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
There are no changes today.
TERM DEPOSIT/SAVINGS RATE CHANGES
None to report here either (although there will be a good rise to report tomorrow).
TREADING WATER
Today's dairy auction was a disappointment, mainly because an expected rise didn't happen. And there was a very bid fall for cheddar cheese which took a significant hit, easing nearly -US$500/t on average with the commodity’s lowest price since mid 2021. In a little-changed environment, demand from China was unremarkable, but even so without it the result would be even more of a disappointment. Westpac notes that this result brings in downside risk to their farmgate payout forecast.
TOPPING OUT?
Remember there was an unexpectedly strong January for job ads. The February data increased again, this time with a more modest rise. Auckland ad levels were steady after the late-January flood events. The they fell away in Hawkes Bay after their catastrophe.
NEW PRESS GALLERY REPORTER
We are (very!) pleased to announce that Dan Brunskill has joined our team of journalists, as our Press Gallery reporter and will be based in Wellington as we build up to cover the economic and policy side of the upcoming election policy debates.
STORMS AFFECT RESULTS & DATA QUALITY
The specific impacts of Cyclones Hale and Gabrielle are expected to be seen in the data Stats NZ collects and it will affect results from the March 2023 quarter. Readers should seek out the notes that discuss these impacts as each data set is updated over the next few months, and probably all of 2023.
ENTREPRENEURAL FRAUD
A former American developer who arrived here in 2016 in an entrepreneur residency visa has been jailed for tax fraud in relation to $1.5 mln in fraudulent GST refunds. Colin David Rath was charged under the Crimes Act with dishonesty charges relating to work on a North Canterbury vineyard business. He claimed for work done for others on property not owned by him.
REGULATORY INFLATION
In Australia, they are about to get reformed energy pricing regulations on July 1 to be announced very soon - and industry insiders say consumers may get a +20% bill-shock as a result. But perhaps they are used to this? They had an +18% rise last year too.
SWAP RATES FIRMISH
Wholesale swap rates are likely to be marginally firmer today across the curve. However, the real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate is up +1 bp at 5.19% which is +44 bps above the current OCR. The Australian 10 year bond yield is now at 3.71% and down -8 bps today after the RBA commentary. The China 10 year bond rate is softer by another -1 bp at 2.90%. And the NZ Government 10 year bond rate is now at 4.66% and down -2 bps from yesterday and now back above the earlier RBNZ fix at 4.58% which was down -11 bps today in a 'catchup'. The UST 10 year is at 3.99%, and up +2 bps from this time yesterday.
EQUITIES MOSTLY LOWER
In its Tuesday session on Wall Street, the S&P500 gave up ground increasingly as the day wore on and ended down -1.5%. Of course, Powell's hawkish testimony to the US Congress didn't help. Tokyo has opened its Wednesday session up +0.2%. Hong Kong has started down a very sharp -2.2%. (Hong Kong has a fixed exchange rate pegged to the USD.). And Shanghai is down -0.3%. The ASX200 is down -0.7% in early afternoon trade. The NZX50 is down -0.5% in late trade.
GOLD MUCH SOFTER AGAIN
In early Asian trade, gold is down rather hard again from this time yesterday, now at US$1813/oz and down -US$35.
NZD SLIPS AGAIN
The Kiwi dollar is almost -1c lower than this time yesterday, now at 61.1 USc. Against the Aussie we are +¾c firmer at just over 92.7 AUc. Against the euro we are little-changed at 57.9 euro cents. That means the TWI-5 is down -30 bps at 69.7.
BITCOIN STILL BECALMED
Bitcoin has moved very little again today, now at US$22,242 and down -1.1% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/-1.4%.
This soil moisture chart is animated here.
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67 Comments
Was listerning today, inhouse presentation, as the CoreLogic economist said that 2022 house sales volumes, you have to go back to 1989 to find less sales, and with a bigger population today they are probably the lowest sales numbers on record.
So its safe to say there is very low liquidity, there is a growing overhang of people who want to sell.
Very shortly there will be those who have to sell, including brand new houses.
He mentioned that agents will have to deploy new tactics to get motivated sellors to move towards buyers.
The situation will not degrade gracefully.
No one can say they weren't told what was coming.
And the irony is that even though it's yet to hit in all of its horrendous glory, they still think it's all going back to the way it was. And it's not just us peasants I'm referring to here. Some supposedly expert personalities will have a lot to answer for. But they won't of course.
Yeah. Human nature is a funny thing.
Its like a slow moving bhild up to a serious car crash that has been obvious for the past 7 years or so.
Most are still ignoring the pending collision.
38 Knighton Rd Hamilton- sold in Feb 2022 for $940k, now on the market for $869k.
https://www.lugtons.co.nz/listings/38-knighton-road-hillcrest-2/
https://homes.co.nz/address/hamilton/hillcrest/38-knighton-road/WZ77n
Drop of only 7.5%?
Tell them they're dreaming....
$750k, and even then it's only for those who can wait out another drop. $575k probably awaits in the interim.
But that's all speculation. We'll all know for sure in a few years time. The trick is to be able to afford being wrong.
HW2 will buy it off him, he doesn't care about purchase price levels as in the really long term it does not matter.........
Price definitely dreaming. Wonder why it is back on the market though. As far as Hamilton goes it is desireable (though ugly af) - school proximity, pool, spa, etc. I doubt it is a rental/investment property.
Funny old Hillcrest. We moved there in the mid-70s and whenever I go back it strikes me how little most of it has changed.
Don't know why the Tron gets bad press - I didn't think there was anything wrong with it, once my hands defrosted after a winter bike ride to school.
But yeah, those prices have got to half, and even then it's probably better to rent.
Is the Tron the least likely place in NZ to suffer a natural disaster? It used to be too far from the coast to be desirable, give it a few years and the tides may have literally turned.
Have you checked the auction results today, some very low prices…. Auckland sales very low ( that’s the price that is low Hemi) prices achieved sitting between 2017 RV and 2014 RV.
Don’t poke the bear
I thought there were some pretty good prices fetched today. There were a couple of lowballs that got passed in but nothing stood out as particularly stressed or noteworthy. A couple I thought they should have accepted the bids but nevertheless passed in at their CV or QV estimate.
You are right ZS, I had scrolled the first page or two not realising that there were so many sold. Looking further some went for good prices, but I am still shocked at any prices below the 2017 RV. Here in the provinces we are still looking at prices above or around the 2020 RV, but very few sales so expecting a change.
I suppose you will interpret the sales numbers as meaning you can buy a home in 1989 dollars. Go for it. Did you make a low ball offer for the hot orakei buy.
I think that hot Orakei buy sold today for not too bad a price. 2.6M
Maybe we should open the flood gates to Chinese/Asian investors, they took the blame when house prices sky rocketed.
That's why I like bitcoin and ethereum (up a pleasant 0.71% and 0.29% respectively in NZD today).
Stocks are far too volatile.
On a more serious note, it starting to look like the correlation between the Nasdaq and crypto is well and truly broken at least this year. Some speculation that it is due to liquidity being deployed in Asia as they try and stimulate their economy, and Hong Kong opening up (more) to crypto.
It is like I don't like to smoke Ganja but like ecstacy. Lol.
Please don't say things like this. Not everyone has done drugs so will not get that "humour"..
I am so totally square I've never even tried a ciggy, but I thought it was funny.
Ironically I've done quite well buying LSD tokens this year. (Although of the defi type like FXS / LIDO rather than the acid pills)
Dairy farm values will be dropping a bit. With the changes from government to CCP control of lots of Chinese regulations,Mr Xi will be able to let his people starve instead of importing our dairy products, just like Chairman Mao did. So don't expect any dairy price improvements in the short or long term. Their prices will drop until they reach their new normal. This will be reflected in future Fonterra share values, dairy farm values. and foreign owned dairy factory values, which may well close down. This will drive even more people to convert their farms to forestry. Our rural population will plummet again, after a few years of stability from the dairy conversions.
I think the biggest factor at the moment is rising farm input costs. A falling NZD will help on the revenue side a bit, but nothing softens inflation on the input side.
Unbelievably there's some having such poor seasons, on the likes of peat farms, that even with the relatively high payout they will only break even with luck.
Noticing the contracts and wages on offer for next season have in some cases pulled back over last season offers. Un surprisingly those jobs are being readvertised multiple times.
Pakn Save Wairau has 1kg of cheese for $9.99 their value brand tastes great and thats Edam,Colby, Tasty whatever.
Costco had 907g blocks of US cheeze for $2.97. Brought 3 of them.
Don't believe it. Xi knows full well that without dairy protein his legions of warriors will be tiny/puny little guys.
How strong do you have to be to pull a trigger?
Yeah watch National Bird..... much more AI now....
https://thoughtmaybe.com/national-bird/
thought maybe is a good site most of their docos are UNEDITED vs youtube
With the changes from government to CCP control of lots of Chinese regulations,Mr Xi will be able to let his people starve instead of importing our dairy products, just like Chairman Mao did.
Closer than that for other reasons according to The Age newspaper in Australia.
Whenever I read about Australia's fearmongering on China, I'm always reminded of this absolutely hilarious skit by @workingdogprod Link
Great skit thanks! Smirked my way through the whole thing. I like how the senior military guys do the heavy lifting for the group in terms of being vague - they really step up.
Just the other day I recounted to my kids two times when mates had used the ''nod system'' with me, just so they are prepared when it happens to them.
I cried when Clark died....
https://youtu.be/drkrg6NtYwA Clarke and Dawe - The Complexities of Foreign Policy Explained
Yes, John Clarke's work (the Fred Dagg years) was part of my childhood and I was very sorry to see him go. Loved this stuff with Dawe too from Oz.
He propped NZ up on the comedy map and stomped it right in with his gumboot.
I heard him say in an interview that in the early 70s he was waiting for some comedy act to do an NZ farmer because he thought it was obvious, but nobody came along, "so I did it".
So the global price of Chedder is US$4.50 a KG, or $7.38 NZ KG. Cheapest I can find at a supermarket is Pams @ $15 kg. Quite the mark up by a supposedly low margin supermarket isn't it?
Edit: Looked at the supermarket price in AU and UK for cheddar and it looks like we are actually getting a pretty good deal.
You may well find that the USD$4.5 a KG is not packaged in 1 KG lumps......
Pam does that. I'm sure Pam is a machine not a lady. How much do you think it costs Pam to "cut the cheese" and package it? 20c maybe?
Once you add in Freight/logistics, holding costs and GST, etc. you'll be up over $10/kg so $15/kg retail maybe isn't so bad.
Yet they can sell a bag of chips for $2.
Meaningless comparison
$7.38 a kg but you have to buy tons... then store it, package it, distribute it and add the GST.
Seems quite reasonable.
Don't confuse bulk industrial young Cheddar with anything you buy at the supermarket, they aren't even close to the same thing, And feel free to negotiate a much better price for cheese from the supermarket when you buy it by the Ton.
Supermarkets are meant to be low margin, so buying by the ton shouldn't be significantly cheaper.
But I have edited my post and noted that it isn't cheaper in the UK or Aus
think pizza cheese?
So the global price of Chedder is US$4.50 a KG, or $7.38 NZ KG. Cheapest I can find at a supermarket is Pams @ $15 kg. Quite the mark up by a supposedly low margin supermarket isn't it?
NZD15 is the approx shelf price for NZ cheddar targeted at food service in South-East Asia at the moment. European producers are 20-30% higher. But the stress is starting to tell as sales volumes drop. Cheese is discretionary for Asian consumers.
The number of households behind on mortgage repayments rose 22% to ~18,400 in January, a near three-year high, as households continue to be squeezed by rising costs and interest rates, according to Centrix data. This is the highest since the early-Covid impacted month of April 2020. The data comes as 34% of all home loans come up for repricing (RBNZ) within the next 180 days. (NZ Herald)
Wow - who could have seen this coming?
Still at low levels, not even back to pre-covid levels yet.
The number of households behind on mortgage repayments rose 22% to ~18,400 in January, a near three-year high, as households continue to be squeezed by rising costs and interest rates, according to Centrix data.
Noticed you sourced that from Granny Herald Dr Y. I can imagine that's been high up on your media consideration set.
Heartland at OnCall 3.6%
I’m waiting with bated breath for the teaser of a good rise in TD rates to report tomorrow…
From past performances perhaps, ANZ lagged behind then did a big 0.50% jump so as to spread-eagle the field. Ploy, not any more worthy than any other publicity stunt.
Closing swap rates today. New cycle highs at 1 year, 2 year, and 3 year.
Just bought my kids pajamas for winter. Bought the same last year. Price gone from $15 to $20/set - a 33% increase.
Maybe your kids have grown by 33% lol
(Please don't take offence I'm just being humorous)
upvote as I larfed... good investment , good duvet good PJs and lower temp room, i sleep all winter with the window open so the cat can come and go, I like to sleep in a cold room......
LOL. I had originally added that prices are static across the sizes, but left leeway for the obvious humour there :)
A bit of levity is great sometimes.
The last time Congress did something big about the Fed.
As the Great Inflation wore on into its second decade, even politicians in Congress knew it had something to do with failure at the Fed. Demanding answers, a series of reform laws were passed including the one which commands Jay Powell's presence today. Why all this happened is as important and relevant to today as anytime in between.
“New tactics”
lol you mean opening the front door and browsing Reddit on their phone for the next 30mins isn’t working?!
I just had confirmation on a house I'm selling. I thought the agent was great, he was worth every penny of his commission, which I have gladly paid.
Its not called confirmation bias for nothing......
ITG,
Confirmation on the sale of a house is when the purchaser confirms all conditions, and the sale therefore becomes unconditional. It's also when the purchaser pays the deposit (generally 10%)
10% is what I used to do back when houses cost 500k....
Neuro-linguistic techniques to convince your vendor they are asking too much.
Heartland car finance demanding you return your car.
Eating only rice and chicken....
All these things motivate people.
Still bullish on shares, HW2?
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