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
No changes.
TERM DEPOSIT/SAVINGS RATE CHANGES
Kiwibank says it's "pleased to be able to maintain leading rates across the major banks" in the six-month and one-year terms, "which have historically been the most popular terms for our customers". Kiwibank's increased its six-month offerings by 10bps, with a peak rate of 6.15%, while the rates from one-year and longer have all been dropped by between 5bps and 15bps.
AUCTION SALES RATE STUCK ON A THIRD
The number of residential properties being offered at auction declined for the second week in a row last week but there was no change in the overall sales rate.
PATH OF EXPANSION
New Zealand’s services sector continued its path of expansion in February, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for February was 53.0 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was up 0.8 points from January and the highest level of activity since March 2023. However, it was still just below the long-term average of 53.4 for the survey. BusinessNZ chief executive Kirk Hope said that three of the last four months has seen the sector in expansion, with the key sub-index results for both Activity/Sales (53.1) and New Orders/Business (56.0) remaining in positive territory for the current month.
HOUSING 'PRIMED FOR TAKEOFF' - AFTER RATE CUTS
Kiwibank economists expect the Reserve Bank to start the rate cutting cycle by November this year. Wholesale rates should fall as expectations for rate cuts build. And these lower wholesale rates will enable further cuts to carded mortgage and business lending rates. "The result? Higher house prices," they say. "Once rate cuts come through, it will be a new chapter for the housing market. We are forecasting a strong 5-7% increase in house prices this calendar year."
ECONOMISTS AGREE GROWTH WILL BE WEAK
The latest NZIER Consensus Forecasts show a downward revision to the growth for the coming year. Annual average GDP growth for the year ending March 2024 has been revised down to 0.5% and is is seen remaining weak at 0.8% for the year ending March 2025. These forecasts come of course as we await this week GDP figures for the December quarter that are likely to be underwhelming.
MORE SEEING +$8 MILK PRICE FOR NEXT YEAR
The outlook for the milk price for farmers looked okay this season. Then it looked terrible. Now it's looking a bit better and its looking a bit better again for next season, with economists increasingly settling on a better than $8 per kilogram of milk solids price. ASB economist Nat Keall's going for $8.30, but sees the risks to the price as being "a bit more balanced".
REMINDER
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SWAP RATES MOVE UP
Wholesale swap rates are likely a little higher Monday. 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 unchanged at 4.14%. The China 10 year bond rate is down 2bs at 2.32%. But the NZ Government 10 year bond rate is up 2 bps at 4.75%. The UST 10yr yield has started the week at 4.31% and unchanged from Saturday but is up a sharp +29 bps in the past week.
EQUITY WINNERS & LOSERS
The NZX50 has started the week with a 0.5% retreat, while the ASX200 is down 0.1% in early afternoon trade. Tokyo, however, has opened markedly higher, by 2.3%. Hong Kong opened slightly down but more recently was just up for the day, but Singapore was very slightly down. Shanghai's up 0.5%. The S&P500 futures are currently suggesting Wall Street will open very slightly higher overnight Monday our time with a 0.1% rise.
LITTLE OIL MOVEMENT
Oil prices haven't moved much on Monday, with WTI just up slightly to over US$81/bbl in the US while the Brent price has similarly edged up to US$85/bbl.
GOLD SLIPS AGAIN
In early Asian trade, gold was at around US$2152/oz, down around US$4 from its starting point for the day.
NZD ON STILL HOLD
The Kiwi dollar is at 60.9 USc and up very slightly from Monday morning. Against the Aussie we are slightly down at just under 92.8 AUc. Against the euro we are still at 55.9 euro cents. That means the TWI-5 is holding at 69.3.
BITCOIN PERKS UP AGAIN
Bitcoin's had one of those tempestuous weekends, but it has started the week in a more perky mood again, up about 2.1% in the past 24 hours to US$67,850.
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41 Comments
Absolutely Positively Wellington
“Amendments by mayor Tory Whanau
Changes to noise limits for music venues and prayer calls
Instruct council staff to report back on options to ensure music venues aren’t affected by noise limits. This has been an ongoing issue for some venues, including Meow, San Fran, and Valhalla. Whanau also wants changes to allow broadcasted calls to prayer to be played from loudspeakers on mosques and other religious buildings.”
Revealed: All the changes councillors want to make to Wellington’s District Plan | The Spinoff
Mayor Tory Whanau (“Jesus Christ Sean”…)
https://youtu.be/68tjo8MJisc?si=FKAgagWZKmpvleT3
Cr. Nicola Young (some background)
https://youtu.be/WOr3zkELIWM?si=fBcPm86lloOP3prd
“The first New Zealand Parliament, enshrining ‘a perfect political equality in all religious denominations’1 in 1854, separated church and state more sharply than in the Australian colonies. The Education Act 1877 established a nationwide system of free, compulsory and secular primary schools. Voluntary organisations such as scientific societies, trade unions and service clubs sometimes discouraged members from discussing religion. There was a desire to secure harmony by keeping religion private.”
National party sleeze under Luxon is getting out of hand.
https://www.nzherald.co.nz/nz/political-roundup-is-simon-bridges-nzta-a…
So far no policies to address cost of living, just crony appointments and donor interests looked after.
Lol. There was a ...
1. Too low (for too long) 'cheap cost of borrowing' crisis where demand for everything far exceeded suppl as there was so much cheap money.
(In nz we exaggerated that crisis with a pandemic response that handed out tons of cash to everyone for free)..
Then there was a entirely related and predictable. ...
2. 'Cost of buying' crisis as inflation (from the cheap cost of borrowing crisis in step 1) made everything far too expensive...
And now an entirely related and predictable...
3. 'Cost of borrowing' crisis to stop the aforementioend cost of buying crises. So we have to make borrowing super expensive and salaries super low and everyone unemployed.
When we complete step 3 . We will have a period of 'forgetting the 3 crises' before we revert to point 1 and repeat the process.
Special Topic: RBNZ Chief Economist Paul Conway comes to Kiwibank:
"The feeling, or vibe, in the room is simply, give us rate cuts, and we can grow. Many business owners are looking past the struggles of last year, and are looking beyond the challenges this year. “Survive until ‘25” was a phrase we heard coming out of the commercial and tourism space. It’s the idea that businesses just need to keep their head above water until the RBNZ starts cutting, and confidence returns. Survive until ‘25 summed up the mood of many."
I suspect it is going to be a long wait for them as the RBNZ drags their heels and cuts too late for many
Bridges had transport as one of his earlier portfolios, I think. Makes sense to continue the journey. One of John Keys better legacies is that main road south out of Auckland. The new one heading north out of Wellington is not bad either.
The cost of living thing is just another way of saying we have too many people & not enough people. Figure that out.
""The NZX50 has started the week with a 0.5% retreat"" - imagine you hate money (or yourself) so much that you decide buying NZ shares like the Warehouse is actually a good idea.
Even my Argentinian stocks are running rings around the NZX.
And you get the same tax benefits (no FIF) with Aussie shares. Not that you need to worry about tax anyway with NZ shares since they don't make money
Maccy B lets rip on the worsening economic nightmare emerging in Aussie - the "Brave New World of fake politics, bizarro ideologies and vested interests".
Taking the DGM amplifier up to 11. Some highlights.
And consider, if the AI rollout takes a decade, at the loss of 300k existing jobs per year (with some offset in new areas), the risk of the plutocratic ‘immigration consensus’ exploding in a popular (not populist) mushroom cloud is very high.
If immigration is cut to nothing, as it should be, and the economic model shifts back to capital investment growth-led from labour supply-led, then property prices would become vulnerable to a sustained correction.
Still, it would be fairer and ultimately more sustainable as interest rates collapse to zero (or below) and an obliterated currency repatriates supply chains.
This would be the structural unwind of twenty years of Chinese-inspired Dutch disease.
In truth, neither of these throwaway models is especially helpful.
If this convergence of horrors does occur, then, one way or another, Australia’s Brave New World of fake politics, bizarro ideologies and vested interests will blood a feeding frenzy at the economic carcass.
And the outcome may be better described as national chaos.
https://www.macrobusiness.com.au/2024/03/australias-luck-has-run-out/
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