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
ICBC raised most fixed rates today. Basecorp raised their floating rate. Update: ANZ has announced some broads rate increases for all home loan products, but only for those 2 years and shorter.
TERM DEPOSIT/SAVINGS RATE CHANGES
ICBC also raised their term deposit rates. They new 6 month rate is now 5.50% and their one year rate is 5.85%. Update: ANZ has announced rate rises for both term deposits and its Serious Saver at-call account.
RETAIL RISES STRONGLY FROM A YEAR AGO, WEAKLY FROM FEBRUARY ...
After falling in February, retail (card) spending rose in March to be +15.5% higher than year-ago levels. For all card spending it was up +17.7% on the same basis. These are outsized because the base was very pandemic-affected. High inflation helps too. But the rise from February was only half of what was expected. After an unusually soft December, retail spending regained its ground over the first three months of this year. That will probably contribute to a Q1-2023 GDP expansion. But that does not change the overall view of 2023 that the year will be weaker than 2022. Mortgaged homeowners will be refixing at substantially higher interest rates in the months ahead, which is likely to keep the squeeze on discretionary spending. (H/T MG)
... BUT NOT AT KIWIBANK
At the same time, Kiwibank released its card tracker data (from its client base) and they report that their values fell 9% in Q1-2023. That is very much less than StatsNZ +1.2% rise from Q4-2022.
'LATITUDE WILL NOT PAY A RANSOM TO CRIMINALS'
Latitude Financial says it has received and rejected a ransom demand from the criminals behind the recent cyber-attack it suffered. Latitude CEO Bob Belan says there's no guarantee paying a ransom would result in any stolen customer data being destroyed and would only encourage further extortion attempts on Australian and NZ businesses. Latitude has said millions of customers' driver's licence details and details from tens of thousands of passports, dating back to 2005, were stolen in a cyber-attack last month.
NIGEL ANNETT LEAVING ASB
ASB says Nigel Annett, its Executive General Manager of Corporate Banking, is leaving to pursue a new role away from banking. Annett has been at ASB since 2011 in a range of roles. ASB says Annett will remain at the bank until a decision is made on his replacement.
GUILTY OF MARKET MANIPULATION
A judge at the Auckland High Court has ruled that two directors of ONL engaged in market manipulation in all the seven cases brought by the FMA against them. Penalties are yet to be assessed for the crime. The two other individuals admitted their wrongdoing in connection to the proceedings and were ordered to pay pecuniary penalties of $180,000 and $130,000 respectively in March 2022.
SLIDING FASTER
Average home values in Auckland and Wellington both down by more than $250,000 since the start of last year, according to QV data. The rate at which property values are falling is speeding up, suggesting further big declines are on the way.
YET MORE CCCFA CHANGES
The Government's has had another go at fixing problematic credit rules it first implemented nearly 18 months ago, but the bankers are still not thrilled.
SUCCESSFUL BOOKBUILD
The LGFA has got away a $1.1 bln 7 year bond which will be priced at +0.61% above the swap rate. These funds will cost the LGFA members 4.76%. More than $1.6 bln was bid for these bonds. It will have a coupon/interest rate of4.50% per annum.
SWAP RATES STAY FIRM
Wholesale swap rates have probably risen slightly again 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 unchanged at 5.52% and 27 bps above the OCR. The Australian 10 year bond yield is now at 3.25% and up +3 bps from yesterday. The China 10 year bond rate is down -2 bps to 2.84%. And the NZ Government 10 year bond rate is now at 4.07%, and that is up another +5 bps from this time yesterday, and still above the the earlier RBNZ fix at 4.01% which is up +1 bp. The UST 10 year yield is now at 3.44% and up +4 bps from this time yesterday.
EQUITIES VARIED AGAIN
After a steady but modest rise all session on Wall Street the S&P500 fell away sharply at the end to finish unchanged. The NZX50 is up +0.4% in later trade here. The ASX200 is up +0.6% in mid afternoon trade. Tokyo has opened up +0.7%. But Hong Kong is down -0.8% at its open. Shanghai has opened up +0.2%.
GOLD RISES
In early Asian trade, gold is up +US$20 from this this time yesterday, now at US$2016/oz. It closed in New York earlier at US$2004/oz and in London at US$2003/oz.
NZD FALLS BACK FURTHER
The Kiwi dollar has slipped against the US dollar to just under 62 USc. Against the Aussie we are now under 93 AUc. And against the euro we are still soft at 56.9 euro cents. That means the TWI-5 is down at 69.9 with a -40 bps fall from this time yesterday.
BITCOIN OSCILATES AROUND US$30K
The bitcoin price has changed very little on a net basis since this time yesterday, still at US$30,017. But volatility over the past 24 hours has been moderate at +/-2.4%.
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37 Comments
What is appallingly funny is the Oneroof house price estimates that do not reflect QV data AT ALL.....
They bump houses worth 2.65mil around by stupid little numbers like 15k when they have clearly lost 350-500k
Some have lost a 1/3 ... old leaking rotting house on large section waiting for developement in a good suburb.....
they are still showing at RV, tell em their dreamin.
Not!
What CV?.. one that is pre covid/ pre covid bump or a "over the top " covid CV that reflects the covid madness and is over valued?
My stratergy, when buying this time, is to look at the pre covid CV and add the average % rate of increase from the previous 3 years as a bargining high point.
But im a waiting for the bottom...
According to Cameron Bagrie, the average cash at hand (bank balances) is around $NZ8,000 and a median closer to $2,000 (right skew). He reckons 2-3 months of living expenses squirreled away is enough.
Living for today.
https://www.newshub.co.nz/home/money/2023/04/tax-hikes-likely-in-coming…
"It's looking at the whole story through a fundamentally different lens; through a supply lens as opposed to a demand management lens. What we're seeing out there at the moment is a lot of talk about demand and not enough talk about supply."
In other words, we need to produce more here; import less and stop trying to fill any deficits - Private or Public, with new Debt conjured up on the back of unsustainable capital gains.
The bitcoin price has changed very little on a net basis since this time yesterday, still at US$30,017
Will stick my head out and say that we're possibly still in a bear market - 70% falls from here possible. However, the longer we stay around USD30k, the greater the likelihood that we've pushed through. USD30k is quite an important level based on the past and technical patterns.
My thoughts on this is that I see two probable scenarios:
- dead 🐈 bounce (we’re seeing now). when s&p, nasdaq crashes closer to end of the year, bitcoin goes down with it.
- this cycle is different (recession). When stock market goes down, people choose bitcoin for safety (not gold - cause young folks don’t like it, not cash cause inflation is too high). Up to the 🌝 then.
Im leaning toward dead cat bounce and big slide down ahead. Would love to hear other people’s thoughts.
dead 🐈 bounce (we’re seeing now). when s&p, nasdaq crashes closer to end of the year, bitcoin goes down with it.
Sorry but I don't buy into these correlations. Ratty's correlation with gold has been stronger in the near past. Fiat monetary debasement is now a strong driver of interest and purchase.
My comment was based on technical analysis more than trying to build narrative.
I'm with JC on this one..the banking crisis is far from over (head in the sands approach).
For sure. Growing realization of monetary debasement; low trust in trad-fi; zero trust in govt / central banks; early awareness that the monetary system is fundamentally broken and de-dollarization.
All these factors are entering the narrative.
I’m happy with how my allocation has developed. I don’t feel under or over exposed to whatever the future holds. If the price matches my prediction then my risk adjustment is recalculated and I’ll pick up more. I’m not a trader but I’ve competing financial goals/investments I’m balancing against economic risks.
Inversion on the US 10 year minus 3 month is as deep as its been in the past 40 years - and the inversion appears to be getting deeper.
It will be hard for anyone looking at this to say that if recession and asset price destruction comes in the next 12 months (worse than what we've seen already), that it was caused by a black swan event that nobody could see coming. The bond markets are indicating that it is coming and has been a consistently reliable indicator of such events.
August to Sep 2019 this indicator was saying that recession/asset price destruction was coming - I sold out of many risky assets based upon this (and the 2/10) inversion - and by March 2020 the asset price destruction arrived - but was blamed on COVID as the black swan....it was likely going to happen regardless of COVID.
Here's the 2/10 as well which is also deeply inverted.
Of note is that recent recessions and asset bubbles (dotcom/GFC) occurred after these yield spreads returned to a normal/positive spread....however in the early 1980's, the initial recession arrived while the spread was inverted.
Perhaps given how deep this inversion is now - we are heading down a similar path to the 1980s? A double dip recession?
I made a conditional offer on a property in the week leading up to Easter. It had become a multi-offer situation and while my offer was more than fair (in my opinion) the other offer was accepted.
2 days later I received an email from the REA boasting about how well the market was and specific mention was made to the ‘sale’ of the property I’d been competing for.
This delightful character home was hot property this week - sold by multi offer within 7 days. Refurbished to a very high standard, the property attracted first home buyers, second home buyers and investors alike.
I’m not privy to what the other offer was but presumably it was conditional as well. It’s a bit deceptive declaring this a ‘sale’ when it is more likely it is under contract. Their promotional email only had one ‘sale’ to speak of so I suppose they were milking it for all it was worth.
If it was a multi offer situation, it sounds like people are coming back into the market. Do you think the property offered on will drop in value over the next year? The only reason any offer in your situation is accepted is because the vendor thinks it is the best offer. Whatever that means. The consensus at our barbecues is that the end of the year will probably be the time to come back in. Still too soon at present. Unless it is a property you like, for yourself to live in.
We bought back in after 15 months. It was multi offer with 2 others. We're Central Auckland but large homes in this area are scarce and always covetable. Old house was about the land - 850sqm, new house 600 with 230sqm house and double garage, spa etc
Paid 125k less than cv. Decent family home that we'll do up in the future some time. 325k less than the first one did for after agents. This just suited us, you can't time markets perfectly. Took some patience but well worth it.
They are marketing themselves to get more listings. REs ability to spin the story in a very positive light for themselves is more or less part of the job. In the current market with the lack of sales worthy news it is newsworthy in their mind.
Does show what a house of card that industry is.
Huge moves in key spreads, massive problems as authorities begin to admit there's real danger.
Alarming compression of interest rate swap spreads indicate more systemic issues in global balance sheet capacities and collateral, too. Also, the IMF reported on its World Economic Outlook where it very plainly reveals just how worried authorities have become.
"Latitude Financial says it has received and rejected a ransom demand from the criminals" Bummer. Less new tanks for Vlad. :-(
Given the blaise way they handled people's private data security, the real criminals here are Latitude. Full-scale access to sensitive data is beyond a joke - and the storage of data back to 2005 as well - if it was paper it would've been destroyed at 7 years.
Best result would be they get fined out of business (representative charges x 14 million) as an example to others with shonky security practices.
Well, we have mortgage brokers being pretty blasé too. Go to bankstatements.com.au, log in to your online banking via their proxy window, let them siphon off your bank statements to the broker.
Sure, 256bit encryption etc completely safe, doesn't store your login details, brute tested by top IT professionals etc. But it goes completely against the rule "Don't give anyone your banking login details".
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