Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
SBS Bank has raised most of its fixed rates today.
TERM DEPOSIT RATE CHANGES
SBS Bank has raised term deposit rates as well.
FLAT OUT IN FEBRUARY
Reserve Bank figures show February mortgage borrowing rose strongly from January's figures, but first home buyers are getting a smaller share of the lending. Total monthly new mortgage commitments were $5.7 bln in February, up +$1.0 bln or +22% from January. There is typically a seasonal increase from January to February, however this is the largest such increase since February 2018.
NOT GETTING BETTER FAST ENOUGH
Households remained positive about labour market conditions in the early part of this year, despite the number of headwinds for the wider economy. The Westpac McDermott Miller Employment Confidence Index rose by a further 6.6 points in March, reaching its highest level since June 2019. The employment results are in marked contrast with the gloom that pervaded the consumer confidence survey. There’s no contradiction here, though, says Westpac. Collectively, "we" are upbeat about our job prospects and are seeing some growth in incomes, but the rapidly rising cost of living has left many feeling like they’re going backwards.
RBNZ LAUNCHES PUBLIC REGISTER FOR BANKS IN BREACH OF KEY REGULATORY REQUIREMENTS
The Reserve Bank has launched a public material breach register for banks not meeting key prudential regulatory requirements. Banks were told in January last year that they would have to perform a materiality assessment of all breaches, whether they were identified by the Reserve Bank, the bank itself or a third party. Once a breach is deemed material, it gets published on the register, with the breaching bank also required to disclose the breach in its next disclosure statement. The Reserve Bank says the three banks currently on the register - SBS, Kiwibank and Westpac - were all compliant with liquidity and capital requirements as of December 31, 2021. The Reserve Bank says the register aligns with its aim to be an open, transparent regulator.
WEAK SIGNALS
Recent levels of electricity demand are not indicating normal economic activity. Averaging just 105 GWh/day in March is weak. Normally the whole Q1 averages about that and that includes the weaker holiday periods. A more normal March would be 112GWh, so we see, to be running -6% below par.
MANIPULATION & DISCLOSURE BREACHES COSTY
Zhongyang (Sean) Meng and Jiashun (Sam) Qian have been ordered to pay pecuniary penalties of $310,000 in total for market manipulation and disclosure breaches involving Oceania Natural Limited (ONL) shares. In 2019 the FMA brought Auckland High Court civil proceedings against four individuals in relation to trading of Oceania Natural shares between April 2016 and April 2017. Oceania Natural Limited listed on the NXT board on 31 March 2016, delisted on 29 June 2018 and was placed into liquidation on 18 June 2019. Before the case went to trial, Meng and Qian, both chartered accountants, admitted to several market manipulation breaches, while Meng also admitted to failing to disclose a relevant interest in the trading of shares. A recent judgment from Justice Geoffrey Venning has ordered Meng to pay a pecuniary penalty of $180,000 and Qian to pay a pecuniary penalty of $130,000.
TAX CUT DOES NOT FULLY COMPUTE
In the week to March 18, MBIE has reported that the discounted U91 price fell by -33c/liter to a national average of $2.71/L from the immediate prior week. This was the week that petrol taxes were cut and the MBIE data shows that was worth almost -26c/L. But the same data shows the crude oil price also fell in the week from US$107/bbl to US$93.70/bbl. When you work that through the exchange rate, that is a fall of -31c/liter. So how does that work? Crude oil went down by -31c, taxes went down by another -26c, and yet the discounted price was down by 'only' -33c/L? !! The answer from the MBIE data is that "importer margin" went up by +8c/L. And clearly other items between the crude oil, taxes, and 'margin' went up as well - like refining and distribution. It is probably too soon to assess the impact of the excise tax cut on pump prices yet, given it is only the first week impact, but it is worth keeping an eye on.
HOT COMPETITION BUT RISING YIELDS
There were two very well supported NZ Government Bond tenders today - but only 11 of 50 bids won anything. The May 2028 $100 mln attracted $426 mln in 22 bids but everyone was disappointed except one bidder. They won the $100 mln at a 3.15% yield, up from 2.86% two weeks ago. There were a few more winners in the May 2032 $100 mln on offer which attracted $329 mln in bids. Ten of 28 bidders won a share in this one, at an average yield of 3.25%, up from 2.93% two weeks ago.
SLOW ACTION - ON REFUGEES
Australia has finally struck a deal for New Zealand to accept some of the refugees who arrived by boat, almost a decade after the offer was first made. The three-year agreement will lead to 450 refugees resettling in New Zealand. Priority will be given to about 100 people still on Nauru after being processed in Australia’s offshore immigration centre there.
FAST ACTION - A$DC ARRIVES
ANZ (in Australia) today said it has successfully executed the first ever Australian-bank issued Australian dollar stablecoin (A$DC) payment through a public permissionless blockchain transaction. ANZ delivered the stablecoin for Victor Smorgon Group. It is the first time an Australian bank has minted a digital asset linked to the value of the Australia dollar, and may be the first time a bank anywhere in the world has created a stablecoin that has been used in a real transaction.
GOLD BACK UP
In early Asian trading, gold is up +US$27 from this time yesterday at just under US$1947/oz. It ended in New York earlier at US$1944/oz and in London last night at US$1932/oz.
EQUITIES MOSTLY LOWER
The S&P500 ended their Wednesday trading down -1.2% and weakish for the whole session and cancelling out all this week's prior gain. Tokyo has opened today down -1.3% and taking the top off yesterday's good rise. Hong Kong has started . Shanghai has started . The ASX200 is flat in early afternoon trade. But the NZX50 is down another -0.5% in late trade.
SWAPS HIT REVERSE MODE
We don't have today's closing swap rates yet. They are likely to have fallen back today. The 90 day bank bill rate is down -1 bp at 1.57%. The Australian Govt ten year benchmark bond rate is down -9 bps from this this time yesterday at 2.70% although all of this retreat happened overnight. The China Govt 10yr is unchanged at 2.85%. The New Zealand Govt 10 year bond rate is now at 3.28% (down -8 bps, all of which has happened in today's session) but still higher than the earlier RBNZ fix for that 10yr rate at 3.26% (down -8 bps). The US Govt ten year is now at 2.32% and giving up all of yesterday's +10 bps rise.
NZ DOLLAR STILL FIRM
The Kiwi dollar is now at 69.7 USc and marginally firmer than at this time yesterday. Against the Aussie we are down -40 bps at 93 AUc. Against the euro we are up slightly at 63.3 euro cents. That means the TWI-5 is now just over 74.9.
BITCOIN UP AGAIN
Bitcoin is up +2.3% another from this time yesterday, now at US$43,046. Volatility over the past 24 hours has been modest at just over +/- 1.8%.
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27 Comments
So the fuel tax relief has ended up on the money go round then? Just as confusing, or worse, is Finance Minister Robertson. Quoted today in response to questions about tax relief by introducing a tax free threshold $18k or thereabouts. “……. made a commitment at the election not to make major tax changes this term.” Given in Mar/Apr 2021, the extension by 5 years of the bright line test and the introduction of an increased top tax margin of 39% this simply does not reconcile. Surely he must mean said commitment, only applied to a tax reduction? Otherwise this is just another glaring, blatant example of the double talk this government has indulged in since day one. Straight from the PM Blair textbook, never say anything that does not have at least two meanings. Wonder who was on hand at the time to etch that practice deeply in the memory lobe. This way of conducting government is shameful, deceitful and a gross insult to every citizen in New Zealand, except of course this government, The Labour Party itself and its Praetorian Guard, who undoubtedly consider it to be just the bee’s knees.
Robertson exhibits the obduracy that will cost Labour the election. If he wishes his party to survive he'll introduce a tax-free $20,000 a year, as in Australia and Britain, and lower the 33% and 39% thresholds to cover it. And/or, gulp, introduce a national land tax.
Robertson threw out a red herring by saying it would cost to much to have a $40000.00 tax free threshold, deliberately evading the issue nobody suggested 40k the suggestion was to match Australia at about 18k . One can only conclude by their policies they are not interested in helping the people on low incomes they are a party for the well off only .
Are you serious? A party that has overseen one of the biggest wealth transfers in living memory from the asset-less to the well off hates the rich? They friggin love them. Luxon’s property portfolio increased by $4.3 million in a year. If that’s hate then gimme some please.
trust in the irony, a great feature and strength of Orwell’s prose. here is a government that extols the need to lift let’s say, those in poverty, out of poverty. Tax adjustments could assist that either through the tables/brackets or a retrospective rebate each 31/3. Yet here is a government slamming the door with both great haste and obfuscation, of the most gratuitous type, as soon as the prospect of a tax cut, repeat cut, is raised. In truth when has any Labour government, except for rogernomics quid pro quo, ever made a income tax reduction. So the moral of the story is that any thought of a tax cut is simply heretical, unpalatable even if it would help the poor. And there it is, Orwell)s first point. Such intransigence, coupled with other dilatory management, will easily produce undesirable, undoubtedly unforeseen too, collateral impact elsewhere.Bit of an own goal then isn’t it for them, if to view the outcome in terms of your displeasure about the particular enrichment(s) that have issued forth as a consequence.
I for one am shocked that the retail oligopoly and the refining monopoly did not pass on the proceeds from the drop in oil prices as quickly as they jacked up the prices in response to the decline. Shocked!
It’s disappointing that people here blame the government when they were probably the same people who blamed them for doing nothing.
Excellent work David Chaston.
It would be interesting to see this worked on price per barrel of refined petrol ex Singapore etc. Which is an international price and the actual way our fuel comes to us. But I don't know how to work it out.
".............TAX CUT DOES NOT FULLY COMPUTE
In the week to March 18, MBIE has reported that the discounted U91 price fell by -33c/liter to a national average of $2.71/L from the immediate prior week. This was the week that petrol taxes were cut and the MBIE data shows that was worth almost -26c/L. But the same data shows the crude oil price also fell in the week from US$107/bbl to US$93.70/bbl. When you work that through the exchange rate, that is a fall of -31c/liter. So how does that work? Crude oil went down by -31c, taxes went down by another -26c, and yet the discounted price was down by 'only' -33c/L? !........................"
Anyway, this calculation should be a shocker and headline news in the MSM. (but we are also not surprised)
The petrol people always make a bigger margin on the way down. They make good margin on the way up as well, but as articled above, are always a little slower on the downside. They make for good playmates - big govt & big business. That's the story of the last 2 years. Big is good! It's time for all the little people to stand up. Like the Ukrainians are standing up for Europe while Western Europe sits on its fat arse & does f.... ...l.
Australia has finally struck a deal for New Zealand to accept some of the refugees who arrived by boat...
If we wanted refugees we didn't need to wait nine years, just turn up with a bus at the Ukrainian-Polish border and ask if anyone would like to nip over for a year or two while the Ukrainian Army/Militia stamps out the Russian invasion.
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