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
Westpac has cut -14 bps from its two year fixed rates, taking its 'special' to 6.75% and lower than all its main rivals.
TERM DEPOSIT/SAVINGS RATE CHANGES
The Police Credit Union raised its bonus saver rate by +50 bps today, taking the potential rate to 4.50%.
DAIRY PRICES FIRM ON LOWER OFFER VOLUMES
Dairy prices rose +2.75% at today's Global Dairy Trade auction event. That was the USD rise from the prior event. In NZD, those same prices rose +4.2%. Bank in USD, WMP was up +3.4%, SMP was up +1.4%, Butter was up +3.1%, AMF was up +2.3%, and Cheddar cheese was up +4.1%. In the background, NZX analysts have been watching concerns lingering over the US market with the outbreak of H5N1 bird flu affecting more cattle herds in the Southwest, and even infecting a person a few days ago. The disease has not been killing cows; however it has been impacting milk production in the infected areas and if it continues to spread there may be an impact on national US milk production, which has already been weak for the past few months. The longer it goes on, the more buyers will want to lock in supply.
FAST-GROWING WORKFORCE
Stats NZ released Q1-2024 working-aged population data today. This is a routine release, but this one revealed a large +12,200 revision for Q4, 2023. Since the start of 2023, our working aged population has been rising at +2,500 per week, every week. It is now at 4.3 mln people. Since these records started in 1987, we have never before had two consecutive quarters where the growth exceeded +3% pa like we has in the past six months.
NOT-SO FAST-GROWING EMPLOYED WORKFORCE
Filled jobs rose by +2.1% in February from a year ago. Although annual growth is still relatively solid, it is at its slowest since January 2023, reflecting that growth is tapering. And it is down from the peak rise of +3.6% in April last year. More significantly, it has now clearly fallen below the rate of growth in the working-age population.
BOTTOMING OUT?
Consumer credit assessing firm Centrix says the number of people behind on their payments has fallen back to 457,000 (down -23,000 month-on-month). Although this improvement was expected following the seasonal uptick of late payers in January, demand for credit was also up +3% compared to the same period last year, buoyed by higher volumes of applications for unsecured credit. However, when looking at the bigger year-on-year picture, arrears are +8.1% higher, tracking closely to 2018 levels after coming off historic lows. We continue to see arrears rise for mortgages, personal loans and Buy Now Pay Later products as debt and financial stress builds.
ANOTHER HUGE SYNDICATED BOND,WITH MATCHING HUGE DEMAND
The Treasury has today announced that $4.5 bln of the nominal 15 May 2035 New Zealand Government Bond has been issued via syndication. The bonds, which carry a coupon of 4.50%, were issued at a spread of 6 basis points over the 15 May 2034 nominal green bond, at a yield to maturity of 4.7775%. Total book size, at final price guidance, exceeded $17.0 bln.
HAMISH RUMBOLD LEAVING KIWIBANK
Kiwibank says Hamish Rumbold, its Chief Digital and Technology Officer, is leaving in June after five years at the bank. CEO Steve Jurkovich says Rumbold has played a pivotal role in progressing Kiwibank's technology and digital capability. Mike Hendriksen, the bank's Chief Legal Officer and acting Chief Risk Officer, has been confirmed as its Chief Risk Officer. A recruitment process will seek a new Chief Digital and Technology Officer and Chief Legal Officer.
STEPHEN GILMORE LEAVING NZSF
The NZ Super Fund confirmed today that Stephen Gilmore will leave them at the end of June to take up the role of Chief Investment Officer at CalPERS, the largest pension plan in the United States with US$494 bln under management.
HANGING IN THERE
American vehicle sales were expected to rise in March but they disappointed, coming in at an annualised pace of 15.5 mln. Still, this is about the same pace we have seen since April 2023 so it is holding its rise from the depressed period two years earlier than that.
CHINA SERVICE SECTOR EXPANSION CONFIRMED
In China, new order levels boosted its Caixin services PMI in March. The expansion isn't swift but it is better than a contraction. It was the 15th straight month of growth in services activity, with new business rising to the fastest pace in the year-to-date.
SWAP RATES FIRM
Wholesale swap rates are likely to be a little higher today on global influences. Our chart below records the final positions. The 90 day bank bill rate is unchanged at 5.63%. The Australian 10 year bond yield is up +8 bps at 4.14%. The China 10 year bond rate is lower, now just under 2.30%. The NZ Government 10 year bond rate is up +6 bps from this morning at 4.75% and the earlier RBNZ fix was at 4.69% and up +2 bps. The UST 10yr yield is up +4 bps from this time yesterday at 4.35%. Their 2yr is unchanged at 4.69%, so the curve is now inverted less, now by -34 bps.
EQUITIES ALL IN RETREAT
In late trade today, the NZX50 is down a sharpish -0.9% and the ASX200 is down -1.4% in early afternoon trade. Tokyo has opened its Wednesday session down a full -1.0%. Hong Kong is down -0.7% in opening trade. Shanghai has opened down -0.3%. All these markets have taken their cues from Wall Street which ended its Tuesday session down -0.7% on the S&P500.
OIL PRICES RISE
Oil prices are up +US$1 to US$84.50/bbl while the international Brent price is now at US$88.50/bbl. These levels are five month highs.
GOLD HITS ATH
In early Asian trade, gold is up +US$32 from this time yesterday to a new all-time high of US$2282/oz.
NZD GOES SOFTER
The Kiwi dollar has essentially held its lower level of yesterday vs the greenback, now at 59.6 USc. But against the Aussie we have slipped to 91.5 AUc. Against the euro we a little lower at 55.3 euro cents. This all means the TWI-5 is down -20 bps to 68.8.
BITCOIN SLIPS BACK FURTHER
The bitcoin price has retreated further, now at US$65,671 and down -5.4% since this time yesterday. Volatility of the past 24 hours has been high at +/- 3.8%.
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75 Comments
Correct! Read the report. See the link: https://www.transpower.co.nz/system-operator/notices-and-reporting/mark…
Plan B?...now about that NI transmission line
https://www.rnz.co.nz/news/business/513282/tiwai-point-smelter-closure-…
$70 million gifted to Transpower annually by Tiwai will have to be sucked up by the hoi polloi when it evaporates. Been a good little earner for the North Island.
"The current model, which is currently under review by the Electricity Authority, has proved unpopular throughout Southland.
Since 2004, $1.3 billion has been spent on the upper North Island grid, yet only 39 per cent of the investment has been paid for by the upper North Island.
Since that time, transmission prices have increased by 330 per cent in the South Island, 225 per cent in the lower North Island, and 40 per cent in the upper North Island."
In early Asian trade, gold is up +US$32 from this time yesterday to a new all-time high of US$2282/oz.
Word is that the smaller trading desks have been wrecked on short positions. All kinds of shenanigans will be taking place.
Powering towards 4000 Kiwi pesos. Not sure Adrian Orr and his team of pointy heads will call it a store of value. But anyway. Should be considered solid gains in most people's books.
Past month - +10%
Year to Date - +17%
Past Year - +22%
Past 5 Years - +101%
Isn't difficult. Had a colleague locked of the country during Covid and his ASB token expired. So all online banking confirmations had to be done via phone. For some reason, the ASB app could not handle confirms in the country where he was based. It took their tech people almost 10 months to find a workaround (via WhatsApp). Not what I would call a technically advanced company.
No mention of the EV market collapsing as it appears to be all around the world. Tesla deliveries -10% BYD -40%. Resale prices collapsing too. Happy days for those holding the lemons.
Relayed via water cooler interactions is that NZ financing companies feeling some heat in from Team Cindy's cunning plan with the EV uptake plan.
Jeremyr has a pre-held bias you could rely on to
oops...
And PV has been 'worth it' for 20 years. I built my whole system for 5k, in 2004/5. Probably added 8k since then. Have 3 separate systems, 300 watts each - cannot possibly have a fail, and haven't run the generator in months (run it about 5 hours a year, for bigger power tools).
20 years of no power bill; new batteries and components with life ahead, 13k outlaid over 20 years. Energy prices could only head one way - and the only way they can't is a recession. Or worse...
Worldwide EVs have had a massive initial uptake, but that early adopter market is now saturated, and the bulk of everyone else either can't afford them, or can't justify them.
Removing the subsidy doesn't help, but it also doesn't alter the dynamics of a new technology. We'll need to see them get cheaper and/or better for another surge of uptake.
the incentive scheme just meant EV importers could have fatter margins, they will slowly drop back to a price point that is lower than what it was with the incentive.
JG of the greens has a bill to make EV cars FBT exempt, if you want to increase ownership of them in NZ that's the way to go, companies can lease them (claim that back as an expense) for employees and every 3 years they will appear on the second hand market forcing pricing down as more and more second hand cars appear
it will not get passed as ACT and NZ first will vote against it due to being a greens idea, and so national will not support it either so as to not upset their partners
The majority of increased ICE sales are vehicles with little to no EV equivalent (no one bought the only electric ute on the market, even when it was subsidized).
Globally, EV manufacturers are facing dropping sales, even as they dramatically cut prices. Sales have dropped in China, so they're trying to flood other markets to try and retain production levels.
It would seem unlikely NZ would buck the global trend if the previous levies and subsidies were available.
Incredible. Chinese are being encouraged to buy new homes over their existing home. Zhengzhou City in China will buy 10,000 existing houses this year to boost property sales. The policy will create additional demand for new properties equal to 17% of new home sales in the city’s central areas last year.
https://www.yicaiglobal.com/news/chinese-provincial-capital-to-buy-1000…
National/ ACT/ NZ First (56%) increase lead over Labour/ Greens/ Maori on 40.5% – now at 15.5% points
https://www.roymorgan.com/findings/national-act-nz-first-56-increase-le…
From the same poll
New Zealand Government Confidence Rating plunges 17pts to 81 in March
The Roy Morgan Government Confidence Rating plunged 17pts to 81 in March as sentiment turned heavily negative. Now only 35% (down 6.5% points) of electors said New Zealand was ‘heading in the right direction’ while 54% (up 10.5% points) said New Zealand was ‘heading in the wrong direction’.
Yes, but...They didn't do what they said the would do. They got elected on a 'trust us' we will govern for everyone promise. Then they went ahead and gave us 3-waters, co-governance, HuaPua (or whatever is was called), and let all the crims out, and then let those crims do whatever they wanted. This government is doing exactly what the voters asked it to do, so the situation is very different. If they continue like this, they will be re-elected with a larger majority.
No it isn't saying that, I don't believe they asked whether under a Labour led coalition the country would be going in the right direction.
You can believe that the country is going in the wrong direction under the current govt and still vote for them over Labour if your main concern is your personal prosperity over the country's.
I think HM said he voted for NACTNZF because of the personal benefit he would get from the tax cuts not because he thought they would take the country in the right direction or be better than a Labour led govt.
It does kind of. It probably means that voters are very happy with what the government is doing, i.e. cancelling stuff, cutting out the deadwood, making a plan to rectify and rebalance. However, there is still a lot to go and voters still don't like the direction of the country (it will take a while to turn around the Labour disaster). So people still don't like the direction of the country, but voters are still happy with how the government it tackling it and fixing it. So over the next year or two you will likely see those happy with the direction of the country increase as things are progressed as promised.
cutting out the deadwood, making a plan to rectify and rebalance.
That's imaginary, though. But the belief in it is plausible, as it exists here.
Could also be a case of under-performance by Labour (who?) and Greens (shoplifting, and violating labour laws like an ACT voter).
Hardly worth comment, such are the early days. Venture to suggest the water yet to come to the bridge will have its fair set of challenges for all the parties in parliament. What is being read today is hardly likely to be the same, and anywhere near as important, as in two years time provided of course the coalition’s glue is still sticking.
It's marginal increase and just because you're beating the other guy doesn't mean you're doing the right thing.
Labour and the greens at this stage don't have to offer up any alternative approaches, they just sit back and watch the coalition continue to fuck up and take the country in the wrong direction. In a few years they can just say how did that work out for you? And get voted back in because they are not NACT. Essentially the same strategy as National took when Labour was in.
Until one of the major parties gets onto the real issues (the stuff that PDK harks on about) it will just ping pong between the two.
What fringe nutter policies do you mean?
I'm talking about recognising the actual major/problems issues we're facing and moving away from a "we need to grow the economy" mindset.
I'm not sure what policies would solve the problema but I do know that a lot of what the current government is doing will make them worse. I also don't think Labour fully faced up to them either if you're worried I'm biased against National.
Degrowth is a fringe nutter policy. Although, you are right, Labour didn't do anything in this area (even they are not that crazy), but they have managed to increase debt massively and shrink the economy, so they did do a bit of de-growth, but they did not set out to do that.
AFR: The simultaneous rally in both gold and oil is signalling that geopolitical risks have returned to markets, presenting a fresh threat to the barnstorming rally in risk assets such as equities and cryptocurrencies.
US oil futures shot through $US85 a barrel for the first time since October, while the global Brent benchmark jumped to near $US90.
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