Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Kiwibank raised its floating rate by +50 bps to 5.00%. The Cooperative Bank raised their floating rate by +50 bps to 5.45%. WBS raised theirs by +25 bps to 5.24%. Avanti Finance raised theirs +40 bps to 4.95%. On carded fixed rates, WBS raised them too.
TERM DEPOSIT RATE CHANGES
Kookmin Bank raised most of its TD offers. The Cooperative Bank raised all its TD rates and most of its savings account rates.. Heartland Bank raised its popular Direct Call account by +45 bps to 1.50%. It also raised both its Notice Saver accounts by +50 bps to 1.90% (32-day) and 2.50% (90-day). Kiwibank also raised its Notice Saver accounts, to 1.25% (32-day) and 2.15% (90-day).
'NOT IN A GREAT PLACE NOW'
RBNZ Governor says the central bank needs to 'retain anti-inflation bias in everything we do' to prevent inflation expectations becoming 'baked in' to price setting.
A BETTER WAY TO STAY ON TOP OF BUILDING CONSENT DATA
We have launched a new free building consent resource analysing residential and commercial consents by building type, size, location and value. More here.
LATITUDE SEEKS COMCOM CLEARANCE TO ACQUIRE HUMM CONSUMER FINANCE
Latitude Group has applied to the Commerce Commission for clearance to acquire Humm Group's consumer finance business. The deal would bring the two groups' respective buy-now-pay-later operations together. In NZ Latitude’s main products are installment payment products such as Gem Visa and Genoapay, plus personal loans. Humm’s main products are credit cards such as Q Mastercard, Farmers Mastercard, Flight Centre Mastercard and BNPL products.
A STRUGGLING MARKET
Last week the overall NZX50 fell -1.4% but that masked some rather large shifts by some large component stocks. The property sector stocks fell -1.9% but the rest home/retirement center sector only shed -0.2%. The energy sector fell more than -2% to be -6% lower than a year ago. Among individual stocks, F&P Healthcare (FPH, #1) shed -4.6% last week, an evaporation of more than -$600 mln in capitalisation. Serko (SKO, #44) fell -8.1% in the week. A2 Milk (ATM, #11) was down -6.2%, dropping it a few places. The big winner last week was AirNZ (AIR, #41) which recovered +7.5%. The overall NZX50 market cap is now -8.6% lower than it was a year ago.
WORK & RESIDENCE VISAS SURGE
There was a huge surge in the number of work and residence visas approved in March. More than 13,000 residence visas and 32,600 work visas approved in the month, but student visa numbers are still bouncing along the bottom.
AND ANOTHER EXPANSION
New Zealand is relaunching and "expanding" its Working Holiday Scheme with Singapore - but even after that it will still be a very small scheme.
SERVICE SECTOR EXPANDS EVEN AS SENTIMENT IS NEGATIVE
The measure of activity in the service sector surprised somewhat with a shift from contraction to expansion in March. The two key sub-indexes of New Orders/Business (60.1) and Activity/Sales (53.8) both continued their upwards momentum. However, Employment (48.5) and Supplier Deliveries (40.1) remain in contraction. In addition, the proportion of negative comments stands at 57.5%, although this is down from 61.5% in February.
A BIG DROP IMMINENT?
There is another dairy auction tomorrow morning and there is no certainty it will bring higher prices. In fact the previous two has brought declines of -0.9% and -1.0% respectively. In fact, this one could deliver a much larger fall. The dairy futures market suggests it could be as high as -7.5% for WMP and -3.0% for SMP. We shall see.
WAITING TO SEE THE WHITES OF THE EYES IN INFLATION
The minutes of the last RBA board meeting made it clear that they wanted to see actual evidence of rising inflation, and rising wages before they acted to raise their Cash Target Rate.
GOLD HOLDS
In early Asian trading, gold is little-changed from this time yesterday at just on US$1978/oz.
EQUITIES VERY MIXED
Wall Street ended unchanged in their Monday trading for the S&P500. Tokyo has opened strong but is now only up +0.3% in later morning trade. Hong Kong is back trading and is very weak, down -2.7% in early Tuesday trade. Shanghai has opened flat. The ASX200 is up +0.7% in afternoon trade, but the NZX50 is down -0.2% in late trade.
SWAPS UP
We don't have today's closing swap rates yet. They are likely to be firmer by more than +5 bps as Thursday's slip is reversed. The 90 day bank bill rate is up sharply again, up a further very unusual +12 bps at 1.91%. The Australian Govt ten year benchmark bond rate is up +3 bps from this morning, now at 3.06%. The China Govt 10yr is still at 2.86%. And the New Zealand Govt 10 year bond rate is up +6 bps at 3.49% and still just below the earlier RBNZ fix for that 10yr rate at 3.51% (up +3 bps). The US Govt ten year is now at 2.84% and a small -2 bps slip since where we opened this morning. But this new level is the highest since later 2018.
NZ DOLLAR HOLDS
The Kiwi dollar is now at 67.3 68.3 USc and little-changed since this this morning. Against the Aussie we are also unchanged at 91.5 AUc. Against the euro we are marginally firmer on that basis at 62.5 euro cents. That means the TWI-5 is now at 73.6, and and little-changed from where we opened this morning.
BITCOIN HOLDS
Bitcoin is firmer, now at US$40,760 and up +0.9% since this this morning's open. Volatility in the past 24 hours has been high at just under +/-3.5%.
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48 Comments
Surely this is big news for Auckland? Maybe it’s just me.
https://i.stuff.co.nz/life-style/homed/real-estate/128374969/i-dont-thi…
Personally, in an 'ideal world' I'd say something like Stockholm, 2.4 million (another 700K).
But ONLY on the proviso that there is proper planning, funding and delivery of various types of infrastructure (including social infrastructure)
And given the track record of NZ governments over the past 20 years I have very little confidence in that happening.
So in a non-idealised, realistic sense, I would say another 200-300K MAX over the next 30 years.
Yeah. I hate all the greenfield zoning in the AUP. Hopefully a lot less of that will be developed, even if the zoning doesn't go away, especially as the costs of providing infrastructure are so excessive.
But you get my point, right? Growth is fine, even potentially good, but only if it is supported by good investment into infrastructure. And it's very hard, maybe impossible, to be optimistic on this given the performance of our governments.
In the long run you might be right but at present the CBD has many empty apartments and many filled with beneficiaries (a mixed bunch who currently cannot be evicted) so it is a possibility that Auckland will end up like some US cities with a rotting centre surrounded by thriving suburbs. I'm reminded of visiting Detroit and Portland 40 years ago.
Toulouse - 471k, Frankfurt - 753k, Munich - 1472k, Edinburgh - 418k, Salzburg - 152k, Florence - 382k.
Your target of 2.5m is met by two cities in the UK, four in America. You would be happy in China with its 50 cities over 7m.
FYI I have never been to China nor Italy but I reckon Florence must be a wonderful place to live.
For anyone that feels like having a bit of a play around with the overlays: https://aucklandcouncil.maps.arcgis.com/apps/webappviewer/index.html?
Hopefully there's some strong considered submissions to the consultation. The herald comments make for an interesting read - pretty good mix of those that want to preserve the aesthetic, others that want to build a new one...
Thanks was just about to post that, as expected it clearly shows high density intensification (6 storey apartments) in places like Freemans Bay, St Marys Bay, and Parnell - all about 20 minutes walk to the CBD's edge.
I'm sure there will be an outcry in the Eastern Suburbs, where widespread three storey development is planned for.
BTW, as council have pointed out, the extent to which feedback can change things is pretty limited, as the Council is hamstrung by the government and National Party's legislation which has imposed this on Auckland. For once, clever by Labour - they can say that National signed up for this as well!!!!
Seems to make a lot of sense. Many more people can live in quickly accessible distance if we get away with overly authoritarian restrictions on what people can build on their own freely held land.
Bizarre that so much freedom has been prevented by authoritarian NIMBYs and we've had to have far more development pushed to the fringes, with expensive much more infrastructure and rates bills as a result.
If anything it's a bit weird the liberalising is still in so small an area (see below), where planners can't conceive that a 40-minute commute on foot has something in common with a 40-minute commute by car or train.
Yet now I'm seeing people pointing out the council planners are trying to slap heritage status on all manner of old wooden building in the Kingsland area - an area ideal for 6 stories near train and bus arterial transport - to prevent intensification. That is just plain absurd and drives rates higher as people are pushed further out and more and more expensive transport infrastructure is required.
Auckland released their consultation on intensification, it has some idiosyncrasies.
It appears the city planners believe walk to work behaviour only occurs up to 800 meters from The CBD, In other cities walk to work is acceptable for 40 minutes or 3km approximately, and then there are scooters.
Aucklands planners probably jump in their cars and head for the motorways I guess, or perhaps they walk to the ferries.
40 minutes makes sense for walking as it is similar for the time for train journeys, from Swanson for example, or
Upper Hutt.
So, maybe unlimited height for a 3km radius from CBD including other transport modes such as swimming…
Sometimes it’s not what is being said, but rather what is not being said.
Unless I have missed it, it seems that RBNZ and bank economists have been quiet over the past couple of months and seemingly reluctant to put an updated figure on their expectations as to the extent of the fall. I see many posters banding about their expectations, but RBNZ and banks are possibly seemingly unsure.
P8 - at this point its anyone's guess as to how high the OCR might go to either get inflation under control, or completely break the economy. Or whether one happens before the other, or at the same time.
The higher they go with OCR (or the higher swap rates go), likely the more damage done to asset prices.
Its all a bit of an unknown at present....I'd think even to the central bankers themselves have no idea of the potential outcomes and trying to forecast it.
The US Govt ten year is now at 2.84% and a small -2 bps slip since where we opened this morning. But this new level is the highest since later 2018
It's not a reaction to cost-push inflation.
Adjusted for inflation, median personal income has been stagnant for the past 40 years, and a substantial fraction of the population has seen a sharp drop in its standard of living, a situation almost without precedent in American history. Meanwhile, the costs of numerous budget items such as healthcare or higher education have risen very rapidly, thereby forcing more and more families into what Paul Krugman has characterized as a system of permanent “debt peonage” or what Warren Buffett has similarly described as a “sharecropper’s society.” As a result, nearly a quarter of American households have zero to negative net worth, and a single unexpected illness or economic setback can push them to the brink of destitution. Link
The government, as usual, following the science...
MIQ not justified beyond November, health officials told Govt last year
PM out of the country and it's all on.
- MIQ Lies
- RBNZ Governor talking about the end of days.
- Finance minister talking about the RBNZ Failings and saying the government don't care.
- Trotter acknowledging Labour are toast.
Will Poison Ivy come back? will the Joker laugh at FHB when he raises rates? will Penguin try and spend his way out of trouble? stay tuned, same bat channel, same bat time....
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