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 today.
TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here either.
MORE CORPORATE BOND ISSUANCE
Christchurch Airport (CIAL) has raised $125 mln in a 7 year bond issue at 5.44% per annum, being the sum of the Swap Rate (4.39%) plus the issue margin (1.05%).
ANOTHER SENIOR DEPARTURE
Fletcher Building has said Bevan McKenzie, the Group Chief Financial Officer, has decided to resign and will leave the business on 4 October 2024.
DAYLIGHT SAVING ENDS
Don't forget to "fall back" on Sunday morning. We get an extra hour. If you still have manual clocks, you will need to adjust them to one hour "earlier".
AUSSIE RETAIL SALES VOLUMES RETREAT
Australian retail sales are rising but slower than their inflation rate. They were up +1.6% in February from a year ago. But in that same time their inflation indicator rose 3.4%. Any way you look at it, that is a volume drop.
THE RIVERS OF IRON ORE & COAL RUN SLOWER
The Australian goods trade surplus halved in February from the same month a year ago. It came in at a +AU$6.5 bln surplus, down from +AU$12.9 bln in February 2023. The reasons is the combination of falling exports (-2.4%), and import growth staying high (+17.1%). Of particular note is that both rural and non-rural exports fell more than -3%, but that gold exports were up +25% on that basis.
TALE OF TWO EV MAKERS
Talk about Tesla's EV car delivery declines recently is everywhere. They sold 386,800 EVs in Q1, down from 356,500 in the same quarter a year ago. But not so visible has been BYD's recent sales drop. However, it sold 260,000 EVs in Q1-2023 and 300,400 EVs in Q1-2024, a +13% rise. But that was down from the 526,400 it some in Q4-2023, so a big drop from there. Equally curious is that there has been a big negative share price reaction to the Tesla results - but virtually none to the BYD results.
WAITING FOR NFPs
Financial markets are quiet today. Not only is China on holiday, but markets are awaiting the US non-farm payrolls report tomorrow. Given the range of views from recent Fed speakers, the assessment of how they will react to any changes is in flux today.
SWAP RATES ON HOLD
Wholesale swap rates are likely to be little-changed today ahead of the US non-farm payrolls data. Our chart below records the final positions. The 90 day bank bill rate is unchanged yet again at 5.63%. The Australian 10 year bond yield is down -1 bp at 4.15%. The China 10 year bond rate is unchanged again at 2.30% while they are on a long weekend holiday. The NZ Government 10 year bond rate is down -3 bps from this time yesterday at 4.68% and the earlier RBNZ fix was at 4.63% and down -3 bps. The UST 10yr yield is down -5 bps from this time yesterday at 4.31%. Their 2yr is unchanged at 4.67%, so the curve is now inverted more, now by -36 bps.
EQUITIES SHOW WIDELY DIFFERENT RESULTS
In late trade today, the NZX50 is down another -0.5% to be heading for a weekly -0.3% dip. The ASX200 is down -0.9% today and if that holds their week will also be down -0.9%. Tokyo has opened its Friday session down a very sharp -2.3% and taking it on the chin by heading to a -4.4% weekly retreat. Hong Kong is back after a short holiday, down -1.1% in early trade and if it stays like that they will end the week even. Shanghai is closed for a public holiday and probably pleased they are missing the negative action. Singapore is down -0.9%. Earlier Wall Street closed with the S&P500 down -1.2%. after spending most of the day up. Comments from Fed speaker Kashkari drove the late sentiment dive.
OIL PRICES RISE AGAIN
Oil prices are up +US$1.50 to just over US$86.50/bbl while the international Brent price is now just over US$90.50/bbl. These levels are back to five month highs.
GOLD RETREATS
In early Asian trade, gold is down -US$29 from this time yesterday to US$2272/oz and off its ATH.
NZD HOLDS
The Kiwi dollar has held at 60.2 USc although there has been movement in between. And against the Aussie we are also unchanged at 91.5 AUc. Against the euro we a little firmer at 55.6 euro cents. This all means the TWI-5 is still at 69.2 where it was this time yesterday.
BITCOIN RISES
The bitcoin price has risen today to US$68,080 and up +3.0% from this time yesterday. Volatility of the past 24 hours has been high at +/- 3.2%.
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65 Comments
Shanghai is closed for a public holiday and probably pleased they are missing the negative action.
Fascinating article by Nicholas Lardy, perhaps the most esteemed Western scholar specializing on China's economy: https://foreignaffairs.com/united-states/china-still-rising Contrary to The Economist's claim that we've reached "peak China", he argues that "China is still rising", that the West "underestimates the resilience of its economy" and that China's "nominal GDP [will] resume converging toward that of the United States this year and is likely to surpass it in about a decade". He debunks several misconceptions: Link
CIAL raises $125 mill. Assumedly that will off set the debt raised for the pie in the sky airport venture at Tarras, Central Otago now defunct. Cash strapped Christchurch City Council & the city’s hard pressed ratepayers now own a large tract of land only 4 hours drive away from any actual catchment locality for which they service debt and pay rates to another local body. One day proudly declare a climate emergency, the next , let’s build a big jet airport. All those responsible for signing off on this outrageously abysmal project should at least do the decent thing and quit forthwith.
Not to mention their current water testing results.....High levels of nitrate found in Canterbury drinking water
Flashback. 2018. The then CCC water management team withheld adverse water testing results from the CEO for seven months. Hamlet was right but geographically astray about where something is rotten. Getting to the point that Christchurch, as happened with Tauranga, needs a serious intervention from central government to sort out the general ineptness, mismanagement and downright obduracy pervading councillors and down through all levels of executive and staff.
Total deliveries Q1 2024: 386,810
Total production Q1 2024: 433,371
Vehicle production declined around 1.7% from a year earlier and 12.5% sequentially for Tesla, not nearly as steeply as the 8.5% annual drop in deliveries.
Tesla doesn’t break out sales by model but reported it produced 412,376 Model 3/Y cars and delivered 369,783. It produced 20,995 of its other models and delivered 17,027.
In the same period last year, the electric automaker reported 422,875 deliveries and production of 440,808 vehicles. In the fourth quarter of 2023, Tesla reported 484,507 deliveries and production of 494,989 vehicles.
Until he figured out that Tesla can simply provide the fleet of robot taxis and cut out the middleman. Waymo are using Jaguar i-Paces for their self driving Uber Eats deliveries in the US. https://www.cnbc.com/2024/04/03/waymo-self-driving-cars-are-delivering-…
Aussie import growth staying high (+17.1%)
Migration-led population growth doing what it does best. You minus the imports priced at CIF from your GDP numbers but the increased activity due to growing imports from freight moving, importer margins, retail and other ticket clipping helps governments peddle the Ponzi as real economic growth.
The Ponzi being the bulk of migrants arriving to service the demand added by the ones that arrived before them.
Of particular note is that both rural and non-rural exports fell more than -3%, but that gold exports were up +25% on that basis.
Perth Mint has always been important for WA, even though people don't really understand why. What's more, if the Federal Govt ever tried confiscating their gold, they couldn't do so. The WA Govt has an important role to play here. Perth Mint has had some scrapes with the Shanghai Gold Exchange. They need to drop any bogan/cowboy attitude in how they operate. I've also seen claims laid against PM for potential rehypothecation. Also, not something they should ever get involved with.
Their purity was fine, it was still 99.99% pure gold
"The mint has confirmed that all gold sold during that period had exceeded the minimum 99.99% industry standard; however, it had breached Shanghai’s tougher specifications which require that 0.01% of the non-gold component cannot contain more than 50 parts per million of silver."
So nothing wrong with the purity.
AFR on the boomers have screwed over younger Aussies. Chickens coming home to roost.
Ken Henry has warned that Australia’s social compact [contract] with younger workers shouldering an ever-rising tax burden faces an “existential crisis” unless reformers can better persuade a sceptical public of the need to overhaul tax and spending.
Australia was too reliant on economically damaging taxes on wages, corporate non-mining profits, and state property stamp duties, said the former Treasury secretary who, in 2009, led the last major review of the tax system for the Rudd government. Its 138 recommendations remain largely unimplemented.
“Dumb luck” of “plundering” natural resources would not deliver prosperity for future generations, he said in a speech in Canberra
https://www.afr.com/policy/tax-and-super/young-people-have-been-screwed…
Dr Henry said business investment for years had been at “terribly, terribly low” recessionary levels, as Australia was one of the very few advanced economies not to cut its 30 per cent corporate tax rate this century.
It explained why Australia had become a net exporter of capital because local investment was less attractive, he said.
“Superannuation funds are investing more and more of our savings offshore, and foreigners are investing less of their savings in Australia. This seems to me to be pretty rational behaviour.”
Already, we have run 13 cash deficits over the last 15 years.
To hide it, successive governments have increasingly labelled new spending capex rather than opex, gaming the fiscal-responsibility rules to make the operating balance before gains and losses (OBEGAL) look better.
Treasury pushes back against the practice, but usually in vain.
When Willis ever achieves surplus, now not expected until 2028/9, New Zealand will have run a cash deficit for 18 of the previous 20 years. Even under the OBEGAL measure, there will have been just five surpluses in 20 years, two under Labour.
Luxon and Willis promised to address Robertson’s wreckage seriously. Link
https://www.stuff.co.nz/politics/350220974/public-service-job-cuts-what…
The axe is falling on the public service, with major job cuts looming in the weeks and months ahead.
As of April 5, Stuff had confirmed that 975 roles have been disestablished as part of the cost savings drive.
So a saving of $97 mil if they average $100k each. Nothing to be sneezed at, but they still need to do that another 30 times just to pay for the $20 a week tax cut.
The big unknown is the flow on from those 975 roles disestablished.
Some may have been ultimately saving us tax payers $$, or reducing risks in certain areas.. On the other hand removing some roles may save not just the salary, but more $$ if the work they were doing was negative cost/benefit.
I have my doubts that the minister of finance's demand for ~6.5% costs savings across all departments is a sound strategy.
Some ministries may already have been running lean. Some others with fat in the system.
It's a pretty blunt approach to take.
You are missing the fact that the 975 FTEs largely represents cuts to permanent roles. On top of that, thousands of fixed-term and hourly contracts have not been rolled over across the public sector. Reportedly, IT professionals are some of the worst hit in Wellington.
Also a good chunk of departmental budgets have been culled, stuff that wouldve been spent on service procurement, grants, etc. For example, MBIE got stripped off a $30m fund for transforming "advanced manufacturing" and a few million more for supporting diversity initiatives, whatever that means.
and salary costs are just a small part of the cost of each employee who need office space, resources, HR services etc etc. In addition lots of civil servants create work for other civil servants -so if the least productive are gone you would expect to see an improvement in services not a decline - if not the GM or HOD should be following them down the road.
It's not just WGTN, all over NZ Contractors are being cut across public and private sector, mostly they never appear on org charts anyway.... It's a dire time to be a contractor. This will set projects back, and the velocity of many agile teams who rely on contractors to perform specialised tasks will slow... IE productivity must fall here, this recession will deepen, its not going to be a few Qs, the impact of current changes will hit hard H2 24 / H1 25. Cannot believe how quiet the media (do we have a non woke media anymore) are being here. I know you are not meant to frighten the woman and children but.... the reason private is firing staff is they had no plan B and suddenly need one
Although universities are not technically public departments, I'm feeling like a trend setter by getting made redundant late last year. Apparently we don't need Frontline clinical educators at the moment.
Now working privately with a pay rise and a chunk off the mortgage.
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