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/LOAN RATE CHANGES
Surprisingly, one day ahead of the RBNZ review, ASB cut its fixed 18 month mortgage rate by -26 bps without waiting to hear what the RBNZ says tomorrow. More here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Nelson Building Society (NBS) cut two term deposit rates today for 2 and 3 year terms.
LESS HEAT
Housing rents tended to level off in Q4-2023 following nine months of substantial increases. The biggest increase was for two bedroom units/apartments. Affordability caps are limiting what rents can be expected by landlords.
HOUSEHOLDS FIND THE GOING TOUGH
Westpac says its customers are spending just +3.4% more than a year ago, while the population has grown +2.8% and retail prices have increased about +4%; customer with mortgages particularly spending less. And "importantly, even though we don’t expect further rate increases from the RBNZ, many households will still face increases in their debt servicing costs this year. Around 90% of New Zealand mortgage interest rates are fixed for a period, and over the coming year around 60% of all fixed rate mortgages will come up for repricing. That will see many borrowers rolling on to higher rates. In fact, we estimate the average mortgage rate that borrowers are paying will rise by a further 60bps on average in 2024."
OUT AT THE TOP?
Ex-PM John Key, who has made an art form of knowing when to move on, is stepping down from ANZ NZ's board next month (he's chairman). He will quit parent ANZ Banking Group's board too.
SAND SHORTAGE GETS SERIOUS
Infrastructure projects may get seriously delayed if new sources of sand at volume are not consented soon. The situation is particularly concentrated in the upper half of the North Island. That is the warning from the quarry industry. "Auckland ran out of sand for construction before Christmas and the quarry industry head says urgent interim fixes are needed to avoid further shortfalls impacting building and roading projects across the upper North Island." (It is not a real sand shortage; it is rather a failure to consent at a level to meet construction demand.) The pressure is coming out in high prices. See this.
FARM SALES ACTIVITY SHARPLY LOWER
The residential sector isn't the only real estate market drifting along and with soft prospects. The farm sales market is too. According to the REINZ, 228 farms were sold over the three months ending January 2024, down -38% compared to the three months ending January 2023, and down -56% compared to the three months ending January 2022.
HEARTLAND PROFIT DOWN
Heartland Group Holdings' half-year net profit after tax fell -$11.1 mln, or -23%, to $37.6 mln. It says one-off, or "non-cash technical items" had a -$15.1 mln impact. Gross finance receivables rose +4%. It's still awaiting approval from the Reserve Bank of New Zealand and the Australian Prudential Regulation Authority for its proposed acquisition of Australia's Challenger Bank. Heartland will pay a 4c per share interim dividend, down 1.5c. Heartland's shares rose +2.6% today, but they had fallen -8.7% from where they ended last week to the end of trade Monday.
NO LONGER THE DRUG OF CHOICE?
2023 recorded the largest fall in alcohol consumption since before the GFC. Alcoholic drinks are losing market share fast, down -4.3% from 2022 according to data released by Stats NZ today.
CAPACITY SURGE
The RBNZ raised its "foreign currency intervention capacity' by $810 mln in January, taking it to a record high $19.6 mln. That is a massive +$7.6 bln (or +63%) more in the past 12 months. More here.
NOTHING TO SEE HERE
New mortgage lending data for January brought not much more than the expected seasonal shifts. In a down market, no new trends are standing out.
DAIRY PRICE TEST OVERNIGHT
Overnight there is another dairy Pulse auction for both WMP and SMP. Attention will be on whether the rising price impetus continues. Derivatives markets are suggesting the upcoming Pulse event could bring a hesitation for WMP. But they also suggest that SMP could be in for a +3% boost.
LOWEST IN 22 MONTHS
Japanese consumer price inflation was expected to slow in January, and that is what happened, falling to 2.2% from 2.6% in December. But core inflation fell slightly less to 2.0% from 2.3%, and that is down from over 3% a year ago. They will be nervous that their long-run deflation tendency is not yet beaten.
SWAP RATES SLIP
Wholesale swap rates will probably be a little higher today ahead of tomorrow's OCR decision. (Bond yields are up +7 bps across the curve.) But at the close they actually slipped. However, the key reaction will come at the close. Our chart below records the final positions. The 90 day bank bill rate is unchanged at 5.72%. The Australian 10 year bond yield is up +4 bps from this time yesterday at 4.15%. The China 10 year bond rate has dropped to 2.38% an unusual -4 bps drop and a new record low. And the NZ Government 10 year bond rate is up +4 bps to 4.92%, while the earlier RBNZ fixing was at 4.84% and unchanged from yesterday. The UST 10 year yield is now at 4.27% and up +4 bps from this time yesterday. The UST 2yr is now up to just under 4.70% and so that key inversion is now -43 bps and marginally less.
EQUITY WINNERS & LOSERS
The NZX50 is down -0.6% in late trade today. The ASX200 is down -0.1% in early afternoon trade. Tokyo has opened up +0.4% to a new all-time high. (A falling yen helps boost it.) Both Hong Kong and Shanghai have opened little-changed after yesterday's chunky falls. Wall Street ended its Monday session down -0.4% on the S&P500 index.
OIL RISES
Oil prices are +US$1.50 higher than this time yesterday, now just on US$77.50/bbl in the US while the international Brent price is now at just over US$81.50/bbl.
GOLD HOLDS
In early Asian trade, gold is now at US$2032/oz and up +US$2 from this morning.
NZD RETREATS AGAIN
The Kiwi dollar has retreated slightly from this time yesterday, now at 61.6 USc. Against the Aussie we are holding at 94.2 AUc. Against the euro we have dipped to 56.8 euro cents. That means the TWI-5 is now at 70.8 today and down -20 bps.
BITCOIN RISES STRONGLY
Bitcoin is on the move higher again. The bitcoin price has risen today, now at US$56,454 US$54,714 and up +9.2% +5.8% from this time yesterday. There's been extreme high volatility over the past 24 hours of just over +/- 5.9%.
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54 Comments
Well the last government seemingly was not short of a laugh or two in spending it either. More than sobering though. Perhaps that is why alcohol intake has fallen. Most wisely experienced understand that it is a depressant. Lift you up and then drop you down hard, lower than before. Where’s the yardarm? Tallyho!
BTC went over $57k at one point. Now $6k NZD off all time highs.
Ratty hit ATH in JPY a few weeks back. Nobody blinked.
Coinglass data shows that in the past 24 hours, $285 million was liquidated, including $211 million for short orders; a total of 74,800 people were liquidated, and the largest single liquidation order occurred on Binance - BTCUSDT worth $4.81 million.
These people betting against BTC are madder than a box of frogs.
https://www.coinglass.com/LiquidationData
Bitcoin is ultimately a Greater fool scheme
Of little worth to anyone for anything
In the meantime, you can make or lose fiat by playing the roulette wheel
Yes i know there are limited quantities of the nothing, and that it will soon halve, and that half nothing is still very little.
But you will always need a greater fool
2008: The Collateralized Debt Obligation (CDO) market was USD400 billion in derivatives before it collapsed.
2024: The Collateralized Loan Obligation (CLO) derivatives market is valued at USD1.25 trillion.
For a bit of perspective, If you spent $1,000,000 every single day, how long would it take for you to spend 1 trillion dollars?
Horseface, the nickname Trumps uses on ex lover and prostitute Stormy Daniels. Gee Donald can you be any ruder towards the woman you were rooting while your wife Melania was breastfeeding Barron, the youngest member of the clan
Pity you have to "come" face to face with horseface next month when in court.... again!
I guess its the abortion angle... Americans are ridiculous where the demz want to have the right to kill people before they're born while the repubz want the right to their semi-automatic weapons with the resulting mass shootings.
But democracy trumps trump and his fascist ideas. I'm looking forward to see his deserved downfall
Abortion is the modern method to get folk riled up, but it was only in the last fifty years that it was coopted by the religious Right to do so. Prior to that it was pretty politically non-partisan, except for Catholics.
Seems like it was coopted after Evangelical colleges had their tax-free status threatened if they refused to allow black students entry. They needed a wedge issue that worked to replace segregation, especially in mobilising against Carter: https://www.politico.com/magazine/story/2014/05/religious-right-real-or…
There's a fun wee book called Crazy for God (if I remember correctly, written by Francis Schaeffer's son Frank. (Francis was one of the key figures in the Religious Right movement.) He claims in it his father came to regret being involved after witnessing how much Christianity had been coopted by insincere folk out for power and political control, in all this. Francis comes across like a decent man, especially compared to the likes of Jerry Falwell.
Perhaps if we stopped regional councils from planning and did it nationally we would be in a better position. Huntly, Mercer, Pokeno and Tuakau all on the railway and all commutable to Auckland but no stations. Lots of land in North Waikato and not all high quality vege land like South Auckland.
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