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). It's a skinny edition today.
MORTGAGE/LOAN RATE CHANGES
Heartland Bank cut its fixed home loan rates sharply today. Details here.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here today.
A quarter of all apartment sales nationwide in the fourth quarter were made at a loss, notes CoreLogic. 10% of all residential property sales in Auckland made at a loss.
ANZ's truckometer monitoring in January continues to point out the weakness of any growth it does find. It isn't strong, and kike with the GDP data,very strong population growth is masking per capita weakness.
ANOTHER SEES MORE
ASB has now raised its farm gate milk price forecast to $8.00/kgMS. This follows Westpac yesterday (at $7.90), and a good recent dairy auction.
The FMA says that a prosecution bought successfully by them against Yuen Pok (Paul) Loo, a former financial adviser, has resulted in a sentence of a combination of six months’ community detention with a 7pm to 7am curfew, 200 hours’ community work and 12 months’ intensive supervision. Loo was charged with fraud, using forged documents, operating without a license, and failing to comply with FMA orders.
FOCUSING THE GROCERY COMMISSIONER'S WORK
The Commerce Commission has extended its whistle-blowing tool used to report cartel offences anonymously, to its Grocery Commissioner initiative. That will allow supermarket insiders (including suppliers) to report on illegal practices (or more generally "concerning or inappropriate behaviour") in a way the supermarket chains can't identify the source of the information. The tool is here.
Consumer NZ is touting that the average saving for Powerswitch users is now $409 per year. They say that in 2023, Powerswitch users who switched energy providers collectively saved over $6 million. They say the power plans on Powerswitch cover about 97% of the market. Many more people need to use the tool. After all, Meridian
Mercury had $3.2 bln of revenue in 2023, Contact's revenue was $2.1 bln. For Mercury it was $2.7 bln. And for Genesis it was $2.3 bln. Just for those four, that is annual revenues exceeding $10 bln. So $6 mln saved isn't actually that much. Obvious not all the power company revenues relate to household costs - but much of it does. Consumer could perhaps do a better job getting the word out (?). But in the end, it is up to consumers to act on the opportunities.
VERY GOOD, BUT GOOD ENOUGH?
The NZ Superfund has issued a statement noting it achieved a 16.03% return in 2023, pre-tax. The Fund rarely issues media statements on performance unless they are very good (the last one was in September 2021), but they do release actual results monthly on their website. Although they can be proud of the 16%+ result (and it is far better than their opportunity cost benchmark of 5.16%), they did note that it wasn't as good as their "reference portfolio" which achieved an 18.3% return in the same period.
NO MORE REGIONAL FUEL TAX, BUT MORE TARGETED USER PAYS
National says it will kill Auckland’s regional fuel tax. The current 11.5c fuel tax will be replaced with toll roads, congestion charging, and targeted property taxes.
STRONG BIDDING FOR RISK-FREE YIELDS
At today's NZ Government bond auction, there were 116 bls totalling almost $1.5 bln for the $500 mln on offer. But about half the bids won something. The May 2031 $275 bond brought a 4.67% pa yield, down from 4.79% nine weeks ago at the prior equivalent tender. The April 2033 $$150 mln offer was also very popular, but bidders got a 4.75% yield, up sharply from 4.51% just one week ago. Worth keeping an eye on that. And the April 2037 $75 mln tranche went for 4.95% yield, little-changed from the 4.92% tow weeks ago.
LENDERS HESITANT, OR BORROWERS RELUCTANT, OR BOTH
New lending flow data from the RBNZ (C70) shows stable personal lending from a year ago although weakening over the last 8 months, commercial property lending has been low but rising in the last three months of 2023. Lending for farming remains in the dumps especially for dairy. New borrowing for residential property is going nowhere, whether it be by owner occupiers or investors.
SHORT IS POPULAR
The latest Reserve Bank figures indicate that New Zealand's home owner-occupiers are increasingly focusing on shorter term fixed mortgage rates - presumably in the assumption that rates will come down sooner rather than later
BATTLE AGAINST DEFLATION GETTING SERIOUS
China released its January CPI data and it isn't calming nerves. Consumer prices fell by -0.8% in January from a year ago, marking the fourth straight month of decline which was the longest streak of drop since October 2009. This data came worse than market forecasts of a -0.5% fall, and is the steepest retreat in more than 14 years. Food prices declined at a record pace with beef prices down -7.7% in a year and lamb prices down -5.9%. Milk prices were more insulated, down just -0.8% in the year.
ON THE FACTORY FLOOR TOO
Meanwhile the -2.5% drop in producer prices is actually an easing of the declines in the factory sector, even if it is running more deflationary than consumer prices.
EQUITY WINNERS & LOSERS
The S&P500 closed its Wednesday session up +0.8%, strong all day. It closed just a whisker under the 5000 index level. But the NZX50 is down -0.7% late in its Thursday session. But the ASX is up +0.6% in early afternoon trade, still encouraged by the talk of potential Chinese stimulus. Hong Kong has opened its Thursday session down -0.3%, but Shanghai is up +0.9% at its open. Singapore has opened down -0.3%.
OIL PRICES UP
Oil prices are up +50 USc from this time yesterday at just over US$74/bbl in the US while the international Brent price is now just under US$79.50/bbl, a slightly higher rise.
GOLD FIRMS SLIGHTLY
In early Asian trade, gold is now at US$2037 and back up +US$3 from this time yesterday. It closed in London at US$2,035/oz.
NZD FIRM AGAIN
The Kiwi dollar is now just on 61.1 USc and barely higher than this time yesterday. Against the Aussie we are up +30 bps however to at 93.7 AUc. Against the euro we have firmed marginally to 56.8 euro cents. That means the TWI-5 is now at just under 70.4 today and up +20 bps from yesterday.
BITCOIN UP STRONGLY
The bitcoin price has risen strongly today, now at US$46,546 and up a sharp +7.9% from this time yesterday. There's been moderate volatility again over the past 24 hours of just on +/- 2.2%.
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