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
There are no changes to report so far today.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.
HOPES TRUMP FACTS
The latest ASB housing confidence survey finds kiwis are sitting on the fence when deciding if it's a good time to buy a house. The last time NZers were this confident house prices would increase was - just before the housing market slump!
DOWN SHARPLY, BUT PROTECTING PAYROLLS
More components of the Q4 GDP result were released today. Manufacturing industry data shows the volume of finished goods stocks fell +1.4 in the December quarter compared with the same period a year earlier. Manufacturing sales volumes fell -3.4% after a -6.8% drop in September. The really big falls are coming from the meat & dairy sectors. Manufacturing purchases fell -$2.3 bln (-8.7%), while salaries and wages rose +$244 mln (+5.0%) compared with the December 2022 quarter.
FMA FILES COURT PROCEEDINGS AGAINST TOWER
The Financial Markets Authority (FMA) has filed civil court proceedings against insurer Tower for failing to apply multi policy discounts to eligible customers' premiums, resulting in about $9.5 million of overcharges. The alleged breach of the Financial Markets Conduct Act began in 2016, affecting about 65,000 customers and 81,200 policies. Tower Chairman Michael Stiassny says the insurer is disappointed the FMA has filed proceedings, and is focusing on identifying any further actions necessary to prevent overcharging. Stiassny says Tower self-reported the problem, apologises unreservedly and has so far remediated 58,000 customers to the tune of $9.26 million. The FMA is seeking a court declaration that Tower contravened the Act, and that a pecuniary penalty is paid to the Crown.
DOUBLING UP
Spark is issuing two unsecured, unsubordinated bonds totalling $300 mln, a 5yr and a 7yr, both retail bonds, both rated A- (investment grade). The 5yr pays 5.21% pa yield, the 7yr pays 5.45%. $125 mln will be used to repay an existing bond, the rest used "for general business purposes".
GOING SHORTER, DESPITE THE RATE
The one year home loan mortgage rate is by far the most popular choice by new borrowers, according to January RBNZ data. More here. The two year choice is fading fast even though lower rates are being offered for that term; only one in eight borrowers chose than in January.
TWENTY-NINE WINNING BIDS
In today's NZGB tender, 71 bids were competing for $500 bln in three maturities. More than $1.2 bln was bid. The Three year April 2027 tranche was only mostly popular, going for a yield of 4.54% and down from 4.80% three weeks ago. The May 2032 offer was very popular, and it also went for a yield of 4.55%, also down from 4.83% but that was back 15 weeks ago. The $50 mln May 2041 offer was won at 4.83%, down from 4.96% just one week ago.
A BIG LOSS
In the US, Google may have had its key AI code stolen and passed to China. And sadly, this case will reinforce nationality stereotyping that is growing in the US-vs-China rivalry.
FALLING AWAY
Australian lending for housing fell more than expected in January, trimming their year-on-year rise to +8.5%. For owner-occupiers, the monthly drop was -4.6% taking the year-ago change to just +3.4%.
WAGES RISE
In Japan, worker earnings rose by 2.0% in January from the same month a year ago, rising from a +1.0% gain in December and posting the highest reading in seven months.
SWAP RATES STILL ON HOLD
Wholesale swap rates will probably be little-changed yet again today. Our chart below records the final positions. The 90 day bank bill rate is down a minor -1 bp at 5.65%. The Australian 10 year bond yield is down -9 bps from yesterday at 4.01%. The China 10 year bond rate slipped an outsized -6 bps, now just under 2.27%. And the NZ Government 10 year bond rate is down -5 bps to 4.71%, while the earlier RBNZ fixing was at 4.69% and down -7 bps from yesterday. The UST 10 year yield is now at 4.12% and down -10 bps from this time yesterday. The UST 2yr is now down to just on 4.56% and so that key inversion is out further to -44 bps.
EQUITY WINNERS & LOSERS
Wall Street ended up +0.5% the S&P500, in Wednesday trade. Tokyo has opened up +0.2% today but the Nikkei225 is looking like it might not hold. Hong Kong has opened down -0.4%. Shanghai is up +0.2%. Singapore has opened up +0.8%. The ASX200 is up +0.3% in afternoon trade. And the NZX50 is up +0.2% in late trade today.
OIL RISES
Oil prices are about +US$1.50 higher at just under US$79/bbl in the US while the international Brent price is now just under US$83/bbl.
GOLD UP YET AGAIN
In early Asian trade, gold is now at US$2145/oz and up +US$18 in a day, and again to a new record high.
NZD FIRMS
The Kiwi dollar rose +½c from this time yesterday, now at 61.3 USc although all this gain was overnight. Against the Aussie we are marginally softer at 93.4 AUc. Against the euro we are +¼c firmer at 56.3 euro cents. That means the TWI-5 is up +20 bps today, essentially making back yesterday's drop.
BITCOIN STILL VOLATILE
The bitcoin price is volatile again today, with the price now at US$65,776 and up +3.4% from this time yesterday. Volatility has been high at +/- 3.8% today.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
66 Comments
"The two year choice is fading fast even though lower rates are being offered for that term"
In reality the 6 month rate was only about 0.14% higher than the 2 year rate (6.99% vs 6.85%) so why wouldn't you gamble that rates are going to be lower soon? It's very unlikely they will be significantly higher than current.
Yes reality setting in here. Every year there are less Network TV viewers. Most people now under the age of about 40 don't watch Network TV except for some of the reality shows. Who wants to sit thru 10 mins of weather waiting for the 10 seconds on your area. The young generation choose individualized veiwng on the net.
The Egyptian pound fell 60% in the last 24 hours. They'll be running out of USD foreign exchange reserves - which spells trouble. Others say they have enough FX reserves but a lack of net inflows - tightening dollar liquidity at the same time dollar denominated debt payments had increased substantially.
The MMTers will likely say that that they're their own worst enemy. I don't think the MMTers get it. It's a club. And countries like Egypt are not in it.
Egypt secured an expanded $8 billion deal on Wednesday with the International Monetary Fund, hours after the central bank unshackled its currency and delivered a 600 basis points rate hike in a push to stabilise the economy.
Additionally, Egypt would obtain a $1.2 billion loan for environmental sustainability, bringing its total from the IMF to more than $9 billion, the government said. This was towards the lower end of what some analysts expected.
https://www.reuters.com/world/middle-east/egypt-raises-interest-rates-b…
Lol, Fadhel Khaboub is the leading MMT economist on economies 'outside the club'. He is Tunisian and has written and published extensively on the need for African countries to purse food and energy sovereignty, and for the economies 'in the club' to take the foot off the neck of countries in the global south who they overtly keep in servitude. A recent article that is well worth a read: https://africanarguments.org/2023/11/just-transition-cop28-qa-whats-at-…
Indeed:
The IMF was in charge of short-term foreign currency loans. Its aim was to prevent countries from imposing capital controls to protect their balance of payments. Many countries had a dual exchange rate: one for trade in goods and services, the other rate for capital movements. The function of the IMF and World Bank was essentially to make other countries borrow in dollars, not in their own currencies, and to make sure that if they could not pay their dollar-denominated debts, they had to impose austerity on the domestic economy – while subsidizing their import and export sectors and protecting foreign investors, creditors and client oligarchies from loss.
The IMF developed a junk-economics model pretending that any country can pay any amount of debt to the creditors if it just impoverishes its labor enough. So when countries were unable to pay their debt service, the IMF tells them to raise their interest rates to bring on a depression – austerity – and break up the labor unions. That is euphemized as “rationalizing labor markets.” The rationalizing is essentially to disable labor unions and the public sector. The aim – and effect – is to prevent countries from essentially following the line of development that had made the United States rich – by public subsidy and protection of domestic agriculture, public subsidy and protection of industry and an active government sector promoting a New Deal democracy. The IMF was essentially promoting and forcing other countries to balance their trade deficits by letting American and other investors buy control of their commanding heights, mainly their infrastructure monopolies, and to subsidize their capital flight. Link
How did this not get a mention at all? Poor Egyptians.
Bitcpin printed what we now call a Pharoah candle, up 1,300,000 pounds...
https://twitter.com/BitcoinNewsCom/status/1765413173320913269?t=rg-EqDh…
Mainstream Anglosphere media launches its jihad against gold. When they advise the sheeple not to buy gold, it might signal that you should perhaps pay attention.
The concerning thing is that they resort to outright lies. Measures show that gold has outperformed the S&P500 since 2000.
Propaganda: https://www.cnbc.com/2024/03/06/what-the-gold-rally-means-for-investors…
Alternative: https://www.marketwatch.com/story/gold-still-outshining-stocks-and-bond…
In Japan, worker earnings rose by 2.0% in January from the same month a year ago, rising from a +1.0% gain in December and posting the highest reading in seven months
But in reality
https://mainichi.jp/english/articles/20240307/p2g/00m/0bu/013000c
Japan real wages fall in January for 22nd month, down 0.6% on yr
https://www.stuff.co.nz/business/350203176/timaru-building-company-liquidation
Mitre10 going bust. People realising there is a massive difference between being busy and making money. Its the distributors that have been making bank. I really fail to see how the construction industry is going to get going again.
EDIT: IGNORE ME. I READ IT QUICKLY. THEY ARE JUST PUTTING A SMALL COMPANY IN TO LIQUIDATION. WHAT A STUPID ARTICLE.
The opening of a large Bunnings in Timaru in 2023 would not have helped Mitre10
Edit: I just read the link. "Mitre10 going bust" is incorrect. A building company in Timaru is going bust, and Mitre10 forced them into liquidation. That's very different from "Mitre10 going bust"
And the previous ceo.....I mean....when your bonus exceeds your fixed remuneration by a significant amount.....
The report states Kenrick's pay, for the first eight months of the year to February 28, was $2,087,034.
His basic salary accounted for $560,071 of that - with various other payments bringing the figure up to $2m.
Those other payments include a $1.2m bonus, $755,725 in "fixed remuneration", $99,365 superannuation and $195,154 in holiday pay.
https://www.rnz.co.nz/news/business/477337/tvnz-boss-2m-exit-including-…
well yes - but it does become difficult to pay your way without exporting something ...
The trashing comes in some form
- more tourists
- more Ag
- more subdivisions and land development and land sales
- more immigration
Yes we could only export Video games ... but someone somewhere has to trash something to pay for it
I wouldn't be in Shane Jones' position for love nor money.
Firstly, I have a moral code.
Secondly, I like to be doing something that is long-term socially beneficial.
Thirdly - I've never liked being on the wrong side, as history will see things.
Edit - and I would HATE to be associated with voodoo economics. Me, I prefer physics.
While you & I don't agree on much, we can agree on physics
https://www.abc.net.au/news/2024-03-08/explaining-the-mysteries-of-swin…
https://www.nzherald.co.nz/nz/oranga-tamariki-boss-signals-possible-job…
this is wrong, people should be told bad news face to face....
yes i agree with that , he should have just booked, may have needed the ministers permission
sick of the BS only way they are going to save 6.5-7.5% is to lay off about 7-10% of staff, get on with it, sandwiches and coffee will not help, hell most WFH 4 days a week anyways
they campaigned on it now man up and get on with it
we are only in this position because Labour added the 15,000 people..... its crap laying people off, but its also crap creating make-a-job positions up on my/your/he/him/they/it 's money what have we got for 15k more staff ..... nothing I can see, nor anyone else who booted labour out
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.