What happened Wednesday

Business / news

A review of things you need to know before you sign off on Wednesday; Many retail rate changes, dairy prices rise, Nats roll out rural policy, IAG mum about Gabrielle hit, swaps higher, NZD holds, & more

19th 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
ASB has raised and lowered some home loan fixed rates. Details here. After that article was published, ASB confirmed that it will raise its floating rate by +40 bps to 8.39% on April 27, 2023 for existing customers. SBS Bank has raised its floating rate by +50 bps to 8.49% effective May 20 for existing borrowers. They also changed most fixed rates.

TERM DEPOSIT/SAVINGS RATE CHANGES
Both BNZ and ASB changed term deposit rate offers, both to mid-pack compared to their rivals. ASB also raised some savings account rates, but they won't be effective until April 27. We should also note that Sharesies are now offering 4.35% for a new on-call account they have launched. Kernel has a 34 day Notice Saver at 5.25% with an on-call savings account "coming soon":. Christian Savings have also raised rates. SBS Bank has changed all their TD and Savings Account rates with increases.

DAIRY PRICES RISE
Dairy prices rose +3.2% on average at the overnight Global Dairy Trade auctions, posting solid gains especially for butter, cheese and SMP. This ended a weak run of four consecutive price falls. It was enough for one analysts (Westpac) to confirm that next season's payout forecast will remain at $10/kgMS. Others aren't so bullish. A fuller assessment of today's auction results is here.

'CUT REGULATIONS, OPEN DOOR TO MIGRANTS'
The National Party has released policy outlines for the rural sector, emphasising regulation rollback. But it is short on details.

IAG HIT HARDER THAN REALISED?
Aussie fund managers have raised the prospect of IAG downgrading its earnings guidance, as the company hasn’t yet revealed the cost impact of Cyclone Gabrielle in New Zealand. The delay in fronting up has some investors worried that bad news is on the way.

LEADING INDEX WEAK
The Westpac-Melbourne Institute Leading Economic Index in Australia was almost flat from the prior month in March 2023. This isn't a good sign according to Westpac. "The index for March is now consistent with below-trend growth extending throughout the remainder of this year," said Westpac chief economist Bill Evans. "While we see the household sector at the center of this, slowdown in the components of the index is also highlighting the drag from dwelling construction and the slowdown in the world economy.”

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SWAP RATES FIRMER
Wholesale swap rates are probably higher yet again today, probably by about +5 bps 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 +2 bps at 5.56% and 31 bps above the OCR. The Australian 10 year bond yield is now at 3.52% and up another +6 bps from this time yesterday. The China 10 year bond rate is unchanged at 2.85%. And the NZ Government 10 year bond rate is now at 4.34%, and that is up another +10 bps from yesterday, and still above the the earlier RBNZ fix at 4.29% which is up a sharp +13 bps and in catch-up mode. The UST 10 year yield is now at 3.59% and unchanged from yesterday.

EQUITIES STILL DIRECTIONLESS
The S&P500 ended its Tuesday session virtually unchanged in a lackluster session. Earnings reports were mixed to positive, but rising interest rates cancelled out any upward momentum. Tokyo has opened down -0.2%. Hong Kong has started its Wednesday session down -0.7% although it was down more earlier. Shanghai is down -0.3% at its open. Both the ASX200 and NZX50 are little-changed late in their sessions.

GOLD LITTLE-CHANGED
In early Asian trade, gold is firmer from this time yesterday, up +US$8/oz at US$2005/oz. It closed earlier in New York at US$2005/oz and in London at US$1999/oz.

NZD HOLDS
The Kiwi dollar is still just at 62 USc and marginally firmer from this time yesterday. Against the Aussie we are softish at 92.2 AUc. And against the euro we are unchanged at 56.5 euro cents. That means the TWI-5 is still at 69.8.

BITCOIN IN SMALL BOUNCEBACK
The bitcoin price has risen after yesterday's fall, now at US$30,231 at up +2.7% from this time yesterday. Volatility over the past 24 hours has remained modest at +/-1.7%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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47 Comments

by Justa comment | 19th Apr 23, 4:12pm 1681877522

The swaps on the move up again, NZ 10 yr back over 4.3%. Secondly, Nationals live exports of animals a big no from me.

by Jesse1 | 19th Apr 23, 4:18pm 1681877896

Must be betting on a hot CPI number tomorrow.

by JimboJones | 19th Apr 23, 6:50pm 1681887018

I think the CPI will surprise on the upside tomorrow (and i normally don’t think that). I reckon the RBNZ get a sneak preview hence the 0.5% increase last review.

by redcows1 | 19th Apr 23, 7:11pm 1681888309

7.4%

by bw | 19th Apr 23, 4:21pm 1681878078

Next you'll be telling us that you're against the cat hunt! (I second your sentiment, of course)

by sit23 | 19th Apr 23, 4:48pm 1681879710

It all depends on what one prefers. cats, or native birds. We can't have both.

by rolande | 19th Apr 23, 10:07pm 1681898827

Now rerun that game with rats and see what happens when all the cats are gone

by Noncents | 19th Apr 23, 10:26pm 1681900000

I agree, I have seen a few minor studies that show when cats are removed first, the bird and lizard population are negatively impacted. Nothing large enough to be considered definitive, but it does appear to be likely, and it makes sense to me. Removing an Apex predator will mean you have nothing at all stopping the rodents and mustelids.

by tis i | 19th Apr 23, 5:04pm 1681880683

Can’t for the life of me see how how a cat hunt is any different than a possum hunt.

by Prickle | 19th Apr 23, 7:21pm 1681888888

Both are cruel

by Ngrrk | 19th Apr 23, 8:54pm 1681894452

Both are a necessity.

by yeahrightmate | 19th Apr 23, 9:55pm 1681898159

Not sure you can make slippers out of cat skin

by HSL | 19th Apr 23, 8:34pm 1681893296

Not a fan of live animal exports but unfortunately economic reality is that we have to increase our exports. If we carry on down the same road we are don’t expect hospitals, schools etc we will be just another third world shit hole exporting our youth to productive countries. And for all the greenies, if you are wealthy you can make more green choices I.e. afford electric vehicles, organic foods and so on.

by Justa comment | 19th Apr 23, 8:48pm 1681894133

Our farming has done ok last year without the hell these animals face on the seas or at their destination. Sometimes you have make a stand.

by OldSkoolEconomics | 20th Apr 23, 7:18am 1681931911

Agree. Its aa barbaric, yesterday approach to exports.

Unfortunately most of nationals policies are ones that society moved on from.

Be awesome to have a decent choice of govt

by Audaxes | 19th Apr 23, 4:13pm 1681877636

Here comes the wrecking ball as everyone is chasing after dollars everywhere.

Brazil's President Lula traveled to Shanghai to finalize bilateral engagement bypassing the US dollar. This is not de-dollarization, rather an acknowledgement the eurodollar system is in a crisis. And that means the dollar goes up, probably way up, wrecking everything along the way. Can't blame Brazil (or China) for trying to dodge it.

by OldSkoolEconomics | 20th Apr 23, 7:22am 1681932161

So all the authoritarian dictatorships are trying to weaken the democratic wests currency .. and somehow that is a good idea?

Follow this idea through for 20 to 30 years you get a world where unelected brutal dictators from china/russia/brazil/iran etc have a large say over our lives, rule us or terrifying war.

People like macron trying to appease them for a fee dollars now have lots the plot.

by Officebound | 19th Apr 23, 4:15pm 1681877747

To National's credit, they treat animals and people the same.

The piece they aren't saying out loud, is that they would battle the cost of living crisis by suppressing wages.

by nzphoenix | 19th Apr 23, 6:14pm 1681884849

Luxon wants to be John Key so bad.

by Nzdan | 20th Apr 23, 8:35am 1681936557

Same with Simon Bridges. They all mimic John Key's speaking mannerisms.

Listen carefully as they all start a lot of their sentences with "Look, Nashional....." to sound assertive and confident.

It's called the chameleon effect.

by Silvi | 19th Apr 23, 6:33pm 1681886017

Umm what have the Labour Admin done but supress wages for Nurses, Teachers and more, The Labour solution! has been to spend taxpayers money but not on real wages. Proof in the pudding, those wage increases go back years and they were tight fisted until embarrassed to appear to do something. all Labour is doing is holding up that spend until after the election.The Court case on pay equity is still ongoing. What Labour or far too little far too late, did to Senior Nurses is not pay equity. Very quiet about that hmm.

by Nzdan | 20th Apr 23, 8:37am 1681936676

What do you mean suppress wages? My wife is an early childhood teacher, working for a private center (not a kindergarten). The Government's pay parity has just last week resulted in her pay going up from $29 an hour to $38 an hour. And that's just the first round.

by IT GUY | 19th Apr 23, 4:28pm 1681878511

Its good that National Policy is coming out, it will be amusing to see what amazing policy Labour think up and to ask, well you have been in power for 8 years why have you not done this already?

Their will be a lot of mud slinging on both sides. Its just good that the games have begun.

Most picking CPI above 7.0 but below 7.3

by Foxglove. | 19th Apr 23, 4:41pm 1681879262

Go back further, nine years in opposition and when the curtain was raised in 2017 the entire cast were standing there stark, frozen with no script. Nine years and all that could be espoused were a dogs body of mealy mouthed promises such as house galore and the termination of homelessness etc, etc. Vacuous damn lot of non entities no wonder they needed train loads of consultants and bureaucrats galore to tell them what they were meant to do.

by Uninterested | 19th Apr 23, 5:13pm 1681881189

And then they didn't do it.

by Foxglove. | 19th Apr 23, 6:11pm 1681884673

In nine years of opposition Labour had five different leaders. They were utterly hapless & hopeless and obviously, and even more regrettably, they carried that same form into government. The weird mitigation, for want of a better word, was that National then set about, quite energetically, proving they could be an even worse opposition. Don’t hold your breath, Split Enz sang “History Nrver Repeats,” but it wasn’t a promise.

by KiwiinSpain | 20th Apr 23, 7:23am 1681932239

I do sometimes wonder if this Govt ever actually implemented any advice for which we (the sorry taxpayer) payed the consultants such handsome rates? Every document I have the mental capacity to decipher seems to be a joyous hodgepodge of woke terminology coupled with grand blue-sky dreams of an enlightened, inclusive and understanding Maori world view Aotearoa. Quite clearly this troglodyte is not the target audience.

I love poetry, indeed Sam Hunt was once a customer in my fathers store. But it would be nice to know Rome isn’t burning while reciting classic kiwi literate.

God Defend New Zealand.

by bw | 19th Apr 23, 4:37pm 1681879079

"Tuesday session virtually unchanged in a lacklustre session"

It's been one of those days when you check your dealer's dealing sheet and find half of them opened a position at 8 am, closed it at 1pm, with next to nothing in between, and went off for lunch and didn't come back.

by J.C. | 19th Apr 23, 4:41pm 1681879280

Imagine carry around an ounce of gold on your phone and being able to pay for goods and services with it instead of the Kiwi peso. Tokenized gold just hit a milestone.

Tokenized gold assets surpassed $1 billion in combined market capitalization on Tuesday, according to data by crypto price tracker CoinGecko, as gold’s price neared its all-time high.

Tokenized gold is a type of stablecoin that pegs its price to gold, while the tokens on the blockchain represent ownership of physical gold managed by the issuer. It offers investors a way to get exposure to the precious metal without the management fees of an exchange-traded fund (ETF) or the burden of storing gold bullions.

https://finance.yahoo.com/news/tokenized-gold-surpasses-1b-market-21062…

by sit23 | 19th Apr 23, 4:53pm 1681880011

And where exactly is the actual piece of gold represented by one's token? We all remember SBF and his thievery. Us old people remember Ray Smith and Goldcorp. One would think maybe one person could learn from other people's mistakes in the past.

by J.C. | 19th Apr 23, 5:12pm 1681881139

And where exactly is the actual piece of gold represented by one's token?

Caveat emptor. But you raise good questions: Where is the gold in an ETF? Is it really there? And does a blockchain guarantee custodial security for gold tokens?

I own digital gold tokens through the Perth Mint which are audited and guaranteed by the WA govt. Doesn't mean the gold is there in the Mint. Always a risk.

About SBF and FTX. All Japanese customers received their digital assets. That's regulation working properly.

Anyway, what if gold tokens could be safely custodied and you could carry gold ownership on my phone and use it for transactions?

Don't be afraid of change. But do your own research.

by IT GUY | 19th Apr 23, 5:12pm 1681881171

how do you buy Perth Mint digital tokens JC?

by J.C. | 19th Apr 23, 5:29pm 1681882176

I bought mine through Independent Reserve. TBH, I was an early adopter and the mkt depth is not great for PMGT and they're being discontinued. Can be exchanged for Perth Mint gold certificates.

https://www.perthmint.com/invest/goldpass/perth-mint-gold-token-pmgt/

by nigelh | 19th Apr 23, 6:17pm 1681885057

Might only be 99% pure gold! There'll be a number of people at Perth Mint and politicians running for cover

by nigelh | 19th Apr 23, 6:33pm 1681886024

A side story on gold. A lot of conspiracy theories on Fort Knox gold. It evidently hasn't had a physical audit in decades. Some say its been sold off.

I know Texas took its gold away from the Fed. Germany eventually had its gold repatriated. I think it took around 10 years.

by KH | 19th Apr 23, 7:01pm 1681887680

I can understand having a gold ounce actually glued to the back of my phone. But buying it from acronym company and I can only see it as numbers on a screen. Nah.

by Fossil Lover | 19th Apr 23, 7:38pm 1681889906

If one does not have physical possession of such gold then I suggest it is fiat. Gold is hard to digest, hardly nutritious and if we are all starving, a cabbage is more valuable.

by Ngrrk | 19th Apr 23, 8:59pm 1681894769

If it gets to the point that a cabbage is worth more than a gold coin, we are in serious trouble. There are stages, and my bet would be on being able to purchase a large amount of food with gold before we got to that stage.

by rolande | 20th Apr 23, 6:28am 1681928898

How much would a safety deposit box cost for a year?

by Mark L | 19th Apr 23, 4:47pm 1681879643

Kiwi bank 5.75 1year term deposit.

by Uninterested | 19th Apr 23, 5:15pm 1681881307

Its a goodie...

by Justa comment | 19th Apr 23, 7:26pm 1681889174

Well there it is, 5.75% 1 yr TD from a big bank. Could this be the top? ASB the only one left with 5.25% on the 5 yr TD.

by macaroni | 19th Apr 23, 6:10pm 1681884653

Kiwibank, the government owned bank, is now the only big bank yet to raise interest rates for depositors. Perhaps they didn’t get Adrian’s memo.

by Justa comment | 19th Apr 23, 7:27pm 1681889259

Just raised the 1 yr TD (post above). Still waiting for the new on-call svgs rate, still 3.85%

by bw | 19th Apr 23, 8:24pm 1681892686

UK Inflation higher than expected and still over 10%. Market comment:

"Inflation is still scalding, and interest rates look set to be pushed up again to try and cool it down rapidly."

5.75% from Kiwibank? 7% on the cards from someone in the near future if the UK is any guide.

by JimboJones | 19th Apr 23, 8:30pm 1681893004

Maybe this inflation is settling in for the long term. Very mixed signals from around the world at the moment.

by Rob Reid | 19th Apr 23, 9:01pm 1681894904

Yeah, I think it's long term. Govts/Banks will have unlimited reasons to create dosh and spray it around as loses come home to roost (like bonds) and people scream for help in recessions and under pressure from the inflation already here.