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
BNZ trimmed most fixed rates by between -4 bps and -20 bps. More here.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here today.
UNBALANCED WITH THE EU & KOREA
The January merchandise trade deficit was -$976 mln, lower than the -$2.1 bln in the same month a year ago, and even lower than the -$1.1 bln in January 2021. Exports were down -7.1% from a year ago, but imports fell -20%. Oddly, one reason exports fell is because we didn't export as much crude oil. Imports of "petroleum and products" fell -50%. The change in our trade surplus or deficit with our top four trading partners - China, Australia, USA, Japan - changed very little in January from the same month a year ago. But our trade with South Korea is now in a huge deficit, more than -$400 mln in January alone, -$3.6 bln for the year to January and the largest we run with any country. It is only beaten with the deficit we run with the EU bloc.
WHAT IS A GMO?
The Environmental Protection Authority has released a clarification that certain organisms, known as null segregants, are not considered genetically modified organisms under the HSNO Act 1996. Null segregants are descended from genetically modified organisms but do not contain genetic modifications themselves. This can occur when one parent has the genetic modification, and the other parent does not. EPA said, "This decision provides certainty for researchers in our primary industries and brings New Zealand into line with other countries in the OECD, such as Australia and the United States. This will help New Zealand scientists keep pace with international research."
SLIGHTLY HIGHER
The trending higher of dairy prices recently has induced the ANZ economists to raise their forecast payout for the current season by +15c/kg to 7.85/kgMS. This is only marginally higher than the current Fonterra forecast midpoint of $7.80. (ANZ didn't change their initial 2024/25 season forecast of $8.50.) Forecasts from all major analysts are here.
NOT IN FAVOUR
Credit card billings for transactions within New Zealand actually fell in January from the same month a year ago. That is the first time we have seen such a retreat since January 2009 - and we all know what was happening back then. (However, there are still 'healthy' +10% rises for card use outside New Zealand.) One thing credit card users aren't doing is using the debt facilities of the cards any heavier - that is stable. In fact, it is running at its (equal) lowest ever. And as you might surmise from this data, total card balances are little-changed.
NOT WHAT THE RBNZ WANTS TO HEAR
The release of the Q1-2024 household inflation expectations survey will give the RBNZ policy committee no comfort. Householders views of future inflation have risen sharply in a development that goes very much against what the Reserve Bank is looking for as it seeks to dampen down inflation
KEY SOCIAL DATA
StatsNZ today released a comprehensive set of child poverty measures. They aren't nice reading. But are we making progress? We didn't in 2023 from 2022. But a longer term look reveals a declining trend. A proper assessment should have you reading the data released. There is a lot of gritty detail here. But for readers without any attention span or only passing interest in this key topic, here is a chart tracking the percentage of children living in households in Material hardship. Progress may not have been, or smooth, or fast enough - but clearly, there has been progress.
COMCOM WANTS BANKS TO 'PICK UP THE PACE ON PAYMENT OPTIONS'
The Commerce Commission is calling for more innovation in payments between bank accounts, saying this could support better ways to pay online and in-person. Chairman John Small says examples overseas include the use of QR codes and mobile applications that facilitate new in-person payments, with this complementary to the Government's development of a Consumer Data Right regime. The Commission will begin formal consultation on whether to recommend to Commerce and Consumer Affairs Minister Andrew Bayly the need to exercise powers enabling it to regulate so this innovation "happens in a timely manner."
BETTER AS A RENTER?
StatsNZ household expenditure survey results show, for the year to June 2023, total rent payments were up +4.0%, total mortgage payments were up +27%, mortgage interest payments up +50%, mortgage principal repayments were unchanged, property rates up +5.9%, and building-related insurance costs up +14%.
'A DIFFERENT WAY TO THE SAME DESIRED OUTCOME'
The Government said today it will repeal the Business Payment Practices Act 2023, designed to get big business to pay SMEs faster. They say the legislated approach was modelled on a Morrison Govt Australian plan that research shows had no impact at all, other than adding compliance cost. The new government says it recognises there is an issue to be sorted out and will look for new ways to achieve that. BusinessNZ predictably applauded the change of direction.
JAPAN GROWTH STALLING
Some preliminary PMIs for February are starting to come through and the first is from Japan, showing its factory sector contracted more than expected, and its services sector expanded again, but by less than expected. Together they paint a picture of growth stalling in Japan.
MORE ON AUSSIE WAGES
Australia said average weekly ordinary time earnings for full-time adults was AU$1,888.80 in November (NZ$2030/week). The annual increase of +4.5%, or AU$81 a week, was the strongest since May 2013, other than a brief spike in average earnings early in the COVID-19 pandemic.
SWAP RATES FIRM
Wholesale swap rates will probably be on the firmer side today. However, the key reaction will come at the close. Our chart below records the final positions. The 90 day bank bill rate is still unchanged at 5.71%. The Australian 10 year bond yield is down -1 bp at 4.20%. The China 10 year bond rate is unchanged at just under 2.43% and still its lowest ever. And the NZ Government 10 year bond rate is up +5 bps to 4.92%, while the earlier RBNZ fixing was at 4.85% and unchanged from yesterday. The UST 10 year yield is now at 4.31% and up +3 bps from this time yesterday. The UST 2yr is now up to just under 4.67% and so that key inversion is now out tot -36 bps.
EQUITY WINNERS & LOSERS
Just before the market closed on Wall Street, the release of the upbeat Nvidia results which came in higher than the high expected gave the S&P500 a late boost enabling it to finish up +0.1% for the day. Locally, the NZX50 is up a strong +1.0% near the close. The ASX200 is little-changed however in afternoon trade. Tokyo has opened its Thursday session up +1.6% and another new record high. Hong Kong is up +0.2% at its open. Shanghai is up +0.4%. Singapore has opened down -0.2%.
OIL FIRMS
Oil prices are up +US$1 to just under US$78/bbl in the US while the international Brent price is down at just over US$82.50/bbl.
GOLD ON HOLD
In early Asian trade, gold is now at US$2027/oz and up just +US$11 from yesterday.
NZD FIRMS FURTHER
The Kiwi dollar has eased higher from this time yesterday, now at 61.9 USc. Against the Aussie we are firmer at 94.5 AUc and a +¼c gain. Against the euro we are also firmish again, at 57.2 euro cents. That means the TWI-5 is up at 71.3 today.
BITCOIN EASES
The bitcoin price has moved lower today, now at US$51,561 and down a bit more than -1% from this time yesterday. There's been modest volatility over the past 24 hours of just on +/- 1.5%.
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71 Comments
...with the inflated Householders views of future inflation, large anticipated rate rises across the country, combined with electricity prices rising significantly from 1 April, Non-Tradable Inflation is going to be 'sticky' for much longer.
Higher for Longer or Even Higher for Even Longer for the RBNZ?
Because a fixed daily charge is so much better business sense...for the power companies
I had a bit to say to Genesis when last year Labour/MBIE agreed with the companies proposal that dumping the low user fixed daily charge was the only way to reduce consumption charges for high users (= large family Labour voters) who the govt were "concerned" would turn off their heaters. So, to hell with low user tariffs.
My own calc confirmed the massive increase in fixed charges (doubling every year for 5 years) was "offset" by approx a third in the reduction in consumption kWh charge (for me - high energy efficient new home with single occupier). After 5 years my fixed charge would be at least = to my consumption.
I'm still with Genesis atm; the only other feasible option may be Nau Mai Ra who have zero fixed charge however they required weekly accounts & also had some significant unforeseen excess charging incidents due to their management issues/dependence on the other generators/lines companies.
Your grandparents (& mine) had a lot less choices available to them. Including education & reliable birth control.
"Most of us" aren't the result of people taking responsibility for their own lives & families when that responsibility is able to be shifted to net taxpayers.
https://www.stuff.co.nz/business/350188946/warehouse-group-sells-torped…
what kind of debt went with it?
Yes, Kiwirail is a joke! Best thing the Government could do is scrap the the main trunk line and turn it into a cycleway. Just keep Auckland and Wellington commuter lines going and perhaps the ChCh to West coast line. The business the cycleway would bring to the length of the country would be massively more than the current rail freight operation which only survives on government hand outs. And I am no fan of cycling!
Stalled, Stagnant, Stuffed....
https://www.nzherald.co.nz/business/editorial-stalled-housing-market-a-…
Most still won’t believe it. Told my workmate today at the water cooler that she would be doing well to sell her townhouse for the same amount she paid for it in 2020. I got a quite shocked stare of disbelief. She reckons she will get at least 10-15% more.
I changed topic.
I noticed One Roof are in PR saturation mode. One house for sale in Arrowtown had a call from "New York", amazing.
However even this journalism looks Pulitzer Prize worthy when up against Stuff's breaking news headline that "Taylor Swifts boyfriend has landed in Australia". That's the news content we need, someones boyfriend landed in another country.
TK. Do yourself a favour & stuff Stuff. It’s not breaking news, it’s breaking wind.Atrocious writing imo (can’t dishonour good journalists by calling it journalism) and an utter disgrace when compared to the fine history and standard of the old Christchurch Press. Suspect now that the comfort fund from the previous government no longer exists the days are numbered anyway.
Newsflash for NZ millennials and gen z she is as irrelevant as any other US media celebrity when most cannot afford housing, struggle to get decent education, work and to raise a family. Most don't listen to her music, even more don't ever plan on going to her concerts, even more cannot even afford to go to her concerts. You are trying to make out that a celebrity for music entertainment is some kind of political and social movement. Newsflash she is not, it is a luxury expense most of the young generation cannot afford and is not even of the same culture. Her music is as derivative of most white female artists in the US. Cannot say it speaks to a generation when it does not even have or the share similar experiences of most of that generation. But I get it you are the antihero, you are the problem.
You concern yourself more that someones boyfriend from the US is going on a holiday then you do to severe child poverty and abuse in your backyard. It takes a village to raise a child, it also takes a village to abuse one and leave one without adequate health measures to ensure wellbeing.
China surprised markets by slashing interest rates to revive its property sector and economy. China cut the 5-year Loan Prime Rate (reference rate for mortgages) to reduce household borrowing costs for Chinese people.
The 1990s in Japan show us that you cannot fix a balance sheet recession simply by lowering interest rates (Japan 10-year bond yields went from 8% to 1%, yet Japanese house prices kept falling). Most people aren't buying houses in China because mortgage costs are too high, but because they're worried about developers going bankrupt and house prices falling.
This is what we call a balance sheet recession: people focus on repaying debt, not taking on more debt.
Losses in the property sector in China are an accounting issue that can be deleted without costs to anyone (except the property firms going bust). No need to allow this to become a crisis or recession. Unlike Japan, Chinese leaders don't have to take orders from the USA on policy Link
https://www.nzherald.co.nz/nz/realtor-janet-dickson-facing-5-year-ban-f…
Employing bully boy tactics and threatening to take away agents' ability to earn a living. Fascist removal of rights and freedoms.
The New Zealand Settlements Act enabled the confiscation (raupatu) of land from Māori tribes deemed to have 'engaged in open rebellion against Her Majesty's authority'. Pākehā settlers would occupy the confiscated land.
Example
The Waikato campaign was the largest and most successful of the British military operations in the colony between 1845 and 1866. Although one of the government's main aims was achieved – the Waikato basin was largely cleared of Māori for European settlement –
In 1835 two Māori groups, Ngāti Tama and Ngāti Mutunga, invaded the Chatham Islands. They had left northern Taranaki due to warfare, and were seeking somewhere else to live. Moriori decided to greet them peacefully, but the Māori killed more than 200 Moriori and enslaved the rest.
Protip most children in material hardship are in families with disabilities (either one of the parents or the children themselves), this is known to both MSD, MoH and Stats NZ. Parents of children with disabilities often have to be nursing carers so they are ALREADY IN WORK and the govt pays these nursing carers BELOW MINIMUM WAGE for that work they would otherwise have to pay full rates for other health staff to do as these children are DENIED EQUAL EDUCATION AND CHILDCARE ACCESS. Children & severe disability and crippling deprivation is not something they planned on.
How many families do you think set out to have a severely disabled child with cerebral palsy, or autism
There is a significant segment of disabled women in abusive relationships with poor access to healthcare & birth control but that is NZ encouraging abusive relationships of disabled people. It is something aok in NZ; it is by design disabled women are still treated as chattels by MSD and denied independent living support so they are often forced into abusive relationships to live.
But you are sure keen to make those disabled people suffer and live in such deprived circumstances they cannot even afford transport to a GP and minimal power bills to run necessary medical equipment.
Carmel was worse than useless, she did real actual harm. She was told families with disabilities were in severe material hardship and she actually effectively lowered their support by cutting benefits (in real terms with removal of TAS and cutting carers support rates) and still disabled women are treated as chattels by MSD and denied independent living support so they are often forced into abusive relationships to live. When a single benefit cannot even afford 1 bedroom rent (not an apartment, not a home, not even a single bedroom in a hostel environment) of course it is forcing people into more tenuous and abusive circumstances to live and further treating them as chattels to be controlled with their finances in control of a partner does not improve their lives or make GP access more available. Imagine begging a partner for money to get transport to a GP for any health concern (but lets highlight one you think is the biggest problem, reproductive health & family planning) when that partner has full financial control, and can be physically abusive as well.
After 34 years, Japan has finally hit a new all-time stock high (Nikkei). Some of today's highlights - Suntory +10%, Daihatsu Diesel +6%.
The latest gains carried the benchmark index above its closing level on the final trading day of 1989, when 15 Japanese companies ranked among the world’s 20 biggest by market capitalisation. That peak has long been referred to by Tokyo traders as the “iron coffin lid”, with its apparent unattainability becoming a symbol of the three and a half decades of economic stagnation that followed the bursting of Japan’s stock and property bubble.
https://www.ft.com/content/8b982ad2-8923-4f48-adc6-946c10964657
""Boeing says the head of its 737 programme is leaving the company in an executive shake-up weeks after a door panel blew out on a flight over Oregon, renewing questions about safety at the company. Boeing announced the departure of Ed Clark, who had been with the company for 18 years.""
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