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 has trimmed rates for fixed mortgage terms of 6 to 18 months. That aligns them with ANZ and Kiwibank.
TERM DEPOSIT/SAVINGS RATE CHANGES
No changes to report here.
DAIRY PRICES EASE
Dairy commodity prices eased -0.9% at this week’s dairy auction. Results were mixed, with increases for WMP and butter, but falls for SMP, anhydrous milkfat and cheddar cheese. NZX analysts said: "While this result may have been a bit disappointing, it’s in line with the trend we have seen over recent months, and keeps dairy commodity prices bouncing around the levels that they have been for a while. It’s unlikely to have a material effect on milk price forecasts at this time of season."
HOME LOAN AFFORDABILITY
First home buyers benefited from rising incomes in a stalled property market in April - but only slightly. Rising incomes and not interest rates nor house prices,had the biggest impact on affordability for first home buyers last month. Only four provinces were 'affordable' in April (that is, the mortgage payment was less than 40% of take-home pay). Only five towns/cities met that criteria for first home buyers who had a 10% deposit. For FHBs with a 20% deposit, there were 17 towns/cities that were affordable, out of the 28 centers we cover.
FEWER NEW TRACTORS
There were 164 new tractors registered in April, an -18% drop from the same month a year ago. But to be fair this was the average level for an April in the ten years prior to the pandemic.
WORKERS FALL SHARPLY BEHIND
In Australia, wages rose +3.7% over the 12 months to March, and growth at this rate is approaching levels the RBA will find uncomfortable without higher productivity. But growth at this rate is far lower than their inflation rate of 7.0% in the same period. (For perspective, New Zealand total hourly earnings rose +7.6% in the year to March while inflation ran at +6.7% in the same period.)
CHINA'S YOUTH PROBLEM
In China, official April data put their jobless rate at 5.2% and for those 16-24 their unemployment rate was 20.4%. (For perspective, the March New Zealand jobless rate was 3.4% and the 16-24 jobless rate here was 10.4%.) That youth unemployment rate in China is a massive problem for them. And some in Beijing are suggesting graduates that can't find work should be sent to the countryside to work as farm labourers.
MINOR BUT BETTER
Japan's economy expanded more than expected in Q1-2023. However, it only grew by +0.4% over Q4-2022. That is a +1.6% expansion (real) over the past year and was the fastest pace since Q2-2022.
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SWAP RATES RISE FURTHER
Wholesale swap rates are probably a higher 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 up +1 bp at 5.65% and 40 bps above the OCR. This is an unusually large daily rise. The Australian 10 year bond yield is now at 3.46% and up +2 bps from this time yesterday. The China 10 year bond rate is little-changed at 2.73%. But the NZ Government 10 year bond rate is now at 4.27% which is up +8 bps, and back above the earlier RBNZ fix at 4.16% which is up +4 bps from yesterday. The UST 10 year yield is now at 3.53% and up +4 bps from yesterday.
EQUITIES MIXED AGAIN
The NZX50 is unchanged again today near the close. Equity markets are still awaiting Thursday's Budget, although what for isn't clear. The ASX200 is down -0.5% in afternoon trade. Tokyo has opened its Wednesday session up another +0.7%. Hong Kong is down -0.5% at their open, but Shanghai is down -0.2%. On Wall Street, the S&P500 ended its Tuesday session down -0.6% with a sharp late fall right at the close.
GOLD HOLDS
In early Asian trade, gold is down at US$1992/oz and down -US25 from this time yesterday. It closed in New York earlier at US$1989/oz, and in London at US$2007/oz.
NZD HOLDS
The Kiwi dollar is unchanged from this time yesterday at 62.5 USc. Against the Aussie we are up +¼c at 93.7 AUc. And against the euro we are up too at 57.5 euro cents. That means the TWI-5 is holding at 72.1.
BITCOIN STALLS
The bitcoin price is little-changed today, now at US$27,073 compared with US$27,022 this time yesterday and up a mere +0.2%. Volatility over the past 24 hours has stayed modest at just under +/- 1.5%.
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37 Comments
A few thoughts spring to mind here.
- Why did the Police Commissioner even need to approve memes and have a say on the frequency of content posting etc? I mean no offence to Mike Bush, but this should surely be below someone of his professional stature and outside his domain of knowledge, particularly in a time of national emergency? Surely that could all be handled by the Police Comms/PR people (of which no doubt there are more now than there were six years ago)
- The amount paid for the quality of the work is terrible. There are people doing this stuff on their iPhones for likes and the odd free promotional item who could do a far better job.
- If Topham Guerin are running National's ads this year, then based on this effort I think National had best hope they've improved their work or otherwise that massive war chest might go up in smoke.
And you think National will be any different? Maybe you missed this in the article:
"The creative agency, founded by former 'Young Nats' Sean Topham and Ben Guerin, is known for creating viral social media content and delivering successful, if controversial, election campaigns for right-leaning political organisations. It has just been rehired to run the National Party's social media campaign this election."
Vote different.
It takes many years to become a proper sushi chef in Japan. Japanese media was reporting on Japanese who are going to work overseas and earn high wages as sushi chefs after taking a special 2-month training course. Demand for Japanese sushi chefs is quite high outside Japan, and some sushi chefs at restaurants in America are paid better than many white collar workers in Japan. They mention a restaurant in Los Angeles offering a salary of USD7k+ a month.
The B&T auctions today appeared to be quite active. Of the 37 properties auctioned that I noted 15 sold, 9 passed in with no bids and 13 passed in with bids.
More buyer interest than usual. Buyers were interested in 22 of the 37 properties. I added a few more properties to my list of "houses passed in with decent bids".
Perhaps 10 or 11 vendors should have taken the money. Time will tell. I'd guess that half of those will get a little more and half will eventually have to settle for less. Good on them for holding the line.
Life goes on. Some people will be getting bargains. Just you wait and see bw.
I called the top and sold, you guys have no credibility as you did not call the top.... you call the bottom every month!... you both are a joke documented by your posts on here... I laugh at your incompetence hahahahahah no one on here gives you any time as evidenced by the minimal upticks you get... I banked the so called paper profits that you don't care about... what are you eating now ? paper profit or paper loss, i am eating eye fillet.
In Australia, wages rose +3.7% over the 12 months to March, and growth at this rate is approaching levels the RBA will find uncomfortable without higher productivity. But growth at this rate is far lower than their inflation rate of 7.0% in the same period.
A video of billionaire Elon Musk's reaction to the cost of power in Australia long before the latest surge in prices has brought home to many the fears that energy prices may drive them into poverty.
The footage, from an little-known interview he did in 2017, documents a clearly stunned Musk after being presented with Australian electricity prices.
'Wow, really?' he says in disbelief when told that power was becoming a 'luxury item' for many families. Link
Budget day reminder.
- If govt spends $130 billion and taxes back the same amount, we (households and businesses) are no better or worse off financially.
- If govt spends $160 billion and builds / does some good stuff we need, and then taxes back the same amount, we are also no better or worse off financially (but the country will be better)
- If govt spends that $160 billion and taxes back $20 billion less than it spends, we will be $20 billion richer.
I listened to a podcast by Stephenie Kelton where she talked about MMT. Sounded ok, however she made it clear, if the government spend on things that boost productivity it wouldn’t create inflation. That’s where it falls down, our Government in particular do nothing but squander money on crap. That’s why inflation is rocking in NZ.
Rates looking higher for longer.
The speculative are starting to sweat as their cheap debt rollovers approach. National mentioned interest on debt more and more in the media. Would be good for interviewers to ask back "how many rentals do you have", and "how much tax have you avoided"...?
Bank bill rates | interest.co.nz
90 day bank bill rate has been at or above 5.5% since the last OCR announcement. i.e. 25bps above the OCR throughout that time. And now it appears to be spiking higher again.
So, pretty much all the bank economists think house prices will not fall much further:
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