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A review of things you need to know before you sign off on Tuesday; QV HPI data out, less concrete poured, inflation expectations retreat, Nikkei 225 surges, swaps hold, NZD dips, & more

Economy / news
A review of things you need to know before you sign off on Tuesday; QV HPI data out, less concrete poured, inflation expectations retreat, Nikkei 225 surges, swaps hold, NZD dips, & more

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
None so far today.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.

GULF BETWEEN NEIGHBOURS
The average value of all homes was up +2% in the three months to January, according to QV HPI data. Invercargill remained the most affordable major urban district, whereas just 190 kms north, Queenstown-Lakes was the most expensive.

A REGIONAL CRUNCH UNDERWAY
Concrete volumes remain under downward pressure as construction activity slows across the country. Nationally they fell -12.2% but in Auckland the retreat was the least of any region, down only -4.4%. Wellington metropolitan region fell -7.7% and Christchurch by -9.7%. It was in the regions that the slowdown is hitting hardest, with Northland down -13.3%, Waikato down -16.9%, Hawkes Bay by -22.4% and Tasman/Marlborough by -14.6%.

STRUGGLING
On January 30, RBNZ Paul Conway delivered a speech titled: "The importance of quality research and data". Today however quality was not on show for the RBNZ data delivery. We are still waiting for the 3pm release of the RBNZ business inflation expectations survey. Nor the exchange and interest rate data. Hopefully the outage doesn't last too long. Update: this scheduled data access became available at 3:20 pm, thankfully.

RBNZ GETTING WHAT IT IS LOOKING FOR
The RBNZ's inflation expectations survey shows significant progress. The one year expectation is that inflation will be running at 3.2%. In two years at 2.5%. This is an outcome that will move markets. The calls for a higher OCR may have been premature. More here.

TAYLOR TOAST?
Fletcher Building has indicated to the ASX that chief executive Ross Taylor may be about to leave as the company contemplates issuing earnings guidance likely to 'materially vary' from current analysts' forecasts. (see page two, three. That letter was not in yesterday's NZX Halt notice.)

AUSSIE CONSUMER SENTIMENT RISES
The Westpac Melbourne Institute Consumer Sentiment Index rose 6.2% to 86 in February, from 81 in January. This is the biggest monthly gain since April last year, when the RBA paused its rapid series of interest rate rises, and takes the Index to its highest level since June 2022.

AUSSIE BUSINESS SENTIMENT STABLE
Australian business confidence, as monitored by the NAB survey, rose just 1pt to +1 index point, and still well below its long-run average. The improvement was largely driven by manufacturing and construction, partly offset by falls in wholesale and retail confidence. Confidence remained negative across all the states.

SWAP RATES ON HOLD
Wholesale swap rates will probably be higher yet again today, modestly, but the one year term may not have moved today. However, the key reaction will come at the close. Our chart below records the final positions. The 90 day bank bill rate is down -4 bps to 5.74%. The Australian 10 year bond yield is up +2 bps at 4.19%. The China 10 year bond rate is unchanged at 2.45%. And the NZ Government 10 year bond rate is up another +2 bps at 4.95% and a one month high, while the earlier RBNZ fixing was at 4.89% and down -3 bps from yesterday. The UST 10 year yield is now at 4.17% and little-changed from yesterday. The UST 2yr is at 4.47% and so that key inversion is now just on -30 bps.

EQUITY WINNERS & LOSERS
The NZX50 is down -0.4% in late trade. The ASX200 is unchanged in early afternoon trade. Tokyo is up a very strong +2.4% in morning trade in Tokyo. Hong Kong and Shanghai are both closed for the New Year holiday. Singapore has opened little-changed. The S&P500 gave up its early +0.4% rise to also close its Monday trade little-changed.

OIL PRICES HOLD
Oil prices are up +50 USc to just over US$77/bbl in the US while the international Brent price is now just under US$82/bbl.

GOLD HOLDS
In early Asian trade, gold is now at US$2020 and down -US$3 from this time yesterday.

NZD DROPS
The Kiwi dollar has dropped from where we were this time yesterday on the inflation survey, now at 61.1 USc. Against the Aussie we have dipped to 93.7 AUc. Against the euro we are lower at 56.7 euro cents. That means the TWI-5 is now at just over 70.4 today.

BITCOIN SHIFTS UP
The bitcoin price has moved up today, now at US$50,117 and up +3.5% from this time yesterday. There's been moderate volatility again over the past 24 hours of just on +/- 2.7%.

Daily exchange rates

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End of day UTC
Source: CoinDesk

Daily swap rates

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Opening daily rate
Source: NZFMA
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This soil moisture chart is animated here.

Keep abreast of upcoming events by following our Economic Calendar here ».

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40 Comments

BTC doing well , for a pet rock.

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Indeed ! Where is all the money coming from to pour into BTC and S&P 500 at record highs ?

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From the insatiable incentive to inflate national currencies.

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Simple.  Likely 10% of that $12 Trillion US of wages and salaries gets poured into the stock market at the end of every month--not to mention the reinvestment of dividends from the 20% at the top who do not need the liquidity and simply reinvest it. Remember in the US what comes off the top of the paycheck and goes into the IRA's, Pensions, & 401k's is not taxed-not until they retire and begin withdrawing it. And even in NZ must be Billions of Super Dollars invested in the markets every year.

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Inflation dropping like a stone...deflation next?

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For the moment, I'll stick to those "pet rocks" - better than NZD's being inflated away, then devalued v USD's 

So many kiwis just don't realise how much "excess cash" is out there in the world looking for a home  - BTC has been by far the BEST INVESTMENT in the last 5 years. 

I gather from so many comments on this site, that so many people haven't looked into it further  - so instead of saying it's a ponzi scheme and a con etc etc , why don't you say  "I don't know anything about it, so where can I go to find out?" 

 

 

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Jamie Dimon is predicting a financial crisis as US public debt passes $34 trillion. Specifically, Dimon noted that the country is facing a global market “rebellion” amid its growing debt numbers.

 “If you look at that 100% debt to GDP by [2035] I think it’s going to be 130% and it’s a hockey stick. That hockey stick doesn’t start yet but when it starts markets around the world… there will be a rebellion.”

This isn’t just bad news for the Home of the Brave—America’s ability to pay its debts is a concern for the nations around the world which own a $7.6 trillion chunk of the funds. The nations most exposed are Japan, which owned $1.1 trillion as of November 2023, China ($782 billion), the U.K. ($716 billion), Luxembourg ($371 billion) and Canada ($321 billion).

https://fortune.com/2024/01/29/jamie-dimon-government-debt-crisis-marke…

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But wait! Everyone at the water cooler says the US economy is swell

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Yep. I know. I have the same problem. And if I can't validate who this Jamie Dimon fella is via Granny Herald, nobody pays any notice anyway. 

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NZ economy is a bit stuffed, many shares down reflecting the poor trading. Vulcan steel profits down over 50 percent and reckons this will start coming right from April or July 2nd and 3rd quarters

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Finland just elected a new center-right president: a 55-year old triathlete who has a PhD from the London School of Economics, fluently speaks five languages, has held minister posts in finance, trade and foreign affairs, as well as been Finland's prime minister and a VP at the European Investment Bank.

No disrespect to our lot of course. And being a successful bureaucrat is no guarantee Alexander Stubb will be a great leader.

A rejection of woke politics though. Remember Cindy's mate.  

https://www.theguardian.com/world/2024/feb/11/finland-goes-to-polls-in-…

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What is woke politics? 

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Left of center mainstream politics drawing from identity politics, authoritarian tendencies, virtue signaling over constructive action, adherence to globalism. Not to be confused with progressive politics. 

Very much a product of the English-speaking nations and its leading identities like Trudeau, Ardern, Albo, Biden. All of whom I personally dislike as leaders.

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Everything the Greens stand for and their soon to be new leader, Labour weep as you future is buried

 

 

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You nailed the perfect definition there. Worth keeping for posterity.

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Thank you. Best to keep as objective as possible. Cindy disappointed me and many others. We supported her at the start and thought she was the real deal. She made many people feel like mugs.  

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Let it go guys...we are now on the right path remember...smokes, roads, tax cuts for all

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Remember - severe criticism of the phoney left does not at all equal endorsement of the horrid Right.

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Remember - severe criticism of the phoney left does not at all equal endorsement of the horrid Right.

Precisely. 

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Since we can be non binary on gender and sexuality surely we can be non- binary on politics

apolitical, rather than asexual

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they had 6 years to come up with a plan so far nothing but repealing anything labour did, what are they going to do when they run out of things to repeal, they have not introduced any new bills what were they doing for 6 years just sitting on their A and collecting a salary, the one i want them to repeal is fixed toilets in caravans etc they fought against it but now they are in power Nadda

 

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Precisely...but at least we all get a tax cut ...I thunk...can the Nat bots confirm?

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Nicola goes if we don’t 

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I don’t know about you but I enjoy David L.S.’s (Macrobusiness) brutal prosecution of the phoney left in Aus.

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DLS is a gifted wordsmith when he wants to be. He's able to gut Team Albo expertly. Ruthless on the corrupt, thieving wingnuts as well. 

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Woke is saying "be kind" but actually being unkind

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Whatever Winston 1st says it is.

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FBU shares to start with a 3 tomorrow? Will be interesting. Bad news for the conservative and balanced Kiwisaver funds.

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Gonna be ugly

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Vulcan Steel was Up on poor results, how is that possible 

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Perhaps if FBU’s CEO walks then there could be a bounce

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wayne brown has put an immediate stop on all auckland transport projects to be funded by the fuel tax, he is calling SB bluff

not sure which one is playing this game or if both are

Privatisation technique: defund, make sure things don’t work, people get angry, you hand it over to private capital. — Noam Chomsky

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IMHO he needs to draw attention to the funding removal to gather AKL rate payer support....

Next election we have to tick the right councillors not just mayor, going to be a landslide to the right in AKL

 

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Trump might be free to run....?

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He'll be in a jail cell. 

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Behind bars, those in mara-lago. Home D at home, I hope not

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American's are faced with a choice-Are they going to vote for the Elderly man who isn't competent to stand trial--or the one who is!

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that would be unusual for auckland , it normally ends up a left dominated council, i think this is the first RW mayor since 2010 and it became a supercity. and don't get me started on what a disaster the supercity has become thanks rodney hide for creating this huge monstrosity and after he moved as far away from it as he could.

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If Aucklanders want this transport work done they could vote to put the rates up.  

But remind yourselves first we have first world needs and second world incomes.

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I don’t know if I would really call Wayne ‘RW’. He seems quite non-tribal and possibly apolitical to me.

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