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
ASB changed its fixed home loan rates for a third time in two weeks. Kiwibank changed theirs too. Details here. In addition, the Police Credit Union also trimmed two rates.
TERM DEPOSIT/SAVINGS RATE CHANGES
ASB cut their 1 year TD rate by -10 bps. They also trimmed their 4 and 5 year rates. Unity Money also reduced rates across most terms.
LOTS OF AUCTIONS, FEW SOLD UNDER THE HAMMER
Plenty of homes were on offer in the auction rooms last week (573) and that was more than double the number in the same week a gear ago. But the sales rate is stuck at one-third.
WESTPAC SWITCHING AUDITORS
Westpac NZ is following the lead of its Australian parent and moving to appoint KPMG as its auditor from October this year, replacing PwC. The bank says the change comes after a competitive tender process.
LOWER PRESSURE
Suppliers are raising their prices to supermarkets at a much reduced pace. The annual average increase in the cost of goods suppliers charged supermarkets is now at its slowest since the end of 2021. Costs are still rising – just at a much less intense pace than a year ago. The Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index shows an average +3.7% increase in what suppliers charged Foodstuffs supermarkets for goods in February compared to a year ago. But the last food price index from Stats NZ recorded a "grocery food" rise of +5.7% in the January year. The next Stats NZ update for February comes on Wednesday. Then we will see whether the reduced supplier pressure is translating into the same for retail customers.
HOPE DISCONNECTED FROM PROFITABILITY TRACK
Farmers report to their peak industry body (Federated Farmers) that production will increase in the coming year, but that more of them will become unprofitable. Despite that, there was a tiny lift in farmer confidence (or more realistically less pessimism). That is being attributed to the change in Government. How long that will last if more do slip into unprofitability is anyone's guess.
DAIRY PAYOUT LEVEL SETTLING IN
Rabobank has tweaked its 2023/24 dairy payout forecast up by a minor +5c to $7.80/kgMS for the current season. Rabobank have the lowest forecast of all the main analysts, but it does match Fonterra's mid-point forecast.
TRUST TAX RATE TWEAKED
The tax rate on trusts is to be tweaked again. A $10,000 trustee income de minimis threshold is coming. This means that trusts with no more than $10,000 of trustee income per year will continue to be taxed at 33% rather than the top rate of 39%. As a result, only about 49,000 of the 400,000 trusts in New Zealand are likely to be impacted by the change to the top rate, the Government estimates. Trusts with more trustee income will still be subject to the 39% rate on their trustee income.
ROADS & BRIDGES
Simon Bridges has been appointed to chair Waka Kotahi/NZTA (although the new government won't like the reference, with its new culture-war cleansing of non-English department names). He replaces Dr Paul Reynolds who was a public service insider who have environmental credentials. It might be that Simon Bridges is the first Maori to head the department, one with a budget of about $10 bln/pa, and one that the new government has charged with an increasingly active role in upgrading our roading infrastructure.
STRESS LEVELS ON WATCH
In Australia, the peak body representing financial regulators, The Council of Financial Regulators, (The RBA, APRA, ASIC and the Australian Treasury) released the points they are talking about in a quarterly statement. The main issue seems to be the rise of hardship among borrowers, and the increase in the share of households who had fallen behind on loan payments (although from historically low levels).
BUSINESS TO THE RESCUE
The earlier official reports that Japan had slipped in to recession have proven incorrect. Their revised and updated data shows in fact it expanded at a healthy rate, driven by strong capital expenditure in the business sector. Private consumption, which accounts for more than half of Japan's GDP, remained weak at -1.0%, slightly lower that the preliminary -0.9% decline.
REMINDER
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SWAP RATES SOFT
Wholesale swap rates are probably still in retreat today. Our chart below records the final positions. The 90 day bank bill rate is unchanged again at 5.65%. The Australian 10 year bond yield is down -2 bps from yesterday at 3.97%. The China 10 year bond rate is now back at a low 2.29%. And the NZ Government 10 year bond rate is down -4 bps at 4.66% and its lowest since late January, while the earlier RBNZ fixing was at 4.61% and down -3 bps from Friday. The UST 10 year yield is now at 4.06% and down -2 bps from this morning. The UST 2yr is now down to just on 4.48% and so that key inversion is little-changed at -42 bps.
EQUITY WINNERS & LOSERS
The NZX50 has started the week with a -0.7% retreat. The ASX200 is down -1.5% in early afternoon trade. The commodities sector is behind the weakness. Tokyo has opened down a sharp -2.4%. Hong Kong has opened strongly however, up +0.9%. And Shanghai has opened with a minor -0.2% dip. Singapore has opened also down -0.1%. The S&P500 futures suggest Wall Street will open tomorrow with a good +1.4% rise.
OIL SLIPS
Oil prices have receded -50 USc so far today at just over US$77/bbl in the US while the international Brent price is now just under US$81.50/bbl. Worries about easing demand from China are behind the retreat.
GOLD UP YET AGAIN
In early Asian trade, gold is now at US$2182 and up +US$3 from this morning, and just off its all-time high of US$2189/oz reached a few hours ago..
NZD ON HOLD
The Kiwi dollar is still at 61.8 USc and unchanged from this morning. Against the Aussie we are also unchanged at 93.3 AUc. Against the euro it is the same 'unchanged' level at 56.5 euro cents. That means the TWI-5 is still holding at 70.5 today.
BITCOIN SOFTENS
The bitcoin price is slightly softer at US$68,291 and down -2.0% from this this morning's open. Volatility has been modest at +/- 1.9% today.
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60 Comments
Whatever procedure she had, the recovery time in hospital makes me think it was more than something relatively simple like gallbladder removal. A couple of weeks post-operation in hospital suggests it was a major procedure. She's always impressed me. Hope she's doing ok.
Investors wiped nearly $50 billion from the Australian sharemarket on Monday in the largest sell-off in more than a year as investors rushed to take profits following a record run on the local bourse.
The benchmark S&P/ASX 200 Index tumbled 142.8 points, or 1.8 per cent, to 7704.2 by the closing bell.
And so it begins
In early Asian trade, gold is now at US$2182 and up +US$3 from this morning, and just off its all-time high of US$2189/oz reached a few hours ago..
Gold price on SGE was over USD2,200 today - 0.8% over London OTC. The paper price is now following the physical price. Naked shorting no longer work unless COMEX wants to drain its vault further.
The gold price appears as it's being set by physical in the East, not Jamie Dimon's paper.
Mates not buying this at the water cooler. They still believe the West has the gold price on a string. They're probably right. But interesting times.
Max Rashbrooke takes on the social housing dilemma. Max is essentially a smart person with a good soul who wants to improve the lot of the downtrodden. However, he wanders off into LaLa Land suggesting that Nu Zillun can become a social housing utopia like Vienna. He doesn't consider that Austria has a comparatively rigid immigration policy and also has an industrial sector that we is far more diverse than ours.
I also hate to say it, but I suspect if you behaved like a feral in Vienna's social housing, your privileges would not last long.
https://www.thepost.co.nz/nz-news/350205970/solve-our-housing-crisis-we…
Funny, when New Zealand's affordable housing of the 80s and 90s was achieved in huge part through the efforts of post-war govts including in direct build efforts. Familiar private sector names in housing today also got their starts through such efforts at the time.
Back when govt efforts went to supply of affordable housing, rather than subsidising demand while MPs themselves speculate heavily.
Making new housing cheaper hasn't been a government priority for quite some time.
I'm working on a new project at the moment. It is the mirror of the adjacent dwelling, in terms of size, layout, cladding, etc. You will walk past when done, and think they just built the same place twice. The old one is 4 years old and took 4 months to build. The new one, built under newer rules, will take 9 months and cost twice as much.
In 4 years.
- The walls have to be wider (more timber/more expensive fixing method)
- Changes to safety standards require more intensive netting, changes how people can work in the transition between ground floor and ceiling cavity.
- The fire code requires different linings/plaster/insulation
- Changes to weather tightness require different roof setup and flashings
- Changes to how the council do inspections creates more inspections and more wait times waiting for inspections.
None of these things really sound like much in isolation, but they all take longer, and the nature of the process totally borks the workflow. What used to be step 1, then step 2, step 3, etc, is now step 1, step 2a, step 2b, step 3a, back to step 2c, then 3b, etc etc, each step making a handful of subtrades have to make repeated attempts to achieve what used to take one.
Like any manufacturing, building has to be a smooth production line.
I am guessing this is a three storey dwelling if the walls need to be wider.
Things are so complicated that I think we will get back to a builder building a single dwelling at a time. At the moment the build times have become a joke. Even a scale builder, like Landmark and Signature take over 18 moths to build. It ties up a lot of working capital and generally a shitty job with builders going to different sites everyday.
Nah, it's the height of the building and pitch of the roof.
You'll struggle to get a builder doing a whole job woe to go anymore. 100 years ago, builders did almost everything, including flooring, plastering and paint. Now, the complexity and compliance requires a dozen or so subtrades to do the same thing - so for extended periods there's nothing for the builder to do, they have to be somewhere else while someone else does something, and then the builder can go back.
Trust me, every tradie would rather just do any job in one motion. Any time you have guys packing up one job to go to another, it's hundreds of dollars per head count.
Depending on the nature of what's being built, the labour component is up to half the cost.
Some of the blowout stems from a "let's just start building and work the kinks out as we go". Then everyone has to pause while that's happening, or undo much of what's been started, then start again.
There's a very clear distinction in final cost and ease of doing a project I can identify by the clarity and completeness of the plan, right at the tendering stage.
One word "consents".
Council is just mindless bureaucracy that does not check for any safety or viability or engineering anymore. It is just layers upon layers of paperwork that is not actually checked and meaningless covenant rules. All done with a smaller and smaller workforce while more social media managers get employed and marketing analysts are consulted by council. So less people to check for meaningless rules like the height of front fences needs to be no more than 1m compared to side fences in certain suburbs etc. Driveways cannot exceed certain widths but if there are multiple houses more width is needed but the council wont accept them etc. Many councils are anti transport access now. So you cannot design your property to have transport access for emergency services & even just access to the door.
Essentially council is defunding house building in the area while they splurge at media budgets for festivals & damage control of the massive screwups on essential stuff. Like Dunedin removing weekly rubbish pickup leaving rotting human and animal feces, medical waste and animal carcasses in the sun for weeks on end with an extra 4% more rates charges for less service. Or Wellington being so unsustainable and such a CF on even the most basic of council services they cannot even manage a water pipe over a decade.
48% income tax >66k, 50% >Eur99k and 55% >Eur1m.
https://www.realestate.com.au/international/at/gumpendorfer-strasse-vie…
Explain to me why this is all so magical?
Recently I've chanced by a few different Nordic travellers.
They seem to feel their system is about as bad as most of the posters on here feel about NZ's.
At best, we are only going to be mid-tier running roughly the same model, in the same system as everyone else.
So we either lump it, or come up with a preferential system, for NZ. One that probably involves a substantive lifestyle shift, many probably won't want to stick around for.
No, but the Nords are often help up as the apex of what a Western Social Democracy can accomplish. Shall we Google how awesome the news is in Austria?
Same thing goes in reverse, you're overseas, tell someone you're from NZ, and many people many places can rattle off all the high profile, well meaning policy or attributes we advertise globally.
The Nords benefit from trillions in capital from Oil and plastic companies. If we want to emulate the Nordic and "green" European companies we need to be drilling for oil like we are picking out worms from the ground. Oh and a genocide of disabled people who need accessible transport every generation or so would also make for less complaints about their lack of transport & housing access in those countries.
That's mostly Norway, who are one of the only fossil fuel economies not to devolve into some sort of failed state/kleptocracy.
One thing I always laugh at is some of these countries have the highest happiness ratings, and also the highest usage of anti-depressants.
This appointment looks inspired
https://www.newshub.co.nz/home/politics/2024/03/former-national-leader-…
Fascinating times - farmers and businesses optimistic because 'their party' is in charge, but they don't realise that this lot are, if anything, even more determined to tank the economy than the last lot. Govt should be investing *now* - particularly in the regions where we have increasing amount of unused labour and productive capacity. If we wait 1 - 2 years for private finance and fast tracked consent (a hoax) to stimulate the economy, we will be in absolute ruins. Buy some farmers the things they need to be productive, fence off some streams, anything.
Keep your beads on JPY for more reasons than one.
The average dropped 984.84 points, or 2.5%, to 38,704.10 at the closing of Monday's morning session -- the lowest level since Feb. 22. The yen continued to climb to around 146.50 against the U.S. dollar from the recent weakest level at around 150.90 in February amid growing expectations the Bank of Japan could exit its negative interest rate policy at its upcoming meeting.
The Japanese Trade Union Confederation, the country's largest labor confederation, has been pushing for the nation's biggest pay rises in 31 years, with the first round of results from annual wage negotiations to be released on Friday.
https://asia.nikkei.com/Business/Markets/Japanese-stocks-fall-as-yen-ra…
But the Bitcoin story is very quickly gravitating from promoted usage function, to whale dominated machinations. Very rare for the little guy to come out on top riding those sorts of coat tails.
Definitely not for little guys with paper hands and no understanding of risk strategy.
No, like a digital currency. Decentralized, we can transact without the banks and government interference.
It's more like gold in reality, not really used as a medium of exchange in day to day transactions (other than transacting gold into fiat, or vice versa).
So Bitcoin is not really a crypto currency, it's just Bitcoin.
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