Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
There have been fixed rate increases from TSB, Heartland and China Construction Bank today. And, rather surprisingly, Heartland Bank cut their floating rate by -25 bps to 3.50% which goes right against the general trend. 3.50% is a fill -100 bps lower than the lowest big bank floating rate (Kiwibank at 4.50%). SBS has raised is FHB combo rate from 2.29% to 2.99%. Update: ANZ has raised their fixed rate card across the board. More here.
TERM DEPOSIT RATE CHANGES
China Construction bank, Heretaunga Building Society, and Finance Direct all increased their term deposit offers. Update: ANZ has raised term deposit rates by between +10 bps and +30 bps in a steepening trend.
WHERE THE JOBS ARE, & AREN'T
Stats NZ released updated data from the IRD's PAYE system (well really, their DED system). Infometrics has noted the number of filled jobs fell -0.3% in February, going against the general trend of jobs growth in 2021, and leaving total filled job numbers now +3.4% higher than a year ago. But earnings per filled job keeps increasing and was +7.3% higher than a year ago. Average earnings are now +8.1% higher over the year to February, compared with the 12 months before. The shiny bum "professional services industry" has over 14,000 more filled jobs than a year ago, the largest gain by industry. The other largest increase were for construction (up 13,200), healthcare and social assistance (up 10,300), and public administration and safety (up 9,800). These industries benefited a lot from stimulus spending that is coming to an end now. Agriculture, forestry, and fishing jobs are down 4,300 from a year ago, the worst industry performer. Info media and telecommunications, as well as arts and recreation, are two other industries losing jobs, down 3,500 and 1,900 respectively, notes Infometrics.
ESCAPEES GETTING READY IN HUGE NUMBERS
Meanwhile, Kiwibank economists say the outflow of people from NZ could be similar to the Aussie mining-fueled exit back in 2011. These outflows 'could reach 20,000 by the end of this year', they say.
SUDDEN 'STOP ORDER'
The FMA has slapped an interim 'stop order' on James Law Realty and The One Management GP Ltd in relation to their promotion of a "wholesale" promotion of The One in Longhorn Partnership Fund. The FMA is concerned about statements regarding the Fund’s returns payable to investors and the level of risk in the investment.
FIJI FOCUS
Fitch has been looking at Fiji's fiscal situation and has forecast their budget deficit to peak at -13.2% of GDP in FY2022 before narrowing to -7.7% of GDP in FY2023 as a tourism-led economic recovery gathers momentum. They also expect government debt to fall gradually after hitting a forecast 88% of GDP in FY2022, but remain high by historical standards over the coming years. Dealing with these deficits will limit what they can spend over the medium term.
"LOW" BUT NOT BY NZ STANDARDS
Australia is sweating "low auction clearance rates". It is a good job they aren't looking this way where ours are very much lower. Auctions typically happen at scale on the weekend in Australia. Over this past one, Melbourne had a 70% success rate with 714 sales of 1026 auctioned. Sydney was at 68% (415 of 623). Brisbane was at 53% (43 of 77). Compare that with last weeks Barfoots Auckland results - 45 of 201 sold for a success rate of just 22%.
GOLD DOWN
In early Asian trading, gold is down -US$5 from this morning at just under US$1953/oz.
EQUITIES MOSTLY LOWER
The NZX50 has turned down today, now down -0.9% in later afternoon trade. The ASX200 is up +0.5% in early afternoon trade. Tokyo has opened down a full -1.0%, Hong Kong has opened down -0.6%, and Shanghai has opened down -0.8% in their very early trades. The Pudong area (Shanghai) shutdown for their pandemic response won't he helping. The S&P500 futures suggests Wall Street will open tomorrow down -0.4%.
SWAPS HIGHER AGAIN
We don't have today's closing swap rates yet. They are likely to have risen today. The 90 day bank bill rate is up a sharpish +3 bps at 1.60%. The Australian Govt ten year benchmark bond rate is back up down -3 bps from this morning at 2.84%. The China Govt 10yr is back down -1 bp at 2.82%. However, the New Zealand Govt 10 year bond rate is now at 3.39% (up another +6 bps in an ongoing push higher) and now back above than the earlier RBNZ fix for that 10yr rate at 3.38% (up +3 bps). The US Govt ten year is now at 2.47% and a -2 bps slip since this morning, but up +10 bps from Friday.
NZ DOLLAR HOLDS
The Kiwi dollar is now at 69.5 USc and marginally lower than where we opened this morning. Against the Aussie we are softish at under 92.6 AUc. Against the euro we are slightly softer at 63.3 euro cents. That means the TWI-5 is still just on 74.9 where we have been for four days now.
BITCOIN UP SHARPLY
Bitcoin has taken a big step up today, rising +4.5% from this morning's open to US$46,940 in a bullish move just before the quarter end. Volatility in the past 24 hours has been high at +/- 3.5%.
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24 Comments
Recent rioting in the Solomons targeted Chinese shop owners. If the Chinese naval personnel stay on board and no one lowers the gangplank then they ought to be safe enough. Incidentally Solomon Islanders tend to prefer Kiwis to Aussies too - my source of that information was a New Zealander so unbiased.
Disturbing for Australia and Indonesia; less so for NZ. Distance from Honiara to Wellington 3,826km.
This is a terrible misuse of statistics! Several reasons why...
- The monthly data is noisy - particularly if you use the cash dataset like David has done (or infometrics?) The cash dataset is based on payments made within the month and of course some months have more pay days than others. The 'accrual' dataset smooths this out but the 12 month increase is lower (6.2% compared to 7.3%) so maybe it didn't make attractive copy for infometrics
- More importantly, in these uncertain and disrupted times, no serious analyst would compare Feb 22 and Feb 21 and conclude anything worth sharing. In fact if you compare Feb 22 to Mar 21 you can show a 12.8% decrease in wages using the monthly 'cash' dataset - or why not try comparing July 2019 to July 2018 when we had a 12.6% increase in earnings per filled job (not sure I remember any wage inflation stories then?)
- If all of the above was not enough, 'earnings per filled job' is not a good measure of how much people are getting paid per hour of work. For example, it is quite possible that in February 2022 a lot of people were off sick or isolating, and still getting paid, whilst other people were working more hours to compensate (and therefore getting paid more). This would lead to increases to total earnings or 'earnings per filled job' figure but it doesn't mean everyone was paid more for each hour of work
My view is that looking sensibly at a range of datasets (e.g. published weekly data) does suggest strong wage growth in the last year - particularly at the lower end (bottom quartile) where we might even be matching current CPI (wow!) But, this is not a bad thing - people are not earning enough to pay their rent or fill up their car. Maybe we could look to ballooning corporate profits, huge increases in household wealth, and $6bn of easy money made by banks before we start fretting about a few hard working kiwis getting paid enough to, errrm, stand still compared to prices?
Nearly every single place I have been to in the pacific is indebted to China. Fiji, they built a big desal plant on Taveuni (was defunct when I was there because of a lack of maintenance), Samoa, Parliament buildings and hospital, and lord knows how many backhanders. I have done quite a bit of business in Samoa, the deals going on at ground level are just astounding. Rarotonga owes so the Chinese trawlers are busy fishing them out for a small payment per kg caught.
Did Mr Biden say something that peace in Ukraine is at stake, likely not. Today he clarified that he was not asking for a change of regime in Russia.
Some say otherwise. Fox News "WH forced to walk back Biden's comments". Fox News hosts and guests are disparaging their own US President!
I can see that Mr Biden is showing his 79 years.
Found it here:
https://www.stats.govt.nz/information-releases/consumers-price-index-de…, the 4th data download.
So, my key points are as follows:
- Housing costs, food and transport are big components of the CPI
- In terms of housing costs: construction costs probably did their big leaps last year more than this year, so those cost increases will subside. Rents will probably be flattish this year, with huge supply coming on line and net migration likely to be significantly negative
- In terms of transport costs: likely to be muted inflation over the next 1-2 quarters as a result of fuel tax cut and half price public transport
- Maybe food will push higher though
So the point here is - maybe inflation won't be as high over the next few months as people tend to think?
I wonder what percentage of the new jobs are government jobs or have I missed it somewhere. This could also explain the wage increase depending on the split . I don't see why the issue with Bidens "slip" seems a fair appraisal to me . As for the Chinese in the Solomon's I think the Solomon's are being at the very least bloody ungrateful for all the assistance they have received in the past from Australia and to a lesser extent nz . They will become another failed state to be " owned " by China and have their resources stripped for nothing .
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