A review of things you need to know before you sign off on Monday; more retail rate changes, strongish labour market detail, Supie in administration, swaps and NZD on hold, & more

do you need 1,000's, 10,000's or 100,000s to get this type of rate?

I need your contact at ASB because when my few hundy rolls over I just get the advertised rate, however I'm pretty much expecting 6.3% to be the norm come this time next month.

"...We find that New Zealand has many similarities to other advanced economies and compares favourably overall, although we do find that mortgage borrowers in New Zealand are relatively more exposed to higher interest rates. This is because of higher household debt levels and the relatively short fixed-rate periods of New Zealand mortgages...."

Figured that out ages ago.  Been reading interest.co.  

DP

Yeah, a lot of words and no answers or directions.

Downside risks remain if unemployment rises or if financial conditions tighten

In part this reflects robust macroeconomic fundamentals, such as low unemployment rates, and past regulatory tightening across many jurisdictions after the GFC.

Key downside risks to global financial stability are potentially weakening labour markets and persistently high inflation rates, raising the risk of further policy tightening.

And yet aren't they complaining about low unemployment rates and we're already seeing persistently high inflation rates and tightening financial conditions.  Sack the lot of them and let's go back to reading the stars, tarot cards and runestones.

European equity markets have profited recently from declining energy prices that increased corporate profits.

That's an interesting one - inflation stays high because the decrease in inputs isn't being passed onto the consumer?

Yes that is surprising to me, and yes it will be HFL if the unemployment rate does not increase by much. 

It's not though. Here's my take on what is actually going on:

• More people are arriving into the country to take up jobs that residents won't do - often for very good reasons, like not wanting to leave their kids and family to go and sleep in a shed or a 6-bunk shared room in Queenstown, or minimum wage work in care services with unsociable hours and bedsit accommodation.
• The number of people arriving is running at around twice the growth in jobs - so the people that are on the edge of the labour market are being shut out. This is showing up in the reduced number of younger people in jobs, and the number of people with health conditions and disabilities joining the dole queue. You can see this trend clearly in higher jobseeker claims - now ticking up at around 500 per week.
• The variation across the country is also significant - with parts of the east coast, nelson, and wellington all seeing job growth well below-population growth. Auckland is booming because it is where migrants go first, and there are lots of jobs that you can only afford to do if you share a house with loads of other people trying to get a foothold in the promised land (note rents there have gone nuts as a result - up over 9%)

We get the labour market data on Wednesday. I am still betting on a 3.9% unemployment rate and an under-utilisation rate nudging 11% (or at least above pre-COVID levels). But, let's see.

Love these sorts of anecdotes. Often much more insightful than the aggregated data.

I have cancelled about $200 of subs a month myself in the last week....     not getting enough value....

I was paying for multiple xero companies moved 2 to spreadsheet, and had some other services not using, also lost about 4 kg in 2 months simply by working harder and eating less.

When will the anecdotes show up in the stats? We still have very low unemployment and good GDP growth, probably the two most important indicators. I agree with the anecdotes, it does seem very quiet out there, but the NZ economy seems to keep chugging though it...

Sounds like tough times manifesting in good service.

Can go the other way. I recently changed dentists after some really bad head office type behaviour. Got chatting to a few clinicians and they are getting squeezed to book a certain number of procedures and have to explain down to each 15 mins. Same for an optometrist friend. 

4 Seasons gone out of business too, a sign retail etc is drying up.

Then again, food prices (especially fruit/veggies) seem to have taken a big tumble. 5 Avos for $1, 2 cauli's for $5, 2 telegraph cucumbers for $3, cheap fruit, cheap other veggies at PaknSave on the weekend. Eggplants still expensive, but thats about it.

Interesting. Pass on to your business owners if you wish that if I'm still in nz by Christmas, we will be pretty austere this year.  The next 3 months are going to be tight even without it.

Yes they are doing great stuff, I hope it goes well. I think it will. But you just never know in the housing development business…

It's a nice sounding narrative but call me a skeptic.  

1. No guarantee on return of capital for investors 

2. No guarantee on the underlying asset - the properties  

Caveat emptor. 

ASB say they will ask for a special rate and always come back with only 0.005% more. BNZ and Westpac will sometimes move more.