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
Both ASB and ANZ trimmed home loan rates today, but most were to levels other majors were already at.
TERM DEPOSIT/SAVINGS RATE CHANGES
ANZ also trimmed its 1-3 tears TD rates. But ASB raised its six month rate.
GOING FOR US
StatsNZ released its full Q4 international trade data today for both goods and services. Goods exports fell -8.8% from the same quarter a year ago, while goods imports fell -11.0% (on cheaper fuel), narrowing the deficit. The sharp fall in our terms of trade (next item) won't be helping either. Also narrowing the deficit was that services exports (mainly inbound travel) rose a sharp +22.0% while services imports changed a minor -1.3%. So we had a -$4.6 bln deficit for the quarter, and down from -$7.0 bln in the same quarter in 2023.
GOING AGAINST US
There was a sharply worse terms of trade in Q4-2023, down -7.7% in Q4 from Q3 and down -10.6% from a year ago. The terms of trade measures the relative price of our exports to the relative price of what we pay for our imports. When it shifts like this, we need to sell moire volume just to stay even.
TAX MINIMISATION
InvestNow is pointing out that the upcoming 39% trust tax rate (in force from April 1, 2024) can be avoided by trusts investing in PIEs (where the maximum tax rate is 28%).
MANY AUCTIONS, FEW SELL
Auction rooms for residential property are getting busier but the sales rate is stuck around a third under the hammer. More properties are were offered in February 2024 than 2023, but the sales rate was lower.
THE CORPORATE GRUMPS
The latest company earnings season reporting shows overwhelmingly negative comments, consistent with economic recessionary conditions. Companies exposed to the domestic consumer, construction sector and primary sectors the worst hit. Although data only from Q4-2023, Australian company profits rose by +7.4% from Q3, easily beating market estimates of +1.8% while marking the strongest growth since Q4 of 2022. But year-on-year, those same profits were down -5.4%. (The same dataset shows payroll costs paid up +8.0% year-on-year.)
ADVANCE NOTICE
Those responsible for payrolls should note that minimum wage rates will increase from 1 April 2024. The adult minimum wage will go up from $22.70 to $23.15 per hour, and the starting-out and training minimum wages will go up from $18.16 to $18.52 per hour. All rates are before tax and any lawful deductions, for example, PAYE tax, student loan repayments and child support.
UPDATE, NO WORRIES BETTER THAN NORMAL
As an update, Auckland's water storage level is 84% of dams full. That is better than the long run average of 78% at this time of year. North Island hydro lakes storage levels are fuller than normal. South Island lakes are at about normal levels.
COMPLETE OUR CAR INSURANCE SURVEY
If you haven't completed our March car insurance survey, you can do so here. Feel free to share the links with friends and family. (There is an option in there to tell us what you really think.)
SWAP RATES HOLD
Wholesale swap rates will probably be little-changed again today. Our chart below records the final positions. The 90 day bank bill rate is unchanged at 5.65%. The Australian 10 year bond yield is unchanged from this morning at 4.12%. The China 10 year bond rate has stayed at 2.38%. And the NZ Government 10 year bond rate is down -1 bp to 4.80%, while the earlier RBNZ fixing was at 4.75% and unchanged from Friday. The UST 10 year yield is now at 4.20% and up +1 bp from this morning. The UST 2yr is now down to just on 4.56% and so that key inversion is still -36 bps.
EQUITY WINNERS & LOSERS
The big news today is that the Tokyo Nikkei225 opened above 40,000 index level, a +0.9% rise at their open and a new record high. Hong Kong is down -0.3% at its open, and Shanghai is down -0.2%. Singapore has opened down -0.2%. The NZX50 is down -0.2% near the close. The ASX200 is unchanged in late afternoon trade. The S&P500 futures suggests Wall Street will open its Monday session basically unchanged from Friday's close.
OIL UNCHANGED
Oil prices are little-changed from this morning, still just on US$79.50/bbl in the US while the international Brent price is still at just on US$83.50/bbl.
GOLD HOLDS
In early Asian trade, gold is still at US$2082/oz and unchanged from this morning.
NZD HOLDS
The Kiwi dollar has changed little from this morning, still just on 61 USc. Against the Aussie we are marginally softer at 93.5 AUc. Against the euro we are unchanged at 56.3 euro cents. That means the TWI-5 is now still just on 70.4 today.
BITCOIN RESUMES IT RISE
The bitcoin price has resumed its climb today, now at US$63,476 and up +1.1% from this morning. Volatility has been moderate at +/- 2.3% today.
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66 Comments
There are a lot of people around that are in limbo. The stress from the inability to move on is pretty tough.
Someone mentioned over the weekend that expensive houses are piling up. That is my experience too. Lots of >$3m houses that look like a maintenance nightmare. The older generation that need to downsize are going to be in for a bit of a surprise over the next 5 years.
Yeah, just split them and there you go.
Why sell; I guess household income becomes something like half it used to be and no income from the rental used as a home. Get flatmates I guess..... But that is not palatable for most people who are used to privacy and no flatmate dramas.
TK. The last government to address that seriously was Norman Kirk’s third Labour government with the introduction of The Property Speculation tax. A major component was a distinction between home ownership by the occupier as opposed all others. It was introduced to take the heat out of a boom of that time and It worked. So much so Muldoon did not yield to pressure and deregulate it until into his second term. Things in NZ would have had the chance to be a lot more rosier now if legislation like that and compulsory super had been retained.
It's ironic that we are fleeing in droves to a country that has some of the most brutal property taxes on the planet.
Nearly NZ$12.5m for this sh!++er across the road from a very busy school. Nearly NZ$900k stamp duty payable for that so call it NZ$13.4m.
https://www.smh.com.au/property/news/eastern-suburbs-family-spends-11-6…
Not at all. I'm not saying they have to give up their $12M mansion or not have one, just that they pay their fair share, what is affordable to them. Remember over the last few decades wealth has been concentrating in fewer and fewer people and yet they are proportionally paying less tax.
They are taking more of the pie and then expecting the rest of us to pony up even more of our money to cover the country's expenses. I'm just saying if you have enough that you can pay 12M then 900K doesn't seem that big a deal.
It will certainly have less of an impact than on someone who is on minimum wage having to pay 45K.
"Fair share" means equal share but the meaning has been subverted to imply if you're not paying more than others you're stealing from them
I would prefer a flat tax rate than being hit 39 percent, and 33 percent on earnings over 70k. One quarter seems like a fair share
Just remember, Australia is still selling houses to the Chinese. No end of wealthy Chinese looking to move to get out of China or Hong Kong. If NZ did the same think of all the tax money that would be raised here? Oh wait .....
https://www.afr.com/politics/federal/china-leading-asian-investor-surge…
What's the article got to do with stamp duty?
If you've got $12M to spend, demolish and build a $20M dream home, what's $900k?
Is that just a sad indictment of our Kiwi mentality - be upset with a "loss" of tax rather than be happy and thankful with the gain that must've been received?
He will love these types of socio-economic groupings, partly because he's likely to be a 1%er himself. That's fine. I'm sure his employer has an idea of what he's worth for advertisers. All power to him.
But see his performance when he got to be at the King's coronation. In reality, he was in the cheap seats. Nobody knew or cared who he was.
Well if its really 7M then poor old Wolfie misses out (but I was there in 2021 with unrealised gains)
I actually made back all my crypto profits I had at the top, but property market still dragging me down
I know a 19 year old kid on minimum wage who has a $30k usd crypto portfolio
Heck there is a FOURTEEN year old earning thousands bull posting on twitter (golden degen)
Deteriorating Terms of Trade and falling productivity are a toxic combination for our standard of living.
The China terms of trade boost from 2008ish on is slowly but surely unwinding.
Gareth's podcast with David Mahon in China. David signed off with a bit of a cheer for Fonterror and Zespri going forward. No disrespect to David, but I think he doesn't understand shelf price pressures in China. Fonterra are not something special in China for 'value add' and Zespri has competition and ASEAN for China kiwifruit at price points 30-40% lower. They will struggle to maintain market share.
Yep it's not looking good. Wether we like it or not NZ has little choice of markets for our products. Farmers in UK and EU don't want our stuff and USA are much the same. Of course they will always buy some but Asia is our main market.
We need to tread very carefully around China.
Yeah, while vehicle relicencing fees have dropped over the years ($287 for a car in 2012 versus $109 last month) the changes were from ACC levies fluctuating wildly ("We've got a deficit! No wait, we've got a massive surplus!"). So an increase here is not without merit. But the rest of it is more uninspired effort by Simeon Brown. I feel like a family member bought him his electorate seat.
On the other hand, increasing the cost of running a car usually means less cars on the road so there's a win for commute times and emission reduction.
Not sure about that. I think the potholes were cause by lack of ongoing maintenance. This was caused because a lot of the renewals budget was reduced or not increased in proportion to the amount of new roads and higher costs because the dollars was being diverted to RONS.
Regardless it will not be enough to cover the new roads being proposed, although to be fair they will never get as there is no money to build them unless we borrow massively or try to hide future costs in PPPs.
There is something like a 25B dollar fiscal hole in the coalition's transport proposals so hardly any of these RONS2 will get built.
https://www.nzherald.co.nz/nz/politics/transport-announcement-likely-as…
Interesting the timing of when it takes effect.
Asked how increases to registration would ease the cost of living which was another Govt priority, Luxon spoke of how the Auckland regional fuel tax was scrapped before talking about general moves to improve the economy.
Luxon reiterated his commitment not to increase fuel taxes this term but said a 12 per cent increase was planned during the second term once inflation was below 3 per cent.
He didn’t believe a staggered increase this term - like Labour had proposed - was the right approach, saying interest rates would be lower after 2026 and the cost of living will have eased, meaning low-income families had a better ability to absorb an increase in fuel prices.
When a government increases a flat tax like rego fees, it's called a regressive tax in that poor people have to use vastly more of their disposable income paying it than the rich.
Typical NACTF. Pack of heartless b'stards.
And it's to pay for fixing potholes?
Remind me again what vehicles do exponentially more damage to our roads? Oh. Right. Heavy goods vehicles!
Once again the lower income kiwis subsidizing the profits of the already rich. Anyone surprised?
Whenever I see Seymour and Luxon I hear this and the breathing https://www.youtube.com/watch?v=QYMETt578MM
Probably a sign of what NZ needs to deal with to sort out our internal bureaucracy. It’s been well over a year that all the interested parties need to speed up and smooth out Auckland airports departure and arrivals process and still no progress. Too many cooks, all earning a fortune and completely incompetent.
Cam Wallace - CEO of Qantas (via Linkedin)
If you’ve flown through Auckland Airport recently, you’d probably agree that it’s in need of a renovation.
But Auckland Airport’s planned renovation is going to cost billions of dollars, which will ultimately be passed on to travellers and will drive up the cost of air travel when there’s already been a lot of upward pressure on fares.
The airport is keen to spend more on the renovation because it means they can charge people more to use it. A lot more.
There’s nothing wrong with Auckland Airport wanting to build something better and legitimately increase its revenue in the process. But that shouldn’t mean building the Taj Mahal and then expecting Kiwis to pay many times more for the privilege to travel through there.
The current system is clearly failing to keep airport over-investment in check. That’s why Qantas and Jetstar (along with other airlines) support the calls for urgent reform. We need better safeguards so that our customers and the broader New Zealand economy don’t pay the price.
"InvestNow is pointing out that the upcoming 39% trust tax rate (in force from April 1, 2024) can be avoided by trusts investing in PIEs (where the maximum tax rate is 28%)."
Even better idea - buy property (if you are a mug), or buy IBIT. All the benefits of BTC but once you are in the FIF regime you pay an effective 1.3% wealth per year (but no tax on capital gains). Not bad for an asset that regularly does 200-500% return per annum
GOING AGAINST US
There was a sharply worse terms of trade in Q4-2023, down -7.7% in Q4 from Q3 and down -10.6% from a year ago. The terms of trade measures the relative price of our exports to the relative price of what we pay for our imports. When it shifts like this, we need to sell moire volume just to stay even.
The most worrying aspect of this statement is that it more or less sums up the 12 year period before the Rogernomics Revolution. To read populist NZ History you would think it was all about the Muldoon Government loosing its way. Far from it. "Going against us" was the cause -plain and simple.
Your "going against us" is simply the periodic cycles of the volatile uncertain complex & ambiguous world we we live in. The swings & roundabouts of human endeavors have been thus for millenia & will continue infinitely.
Muldoons head in sand blinkered protectionist & socialist response, on the other hand, was simply putting his arrogant Canute finger in the hole for several years until the entire NZ economic dam overflowed causing much more devastation & than might have been occasioned by a more enlightened and timely response.
Mentioned this at the water cooler a year ago and people would have thought you're madder than a cut snake. The rally has been driven by foreign investors.
Japan's Nikkei Stock Average tops 40,000 for first time, driven by chip-related industry
Benchmark index crosses key milestone, up 19% since the start of the year
https://asia.nikkei.com/Business/Markets/Japan-s-Nikkei-Stock-Average-t…
The big news today is that the Tokyo Nikkei225 opened above 40,000 index level, a +0.9% rise at their open and a new record high.
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