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
None today so far.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.
FLATTENING OUT
New analysis of residential property rental yields shows that after almost two years of improving yields, they took a breather at the end of 2023. The full analysis is here.
FOOD PRICE RISES QUASHED BY LOWER YEAR-ON-YEAR VEGETABLE & LAMB PRICES
Stats NZ says food prices fell -0.6% in February, while rent increases showed signs of stabilising and domestic airfares went up again. For food, this was the slowest annual pace rise at +2.1% since May 2021. The grocery food component is up +3.9% and more than the +3.7% Foodstuffs said its suppliers charged it in the same month.
RENTS STILL INFLATING HARD
House rents were up +4.5% nationally from a year ago in February. But the subcategory of rents for properties newly listed went up a sharp +6.0% nationally. It was +7.3% in Auckland, +2.2% in Wellington, and a massive +9.9% in Christchurch. In fact that is their third highest rise since 2013. Christchurch rent increases have been strong for 30 months now.
MORE EVIDENCE INFLATION IS NOT CONTAINED YET
Also inflating hard were petrol prices (up +12.3% from February a year ago), domestic airfares (up +7.7%), and local tourist accommodation (up +6.1%). However all these pale in comparison to the rise in international tourist accommodation (when prepaid in New Zealand), which rose more than +24% on the same basis. (The Taylor Swift effect ?) Gulp.
NOT AGING WELL. UPSIDE RISKS BUILDING
As a consequence of today's data release on prices, some analysts (Westpac for example) have already upped their inflation forecasts, in their case to 4.2%. That is well above the RBNZ's last MPS forecast of 3.8% for the March quarter (and going down from there). The RBNZ's forecast hasn't aged well and they will be well aware of that.
WILL UPDATE IN 2025
Under-funded Stats NZ today said it will be reviewing and revising the components of the CPI - but that work won't be released until April 2025.
HOUSE PRICE WATCH
The REINZ said it will release its February sales reports tomorrow (Thursday) at 9am. We will have full coverage.
PACE PICKING UP TO 2019 LEVELS
More than 36,000 people arrived in the country on work visas in the first two months of this year, more than half of them in February alone.
MORTGAGE BROKER SENTENCED
Natalie Ann Carter, a former Hawke’s Bay-based mortgage broker, has been sentenced to 12 months home detention following a criminal prosecution brought by the FMA. Carter pleaded guilty to three charges of forgery, tow of obtaining credit by deception exceeding, tow of attempting to obtain credit by deception, tow of using a forged document, knowingly misleading the FMA, and making a false or misleading statement. Imprisonment was ultimately commuted to 12 months home detention after discounts were applied.
EMERGENCY RESCUE OPERATION
In China a Beijing-directed rescue of property giant China Vanke is apparently underway. We should all hope it works. But even if it does it will take a tough toll on the Chinese economy, Shenzhen in particular.
IN CHINA, ALL DATA IS "NATIONAL SECURITY"
China's Ministry of State Security (MSS) is now increasingly focused on "food security". The MSS says “In recent years, national security agencies have cracked down various espionage activities related to food security, cutting off the "black hands" of foreign espionage targeting China's germplasm resources, preventing and addressing the risks of food security leaks, and ensuring the smooth implementation of the national food security strategy”. That will put paid to the normal global method of sending analysts into the field to assess upcoming grain and crop harvest (something necessary because satellite photos can't yet assess yield prospects - you need to be in the field.) Without that sort of crop intelligence from a major producer (China), global seasonal food planning is going to be far less accurate.
BIG JOB LOSSES
Media reports are suggesting that PwC Australia will swing the axe in the biggest round of job cuts in recent memory, with up to 400 staff set to be made redundant on today.
ONE CLEARED, TWO UNCERTAIN
And staying in Australia, prudential regulator APRA has cleared NAB (BNZ's parent) of having to hold extra capital due to inadequate governance issues. But is is strangely silent on both Westpac and ANZ who are also facing this capital penalty. CBA (ASB's parent) was never on the APRA radar.
SWAP RATES FIRMER
Wholesale swap rates have probably risen modestly today. Our chart below records the final positions. The 90 day bank bill rate is down -1 bp today at 5.64%. The Australian 10 year bond yield is up +4 bps from yesterday at 4.02%. The China 10 year bond rate is up +2 bps to 2.36%. And the NZ Government 10 year bond rate is up +2 bps at 4.69%, while the earlier RBNZ fixing was at 4.61% and unchanged for a third straight day. The UST 10 year yield is now at 4.15% and up +5 bps from this time yesterday. The UST 2yr is now up to 4.59% and so that key inversion is unchanged at -44 bps.
EQUITY WINNERS & LOSERS
Wall Street rose strongly today with the S&P500 up +1.1%. Tokyo has opened its Wednesday session down another -0.5% after yesterday's hold. Hong Kong is little-changed today at its open. Shanghai however is down -0.6%. Singapore is up +0.6% at its open. The ASX200 is up +0.3% in early afternoon trade. The NZX50 is down -0.3% in late trade.
OIL HOLDS
Oil prices are marginally firmer today although little-changed at just over US$77.50/bbl in the US while the international Brent price is still just over US$82/bbl. This has had no noticeable impact on the global oil price.
GOLD LOWER
In early Asian trade, gold is down -US$24 at US$2157/oz.
NZD SOFT
The Kiwi dollar is down -20 bps from this time yesterday at 61.5 USc. Against the Aussie we are softish at 93.1 AUc. Against the euro we are also a tad softer at 56.3 euro cents. That means the TWI-5 is marginally lower at 70.3 today.
BITCOIN HOLDS HIGH
The bitcoin price is little-changed at US$71,935 easing just -0.1% from this this time yesterday. Volatility has been high at +/- 3.0% today.
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83 Comments
Pay your police a living wage https://youtu.be/rMePrwQfT5I?si=Uvt8BKQmWKPtFchK
None of them paid particularly well, really, compared to housing costs. We've really set society out of kilter, and they can build a better life elsewhere.
They used to move here for the lifestyle despite lower wages but our abysmal policy approach overvaluing houses and under valuing work has put paid to that.
There's actually been a global devaluing of human labour that pretty hard to escape. Much of former prosperity of an individual, tied to a level of scarcity that doesn't exist anymore.
Expensive housing just exacerbates the problem.
This is an almost synchronized phenomenon, with escape vectors few. You're better off getting off the bus than hoping it'll take you somewhere better.
I suggest it's more than just a devaluing of human labour - it's a devaluing of the human to a function - it's been happening forever and is just more noticeable now. It's very noticeable in the economic narrative and language, and the labels used to classify groups of people - workers, beneficiaries, owners, investors, elite, wealthy, poor, middle class, taxpayer, consumer - there's not a lot of reference to humans, to people. Note also that property rights seem to be valued higher than human rights. It's a symptom of capitalism where the overarching value is.... capital. The only time human is referenced is as human capital, just another resource to be used.
Standing on street corners handing out tickets to drivers for being on their mobile phone while travelling at 10 kmph doesnt seem like a strenuous job to me.
Its not like they actually investigate crimes any more. Burglaries and car thefts are simply ignored. Rapes go unreported because its a completely pointless exercise these days.
K.W - You wouldn't last a week.
I haven't given out a ticket in months. However, in that time I attended 5 firearm jobs, 15 knife jobs, 4 deaths, had multiple staff assaulted, dealt with a dozen gang members, cases with children assaulted, sexual assaults and told some parents that their son died in a crash after having to put him in the body bag (and subsequently doing the unpaid overtime for the corresponding paperwork).
I haven't taken all my allocated meal breaks once, I've worked night shifts and had to teach/look out for new staff because we can't retain experience on frontline.
Saying that, I do hope someone had the time to give you a ticket. FYI a very large proportion of police funding is from NZTA and if police did not do road policing they wouldn't have enough $$$ to fund the other crucial parts of the job. If you feel like burglaries and thefts are going unattended you'd be absolutely right. We just don't have the resources for the demand.
And 100% Nurses, Teachers, Firefighters don't get paid what they deserve either. Quit? I care too much. But I care about making a fair wage too.
I know money is tight for most, but it would have cost you nothing not to write that.
https://newsroom.co.nz/2023/08/22/junior-doctors-feel-forgotten-as-barg…
And for even more comparison, our junior doctors are now being paid less than our junior nurses.
a first year doctor with six years’ worth of study and student loan, who was working more hours on average, was now being paid less than a first year nurse with three years of study, fewer rostered hours and a smaller student loan.
Much as I appreciate police officers, I'm not sure they should earn more than doctors? This article - https://www.rnzcgp.org.nz/news/college/what-do-our-graduate-doctors-actually-earn-and-is-it-enough-to-keep-them-practising-here/ - unfortunately does not provide the salary for junior doctors in their 5th year, but here's what they earn up to their 4th year:
Doctors’ salaries will increase in January to $66,949 for first years, $71,896 for second years, $75,571 for third years and $79,242 for fourth years.
To be fair, they usually earn more per year by working overtime.
"...and the entire graduating medical class in NZ are applying for jobs in Australia. "
Including those who received preferential entry to medical school (on lower entry qualifications) based on racist privilege because they will then be culturally able to better serve "their people"?
At least half their medical education is funded by the NZ taxpayer. They should be bonded to work in NZ for at least 3 years &/or pay it back before they are permitted to leave the country.
The salary is actually only $74k - while they get a nice superannuation boost that makes up most of the gap to $83k, that doesn't exactly help you pay your bills. $74k is a crap rate for 5 years into a career where you're regularly being put into life threatening situations, shortening your life with shift work and dealing with the absolute worst of society, especially if you're based in a major centre with a higher cost of housing. No number of "better work stories" could convince me to do their job for such a low salary.
I mean I totally get that but I think there could be some easy changes that help with this other than just pay.
For example - assault a police officer = life in prison (maximum security, solitary confinement) no parole. Threaten a police officer = 10 years. Arm police and exempt them from liability and so on. Kill a police officer = death penalty. Gang member = life in prison (El Salvadore style)
Being a police officer wouldn't be too bad in my world.
Not really.
Keep in them the dark. No heating. Just a concrete block with cells. Fill them 30 to each cell and never let them out. One piece of bread a day. If you are naughty you go in the hole for a few years.
Super cheep and get a Chinese private company to manage them.
They deserve parity with teachers and nurses who got the big rises last year. The rolling shifts are really tough, the nights are freezing in the winter, and on top of that the people you are dealing with are mostly bad or not the full quid. They definitely deserve good pay. Meanwhile money is there for property investors and skiers. Really looking like an unlikable one term government.
The nurses pay rise was a pay equity settlement, comparing this female dominated field against comparable male dominated fields. Some of the comparable fields were detectives, detective sergeants, and detective senior sergeants.
Nurses are not considered comparable to a fresh policeman, particularly considering the training and education required to get into the profession.
Even ignoring this, we have a very circular argument if pay equity deals lead to male dominated fields getting similar pay deals in response.
So, over the last three months, over 90% of our 'inflation' (measured monthly) has come from international airfares, overseas accommodation, cigs and tobacco (excise uplift), and rent (population spike). How do bank economists and analysts look at this and say that we need higher rates for longer? What is the plan here - to dive so deep into recession that enough people leave the country to reduce pressure on rents?!? Utter madness.
Yeah, they can't of course but does it really mater? The measures themselves (International airfares, overseas accommodation etc) are carry overs from the low inflation past or obvious (cigs n rent). The point is there is an actual job for an economics graduate that uses their degree. Be kind.
"RENTS STILL INFLATING HARD
House rents were up +4.5% nationally from a year ago in February"
Sorry but if house rents are going up at a rate lower than inflation, that is a decrease in real terms. Not inflating hard.
I wonder how that compares to housing related costs?
Toyota laying down the challenge for corporate Japan.
Toyota Motor agreed to give factory workers their biggest pay increase in 25 years on Wednesday, heightening expectations that bumper pay raises will give the central bank leeway to make a key policy shift next week.
Steelmaker Nippon Steel also said it had agreed to union pay requests in full.
This potentially has potential to booster JPY. Hang on to your hats.
Economists see substantial wage increases as a prerequisite for the Bank of Japan (BOJ) to declare that its long-held goals of sustainable wage growth and stable prices are in sight and usher in an end to negative rates in place since 2016.
https://www.reuters.com/markets/asia/japan-inc-set-offer-big-wage-hikes…
An unprecedented Chinese gold rush looking like they could obliterate the western paper markets very soon. Jamie Dimon will be furious and asking for his PhD'ers for some kind of solution.
Chinese people have started a gold rush as property crashes. Sales of gold, silver, and jewellery have been brisk for months, defying wobbles in the Chinese economy centred around the protracted crisis in the property market.
After months of stagnation, the gold market sprung to life on March 1. Prices broke the December record on Tuesday and have been rising steadily since then. On Friday, spot gold in New York rose to a fresh high of $2,185.19 per ounce.
https://www.chiangraitimes.com/news/chinese-create-a-gold-rush-as-prope…
https://www.imf.org/en/Publications/fandd/issues/2024/03/Symposium-Reth…
- Power: Our emphasis on the virtues of free, competitive markets and exogenous technical change can distract us from the importance of power in setting prices and wages, in choosing the direction of technical change, and in influencing politics to change the rules of the game. Without an analysis of power, it is hard to understand inequality or much else in modern capitalism.
I suppose its not all bad. Apparently the Eden Park rules also require a 1030 curfew for noise mitigation so concerts start much earlier. My 2 (middle aged) kids attended the Pink concert Saturday night & I was very pleased to hear that they were safely home before midnight.
Holes and Homes... Boats and Hoes...
Greece's former finance minister Yanis Varoufakis is in Australia right now, and just made a speech at the National Press Club.
He went onto advise Australia to "ditch the old rentier business model of banking on holes and homes".
"That’s now a Ponzi scheme whose maintenance will result in a country marred by minimal investment, low productivity, debilitating inequality, high inflation and low wages pushing its talented people into a low innovation sinkhole."
"It has never been so dismal to be young in Australia."
Florida condo market getting slammed - described as a 'train wreck' - as prices drop and increasing insurance rates scare away buyers. Never expected this.
Listings have soared as prices fall in major Florida cities, according to a new report from real-estate listings site Redfin. The number of listings in February jumped nearly 30% in markets like Jacksonville and Miami compared to the same time last year. Meanwhile, prices dropped by as much as 7% in Jacksonville, to $254,000, and 3% in Miami, to $385,000. By contrast, median condo prices nationally rose 8% over the same period, to around $340,000.
It's a symptom of the increasing cost of property ownership in the Sunshine State, where the rusk of flooding and worsening weather have scrambled the homeowners' insurance market. Florida homeownership has become increasingly expensive in general as home prices continue to rise, mortgage rates remain frustratingly high, and property taxes keep climbing.
https://www.businessinsider.com/florida-condo-owners-prices-drop-insura…
Maccy B taunting the 'woke media'
On housing, how can we find a solution to Albo’s calamitous housing shortage if we don’t mention the primary driver in immigration? Woke and a property-compromised media is the culprit here:
https://www.macrobusiness.com.au/2024/03/australia-is-muzzled/
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