What happened Monday

Business / news

A review of things you need to know before you sign off on Monday; retail sales under pressure, FMA settles with CBL directors, crude oil prices falls, another volcano watch, swaps and NZD stable, & more

[updated]

12th Jun 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
Heretaunga Building Society and Liberty Financial both raised floating and fixed rates today. Update: ANZ has raised rates on some of its most popular fixed home loan terms. Their one year rate is now 699% and 18 months 6.75%. But these just match some of their main rivals.

TERM DEPOSIT/SAVINGS RATE CHANGES
None have been advised so far. Update: ANZ has added +20 bps to its Online Account and its Business Premium Call account, taking these rates to 2.75%. It's Cash PIE account has risen similarly.

CONCERNING DROP
Stats NZ figures show that retail spending using an electronic card fell by -1.9% in May, with only one industry (miscellaneous services) seeing a rise. This was 'much weaker than expected' in the month. Consumer retail spending is likely to 'remain soggy' over the second half of the year, say bank analysts. We should also note that spending on petrol was down -4.5%, so that isn't necessarily a bad thing.

HELPFUL DROP
Petrol prices may keep in falling (unless we decide to tax ourselves heavier). Today, crude oil prices are under pressure with the US-linked price falling below US$70/bbl (actually under US$69.50/bbl), and the international Brent price is now down under US$74/bbl. MbS won't be happy because this comes despite his threat of production cuts.

CBL SETTLEMENT
The FMA has won court settlements to resolve its claims with CBL Corporation (In Liquidation) and four of its former directors in respect of the FMA's claims of continuous disclosure breaches and misleading conduct. The four directors to reach agreement are Sir John Wells (who was Chair of the CBLC Board of Directors), and Tony Hannon, Paul Donaldson, and Ian Marsh. A penalty hearing before the High Court in Auckland will take place in due course.

UNWELCOME DROP
Japan's producer prices fell in May from April, only the third such drop in the past two+ years, and the steepest monthly drop (-0.7%) since 2016 (pandemic excluded).

VOLCANO WATCH
Let's keep an eye on a Philippine volcano, Mt Mayon. It is erupting in a 'gentle' way, but there are fears a sudden violent eruption could follow. Like the Tongan volcano, it could have global weather implications. (The Tongan eruption was the largest since the Krakatoa in 1883. These events add huge amounts of material into the atmosphere, and airlines will be keeping a close eye on the situation.)

SWAP RATES UNCHANGED
Wholesale swap rates are likely little-changed today. Remember, regionally most of Australia is closed for a public holiday. 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 5.69% and +19 bps above the 5.50% OCR. The Australian 10 year bond yield is unchanged at 3.96%. The China 10 year bond rate is soft and now below 2.70%. And the NZ Government 10 year bond rate is at 4.56%, unchanged, but that is still higher than the earlier RBNZ fix which is up +2 bps to 4.51%. The UST 10 year yield is now at 3.75% and little-changed from this morning's open.

EQUITIES MIXED BUT QUIET
The NZX50 is down another -0.8% in late trade today and continuing its steady retreat. The ASX200 isn't trading today with Sydney and Melbourne closed. Tokyo has opened the week up +0.7% in early Monday trade. Hong Kong is down -0.5%. Shanghai is down -0.4% in its early opening. The S&P500 futures suggest Wall Street will open tomorrow up +0.3%, perhaps feeling the downside risks have all been priced in. But trading volumes have been unusually light recently.

GOLD SOFT
In early Asian trade, gold is at US$1955/oz and down -US$6 from where we started this morning.

NZD LITTLE-CHANGED
The Kiwi dollar is little-changed from this morning at 61.2 USc. Against the Aussie we are soft at 90.8 AUc but that is only back to Friday's level. Against the euro we are still at 57 euro cents. That means the TWI-5 is now at 69.4.

BITCOIN LITTLE-CHANGED
The bitcoin price is little-changed today and is now at US$25,891 but that is down -1.8% from this time Friday. Volatility has again been modest at +/- 1.0%.

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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95 Comments

by lonewolfnz | 12th Jun 23, 4:10pm 1686543018

Potentially more bullish news thing week if inflation in the USA goes down as low as 4% and we get the risk rate hike. Buying a bit more QQQ this week in anticipation of that

by J.C. | 12th Jun 23, 4:23pm 1686543817

Bullish 'what' Wolfie? The Kiwi peso hitching a draught?

by DrGrump | 12th Jun 23, 5:02pm 1686546168

Do you not think this scenario is already priced into long duration assets like qqq?

by Richardfromauckland | 12th Jun 23, 11:12pm 1686568331

Had read that it was still rated buy with the high end of the forecasted range being in the mid500s

by kiwikidsnz | 12th Jun 23, 4:10pm 1686543038

https://cranmer.substack.com/p/epa-recommends-a-model-of-co-governance?utm_source=substack&utm_medium=email

The long march through the institutions continues. Does anyone recall being given the opportunity to vote for any of this ?

by printer8 | 12th Jun 23, 4:26pm 1686543968

Agreed.

This is a significant shift in governance and needs to be not only fully transparent but also fully and openly debated and voted upon.

Once co-governance is implemented it will be near impossible to rescind.

To me, co-governance is one of the most significant issue that will affect my vote in October. I expect that those parties pushing for co-governance clearly state this as part of their policies.

by Foxglove. | 12th Jun 23, 4:32pm 1686544328

Agreed again. Excellent comment.

by kwbrn | 12th Jun 23, 6:20pm 1686550849

I wonder what your understand by co-governance.

Mine is that it is shared governance of the well being of our water services or simply an added voice that is less self motivated.

I have more faith in Maori not to sell our strategic assets to foreign concerns as was done with our generation.

It certainly looks like a lot of you see this very differently.

by kiwikidsnz | 12th Jun 23, 6:26pm 1686551198

I couldn't possibly comment...

by peter.may | 13th Jun 23, 9:19am 1686604744

You may well be right - but the issue is a fundamental change to our long standing method of government - & that surely warrants robust & transparent discussion

by fortunr | 12th Jun 23, 4:54pm 1686545692

Excellent comment indeed. The very basic foundations and principles of democratic government are at stake.

by dumbthoughts | 12th Jun 23, 5:11pm 1686546704

It's the most significant vote-determining issue for me as well, if only because the current government refuses to allow any debate on the topic and thinks we are all dumb frogs not smart enough to realise the water is rapidly warming. Tell us what the end state looks like (I suspect there isn't one, it's a case of 'too much is never enough') and let the public decide on it - the current approach is unforgivable IMO.

If the outcome of my vote means my landlord neighbour gets to upgrade his Range Rover (again) then so be it. To quote the short arse king from Shrek, 'that's a sacrifice I'm willing to make'.

by Advisor | 12th Jun 23, 6:03pm 1686549805

Nothing a National-ACT gov does will bring investor confidence back in NZ's housing market without mortgage rates going down to 2.XX%.

Also, I doubt you could perpetually grow the economy simply on debt and migration without building the infrastructure to support higher value activities. The tide has clearly turned on skilled people wanting to move to NZ and this will only worsen without a complete overhaul of the system.

So there won't be a proper road for your neighbour to drive his shiny new Range Rover.

by DrGrump | 12th Jun 23, 7:54pm 1686556483

Agree, this is really the main issue facing NZ. Whether GDP is -0.1 or +0.1 isn’t important unless this trend can be changed.

by kiwikidsnz | 12th Jun 23, 8:42pm 1686559353

“If you want to raise a crop for one year, plant corn. If you want to raise a crop for decades, plant trees. If you want to raise a crop for centuries, raise men. If you want to plant a crop for eternities, raise democracies.”

Shirin Ebadi is an Iranian political activist, lawyer, a former judge and human rights activist and founder of the Defenders of Human Rights Center in Iran. In 2003, Ebadi was awarded the Nobel Peace Prize for her significant and pioneering efforts for democracy and human rights, especially women's, children's and refugee rights. She was the first Iranian and the first Muslim woman to receive the prize.

by agnostium | 12th Jun 23, 7:04pm 1686553471

"if only because the current government refuses to allow any debate on the topic"

Wow, for a topic the government refuses to allow any debate on it sure does get raised a lot in the interest, MSM and Facebook rants. It must be the most debated topic not allowed to be debated in the history of debate.

by kiwikidsnz | 12th Jun 23, 7:26pm 1686554766

Please link all the MSM reporting of the EPA governance change as an example.

by agnostium | 12th Jun 23, 11:03pm 1686567802

The original comment was around this government banning debate on co-governance as a general principle not the EPA in particular. But here are some articles on EPA and co-governance. They actually seem to support the idea that Labour are not in favour of co-governance so not sure what that does to the narrative you and National are trying to push.

https://www.nzherald.co.nz/nz/politics/rob-campbell-fired-from-second-g…

https://www.1news.co.nz/2023/03/02/rob-campbell-dismissals-about-co-gov…

by kiwikidsnz | 13th Jun 23, 9:03am 1686603807

"...Labour are not in favour of co-governance..."

Those blue pills definitely work for some. Apparently the last 2.5 years hasn't happened.

He Puapua

3/5/6/10 Waters

Local authorities unelected representatives legislation

RMA rewrite

etc

...

by bw | 12th Jun 23, 4:54pm 1686545659

Coming here?

A motorist has won a civil case against a parking firm over an unpaid £160 fine after requesting details of the penalty in Welsh rather than solely in English.

by JimboJones | 12th Jun 23, 6:48pm 1686552519

Would you be happy if you got a ticket in Maori and couldn’t question it?

by HSL | 12th Jun 23, 5:01pm 1686546105

Great for Australia, the smart ones will leave. Co-governance will be the death nail for the NZ economy.

by JimboJones | 12th Jun 23, 6:49pm 1686552547

The smart ones you say…

by Mrs The Point | 12th Jun 23, 10:33pm 1686566008

A Death Knell, be a tolling of a bell...

by HSL | 13th Jun 23, 7:19am 1686597565

Ah I stand corrected, you learn something everyday.

by powerdownkiwi | 12th Jun 23, 5:15pm 1686546956

The moa didn't vote for it, nor did the de-forested Otago landscape.

I have no problem with inclusion - but I have a problem with woke virtue-signallers who think that they can get out of jail free by acknowledging one - the most recent - of the hundreds of over-throwings we are all a result of. Maori only got here five minutes before Europeans, in the big timescale. Driven here by overpopulation, sure as eggs is eggs :) Per head of population, the same proportion of psychopaths, the same proportion of ego-driven, the same proportion of short-term-gain thinking. Just like European-derived stock - all the way from environmentalist to rip/shit/bust-ist; it is silly to think they have magic answers. Yes, they impacted less - but given fossil energy, we're all the same.

by Brutus Iscariot | 12th Jun 23, 6:30pm 1686551433

I hope Seymour is taking names of who to sack come November.

by agnostium | 12th Jun 23, 7:06pm 1686553590

Luxon?

by Nellbell | 12th Jun 23, 7:14pm 1686554054

Me too, have been really split over the two bad choices we have coming voting day, and really concerned that National will wind up house prices again if given the choice…. But am very concerned about this kind of thing being popped in under the radar. I think it is vote deciding also.

by keithwoodford | 12th Jun 23, 4:14pm 1686543273

The biggest news of the day is the new National policy on methane and nitrous oxide.

KeithW

by J.C. | 12th Jun 23, 4:25pm 1686543940

Can you elevator pitch this Keith (positive / negative)? On the surface, I think it's good, but don't feel qualified to comment.

by keithwoodford | 12th Jun 23, 4:49pm 1686545352

Farmers will be highly supportive but National will have some work to do to explain it to the urban voters who will likely determine the election outcome. It makes a real point of difference between the parties, and Labour and Greens will attack it viciously.

KeithW

by Baywatch | 12th Jun 23, 4:31pm 1686544267

Not much of a policy really...more of too hard basket ..kick can..

by UnconventionalView | 12th Jun 23, 5:17pm 1686547028

Since vast majority of humans rarely think about their future beyond the next 5-10 years, politicians use that to their advantage when drafting policies.

Take for example the new housing policy to free up the land for 30 years. Why not designate the land and then release it in 6 stages of 5 years, where its easy to see and measure the progress?

People fail to see the long term damage when presented with short term gains.

by Pa1nter | 12th Jun 23, 5:46pm 1686548785

Since vast majority of humans rarely think about their future beyond the next 5-10 years

Years you say? You give people too much credit. Most people aren't really thinking more than a few moments ahead.

by JimboJones | 12th Jun 23, 7:18pm 1686554291

That would be the worst thing to do, it wouldn’t decrease land prices and it would still create the same amount of sprawl. Either let people build anywhere which will collapse land prices but make NZ a bigger mess, or prevent any more sprawl and create better but more expensive cities. Anything in between is just the worst of both worlds.

by Justa comment | 12th Jun 23, 7:20pm 1686554408

Alot of methane coming out of the secondary school teachers it seems, Robertson said on the radio tonight 67% of teachers would earn more than 100K, plus a 5k cash payment, and the greedy teachers have turned it down. I reckon they need a firm kick up the ###

by JimboJones | 12th Jun 23, 7:25pm 1686554746

A pair of teachers who can live off one of their incomes and put the other into a mortgage could pay off the average NZ house in less than 10 years.

by kiwikidsnz | 12th Jun 23, 7:27pm 1686554829

They can go to Australia and get $130k.

by JimboJones | 12th Jun 23, 7:33pm 1686555220

Or about 170 other countries and get less…

by Justa comment | 12th Jun 23, 7:37pm 1686555471

Exactly, teachers are lowly paid in the US and GB. I think the NZ teachers are taking the public for fools expecting their support. Get back to your 4 hours of classes a day and endless teacher only days and 12 weeks school closed.......... ya lazy buggars......

by agnostium | 12th Jun 23, 11:05pm 1686567940

Looks like Hemi is back

by refactornz | 13th Jun 23, 12:28pm 1686616083

Teachers are underpaid relative to the work they put in and importance of their contribution to children's and the country's wellbeing and future earnings capacity.

By contrast, "Justa comment" and "JimboJones" are overpaid because they slack off on interest nz all day.

by HouseMouse | 12th Jun 23, 10:13pm 1686564798

And the majority of those countries have vastly lower cost of living than NZ.

by Halfway To Paradise | 12th Jun 23, 9:42pm 1686562962

Don’t believe this $100k comment. I am not a teacher, I was a nurse before retiring, when nurses pay rounds came around inaccurate figures were bandied around about their pay.

by Juzz | 12th Jun 23, 10:40pm 1686566449

Nurses get paid by the hour, teachers would have you believe they work 40+ per week 48 weeks a year. Which we all know is a lie

by agnostium | 12th Jun 23, 11:10pm 1686568200

How much do they work then Juzz? Tell us as you must know.

I assume you actually must be a teacher what with the great pay and easy lifestyle.

by Macawsley | 13th Jun 23, 5:40am 1686591649

Yep, politics of envy

by chemistpeter@g… | 12th Jun 23, 4:24pm 1686543891

Tongan volcano released a lot of water into the atmosphere. I wonder if that is what we got?

by HSL | 12th Jun 23, 5:27pm 1686547646

I think they stated this in Australia, in NZ it’s climate change…..ban cars, animals, pay more tax or you will all die….

by Flying high | 12th Jun 23, 5:54pm 1686549252

Catastrophising. Works well for certain pollies

MMP - Mostly More Porkies

by Mr_Jolly | 12th Jun 23, 7:17pm 1686554263

I saw the moon out during the day today. Everyone knows the moon only comes out at night, so is this just another sign of global warming?

by IT GUY | 12th Jun 23, 5:25pm 1686547502

Retail sales are weak, perhaps all the new immigrants are not spending any money, who could have thunk this.....

Surely they must be buying furniture, cars etc for their new houses? wait a minute...

by Flying high | 12th Jun 23, 5:46pm 1686548785

Westpac not so long ago was telling the rbnz, the immigrant numbers would force their hand, to keep raising to 6 percent

Haha what clueless bwankers

There were a few other comments westpac made at the time and have since walked back

by IT GUY | 12th Jun 23, 5:51pm 1686549090

yeah like the milk price forecast

by Flying high | 12th Jun 23, 8:37pm 1686559055

Yeah that's it

by DrGrump | 12th Jun 23, 9:09pm 1686560947

Not spending any money and using the existing services that are under strain.

by tomjones_04 | 12th Jun 23, 5:35pm 1686548151

If I were part of the labour party, I'd be savagely needling Luxon about his self interest in the property market. He is clearly uncomfortable talking about his 'wealth'. Perhaps it's something we'll see in the near future.

by Rob Reid | 12th Jun 23, 5:45pm 1686548710

Haha, property shaming. Labour would need to be highly selective of their front row casting the first stones.

by dumbthoughts | 12th Jun 23, 6:02pm 1686549735

He should just pull a vintage 2016 Donald Trump (before he started getting a bit too kleptomaniacal with State secrets) and proclaim that the Labour MPs are merely jealous because they aren't as good at property investing as he is, and nobody else in parliament has amassed such a big and beautiful property portfolio as he.

Although I say that tongue-in-cheek, in hindsight it was one aspect of Trump's campaigning that was incredibly effective the first time around - because he had absolutely no shame in proclaiming his wealth and saw it as a virtue, but also understood that his opponents sought wealth but just hadn't amassed as much of it, it was simply impossible to effectively attack him with that angle ... like water off a ducks back, or watching boxers of old try to hit Muhammad Ali when he was in his prime.

by Flying high | 12th Jun 23, 8:40pm 1686559255

Americans applaud success more than us I guess

by UnconventionalView | 12th Jun 23, 6:07pm 1686550057

Something on similar lines was published in stuff today:

christopher-luxons-properties-affected-by-density-laws-he-plans-to-scrap

by nzbigben | 12th Jun 23, 5:53pm 1686549187

No one is aware of this? ANZ just raised mortgage rates from 6m to 3y except for the 2y's..... Orr must be busy with preparing the next comforting statement.

by HouseMouse | 12th Jun 23, 6:23pm 1686551008

Ouch

What would people do if refinancing now or in the next few months? 1 or 2 years? (Just curious, doesn’t relate to me as we need to refinance mid 2024)

Bit of a line call

Wouldn’t touch the 3 year with a bargepole

by Harvey W | 12th Jun 23, 6:32pm 1686551551

Definitely 1 year

by HouseMouse | 12th Jun 23, 6:46pm 1686552387

Yeah probably. The only risk is the OCR goes up further then doesn’t start dropping till mid-late 2024. Plausible scenario

by titans1350 | 12th Jun 23, 7:42pm 1686555723

I’m in the 2 year camp. Think there is risk of inflation hanging around. Particularly with elections. Listened to a good Grantham podcast where he discussed how if you went back and looked at the 10-12 month lead in to all the prior election cycles. It is where you have very strong jobs data coming out as the incumbents rosy up the economy. Now nothing ground breaking there but I think it’ll be the old politics getting in the way of getting the job done.

by DrGrump | 12th Jun 23, 9:48pm 1686563295

Housing market would be under a lot of pressure in this scenario.

by JimboJones | 12th Jun 23, 6:41pm 1686552092

Not on their website

by nzbigben | 12th Jun 23, 7:06pm 1686553586

My broker sent me this after she was off. Maybe tmr's headline

by nguturoa | 12th Jun 23, 8:13pm 1686557590

https://i.stuff.co.nz/business/money/300903727/anz-lifts-home-loan-rates

by HouseMouse | 12th Jun 23, 8:19pm 1686557981

How many times have interest rates risen since The Comb and Squirrel (pub name?) said they wouldn’t, a few months back

by Independent_Observer | 12th Jun 23, 8:22pm 1686558156

Just watch what the swap rates are doing and ignore all the other noise if you want to know what mortgage rates are going to do.

by DDDDebt | 12th Jun 23, 8:41pm 1686559300

Don’t forget Bernard who was on the telly calming the flock last May when it was all kicking off

He told the sheeple to ignore the doom and gloom of inflation and rising interest rates as they would be falling within 6 months by the end of 22 or early 23

https://twitter.com/TheProject_NZ/status/1526825567663935489

by Independent_Observer | 12th Jun 23, 8:21pm 1686558102

Interest rate swaps have been forecasting this for a few weeks now.

by Uninterested | 12th Jun 23, 5:58pm 1686549489

Low petrol sales may have been due to the wet weather....

I didn't drive anywhere during that period..

But I'm into it big time now. Prior to July and filling up in Mercer on the way back to Ak to avoid the Ak petrol tax..

by HouseMouse | 12th Jun 23, 6:15pm 1686550530

I can usually get cheaper petrol in Auckland than in the Waikato.

by kiwikidsnz | 12th Jun 23, 6:29pm 1686551382

Petrol is always cheaper in the Hutt than Wgtn, shoutout to Caltex Naenae always has the best price in the region.

by Juzz | 12th Jun 23, 10:47pm 1686566879

Yeh but they don't have 98 and my car throws tantrums on 95.

by BeeBop | 12th Jun 23, 6:40pm 1686552057

Totally agree. AKL cheaper than most other places.

Kiwis too lazy or stupid to watch out and think - oh, yes, NZ education doesn't teach indepth thinking. NZ is in to every woke trend possible. Ride your bike past the petrol station labelled in Maori.

Wiri is cheaper than North Shore - about 30 c / l differential.,

by HouseMouse | 12th Jun 23, 6:48pm 1686552494

I am in Manukau every couple of weeks for work. NPD or Pak n Save Manukau always much cheaper. Got $2.20 at Manukau Pak n Save last week

by kiwikidsnz | 12th Jun 23, 6:49pm 1686552586

Yep. You're seeing the benefits of the special additional 10c/lt Auckland fuel tax working there.

https://www.transport.govt.nz/area-of-interest/revenue/regional-fuel-ta….

by Baywatch | 12th Jun 23, 7:28pm 1686554889

Hi suppose you drive to from the north Shore to Wiri to fill up...genius? Better still you could just plug in at home overnight..

by JimboJones | 12th Jun 23, 6:45pm 1686552352

Much cheaper in Atiamuri.

by JimboJones | 12th Jun 23, 6:44pm 1686552263

Have to refix the mortgage tomorrow. Which of these options do you peeps think is best:

6mth at 6.75
1yr at 6.65
2yr at 6.49

by dumbthoughts | 12th Jun 23, 6:49pm 1686552587

I've got a 2 year fix finishing up soon and probably just going to fix another 2 to be honest, maybe 1 year. I think rates still have some upside (although not much) but I'm not convinced they will fall as fast as everyone seems to think.

by JimboJones | 12th Jun 23, 6:54pm 1686552889

2 years is a long time though, plenty of time for a big recession to change everything. Although I’ve been saying that for a while now.

by gnx | 12th Jun 23, 7:27pm 1686554865

One in the bag, two in the bush I’d say

Hoping for a drop in rates is just that…hoping

by HughJorgan | 12th Jun 23, 7:17pm 1686554232

I’d like to think they won’t fall, or only, say 50bps. It’s time to take our medicine.

by bw | 12th Jun 23, 7:16pm 1686554188

Good LVR? 5.99% for 5 years. (WBC)

Let's remember that even in the good time of +2 years ago, 5 years was 3.99%, so not that big a difference.

by JimboJones | 12th Jun 23, 7:21pm 1686554498

I’m not that brave.

by JamesM | 12th Jun 23, 8:10pm 1686557406

Got offered 5.9% term deposit today on both 6mth or 9mth term. ASB. Anyone heard of higher than this?

by Justa comment | 12th Jun 23, 8:40pm 1686559216

I know a big bank (yellow) that gave 5.8% for 1 year when we asked.

by Mrs The Point | 12th Jun 23, 10:50pm 1686567016

6.0% at Rabo

by blobbles | 12th Jun 23, 10:12pm 1686564768

Man, 1 year at 699%, that's going to be expensive for anyone rolling over onto that rate. I estimate that if people are coming from a 4% rate for a $500k mortgage, they would have been paying $2387 per month on a thirty year term. But at 699%, that goes up to $291,250 per month, slightly less affordable.

:-p