648056350

Given the level of shit they've had to deal with from self-entitled dickheads like this, I'm sure many will happily hold the door open for them as they try to Karen up the joint on the way out.

by sit23 | 23rd Mar 22, 9:49pm 1648025357

Where is this Deltacron made? Wuhan or Ukraine? Does Pfizer make an absolute fortune off it, or is it someone else this time. Is Joe Biden's son involved, or does he just do Natural Gas?

by Waikatohome | 23rd Mar 22, 9:59pm 1648025999

It was formulated by a tin hat wearing giant lizard that lives under a 5G mast.

by HouseMouse | 23rd Mar 22, 10:07pm 1648026463

hehe

by Wrong John | 23rd Mar 22, 4:40pm 1648006805

Wholesale rates just keep heading north. Must be spring up there.

by waymad | 23rd Mar 22, 5:13pm 1648008798

Nah, it's surely all the precip.....

by Brock Landers | 23rd Mar 22, 5:24pm 1648009482

Those basement boys must really be doing a number on CWBW, he hasn't shown his face for weeks.

He assured them and all the people "lining up" for his financial advice that there would be a house price explosion by Autumn.

Be quick.

by agnostium | 23rd Mar 22, 6:17pm 1648012642

He's probably still posting here under a different name. Like TTP, having a few personas going exposing different levels of support for the housing market and predictions allows them to switch to the ones that are most aligned with what the data is doing. Either that or some serious Pulp Fiction action has gone down in that basement ...

by HouseMouse | 23rd Mar 22, 6:22pm 1648012950

He went to get medieval on their asses, but they in fact got medieval on his. In a big way.

Or CWBW could be P8?

They've both extremely pro-property and both have got 'boys' that they seem to collaborate with....

by Yvil | 23rd Mar 22, 7:54pm 1648018474

Com'on HM, you're lowering yourself to this kind of rubbish comments too?

(as an aside P8 has a lot of very good property knowledge and advice, CWBW is just a … well I don't know how to say it politely…)

by HouseMouse | 23rd Mar 22, 9:21pm 1648023671

Come on Yvil, trash talk is fun! And you frequently partake in it!

Don't take things too seriously.

by Brock Landers | 23rd Mar 22, 6:55pm 1648014905

Are you saying that he is pretty ****in' far from okay?

by waymad | 23rd Mar 22, 8:50pm 1648021854

Who's Zed?

Zed's dead, babe...

by sit23 | 23rd Mar 22, 9:51pm 1648025475

That's not what Glorafilia said.

by HouseMouse | 23rd Mar 22, 9:21pm 1648023707

the lines in that film, soooooo good.

by Averageman | 23rd Mar 22, 9:19pm 1648023594

Indeed. Do your sums on rolling over loans at 7-8%, mass inflation on all costs, no depreciation credit, no more interest only, and having to increasingly pay tax on all rental income. When its put like that, all in one sentence, it shows how bad the addiction to tax free gain had become for the speculators.

Popcorn...

by HouseMouse | 23rd Mar 22, 5:43pm 1648010632

NZ dollar = 84.2 yen

I have committed to myself to change NZ dollar to yen (for a planned trip to Japan next year) if it hits 85, maybe tomorrow?

by waymad | 23rd Mar 22, 9:20pm 1648023606

Indian Punchline throws yet another twist into the tangled yarn of international relationships. Short version: not gonna bow to US pressure....

"The point is, India struggled with the pandemic all by itself. No matter the hype about it, India realised that it has no real partnership with the US or EU, that it was a mere transactional relationship — and that in the final analysis, India lived in its region.

Indeed, India handled the pandemic far better than most countries. International experts acknowledge it today, and those who threw stones at that time grudgingly accept it, too."

by sit23 | 23rd Mar 22, 9:54pm 1648025648

Possibly still a bit soon, Waymad, (and not gonna take it any more.) But the narrative will change in the next few months to make respectable what you have just posted.