What happened Monday

Business / news

A review of things you need to know before you sign off on Monday; ASB juices its bonus saver rate, Fonterra cuts its payout forecast, Govt likes Productivity Commission work on immigration, swaps stable, NZD soft, & more

3rd Apr 23, 3:59pm by David Chaston

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 were no changes announced today.

TERM DEPOSIT/SAVINGS RATE CHANGES
ASB raised its no-withdrawal bonus savings rate to 4.05%, which for a main bank is a top offer. (Challenger banks offer more of course.) TSB raised its Wed Saver rate. Unity Money raised its Online Saver rate. Heretaunga Building Society raised its TD rates. Mutual Credit Finance raised its 1 & 2 year rates, curt its 3-5 yr TD rates.

AN UNWANTED MOUNTAIN
The number of homes for sale is now at an eight year high. This mountain of homes for sale and falling asking prices suggest the housing market could be in for a savage winter. At the current depressed sales rate, there is 27 weeks of supply available, 30 weeks in Auckland.

MORE MILK PRICE CUTS
Fonterra has revised down its milk price forecast for the second time in little over a month, to an implied price of $8.30/kgMS, which is now some $1.20 lower than forecasts earlier in the season.

IMMIGRATION POLICY STATEMENT COMING
In its interim response to the Productivity Commission's immigration inquiry the Government agrees mostly with the Commission's recommendations, but has kicked to touch the idea of ending Permanent Resident visas for new residents.

AUSSIE HOUSING MARKET TURNS UP
In Australia, CoreLogic's March house price report shows a +0.8% rise from February, gaining back some of the -8.7% fall for the year. That is actually its first rise in 11 months. For Sydney, they had a better-than-average monthly rise of +1.4% but remain -12% lower in a year. For Melbourne, the gain from February was +0.6% to be -9% lower in a year.

DEEPER VERTICAL INTEGRATION
For dairy industry watchers, Aussie supermarket giant Coles has acquired milk processing capacity to deliver its own-brand milk from an in-house supply chain.

RISING CHINESE EXPANSION AN ILLUSION
In a telling release, the private Caixin PMI for March revealed that the February factory expansion wasn't sustained into March. And it does call into question the official factory PMI released late last week.

CRUDE OIL UP +5%
Crude oil prices rose +US$4/bbl on the surprise supply cutback announcements earlier today. But given the size of the cut, you might have thought the prices would have risen more. Currently the US price is just about at US$80/bbl and the international Brent price is at US$84/bbl

SWAP RATES HOLD
Wholesale swap rates have probably been unchanged today. 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 another +1 bp at 5.24% and +48 bps above the current OCR (which is next reviewed on Wednesday this week). The Australian 10 year bond yield is now at 3.29% and up +5 bps from Saturday. The China 10 year bond rate is little-changed at 2.88%. And the NZ Government 10 year bond rate is now at 4.19%, down -6 bps and still above the earlier RBNZ fix at 4.18% and down -2 bps from Friday. The UST 10 year yield is now at 3.52% and up +5 bps from this morning.

EQUITIES MIXED
The NZX50 is down -0.2% in late trade today, after last weeks solid gain. The ASX200 is up +0.8% however in early afternoon trade. Tokyo has opened up +0.4%. But Hong Kong has opened unchanged and Shanghai has opened up +0.3%. The S&P500 futures suggests that Wall Street will open tomorrow unchanged from where is closed on Friday after a good weekly gain.

GOLD DOWN
In early Asian trade, gold is down -US$13 from this morning, now at US$1957/oz.

NZD IN SLIGHT SLIP
The Kiwi dollar has slipped slightly today, now at 62.3 USc. Against the Aussie we are have dipped to 93.3 AUc. And against the euro we are softish at 57.6 euro cents. That means the TWI-5 is now at 70.5 and down slightly.

BITCOIN SLIPS
The bitcoin price has slipped from this morning's open, now at US$27,786 which is a retreat of -1.5%. Volatility has been modest however at +/-1.7%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

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26 Comments

by Hummy | 3rd Apr 23, 4:02pm 1680494545

Government didn't do much good interfering. interest deduction going to be a killer.

by UnconventionalView | 3rd Apr 23, 4:31pm 1680496271

It should be available either to everyone or else to no one.

by rolande | 4th Apr 23, 7:02am 1680548561

That's a good point.

Can you structure your home ownership so you identify as being "in business" like investors and then get the tax benefit? (Pre change)

by refactornz | 4th Apr 23, 7:35am 1680550558

by HouseMouse | 3rd Apr 23, 4:06pm 1680494769

Of course it calls in to question the official PMI. Nothing that the CCP does or says is to be trusted.

by Audaxes | 3rd Apr 23, 5:29pm 1680499796

Which begs the question why does anyone bother reporting it?

China's reopening just might be the last gasp, the final chance to escape the dreaded 2008-style scenario. If it fails, there is nothing left for the world to pin its hopes on. Examining the latest data from China and why it isn't finding any takers. Link

by Audaxes | 3rd Apr 23, 5:32pm 1680499948

China does make interesting toys.

by IT GUY | 3rd Apr 23, 4:26pm 1680495969

Small business owners braced for cashflow squeeze - MYOB survey - NZ Herald

Based on current conditions, owners of more than a third of small and medium-sized businesses would struggle to stay afloat for six months before they need to dip into their personal finances or seek additional

by Advisor | 3rd Apr 23, 4:40pm 1680496819

Does this mean if conditions worsen or if they continue as they are currently? The latter could spell doom for the economy because all signs are pointing towards more financial pain to come for most in the near future.

A recruiter in the capital city I work with said this afternoon that more jobseekers at the mid to higher skilled end are hitting him up than there are opportunities out there as businesses are scaling back on expansion and even replacements.

by HouseMouse | 3rd Apr 23, 4:58pm 1680497906

I read it as current conditions continuing. So if things worsen as expected, then yep gets even harder.

by HouseMouse | 3rd Apr 23, 5:00pm 1680498031

The same survey has 21% of respondents saying their current cashflow levels are ‘poor or very poor’

by Gummy Bear Hero | 3rd Apr 23, 10:50pm 1680519001

... my cashflow level is ample for my needs ... but , then Mr Taxman takes his " fair share " ... leaving me needing the soup kitchen & a 25 kg bulk bag of Tux .. .

by HouseMouse | 3rd Apr 23, 10:57pm 1680519456

How bout those craft beers

by Halfway To Paradise | 4th Apr 23, 3:22am 1680535362

Have you seen the recent price of a 25kg bag of Tux?

by Jean Valjean | 3rd Apr 23, 5:10pm 1680498633

"ASB raised its no-withdrawal bonus savings rate to 4.05%, which for a main bank is a top offer."

I think BNZ is the pick of the bunch on decent interest (4% ish) flexible savers. A free withdrawal every month, and only $3 for any subsequent withdrawal. Pays 3.95% regardless. Only 0.10% less than this "top offer" from ASB that has a significant hook (you lose a large chunk of your monthly interest as soon as you make a single withdrawal).

Similarly ANZ and Westpac have lose-a-large-chunk-of-your-interest hooks. Westpac slightly different approach, your balance at the end of the month needs to be $20 more than at the start of the month.

My next current favourite would be Kiwibank 32 Days Notice at 4.05%.

I ran the slide rule over the main banks flexible-ish decent interest savings offerings last month and moved money around accordingly. I encourage others to do the same; put the banks under some pressure to sharpen their savings offerings.

I wonder how much "bonus" interest ASB, ANZ, and Westpac avoid paying because people do actually make withdrawals? Part of the business model.

by Uninterested | 3rd Apr 23, 5:29pm 1680499799

Agreed. That change that the BNZ made with their Rapid Save acct whereby you don't have to have higher savings every month makes their overall offer better.

by Justa comment | 3rd Apr 23, 7:40pm 1680507629

Agreed, BNZ rapid saver is the best of the big 4, Rabo Premium Saver also very good. Kiwibank daily on-call the best daily call at 3.85% with no hooks. The ASB Savings Plus is a bit of a dog, you have to have no withdrawals for 3 months, ASB really has no good savings accounts.

by Jean Valjean | 3rd Apr 23, 7:59pm 1680508745

"Kiwibank daily on-call the best daily call at 3.85% with no hooks." is a good no-hooks shout. Ta. They may have bumped the interest rate up since I last looked.

by blobbles | 3rd Apr 23, 5:40pm 1680500445

The global oil Cartels just made enormous profits. This is one of the problems with Cartels, next years profits must be larger, so they will force prices up to make it so. Will the EU/US start enacting windfall taxes regularly?

The Cartels have us utterly and completely by the balls and they know it. This is one of the major reasons NZ should look at becoming less dependent on them as a priority, we can't get a full electric car fleet fast enough. The problem is that it still takes a lot of oil to build those electric vehicles.

How long before the US gets into some more adverturism in the middle East?

by Squishy | 3rd Apr 23, 5:48pm 1680500906

Crude oil prices rose +US$4/bbl on the surprise supply cutback announcements earlier today. But given the size of the cut, you might have thought the prices would have risen more. Currently the US price is just about at UAS$80/bbl and the international Brent price is at US$84/bbl

That sounds quite inflationary. Is RBNZ tuned in?

by J.C. | 3rd Apr 23, 6:51pm 1680504697

In Australia, CoreLogic's March house price report shows a +0.8% rise from February, gaining back some of the -8.7% fall for the year.

The troll puppets were using this as a prop in this article this morning ('Number of homes for sale at an eight year high').

It's good. But interesting in the light of the following from the mighty Chris Joye.

Whereas lenders can and do often hide defaults by extending and pretending (restructuring borrowers’ loans so that no formal defaults show up in the official data), the insolvency time-series does not lie. Another data source that does not lie and which we study closely is the monthly arrears reported on the circa $90 billion home loan-backed bonds, known as residential mortgage-backed securities (RMBS). We compute our own compositionally adjusted arrears indices for all Aussie RMBS, which reveals a striking recent increase in the 30 days-plus arrears rate.

https://www.livewiremarkets.com/wires/corporate-and-rmbs-default-waves-…

by IT GUY | 3rd Apr 23, 6:31pm 1680503492

You will not be hearing much more from the troll puppets, DTI is going to kill them off......

24 years to double HW2

by J.C. | 3rd Apr 23, 6:52pm 1680504762

TBH, it's quite remarkable IMO. You could drop nukes on all Aussie cities and the price index wouldn't budge.

by HouseMouse | 3rd Apr 23, 10:01pm 1680516067

Hahaha

Maybe that will be China’s strategy. Nuke Aus and claim all the country and current property values.

Aussie housing - indestructible. Oi oi oi!!!

by HouseMouse | 3rd Apr 23, 9:57pm 1680515874

I think it’s interesting that Australian housing developers seem to be going bust quicker than here in NZ. Even though our house prices have fallen much further.

by nzphoenix | 3rd Apr 23, 8:31pm 1680510695

Going long on crude.