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A review of things you need to know before you go home on Wednesday; watching for floating rate rises following +50 bps OCR hike, auction activity slowing, food prices jump, Auckland Council faces cutbacks, swaps settle in, NZD firm, & more

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A review of things you need to know before you go home on Wednesday; watching for floating rate rises following +50 bps OCR hike, auction activity slowing, food prices jump, Auckland Council faces cutbacks, swaps settle in, NZD firm, & more

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

MORTGAGE RATE CHANGES
So far, no banks have announced floating rate increases yet. But they will come soon so keep checking. And there may be fixed rate increases coming at the same time given the squeezed margins recently. Further analysts are now expecting another +50 bps rise in May, so the pressure is on. Update: ANZ has now moved with a full suite of rate increases. See this. BNZ has hiked just its floating rates.

TERM DEPOSIT RATE CHANGES
None here yet but we do know that rates will be rising tomorrow from some banks. Update: ANZ has raised TD rates by between +5 and +25 bps across the board.

DOUBLE BANGER
Of course, today's major news is that the RBNZ OCR was raised +50 bps to 1.50%. More here.

SLOWING
Residential auction activity has flattened out over the last few weeks. Fewer properties are selling under the hammer in the Bay of Plenty, but Canterbury outperformed.

UNEVEN OUTCOMES
Consumer NZ says that NZ-owned banks again top their customer satisfaction survey. Bank customers are noticing their banks are doing better than them, they say. Their survey shows Westpac & ANZ bringing up the rear in satisfaction.

FOOD PRICE HIKES GROW
Food prices have their biggest rise in over 10 years. Statistics NZ says the 7.6% annual hike in food prices is the biggest since 2011 - and that earlier benchmark was affected by a GST rise. Analysts now estimate general inflation is set to top 7% annual rate as at end of March.

COSTS UP, REVENUE DOWN, SERVICE CUTS COMING
Auckland Council is now looking at budget cuts as it's squeezed between falling revenue and higher costs, pressures that mean cuts to services are looming.

RENTS RISE FASTER
Stats NZ reports that March rents rose +5.8% for properties that were offered in the month, compared to the same month a year ago. For Auckland, the rise was +2.7%, for Wellington the rise was +4.6%. But for the rest of the country, most rises were about +10% pa. For all properties including those not on-market, rents rose an average of +3.7%. Everywhere bar Auckland saw rents rise with a quickening pace.

FMA WARNING ON FINANEX 
The Financial Markets Authority is warning that Finanex Limited, which offers an online platform for investors to trade in cryptocurrencies, is falsely claiming to be authorised in New Zealand to provide financial services. Finanex is not a registered NZ financial service provider, the FMA says "Finanex Limited is also making statements regarding the returns an investor would receive from their financial service that appear to be false and misleading and/or unsubstantiated. We are concerned that Finanex Limited may be operating a scam and recommend caution when dealing with them and their website," the FMA says.

FMA ALSO WARNS ON TWO OTHER ENTITIES
The FMA is also recommending exercising caution before dealing with www.allianceequities.ltd and www.alphabase.ltd. It says these websites claim to be operated by NZ incorporated companies which is false. "We believe they are associated and are operating a scam," the FMA says The two are "misusing the details of incorporated New Zealand companies, Alliance Equities Limited and Alpha Base Limited respectively. These websites are not associated with, nor authorised by these companies." The FMA goes on to say that these websites claim they can guarantee returns on investment that appear to be unrealistically high. "The operators of these websites are not registered financial service providers in New Zealand. They do not appear to be subject to regulation by a regulator for the provision of these services or products."

GOLD FIRMER
In early Asian trading, gold is up +US$15 from this time yesterday at just on US$1971/oz.

EQUITIES ALL LOWER
On Wall Street, the S&P500 closed down -0.3% in Tuesday trade, unable to hold earlier gains. Tokyo has opened up +1.6% reversing yesterday's fall, Hong Kong has opened flat again after Monday's large retreat, and Shanghai has opened -0.4% lower. The ASX200 is up +0.2% in early afternoon trade. The NZX50 is down -0.4% in late Wednesday trade.

SWAPS SETTLE BACK
We don't have today's closing swap rates yet. They are likely to be a little softer now the full +50 bps hike has been delivered. The 90 day bank bill rate is up another +1 bp at 1.72%. The Australian Govt ten year benchmark bond rate is down -3 bps from this morning, now at 3.05%. The China Govt 10yr is little-changed at 2.82%. And the New Zealand Govt 10 year bond rate is down -7 bps at 3.51% but now below the earlier RBNZ fix for that 10yr rate at 3.55% (up another +3 bps) which pre-dated the OCR call. The US Govt ten year is now at 2.75% and down -7 bps since this time yesterday in a substantial reversal.

NZ DOLLAR FIRM
The Kiwi dollar jumped on the OCR hike, but has settled a little since and is now at 68.7 USc and a +½c rise since this time yesterday. At this level it is close to the average over the seven years since the start of 2015 of 69 USc. Against the Aussie we are a tad higher at 92 AUc. Against the euro we are up at 63.4 euro cents. That means the TWI-5 is now at 74.6, and and a +50 bps firming since this time yesterday.

BITCOIN FIRMS
Bitcoin is firmer, now at US$40,079 and up +1.4% since this time yesterday. Volatility in the past 24 hours has been modest at just under +/-1.8%

This soil moisture chart is animated here.

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

Daily exchange rates

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Source: RBNZ
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Source: RBNZ
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Source: RBNZ
End of day UTC
Source: CoinDesk

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12 Comments

Good move from RBNZ, USD exchange already a plus for fuel. ANZ 1, ASB WPC nil.

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I was baffled at ASB, WPC & Kiwibank predicting a 25bps rise.  ANZ spot on

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Yes ASBs rates have been under the curve recently. I wouldnt expect much change to the longer term rates, 0.5 was pretty much priced in by most. I would expect quite big moves to the short term call and savings rates, and the 60 and 90 day TDs.

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You raise an interesting point. I’ve noticed (of late anyway) that OCR changes tend to flow through to variable rate products and offerings like the notice savers and standard savings accounts but that TDs and fixed mortgage rates have been more affected by wholesale rate movements. Assume that’s because the banks use the wholesale swap rates for their fixed term lending and whereas the OCR flows through quicker to variable rates. 
 

Irrespective, as has always been the case with the banking rort in NZ, they are always (ANZ and ASB in particular) very quick to move up on mortgage rates and slower to increase TDs and other savings rates, but slower to pass on savings on the other end. 
 

This last week or two has been interesting and unusual because we got both a .50 injection and have had significant upward movement on swaps. Getting spicy!

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Agreed - ASB has a long way to catch up

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While there was a brief jump in the NZD after the announcement, it is now lower against the USD than before

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Yeah I just caught up with this. Apparently there was a dovish tone mixed in the commentary regarding the longer term. I think the US driven international swaps will override this, ANZ moves on the 4 and 5 year suggest they think that also. Interesting times.

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On the price inflation front, the U.S. read came in at 8%. Here is another inflation read that comes in at 13.7% from blockchain oracle solution Chainlink. The below link explains what is wrong with how price inflation is measured and manipulated. Much of this explains why the ruling elite are chasing their tail and why the general populace are kept in the dark.

https://whitepaper.truflation.com/introduction/problem 

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Just wait, this time next week, the media will be flooded with angst on consultation on the big urban planning changes for Auckland. 

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This TradeMe ad for rental property sums up the absurdity well. A pokey little one bedroom granny flat in Te Atatu advertised for more than $500 per week: 

https://www.trademe.co.nz/a/property/residential/rent/auckland/waitaker…

 

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Good excuse to lose a few kg so you can fit in the toilet/bathroom.

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No pets. They are concerned that you might try to swing a cat.

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