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
TSB has tweaked some fixed rates today. Its one year fixed rate has been reduced by -15 bps to 7.24%, matching ANZ and BNZ. They also reduced their 3, 4 and 5 year fixed rates. SBS Bank has pushed through cuts too, as has Nelson Building Society.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here today.
LABOUR MARKET EASING RAPIDLY
The BNZ-Seek Employment Report for February warns that job seekers may be entering a disappointing period. They say their data remain entirely consistent with very low employment growth and an increase in the unemployment rate to over 5% from its current 4%.
CAUTIOUS CONSUMERS
People are certainly sensing that tightness and adjusting their spending in preparation. ANZ's analysis of consumer spending patterns through its electronic card transactions shows that it is only the tourism sector that is a bright spot. Even though some minor recovery is going on in most other categories (except clothing), the gains are actually less than inflation (so it is probably not right to call them 'gains'). Durables and discretionary spending are still feeling the pinch from more cautious consumers.
PIVOTING TO INDIA
The Asia New Zealand Foundation has established a dedicated (by modest) India Fund to help it scale-up its work in and with India. "In our latest Perceptions of Asia and Asian Peoples longitudinal survey, 40% of New Zealanders said South Asia was important or very important to our future, up from 36% in 2019. It’s still a way behind the importance New Zealanders place on North Asia (71%), but the trendlines show shifting perceptions and a growing sense of India’s importance both as a regional actor and bilateral partner."
MORE PRICEY MONEY
ANZ has placed its $275 mln perpetual preference share issue, which will pay an initial yield of 7.60%. These funds bolster its capital position as equity, Additional Tier 1 Capital. Here is the issue Term Sheet. These PPS are rated BBB by S&P, and are not guaranteed by ANZ Group. The rank subordinate to all other obligations including customer deposits. (ANZ Group's shares have a dividend yield of 5.88% today.)
MOODY'S PLACES ASB'S CREDIT RATINGS ON REVIEW FOR UPGRADE
Credit rating agency Moody's has placed ASB's credit ratings on review for upgrade in line with those of its parent, Commonwealth Bank of Australia. Moody's describes ASB as well positioned to weather a likely weakening in asset quality, given its strong balance sheet underpinned by high capital levels and strong liquidity. High levels of loan-loss reserves will also provide a sufficient buffer against potential increases in loan losses, says Moody's. It currently has an "A1" long-term issuer rating on ASB.
REMINDER
If you haven't done so yet, we would appreciate it if you could complete our car insurance survey. More about it here. The survey itself is here.
INFLATION ISN'T BEATEN YET
Auckland Council has released its Long Term (10yr) Plan today. We haven't read it yet, but note they highlight the following: "The overall rates increases for the average-value residential property under the central proposal are: 7.5 per cent in year one, 3.5 per cent in year two, 8 per cent in year three, and no more than 3.5 per cent a year after that." The challenges they are facing are summarised here.
"ONE OF THE WORST CASES OF BOARD INTERFERENCE"
The Shareholders Association is expressing grave doubts about how minority [Singaporean} shareholder Agria (44%) is essentially controlling listed PGG Wrightson for its own benefit and to the disadvantage of all other shareholders.
NOT GOING TO DO WHAT THEY PROMISED
In China, a published a government policy work plan to reduce its energy intensity – the amount of energy consumed per unit of its gross domestic product – by -2.5% in 2024. This is far, far less than what the country signed up to go, and is essentially an admission of defeat by Beijing.
NOW TAILING OFF
In Australia, Aussies are working fewer hours overall, despite strong immigration. After a couple of years of strong growth, hours worked in Q4-2023 were -1.0% below the series high in Q2-2023. There was strong growth prior to that and year-on-year they are up +2.0%. Apart from early 2020 and the pandemic, this latest data is the first time they have had a fall in hours worked for two quarters in a row in about a decade - since the March quarter of 2014.
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 unchanged at 5.65%. The Australian 10 year bond yield is up +1 bp from yesterday at 4.02%. The China 10 year bond rate recovered a mere +2 bps, now just at 2.29%. And the NZ Government 10 year bond rate is up +1 bp at 4.72%, while the earlier RBNZ fixing was at 4.64% and down -1 bp from yesterday. The UST 10 year yield is now at 4.10% and down -2 bps from this time yesterday. The UST 2yr is now down to just on 4.51% and so that key inversion is slightly less -41 bps.
EQUITY WINNERS & LOSERS
Wall Street ended up +1.0% on the S&P500 in Thursday trade. Tokyo has opened up +0.7% today. Hong Kong has opened up +1.3% and erasing some of the week's earlier losses. Shanghai is up +0.1% at its open. Singapore has opened up +0.5%. The ASX200 is up +0.7% in afternoon trade. And the NZX50 is up +0.4% in late trade today and heading for a +0.9% weekly rise.
OIL HOLDS
Oil prices are little-changed today at just over US$79/bbl in the US while the international Brent price is now just on US$83/bbl. That is actually also little-changed (+US$1) from a week ago.
GOLD UP YET AGAIN
In early Asian trade, gold is now at US$2158/oz and up +US$13 in a day, and again to a new record high. For the week, it is up +US$114/oz or +5.6%.
NZD FIRMS
The Kiwi dollar has risen +¼c from this time yesterday, now at 61.7 USc. Against the Aussie we are marginally softer again at 93.2 AUc. Against the euro we are marginally firmer at 56.4 euro cents. That means the TWI-5 is up more than +10 bps today.
BITCOIN FIRMS
The bitcoin price is firmer with the price now at US$66,988 and up +1.8% from this time yesterday. Volatility has been modest at +/- 1.8% today.
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71 Comments
i often watch about 8pm once the kids are in bed, but recorded on media box from terrestrial, so like all but a handful of terrestrial viewers, they'll never know i'm watching.
Inability to measure is partly why Nielsen Holdings is no longer a listed company. Now owned by private equity and always scrambling for media measurement solutions. It seems to be futile. Nielsen employees - particularly the higher paid senior people - never know if they're going to be handed their notice every month. Been going on for years globally.
I havent watched TV news since I stopped caring about Covid. The last time would have been when Jacinda was still fronting her 1pm daily TV show. I'm also tired of reading about all the criminals getting off scot free, able to murder their kids and beat up others with absolutely no consequences. Its depressing. NZ news is best avoided.
Personally I get all my news from Australian sites. No racist ideologies, conveyed in English, intelligently written - so refreshing. The NZ media, in particular the NZ Herald (about the only NZ news I read) should look across the ditch to remind themselves how news should be presented.
Apart from that, X lets me know if there is something I may have missed locally.
Wow, Luxon well below Hipkins in latest poll. That takes some doing so early in a term
I called it after the dreadful ball drop on the accommodation allowance. Good to see him held to account. And remember, Cindy Ardern pulled out of the affordable housing promise pretty early, but it barely dented her popularity. She knew then that she was the Pied Piper of Hamelin.
Appears Luxo is not going to have it so easy. The people have had enough.
Compared to Luxon she is charm personified.
I notice the Australian soccer player Sam Kerr has been widely supported for calling an English police officer a "stupid white b@st@rd" after throwing up in a taxi and refusing to pay. As I have said a number of times, it's open season on white men - you can abuse them with impunity.
Paedophile prison population by ethnicity:
- Maori - 357 (17% of NZ's population)
- European - 560 (72% of NZ's population)
- Pacifica - 146 (8% of NZ's population).
https://www.stuff.co.nz/national/crime/99955081/paedophile-prison-popul…
What’s neither detected nor reported is more frightening though and even more worrying, in that dreadful field of statistics, how would that affect those ratios? About the time of the famous Monty Python movie over dinner someone asked me what I thought was the meaning of life. I didn’t stop to think, just two words “your children.”
She had barely any charisma.
Agree and disagree. I was one of the suckers who believed she was a 'breath of fresh air' and represented change. Fortunately, I cottoned on quickly and could see through the facade. I'm not the only one who fits this description. Maybe our negative perceptions of Cindy are simply the shame of being so gullible.
People related to Adern .Even if they didnt like her , or believe her, they felt she was pretty close to an everyday person.
Luxon comes across as what he is, a rich CEO type,even religious people would seem him as a elitist, its not so much he got caught out on the allowance , it was more he continued to behave as he had done nothing wrong, and didn't understand what people were upset about.
I don't think he did anything wrong.
Folk didn't like it just because he has more money than them. Read the venomous comment streams. That is what you will see.
Nobody seems at all upset at the other 20 who own their own place in Wellington. Or the rest who rent them.
They have to live away from home, and have to live an insane travel lifestyle.
(As for "Premier House". I would admire if they put it on Trademe auction on Monday. Starting bid $1. Must sell.)
His real own house is in Auckland. You are deceptive on that. Buts it conflicts with your hatred.
He's owns the apartment. So what. He paid for it. With his own money. What's the difference from paying rent with his own money.
There are about a 100 MPs who fly to Wellington each week from their real homes, and need to arrange to stay someplace.
I guess one or two stay with their own mum. You should object to that too.
As for Premier house. I:m pleased this issue has arisen
Solution. Trademe. Land is worth a bit. Save us 30 mil and it will still be a dog if they spent that.
Didn't he proclaim himself a natural leader of men? Or something like that.
Who have National got left because I just can't see him stopping these gaffs and blindness to what he should be.
I'd probably have had more respect if he'd just stuck to his guns on the accommodation allowance if its within the rules. But he just comes across as somebody lacking total conviction in himself, chasing the likes.
Maori aren't profiting from killing New Zealanders through tobacco.
Maori aren't depriving hungry kids of their lunches.
Maori aren't trying to make us pay them 52K to live in their own house.
Maori aren't forcing everyone who doesn't drive to get an Uber to their medical/shopping/trip around town.
No, Maori aren't the thing to be afraid of here, the colour of their skin is only threatening to those insecure enough of their own success to think it is down to their skin colour.
'and is essentially an admission of defeat by Beijing.'
No, David, it is not.
It is an admission of physical realities - as you should have learned by now.
If they are planning on running a future less-energy economy, they A MILE AHEAD of this 3-clown circus, and ahead of our (false but still peddled) assumption that GROWTH is (a) possible and (b) above challenge.
Will not be top of mind for most in Nu Zillun, but the Bank Term Funding Program (BTFP) ends next week.
Powell sticking to his guns and being open about bank failures. I'm sticking with the scenario that QE will be back sooner rather than later.
Federal Reserve Chair Jerome Powell said Thursday he expects to see some banks fail due to their exposure to the commercial real estate sector, which has declined significantly in value following the shift to remote work.
Powell said the banks that are in trouble with falling office space and retail assets are not the big banks, which were designated as “systemically important” in the aftermath of the 2008 financial crisis. That episode, which resulted in a taxpayer bailout of the financial sector, was also triggered by unsound real estate assets.
https://thehill.com/business/4516758-powell-there-will-be-bank-failures…
And about illegal payments. Btw it doesn't worry me if you want to insist "Trump WILL win". Its a contest
5 million over the border in USA is still less than what came in under trump. And it equates to 78,000 in NZ terms, but we have 250,000 arrivals. The problem seems to be over-exaggerated
Trump boasting about killing the immigration bill is not a good look
Chinese offload property after failing to keep up with repayments
Tokyo | Middle-class Chinese are increasingly selling their properties in Australia and other countries, with some forced to offload their investments at below-market rates, as high interest rates and a sputtering Chinese economy bite, overseas data shows.
For decades, Chinese buyers poured money into high-rise apartments in Sydney, Melbourne and Brisbane, lured by the prospect of quick capital gains in a low interest rate environment.
China’s biggest property portal, Juwai IQI, says the number of people selling overseas properties has doubled in the past 12 months. Michaela Pollock
Many had children studying at universities in Australia which fuelled the buying boom of apartments during visits to see their offspring. Others were cashed-up investors looking to make a profit in the future.
But data and anecdotal evidence suggest that trend is reversing, not only because they can no longer afford the mortgage repayments but also because of China’s strict capital controls on taking money out of the country to make up the difference.
Even if some can get the cash out, the slowing economy and a property crisis inside China mean many of the country’s middle class no longer have spare money to invest.
“For some, the only solution is to cut it loose and make sure they don’t bleed more money,” said Peter Li, the managing director of Sydney-based Plus Agency, which specialises in property sales to Chinese buyers.
“It started during COVID. A lot of Chinese buyers who own property in Australia started finding out the cost of keeping a property was outgrowing their capability of actually paying the mortgage.
“Because of the capital controls in China, even if the buyer wants to deposit more money in their offset account and pay off their mortgage, they can’t do it.”
Forced to sell
China’s biggest property portal, Juwai IQI, says the number of people selling overseas properties now accounts for 3 per cent to 8 per cent of all Chinese transactions, double what it was a year ago.
“We’re seeing more Chinese sellers in places like the USA, UK and Australia,” Juwai IQI chief executive Kashif Ansari said. While some owners were looking to sell so that they could upgrade to a bigger property, others needed to offload because they could no longer afford an investment property, Mr Ansari said.
Last month, a Beijing-based businessman was forced to sell his two-bedroom apartment in North Bondi’s Old South Head Road after failing to keep up with mortgage repayments. The man, who did not want to be named, bought the property for $1.25 million in 2014. The sale was well below market value, according to agents.
A Chinese owner was forced to sell this North Bondi property at below-market value.
The data reflects Foreign Investment Review Board figures that show the value of applications for residential property purchases by non-residents is slowing. Foreign buyer surcharges adding up to 10 per cent to the cost of a new apartment are putting investors off. Figures published in February show the overall value slowed to $1.5 billion in the September quarter from $2.4 billion in June.
Another part of the problem is China’s tough capital outflow laws which make it difficult to exchange more than $US50,000 ($76,000) in foreign currency each year. While there are ways of getting more money out of China, it can take up to a year, leaving owners under pressure from lenders to sell.
A Shanghai businesswoman sold her two-bedroom apartment in Sydney’s Chiswick in 2022 for $940,000 after realising interest rates were going to keep rising. She was one of many Chinese buyers who use non-bank lenders which have variable interest rates and less flexibility. She bought the property for $665,000 in 2009.
There is no hard data for overseas property sales by mainland Chinese owners. Mr Ansari said that although investment properties were selling, Chinese interest in owner-occupied places, particularly larger homes, remained strong.
China this week set a GDP growth target for 2024 of about 5 per cent, but policymakers did not offer any concrete solutions to the country’s housing crisis. Consumers and businesses are holding back on spending, spooked by the property crisis and other challenges facing the world’s second-largest economy.
The abrupt halt to a Chinese property spending spree over more than a decade is affecting commercial and residential property prices globally.
Chinese investors are also selling off commercial developments. Chinese housing giant Country Garden has almost completed its exit from Australia after the sale of its last remaining estate, Wilton Greens, in January.
The next Stats NZ unemployment update not out until 1st May 2024.
Which is after the next MPS which is due 10th April.
Fools will say, "Full employment is not part of the RBNZ's remit", which completely misses the fact that unemployment is a core economic indicator of the rest of the NZ economy.
The May MPS gives the RBNZ plenty of time to make total mess of things and ensure a 'soft landing' remains a pipe dream.
The good ship NZ Inc. is heading for the rocks and there's little the ghouls at the RBNZ can do about it now.
The carded rates are a waste of time. I am getting new lending and have the following rates from ASB
- .8% cashback
- 1yr 6.89%
- 6m 6.99%
- Floating 8%
It's frustrating because the banks all play the game of "dropping rates" when they have non-carded rates the second you call them.
I wonder if the smaller banks are naive sometimes, because they often refuse to match non-advertised rates to their peril.
There's a "log jam" of properties at the moment.
https://www.interest.co.nz/property/126682/auckland-housing-market-swam…
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