Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE RATE CHANGES
BNZ was back again today with mortgage rate cuts. Heartland Bank raised two rates. SBS Bank raised some and cut others. More here.
TERM DEPOSIT RATE CHANGES
TSB raised many of its TD rates today, but mainly short term ones.
AUCKLAND STATE OF EMERGENCY EXTENDED
Auckland Mayor Wayne Brown has extended the state of emergency for the city for seven days following recent flooding. Brown says the decision is based on advice from civil-defence authorities. He says the state of emergency could be lifted early if circumstances permit. Brown also says he "dropped the ball" last Friday when the worst of the flooding occurred, saying he was "too slow to be seen" and "communications weren't fast enough."
BOUNCING UP OFF ITS LOWS
According to the latest ANZ-Roy Morgan consumer confidence survey, it jumped 9 points in January to 83.4, more than undoing its December fall. The lift was driven by the forward-looking questions. The level is still very low. The proportion of people who believe it is a good time to buy a major household item, a key retail indicator, lifted 5 points to 28%. Inflation expectations were little changed at 5.3%.
FLOOD INSURANCE CLAIM UPDATE
IAG told investors that the Auckland flooding even had resulted in more than 15,000 claims so far. They also said the claims level probably exceed AU$350 mln (NZ$390 mln). And that is just one insurer, even if it is the largest. Future insurability is fat becoming an issue for many homeowners. There is more on that here.
WIDER RETAIL SPENDING RESTRAINT
Worldline (ex-Paymark) said the storms in January led to a drop in consumer spending in several regions at those times and may have dampened spending more generally over the month – but a weakening pattern suggests wider economic factors are also at play.
STILL BUYING 'NEW' AT A STRONG PACE
Sales of new cars remain strong in January although not as strong as in December, but weakened further for used imports. A new 12 month record was reached for new cars in January, but used imports sank to a nine-year low. There is a noticeable shift to smaller cars underway, possibly coinciding with the rise in EV sales (although the luxury end is still strong). Sales of new commercial vehicles however fell away further, now down -30% from year-ago levels. Auckland flood damage recovery may distort this activity in some future months.
BUSINESS CREDIT DEMAND 'MIXED'
Equifax says overall business credit demand was down -1.7% year-on-year in the December 2022 quarter. Following some uplift in the previous quarter, business credit demand reduced in the December quarter, but the overall reduction is relatively small, with mixed experience across industries.
'REASONABLE GROUNDS'
The FMA is reinforcing that financial advisers must have reasonable grounds for any recommendation or conversational guidance to clients. Failure to do so puts them at risk. Without reasonable grounds, an adviser cannot make a recommendation. Those positions must all be properly documented, says the regulator.
FIJI ON THE UP
ANZ has been looking at Fiji's economy. That say their economic growth accelerated in 2022 and is gaining momentum. However, a strengthening economy where demand could escalate quickly, raises the prospect of interest rate rises there in the near future. Higher rates will be necessary to retain an adequate level of surplus foreign reserves, contain underlying inflation and anchor inflation expectations.
CLIMATE CHANGE ADAPTION URGENCY & PARAMETRIC INSURANCE
We released the next in-depth interview in our Of Interest podcast series today. David Hall explains the need for, and possibilities for, climate adaptation finance as people in the upper North Island clean up. You can find that episode here.
YES, CHINA'S SERVICE SECTOR IS REBOUNDING
The private services PSI survey for China confirmed the official PSI rebound in their services sector in January. (Recall this same private survey did not confirm the factory improvement.)
STRUGGLING
In Australia, the value of new home loans for owner-occupied homes in Australia fell -4.2% in December from November, sliding for the seventh straight month and coming in worse than forecasts for a -2.75% decline. Refi is strong there however.
SWAP RATES FALL SHARPLY AGAIN
Wholesale swap rates likely retreated further today with chunky retreats across the curve all driven from international influences. The real action comes near the close however. Our chart will record the final positions. The 90 day bank bill rate is down -2 bps at 4.89%. The Australian 10 year bond yield is now at 3.40% and down -11 bps. The China 10 year bond rate is down -2 bps at 2.93%. The NZ Government 10 year bond rate is now at 3.96% and down -16 bps, and now just below the earlier RBNZ fix at 3.98% which was down -15 bps. The UST 10 year dropped back another -3 bps to 3.38%. Recall it was 3.52% a week ago.
EQUITIY MARKETS MIXED
The S&P500 ended up +1.5% on Wall Street at the end of its Thursday trading. Tech indexes rose even more. All this was driven by a market feeling the US Fed is or is about to reach the end of its 'normalisation' transition. Tokyo has opened its Friday trading up +0.6% and heading for a weekly gain of +0.7%. Hong Kong has opened down -0.7% and heading for a weekly loss of -3.5%. Shanghai has opened down -0.3% and if that holds will be down -1.0% for the week. The ASX200 is up +0.4% in its Friday afternoon trade and heading for a +0.6% weekly gain. The NZX50 is flat in late trade today, but it already has a weekly gain of +1.0% in the bag.
GOLD TUMBLES
In early Asian trade, gold is back down as sharply as it rose yesterday, now back at US$1917/oz and a -US$36 daily retreat.
NZD SHIFTS CANCEL EACH OTHER
The Kiwi dollar is at 64.8 USc, and down almost -½c from this time yesterday. Against the Aussie we are up +½c at 91.6 AUc. Against the euro we are little-changed at 59.4 euro cents. The TWI is now at 71.5 and also little-changed.
BITCOIN FALLS BACK SOME
The bitcoin price has retreated a bit today, down -2.1% from yesterday to US$23,568. Volatility has been modest however at +/- 1.5%.
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89 Comments
Anyone else tiring of heavy rain warnings?
I'm certainly tiring of the rain and finding that everything that is green is growing like crazy - including weeds! 🌱🌱🌱
The sea of dandelions in our backyard reminds me I really need to tend to our lawn.
You should be mowing it twice weekly! 😉
nature at work - carbon capture at its best
... claim carbon credits on them .... weeds are CO2 sequesters too .... same as those taller weeds , radiata pine ....
We had an earthquake at 2:04AM here in Tauranga just for a bit of variety.
Woke us up in the Tron
The media is loving it, fear mongering like crazy!
We are going to hear about every rain forecast for months, just like how they posted the daily Covid numbers well after anyone cared.
So earthquakes don't scare you?
Only if they are over Magnitude 6.5
and Christchurch is currently 33 degrees.
That is more than the highest ever recorded in Auckland (32.4 degrees). Although I reckon ChCh has probably done worse than Auckland's lowest ever temperature, -1.1 degrees.
Highest recorded temperature in Christchurch is 41.6 degrees. and the lowest -7.1 (that I can find)
Brown dropped the ball alright, the tennis ball.
I think he has got his PR team back that won him the election. He might need to keep them on full time
Darby continues to dig a hole for himself.
?
That's actually pretty funny, was it intentional from Brown? You'd think he'd be avoiding anything to do with tennis unless he's taking the piss.
This came across my desk, it is from a trade association and looks to me to be very much on the positive side of things I wonder what the regular posters think of the below comments
"Although pessimistic predictions for the economy and a possible downturn in the NZ construction industry are forecast, New Zealand often has a way of softening the harsh effects of a slowdown. If businesses make sound decisions and plan for the future, we'll find the consequences are often less than expected.”
Comments welcome
Keep taking the blue pills
I personally found the comments to be at best naive and at worst delusional 😉
Definitely delusional
Tomorrows barfoot auction numbers, i do not think HW2 and TTP will be getting up earlier to spin them, they are going to be DISMAL not green shoots more brown shrivelled ones
My understanding is that before FTX popped, it created its silly FTT tokens, and had its associate company Alameda pretend to buy them to create a "market". It then started selling the things based on said market.
It's time for house spruikers to invent some similar scheme to make it look like there is lots of trading going on and we've bottomed.
I noticed a house nearby pop up a for sale sign. So I had a nosey on homes. The agent had been in and propped the “value” back up to 2021 levels, and the listing was asking for it too. It was a tidy house but not incredible, not in the best location either. Talking a $1.6m home value at the peak, had dropped to $1.2 on homes. It sold within one week for $1.6m. A similar house across the road listed for under half CV, has not sold in months.
How different are the two properties.
Fairly different to be fair. That’s reflected in CV. The cheaper a two story converted to two flats. The dearer a tidy home. 3x price disparity. I was more concerned with the unusual spike in homes agent appraisal followed by quick sale. Similar sales of very tidy homes in the area anywhere from 15-25% down from peak over the last 6mo.
No anecdote intention or reflection of market whatever. Just looks fairly sus.
I've got several businesses running on skeleton mode since 2020. You never know what's going to unfold but I know a few other business owners who've been doing the same thing, minimise debt exposure, minimise costs and by the numbers trading.
On the other hand I know other businesses who've thought the business environment over 2021-22 was the new normal and spent up on that basis.
So mixed bag, probably.
One Roof are still glass half full!
- "The vibe is back: Why a blue-rinsed suburb is suddenly hot with younger buyers"
- "Go the Lods! Grand Designs stars celebrate sale of Ponsonby stunner"
- "Tony Alexander: Signs the housing market is pulling back from the edge"
Lol
well I guess the Herald’s viability is quite reliant on real estate advertising revenue, desperation?
Ray White Remuera real estate agent is hoping the prospect of a year’s supply of eggs will lure prospective homebuyers to a property he is selling....past marketing campaigns have included a year’s supply of free avocado on toast...
Did he do a year's supply of dildos after Joyce got hit? Or is that more a Hamilton thing?
Looks like there's plenty of eggs in Auckland
From TA's missive
"But again, those surveys are also showing things pulling back from the edge to levels which are appalling rather than catastrophic."
So things are bad, just not as bad ... maybe , if the wind is blowing in the right direction and a dog isn't p*ssing on your shoe.
I would take TA offshore sailing, I like is relentless positiveness ..... even as we where in the life raft seeing the mast dip below the surface TA would be
Well boys isn't it great we had this raft......
so a big yes to offshore sailing, but as a financial adviser.
no
I can definately see a pullback at some point shortly - one bad news of one month CPI print or employment numbers for the US will force a bit of sell off
The S&P500 ended up +1.5% on Wall Street at the end of its Thursday trading. Tech indexes rose even more. All this was driven by a market feeling the US Fed is or is about to reach the end of its 'normalisation' transition.
History is repeating. Again. And it can cost you big.
Equity markets cheered the Fed's position, major stock indices surging to record highs when policymakers confirmed they were open to rate cuts. The punchbowl, Goldilocks, the Greenspan put. Nah. The last hurrah before much harsher reality set in. There is no punchbowl and curves told everyone exposing the Fed's fraud.
I'm not sure if this video is to inform / educate or mislead, confound and confuse like much of which is written on the internet (something about simians and Shakespeare).
Coromandal declares state of emergency, what a crap summer for holiday parks.
Oddly enough I have zero sympathy for Caravan Parks being of the bent that the precious freedom of parking beside a river and fishing has always appealed much more. As we have seen the erosion of who we are and how we lived, the memories of taking our kids up into the Pillar and Rock Ranges and exploring old gold mining and showing the kids ;and at the end of the day putting up a tent digging the hole and just being in the back of beyond is something I know most New Zealanders will never experience. What purgatory to park jaw to jaw and have to pay for the privilege. Get on with you!
Yeah as a white water kayaker in my yoof, it was always Macpac tents next to a semi flooded river. but you have to introduce these snowflakes to things slowly....
Remember. Not your keys, not your coins.
Online investment platform Sharesies is looking to shed staff as it prepares for a slowdown.
The company said it was consulting with staff affected by the restructuring, although it did not detail how many jobs were likely to be lost.
Sharesies chair Alison Gerry said the company had been planning last year how to cope with a global downturn, including cutting costs, stopping hiring, and looking for new sources of income.
"With the uncertain economic outlook projected to continue for some time, we need to ensure the business remains strong and sustainable, and that the Sharesies platform is compliant and efficient."
https://www.rnz.co.nz/news/business/483562/sharesies-prepares-to-cut-st…
What a bunch of DGMs Infometrics are. They think NZ is already in recession and that the recession will continue into 2024:
https://www.rnz.co.nz/news/business/483545/new-zealand-likely-to-remain…
Expect the GDP figures coming out of NZ to be highly distorted by trends such as Auckland clean-up, tourism, export education and low-skilled migration over the next few quarters at least.
The underlying economic productivity, export competitiveness and per capita GDP will halt to a grind, but no political party in the Beehive cares about those critical measures of economic health.
So, the government of the day will stick its head in the sand and stick to the meaningless headline stats, while middle NZ continues to suffer.
Are middle NZ really suffering? The majority of middle NZ probably have half a mil plus in housing assets as well as multiple TVs, phones, TV subscriptions, food box, holidays, etc. I’m not sure people understand the term suffering any more.
The lower end yes, but the middle I’m not convinced.
So, those cheap imports from abroad can offset the long waiting at hospitals and GPs, poor educational outcomes for kids, soaring insurance premiums, high cost of essentials and expensive housing in NZ?
Maybe we can subscribe to a streaming channel that features Scrubs on those cheap phones or TVs and teach ourselves to perform elective surgeries on one another.
Jimbo hangs with the upper-middle income progressives, seems quite divorced from reality
And this is the point - how much distance is there between middle NZ and the poor farm? IMHO its your job and ability to get another. god its gd to technically have no mortgage and still be making coin.
It's kinda true.
Most of the people complaining dont even know they're alive.
Anyone in NZ who owns a home (even with a mortgage) and has done for more than say 4 years, would probably be in the top 10-20% of wealth in the world. Thats a very big percentage of middle NZ.
I'd say top 2% of the world, and the rest of the country is in the top 10%.
And it still won't do.
In NZ a family needs about 5 mil to be top 1%, a single person 3.3 mil
According to this website, if you are earning minimum wage in NZ full time, you are in the top 5% of earners worldwide.
Stoic philosopher Epictetus: "Wealth consists not in having great possessions but in having few wants."
A meal is as good as a feast.
Sounds like light rail will probably be scrapped Jimbo. How long are you going to stay loyal to Labour, ‘the party of failed delivery’….
We’ll see. I think I actually voted green at the last election, I can’t actually remember. Transport is a big factor in my vote and it’s almost guaranteed that National and ACT will have worse transport policies for Auckland.
What good is policy if it’s not implemented?
That’s why I have zero faith in any policy that Labour proposes.
All virtue signalling talk…
At least the money hasn’t been spent on something worse. You could have argued the same about the CRL, it took Len Brown ages to get it across the line and it’s taken ages to build, but it will be awesome once complete. Big transport projects always take time.
But yes Labours LR delivery has been terrible, I think the greens would have done better.
I guess the real question is do you think NZ will be a better place in 3.5 years time under ACT and National? I highly doubt it.
No I don’t think NZ would be better under Act / National, I think it would be worse in some respects, perhaps better in others.
There’s almost no chance I will vote for Act/ National, it will probably be TOP or Greens, maybe if Labour did something decent on tax I might consider them.
Why are National/ACT linked this way? They are almost opposites. National party for the status quo, worried about unintended consequences of radical policies, drinking from the trough of crony capitalist donations. ACT are radical and brave enough to advance policies that disturb the silent voter: euthanasia, immigration, free speech, competitive capitalism and market forces.
Ones right wing conservative and the other is right wing liberal.
So they've some levels of distinction, but the other parties are more distinct from the pair.
It is NZFirst who are right-wing conservative. Nats are the do nothing middle.
Maybe more to do with the individuals outlook - I can never understand how the Greens suck up to Labour when they might achieve more with the Nats. Maybe it has less to do with policy and more to do with containing the same young trendy graduates
> What good is policy if it’s not implemented?
It's better than bad policy, well executed.
I think they need to go big on public transport and stick to heavy rail. North shore and out to the airport. Special financing to build high density apartments within 10 minutes walk of train stations. Anything more than 10 minutes walk needs a car park. Or something of that gist.
Yep, new harbour crossing with rail, build it out at least as far as glenfield (spur line up to Albany?) , then loop via hobsonville back to the Western line at Henderson. Use the land NZ rail already owns to build the line from Avondale down to Onehunga alongside SH20, then continue the line from Onehunga out to the airport, out to puhunui/manukau city and continue via flat Bush, east Tamaki and pakuranga and connect back to the Eastern line at Panmure.
Would cost an absolute bomb, but would put a huge number of homes and workplaces within a reasonable walking distance of rail, and its never going to be cheaper to do than it is now.
Suffering has changed. Abject poverty is almost forgotten. In the past people sold themselves into slavery to get food and shelter. In the past people died of starvation. When the Americans left Kabul a few weeks later it took a journalist under an hour to find a man selling his 8 year-old daughter so he could feed the rest of his family. There is a definition of such poverty: under $2 per day, never knowing whether you would eat tomorrow, sleeping on the ground. It was how 80% of the world was 200 years ago and is now under 10% and in NZ unknown except for down and outs with mental problems and most of them find food charity.
Modern suffering is a mental condition related to being at the bottom of the status ladder. Still it is a genuine issue since we have Kiwis is such despair that they commit suicide.
BTW I agree with you that middle class suffering is just a response to thwarted aspirations. I have it myself worrying about refixing my mortgages.
we have Kiwis is such despair that they commit suicide.
I would say out of contributing factors to suicide, where one sits on the social/financial heirarchy would be way, way down the list.
Fair point. I was worried that my attempt to explain how absolute poverty has rapidly declined may imply I didn't think poverty was still a critical issue. Where we are in society gives meaning to our life; being at the bottom is not a problem if there are not too many obstacles to moving up. Poverty in modern NZ is a relative matter - where you stand in relation to others. A tramp sleeping in doorways may have nothing while a recently graduate in medicine may owe a $100k but the latter has more confidence about the future.
GDP is calculated by adding up value-added activities. This is the problem with the financial sector - what is the value added? It is so difficult to work out the value added by the financial sector that a fictional value is made up and added onto GDP. The difficulty in calculating the figure is because essentially there is no value added, only value extracted and so in reality, it should be deducted from GDP. Link
IR swap dealer quotes confirm the same.
I've had a couple of Subaru XV's on my watchlist on TM. Nothing fancy, circa 2017 models - they have been on there at least two months. Wonder if that 20-30k range for cars is taking a hit.
I sold my 10 year old boat 2 years ago for nearly the price I paid for it new, at the time everyone was flush with property value increases & locked borders meant money was being spent in NZ, the new boat build lead time increased from 2 months to nearly a year.
Recently I've been watching a few on TM, they're definitely sitting there for a long time unless exceptional & like houses sellers are still aiming for Q4/2021 prices
Go try and buy a new car at present if the exact one you want is not already sitting on the lot. The hot hatch market is currently a total nightmare.
Watching a builders NZ new 2017 Prada, not enough stress yet wanting mid 50s, dealer would be offering 42.. am i a patsy? In the GFC i picked up a low milage Volvo XC90 for 33k, dealer closing the entire forecourt down in Napier, flew in with cash. its a coming
Hah, jokes on you, Volvo's aren't worth anything.
sold it for 35 two years later....... no jokers allowed
Haha, score. I have some older clunkers, one I bought in 2019, sold it in 2021 for triple.
I actually told myself 10 years ago to start hoarding old Landcruisers when they were $4-$5k each, and thought against it. Now they're 10x that.
Watching the car market, a lot of stuff isn't selling and there's a lot more toys coming onto the market.
Only your life when you are unfortunate to crash in one, built like a tank.
Only 17 new insurance jobs advertised on Seek within Auckland over the last week. Looks like they're going to make it a very, very long wait to get you claim handled folks!
Try and dribble out the payments with the incoming premiums.
They're probably hoping a lot of the small claims get dropped as clients get hacked off. Just don't use staffing as an excuse if you couldn't be bothered hiring any.
To avoid nasty expensive human staff they should use ChatGPT to handle claims. I just trialed it and it did a fine job of blocking me at every turn until I gave up.
---
Me: Hey. Look my Auckland house got flooded with sewerage on Friday so I need to make a big claim.
ChatGPT: I'm sorry to hear about the damage to your home. To file a claim, you should reach out to your insurance provider as soon as possible. They will guide you through the process and let you know what documents and information you will need to provide. Be sure to take photographs of the damage and keep receipts for any expenses you incur as a result of the flood.
Me: But you are my insurance provider.
ChatGPT: I apologize, as a language model I am not capable of providing insurance services or handling insurance claims. You will need to contact your actual insurance provider directly to file a claim. They will be able to assist you in the claims process and provide information on what steps you need to take and what documentation is required.
Me: Oh you are a machine. OK, put me on to a human so I can do the claim. Thx.
ChatGPT: I'm sorry, as an AI language model, I am not able to transfer you to a human representative. You can contact your insurance provider directly through their customer service hotline or website to speak to a representative and file a claim. You can typically find this information on your insurance policy or on their official website.
---
Yeah, there is no way I was going to get through THAT firewall.
Some Auckland councillors calling for reversal of the government’s intensification mandates. Too bad they didn’t have the guts to oppose it in the first place, like Christchurch.
https://www.nzherald.co.nz/nz/their-plans-are-flawed-auckland-councillo…
KO confirmed as the buyer of the 27 unit development in the Tron:
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