What happened Wednesday

Business / news

A review of things you need to know before you go home on Wednesday; few retail rate changes, house auctions slow, hiring up including by us, commodities at record high, swaps up, NZD firm, & more

6th Apr 22, 3:59pm by David Chaston

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

MORTGAGE RATE CHANGES
Heretaunga Building Society (HBS) raised rates today. Update: SBS Bank have raised almost all their home loan rates. And The Cooperative Bank has as well.

TERM DEPOSIT RATE CHANGES
Both Xceda Finance and HBS raised term deposit rates today. Update: SBS Bank has raised almost all their TD rates too, likewise the Cooperative Bank.

GRINGING LOWER
The slowdown in auction sales is spreading beyond Auckland to Bay of Plenty and Canterbury. Only around a quarter of properties are selling under the hammer at Auckland auctions, but almost two-thirds in Central Otago-Lakes.

EVERYONE IS HIRING
BNZ/Seek are reporting that job ads hit fresh high in March (amid Omicron’s peak). A desire for full-timers driving it; not contractors or temps. The Hospo sector is recovering well from the February dip. “Orange” and opened borders will offer more scope for hiring, they say.

WE ARE TOO
On those lines, we are hiring. We have multiple openings for experienced business journalists, either in Wellington or Auckland. We would love to hear from you if have experience and enjoy reporting on business and economic matters in a collegial, fun environment, well separated from corporate media 'office politics'. See this.

"KEEP YOUR EYES ON THE HIGHS"
The ANZ World Commodity Price Index hit a new record in March, lifting a further +3.9%. Prices are very strong across most commodities, but none of the sub-indices are currently at record levels. In local currency terms, the index gained just +0.5%, as local returns were eroded by a rising currency (TWI).

OUR SANCTIONS EXTENDED
The Government said today they will apply 35% tariffs to all imports from Russia, and extend the existing export prohibitions to industrial products closely connected to strategic Russian industries. "This is New Zealand’s most significant economic response to the Russian invasion to date."

TAKING 2/3 OFF RETIREMENT BALANCES
Research done for the Retirement Commission appears to indicate that withdrawals to buy homes have had a big impact on retirement savings of young New Zealanders.

CALLING TIME
Public Service Commission (the re-named State Services Commission) has announced the Director-General of Health, Dr Ashley Bloomfield, "has chosen to step down at the end of July".

DATE SET
The Tauranga by-election will be held on Saturday 18 June, necessary on the resignation from Parliament of Simon Bridges.

CHINA IN TROUBLE
China's economic troubles are deepening. Their services PMI sunk sharply in March, according to the private Caixin survey. Unlike the 2020 one with was part of a short-sharp global retreat, they have this one on their own. Services activity fell at its quickest rate since February 2020 amid notable drop in sales. Input cost inflation picked up more than they expected. Business confidence dived to a 19-month low.

ASIC DISLIKES CFDs
In Australia, regulator ASIC has extended its product intervention order imposing conditions on the issue and distribution of contracts for difference (CFDs) for a further five years to 23 May 2027. CFDs enable speculation, not investing, they say.

GOLD SOFT
In early Asian trading, gold is down -US$8 from yesterday at just on US$1921/oz.

EQUITIES ALL LOWER
Wall Street had a down day with the S&P500 down -2.3% at their Tuesday close after taking increasing fright at rapidly rising bond yields. Tokyo has opened down -1.8%. Hong Kong has opened down -1.9% and Shanghai is down -0.5% at their opening. The ASX200 is down -0.9% in early afternoon trade. The NZX50 is down -0.30.3% near the close.

SWAPS UP SHARPLY
We don't have today's closing swap rates yet. They are likely to be up sharply. The 90 day bank bill rate is up +1 bp at 1.67%. The Australian Govt ten year benchmark bond rate is up +13 bps from this morning, now at 2.95%. The China Govt 10yr is unchanged at 2.82%. And the New Zealand Govt 10 year bond rate is now much higher at 3.39% (up +9 bps) and still well above the earlier RBNZ fix for that 10yr rate at 3.33% (up +8 bps). The US Govt ten year is now at 2.61% and a +21 bps leap since this time yesterday. Yes, you read that right. Apart from the gyrations at the start of the GFC, and the confusion in March 2020 confronting the pandemic, this is the largest daily move since we started monitoring it in 2007.

NZ DOLLAR FIRMISH AGAIN
The Kiwi dollar is now at 69.4 USc marginally lower today. Against the Aussie we are -½c lower at 91.7 AUc. Against the euro we are up almost +½c at 63.7 euro cents. That means the TWI-5 is now at 74.9, firmer than yesterday but not by much.

BITCOIN LOWER
Bitcoin is down -2.9% today from this time yesterday to now be at US$45,264. Volatility in the past 24 hours has been high at +/- 3.1%.

This soil moisture chart is animated here.

Keep ahead of upcoming events by following our Economic Calendar here ».

Daily exchange rates

Select chart tabs

Source: RBNZ

Source: CoinDesk

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

44 Comments

by waymad | 6th Apr 22, 4:09pm 1649218158

Zoltan Pozsar unpacks the interactions between commodity trading and liquidity requirements. It's way above my pay grade to comment or to try to summarize. But it feels like another Black Swan unfurling its wings....

Just RTWT.

by Independent_Observer | 6th Apr 22, 4:30pm 1649219409

This also from Pozsar last month:

“We are witnessing the birth of Bretton Woods III – a new world (monetary) order centered around commodity-based currencies in the East that will likely weaken the Eurodollar system and also contribute to inflationary forces in the West.” – Zoltan Pozsar, Former Federal Reserve and U.S. Treasury Department official, and now Credit Suisse Global Head of Short-Term Interest Rate Strategy based in New York.

https://www.credit-suisse.com/about-us-news/en/articles/news-and-expert…

by hindsight.eth | 6th Apr 22, 5:23pm 1649222611

All the stabilization mechanisms are failing.

by Becnz | 6th Apr 22, 6:10pm 1649225435

I have seen many black swans in the river of late.

They tend to ignore my 4 year sons silly antics but sooner or later you know it will put him back inline when he gets cocky.

by company of heroes | 6th Apr 22, 4:10pm 1649218211

"Swaps up sharply" " The US Govt ten year is now at 2.61% and a +21 bps leap since this time yesterday." "New Zealand Govt 10 year bond rate is now much higher at 3.39% (up +9 bps)" " The Australian Govt ten year benchmark bond rate is up +13 bps from this morning, now at 2.95%."

2022 might be right, 2 years fix rates could be 7% soon....

by fortunr | 6th Apr 22, 4:18pm 1649218699

2 years fix rates at 7% is very likely, and it is going to happen sooner rather than later - swap rates are climbing at a very steep rate, with no sign of deceleration

by andrew6 | 6th Apr 22, 4:51pm 1649220696

5 year is not very far from 7%.

This is just the beginning.....fed has just raised its first interest rate hike and that too by just 0.25%......much more to come. Reserve bank governors are showing resistance by not raising by 0.5%, which is required and on the other side, did not think when had to drop by full1% plus.

by hum | 6th Apr 22, 4:55pm 1649220956

-30% price drop guaranteed

by JJS | 6th Apr 22, 5:32pm 1649223169

One of my mortgages is due to refix, rep from my bank tells me I really should lock the rate in before it expires on Monday. Big jump on the cards?

by kpnuts | 6th Apr 22, 6:33pm 1649226805

well its not goign to go down anytime soon -- sounds like bloody good advice -- just how long will be your question!

by Justa comment | 6th Apr 22, 7:55pm 1649231724

Whats with the RBA at 0.1, which planet do they live on ???

by RickStrauss | 7th Apr 22, 11:34am 1649288074

Planet Property?

by andrew6 | 6th Apr 22, 4:47pm 1649220452

Central bankers experimented with MMT and screwed:

https://finance.yahoo.com/news/verdict-is-in-on-modern-monetary-theory-…

Are they accountable and if yes to whom. Are they still not experimenting to pamper their giant inflatable ego.

by J.C. | 6th Apr 22, 5:04pm 1649221459

The MMTers usually point to the lack of inflation in Japan as a good example of how it can be. But the issue is that households and firms have been paying down debt, not borrowing.

by Foxglove. | 6th Apr 22, 5:01pm 1649221268

The Public Service Commission ( the re-named State Services Commission.) Well then, what’s in a name. From contact with a few identities over the years, understood being called Public Servants was both grating and galling to a large number of said Public Servants. One could assume the previous nomenclature of State Services was in those cases preferable? That is serving the government not the people. Will this new letterhead instil a different set of priorities and values? As sung by The Chapter - only time could let us know!

by iliketobike | 6th Apr 22, 5:34pm 1649223270

More likely it's the servant part they had an issue with.

by Nifty1 | 6th Apr 22, 5:29pm 1649222967

NZ's hero Bloomfield resigned along with Caroline McElnay &Niki Stefanogiannis. What's going on there...? What's coming up next?... Do they need a fresh face for new stand ups when the next variant comes?...

by RickStrauss | 7th Apr 22, 11:37am 1649288275

I would hazard a guess it is exhaustion, and the hardest tasks having been accomplished.

Probably tired of deranged threats from rabid anti-vaxers too.

by Hamish | 6th Apr 22, 5:38pm 1649223519

That and the new DHB model on the way.

by Foxglove. | 6th Apr 22, 6:11pm 1649225482

Treasury Investor Confidence Review gave MoH a “D.” D for dunce. This government, and its predecessors, have had obvious problems with this ministry. The carry on at the Canterbury DHB reveals utter mismanagement from Wellington for example. While I do not agree with DHBs being disbanded because of the then lack of local elected representation, it suggests that this restructure has become necessary in order to break down the fortress bunker mentality that the MoH has clearly embraced. Early on in the covid a clear clue to this aspect, was given when the government ordered that all border staff must be tested. Not only did the MoH refuse to do so, they lied that they were. I have little regard for this government but I do sympathise with them over what they had to take on the chin, absorb the embarrassment, on behalf of the MoH. The new organisation is to see the old existing power of the MoH gutted, reverting to administration and nothing operational. The MoH seemingly, has finally got its comeuppance and it is probably a fair observation that these three resignees, have too bigger boots now for the new job(s.)

by sharetrader | 7th Apr 22, 4:27am 1649262461

that was the DHB not rolling out that due to layers of middle management getting in the way, the MOH were caught in the cross fire trying to explain why some DHB's ie counties were not rolling it out at auckland airport

it is very obvious to anyone that has had dealings with DHB's that they have become mired with layers of middle management that frustrates doctors and nurses on the front line as they know what needs doing but can not because of process and paperwork, hence why NGO's were handed money and sent out because they don't have that structure to deal with

it is crazy auckland has three DHB's with three layers of middle management i.e three HR departments that don't cooperate at all. quite often the MOH has to step in request staff from outside auckland and send them in to help out.

by Golfer | 6th Apr 22, 6:49pm 1649227778

I disagree. I suggest they are resigning in protest against Jac/Rob. Being asked to give ‘health advice to suit the political plan’ rather than ‘health advice to mould the political plan’ is unacceptable for a Doctor.

by kiwichas | 6th Apr 22, 8:37pm 1649234233

Resigning rather be saddled with implementing Andrew Little's expensive health reforms,and seeing huge money going into the black hole of Maori health governance;lots going in, nothing coming out...then getting blamed.

by RickStrauss | 7th Apr 22, 11:36am 1649288161

Seems a bit too Talkback-Facebook to me, that nefarious bent.

by chebbo | 6th Apr 22, 6:19pm 1649225965

Been offered a seat on the board at Pfizer perhaps?

by Baywatch | 6th Apr 22, 6:23pm 1649226222

Cheap shot from the cheap seats

by Foxglove. | 6th Apr 22, 6:26pm 1649226384

Cynics A Go Go! Or have you typoed, Fizzer?

by kpnuts | 6th Apr 22, 6:47pm 1649227622

Really -- like all healthcare workers he has worked his bloody arse off for two years doing his absolute best to keep the country safe -- ague about some decisions / timing if you like - but he has done an amazing job -- walking a political tightrope as well as the health one -- and as someone who runs a healthcare company -- the pressure you feel knowing that if you get even a simple decision wrong the consequences are covid in a rest home and 20 deaths for example -- is horrific. He deserves all the accolades we can offer for his efforts - and sadly by not giving himteh head of the new health authority role -- he will be off overseas adn good luck to him

by Foxglove. | 6th Apr 22, 7:56pm 1649231791

Arise Sir Ashley then? I am dead against this farce of heraldry reintroduced for reasons beyond belief by PM Key, unless of course that was a personal ambition, so then what else could be expected.

by kpnuts | 6th Apr 22, 10:36pm 1649241399

NZ order of merit springs to mind before any of those UK gongs -- keys to the city -- or just everyone going bloody good bloke and good luck to you

by Fluffybunny | 7th Apr 22, 7:29am 1649273372

We all worked hard the last couple of years.

He's good in front of a camera, sure. Though overall is/was the health system providing us with the level of value we want?

by WellingtonInvestor | 8th Apr 22, 12:54am 1649336094

I think there were a lot of people, including the whole country, that are the reason NZ did so well, so far. Also a lot of luck and timing. But we are now getting a lot of deaths occurring and if XE and other variants come in and we just keep getting wave after wave over the next few years, we are going to have a lot more deaths, and Long Covid . There is a reason why China are remaining Covid Free.

by nz-it-worker | 6th Apr 22, 6:23pm 1649226186

3 school cricket teams that need coaches?

by nigelh | 6th Apr 22, 6:39pm 1649227163

For AB and CMcE likely to be gone if Nats get in. Public servants politically compromised/co-opted by Labour.

by Foxglove. | 6th Apr 22, 6:49pm 1649227769

Aye, there was a most unsavoury amount of back scratching, amongst the various pulpit participants. Public Servants are meant to be politically neutral for blindingly obvious reasons. I am hard pressed to accept that the relationship here, was not completely compromised in this regard.

by kpnuts | 6th Apr 22, 6:41pm 1649227269

Nifty its just the tip of the iceberg -- senior people in teh MOH . DHB's and NGO health are walking out the door in droves -- this governments agenda is so warped its not real -- the MOH just walked away last week from talks on the pay equity settlement for care workers -- leaving employers , Unions and staff in Limbo -- no reason no explanation and no response to any questions why!

Its a shit show -- and its only just starting - providers are giving up contracts to government departments and simply walking away in disgust -- none of the 100 billion borrowed has been given to mainstream NGO providers in Aged Care, Mental Health, Serious Injury - no additional payments to compensate for all the additional costs and disruptions -- and bear in mind -- despite teh option to bring staff who are isolating into work -- most of us have tried not to do this because the risk of bringing infection into those sites is so high and the outcomes for clients so bad - and you can test negative with a RAT but already be infected and contagious

by KiwiinSpain | 6th Apr 22, 7:04pm 1649228663

I do believe kpnuts you are 100% correct.

The strains of Covid, festered by a lunatic govt, are proving too much for too many in healthcare. When the play book rules are changed so radically most mortals struggle to adapt.

Bloomfield will be well aware that certain aspects of NZ society are now very angry at his role in what has been a massive destabilising force on this country. And they are getting vocal and organised.

I know, I know, his defenders will proclaim that he was doing his best but yet to rough shod over the process of informed consent was in another world, a crime that would have seen our house investigated by the glorious MoH.

by GV 27 | 7th Apr 22, 7:15am 1649272547

The only crime is the abuse of free speech by deranged anti-vaxxers. I welcome these people getting organised because it will make it far easier to ignore them.

by RickStrauss | 7th Apr 22, 11:40am 1649288417

Even their facebook/talkback takes have become stale and tired now.

by Fluffybunny | 7th Apr 22, 7:33am 1649273615

Yeah.. Covid zombies!! Where are they!!

Don't know about anyone else here but I had zero vac side effects and yet to get covid (that I'm aware of)

I mean it did give me a little ouchy mummy in my army arm. Can I have a lollipop to go with my paranoia?

by RickStrauss | 7th Apr 22, 11:39am 1649288376

So what we will do as voters is vote for tax cuts and austerity health funding, with a side serving of magical "metrics" that are surely the middle management panacea to force doctors and nurses to do their jobs properly. Like, wind back 7-8 years.

by HouseMouse | 6th Apr 22, 9:43pm 1649238214

More early signs of the looming slump in residential construction:

https://www.stuff.co.nz/business/128289770/second-auckland-townhouse-de…

by Mark L | 6th Apr 22, 10:35pm 1649241314

Wow. Co op bank lifts its term deposit rates to under where the A grade banks were weeks ago.!

by WellingtonInvestor | 7th Apr 22, 3:17am 1649258223

Banks were quick to drop the saving and bonus saving rates when the pandemic hit and the OCR dropped. But they have hardly raised them at all since the OCR was raised. Only a few have raised them back over 1%. Guessing they are using now to increase the margins.