Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
None to report today. No major has followed ANZ higher yet.
TERM DEPOSIT RATE CHANGES
None here either from any bank but Mutual Credit Finance has raised its offers.
'CPI INFLATION IS MOON-BOUND'
Latest ANZ Business Outlook Survey shows inflation expectations reaching a record survey high, while a 'remarkable' 96% of firms expect higher costs and their pricing intentions have moved into 'uncharted territory'.
BUILDING CONSENT SURGE
Residential construction still booming with new dwelling consents up +25% in the year to February to a new record of almost 50,000 (49,773). There were 4195 dwelling consents issued in February, far higher (+30%) than the previous record for a February of 3238 in 2019. Auckland is building 40% of them (monthly and annually) and the surge is really noticeable in consents for townhouses. Will it continue into 2022? Westpac says they think so.
ALTERATIONS & ADDITIONS
The consenting of housing alteration and additions projects was also unusually high in February. These are usually reported by value (and an all-time record high for a February), but the number of these consents is now back to 2007 levels when they last spiked.
LONG TERM CHANGES COMING
Changes to the tax deductibility rules for residential investment property could bring significant long term changes to the housing market, says Greg Ninness. More here.
HIGHER PREMIUMS, LOWER PROFITS
According to RBNZ monitoring of the insurance industry (J10), life insurance premiums rose +24% in the year to December 2021, and rose +9% for the general insurance industry. If you are paying for house, contents or car insurance you probably already know that. The loss ratios rose for both types (life and general). Overall industry profitability was down to $889 mln industrywide, an -8% fall. You can't split the two sectors for profitability in this RBNZ data. The total of all investment assets (J20) fell to $16.7 bln, down from $17.0 bln a year earlier.
GOLD DOWN AGAIN
In early Asian trading, gold is down -US$2 from this time yesterday at just over US$1922/oz.
EQUITIES HIGHER EVERYWHERE, AGAIN
On Wall Street, the S&P500 ended its Tuesday session up +1.2% in a building gain. Tokyo has opened down -0.7% in Wednesday morning trade. Hing Kong is up another 1.2% in early trade. Shanghai is up +1.0% in their opening trade. The ASX200 is up +0.8% in early Wednesday afternoon trade. The NZX50 is also up +0.8% in late trade.
SWAPS SOFT
We don't have today's closing swap rates yet. They are likely to be soft following Wall Street bond market signals. The 90 day bank bill rate is down -1 bp at 1.60%. The Australian Govt ten year benchmark bond rate is down -7 bps from this time yesterday at 2.82%. The China Govt 10yr is back down -1 bp at 2.82%. And the New Zealand Govt 10 year bond rate is now lower at 3.32% (down -5 bps) but still higher than the earlier RBNZ fix for that 10yr rate at 3.31% (down -1 bp). The US Govt ten year is now at 2.37% and a -11 bps retreat since this time yesterday. The UST 2-10 curve inversion threat remains but it hasn't held yet.
NZ DOLLAR FIRMS
The Kiwi dollar is now at 69.5 USc and back up more than +½c that this time yesterday. Against the Aussie we are down firmer at under 92.5 AUc. Against the euro we are a tad lower at 62.6 euro cents. That means the TWI-5 is now up to 74.7 and a +30 bps rise.
BITCOIN SLIPS
Bitcoin has fallen -1.4% today to US$46,803. Volatility in the past 24 hours has been modest at +/- 1.6%.
This soil moisture chart is animated here.
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27 Comments
AIR.NZ in trading halt at 4pm today due to their upcoming recapitilisation requirements. This news still to be released. Very little volume in AIR all day until about 3.45pm when several large traded lines went through on secondary market dropping the price. Very well timed or just coincidental or both.
Details released on the NZX website, pretty savage for holders. Last traded a little under 1.40, cap raise is at 53c. Pretty brutal, but I wonder how many naive sharesies investors are excited to be able to buy new shares so cheap...
67% dilution for anyone who doesn't stump up the extra money.
Since the Canterbury earthquakes most insurers have moved to capped sum policies for home rebuilds - ridding themselves of the risk to have to rebuild a client's home whatever the cost.
A 2015 Treasury report estimated since that change, the total under-insurance of New Zealand homes was in the vicinity of $184 billion.
96% of firms expect higher costs and their pricing intentions have moved into 'uncharted territory'
Translation: Firms all agree with each other that after record corporate profits last year, this year is another great year for increasing prices, sneaking in some share buy backs, and paying dividends to themselves.
The importing companies that we deal with directly are fuel companies. They are not holding back one scrap on putting on every price increase they can think of. Totally shameless. It is almost as if they already know their competitors will not undercut them. How could that be?
But inflation expectations in the NZ sovereign bond market are muted while banks are more interested in the return of their money, than the return on it.
Our council have sent an advertising email. It starts: "Our region's vibrant cultures are celebrated at Auckland Council's World of Cultures festival ... events provide opportunities to learn, dance, eat and explore everything that makes Auckland an incredible place to live". Many fascinating presentations but nothing relating to my home: England. Why no Morris Dancing? Or even Irish and Scottish dancing and food? I'm thinking of Basingstoke, Havant, Reading, Hemel Hempstead and Slough - sadly us POMs just do not have a vibrant culture.
In New Zealand most of our life is so steeped in British culture that we are not consciously aware of it. Morris dancing is not really part of living English culture and is considered a bit of a joke by most Englishmen. There really is no need for us to be part of a cultural celebration.
Is this the tip of the iceberg - new begining of what is to come.
https://www.stuff.co.nz/business/128204540/auckland-development-with-15…
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