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
Nothing to report today - so far at least.
TERM DEPOSIT/SAVINGS RATE CHANGES
Nothing here either.
PRICEY RENTS
The national median rent was up by +$40 a week in the year to February to $600/week. The biggest surge in rents came in Gisborne which is now one of the most expensive regions in which to rent a home, now averaging $620/week and nor far off Auckland's $650/week or Wellington's $640/week.
NOT GREAT ON A PER CAPITA BASIS
ANZ's truckometer monitoring shows the Light Traffic Index rose +0.1% in March from February to be +2.8% higher than year-ago levels, while the Heavy Traffic Index fell -1.8% from the prior month after a couple of strong months, and it is +3.0% higher than year-ago levels. They noted that while both indices each have a mild upward trend, in per capita terms light traffic is trending down while heavy traffic is pretty flat.
THERE ARE THOSE WHO DO, AND THOSE WHO JUST TALK
Updated data out today for Q4-2024 shows that the commercial service sector, the rural sector, manufacturing, the transport sector, and the utilities sector (electricity, water, gas, etc.) all decreased their greenhouse gas emissions from the prior quarter. The construction sector has no change. But all these gains were nearly wasted because the large household sector increased its emissions. Overall, greenhouse gas emissions rose +2.9% from the same quarter a year ago. Interestingly only two sectors are cutting these emissions on a year-ago basis - the rural sector and service sector. The Household sector is making no progress quarter-on-quarter or year-on-year (even though representatives from this sector complain loudly about the rural sector).
STRONG DEMAND
Today's NZGB tenders drew 83 bids worth $1.18 bln for the three offers totalling $500 mln. That leaves $677 mln unsatisfied looking for a home. Yields were higher by about +20 bps for the two main tranches, but slightly lower for the May 2051 $50 mln portion, dropping to 5.04% from the 5.08% at the same equivalent offer eight weeks ago.
EMPLOYEE COMPENSATION SHARE HITS NEW HIGH
The extended national accounts data for Q4-2023 has confirmed the rise and rise of the share "compensation of employees" has of GDP. It rose to over 45%, the first time it has been at that level ever (or since these records began in 1972).(The low point in this series is 2001 when the share was 38.1%.)
VOLUME DROP
Kiwibank said its card activity analysis reveals a contraction of -7% in the March quarter, year-on-year up +4%. However, the volume of spend however reveals "a bleaker truth", they say. The total number of transactions shrank, down -4% in the quarter, up only +0.3% for the year. And that was despite a fast-rising population.
SCREWING THE SCRUM
The Government has capitulated to the landlord lobby, giving them all they asked for in rolling back tenant protections. The Government is now no longer an 'honest' referee between tenants and landlords in the property 'game'.
CAN YOU SUPPORT US?
If you missed our appeal for support on Tuesday, can you action it today? We want all our resources to be available free for all, but this can only be sustained if those who can, support us. (You choose the amount, reflecting our value to you.)
ASIC HAVING TRANS-TASMAN DERIVATIVES TRADER PROSPERO WOUND UP
The Australian Securities and Investments Commission says Australia's Federal Court has ordered Prospero Markets Pty Ltd be wound up with liquidators appointed following an application by ASIC. ASIC says it has received enquiries from clients concerned about the return of their money. In New Zealand the Financial Markets Authority warned in March NZ-registered company Prospero Markets Company Ltd, which trades as Prospero Markets, was offering New Zealanders financial services including CFD trading services while not registered, noting it wasn't on the Financial Service Provider Register and doesn't hold any license to provide its services. The FMA recommended "caution when dealing with Prospero Markets." The Companies Office registration for Prospero Markets Company Ltd now notes; "This company is now overdue in its obligation to file an annual return. If the annual return is not filed immediately the Registrar will initiate action to remove the company from the register." NZ Companies Office filings list Shengyin Wang as shareholder and director, noting Wang, of Victoria, is also a director of Prospero Markets Pty Ltd.
CHINA CPI FLIRTS WITH DEFLATION
China's consumer prices edged up a meree +0.1% in March from a year ago and much less that the market forecasts of +0.4%, and after an annual +0.7% rise in February. The extended flirting with deflation is dangerous and highlights the economic challenges they face. Demand is actually quite weak - and this data all comes from the officially approved series.
CHINA PPI IN FULL DEFLATION STILL
Meanwhile, China's producer prices shrank by -2.8% in March from the same month a year ago. This was the expected drop and compares to February's drop of -2.7%. It was the 18th straight month of contraction in factory gate prices and the steepest decrease since last November, highlighting the persistence of deflationary forces in their economy.
SWAP RATES LEAP
Wholesale swap rates are likely to be very much higher today after the US CPI miss. Our chart below will record the final positions. The 90 day bank bill rate is up +1 bp at 5.64%. The Australian 10 year bond yield is up +15 bps at 4.28%. The China 10 year bond rate is unchanged at just on 2.31%. The NZ Government 10 year bond rate is up +12 bps from this time yesterday at 4.87% and the earlier RBNZ fix was at 4.81% and up +8 bps. The UST 10yr yield is up +17 bps from this time yesterday to 4.53%. Their 2yr is up +21 bps at 4.95%, so the curve is now more inverted by -42 bps.
EQUITIES ALMOST ALL LOWER
In late trade today, the NZX50 is down -0.8% in late trade. The ASX200 is down -0.5% in early afternoon trade. Tokyo has started its Thursday session down -0.5%. Hong Kong has started today down -0.9%, but Shanghai has opened up +0.4% in an unusual divergence from world markets although that recovers some of yesterdays drop. Singapore is down -0.6% today. The S&P500 fell almost -1% in its Wednesday Wall Street session, hurt by sharply rising yields.
OIL PRICES RISE
Oil prices have risen +US$1.50 to just under US$86/bbl in the US while the international Brent price is now just over US$90/bbl.
GOLD EASES
In early Asian trade, gold is down -US$9 from this time yesterday at US$2341/oz.
NZD EASES
The Kiwi dollar has fallen nearly -1c to 59.8 USc post the US CPI decision. Against the Aussie we are a touch firmer at 91.8 AUc. Against the euro we are softer at just under 55.7 euro cents. This all means the TWI-5 is now down to 69.2.
BITCOIN RISES
The bitcoin price has risen today to US$70,654 and up +2.3% from where we were this time yesterday. Volatility of the past 24 hours has been moderate at just under +/- 2.7%.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
47 Comments
'The Government has capitulated to the landlord lobby, giving them all they asked for in rolling back tenant protections. The Government is now no longer an 'honest' referee between tenants and landlords in the property 'game'." - Not quite sure what to make of this. Wasn't it literally part of the election manifesto? Was labour somehow an honest referee when it made the changes being reversed?
"The Government has delivered its election mandate to reinforce private property rights, giving them all they asked for in reinstatement of landlord protections. The Government is now again an 'honest' referee between tenants and landlords in the property 'game'."
Fixed that for you.
Lets hit the streets and ask renters if they feel better off after 6 years of Labour's tenancy laws? Are they paying less rent? Do they have their pick of rental houses to choose from? Is obtaining a new tenancy easier? Are they at less risk of being evicted because their landlord is selling up?
I'm prepared to bet that the majority of tenants are worse off today than they were in 2017.
Immigration has been a huge factor, and that's what irritates me about both parties' policies in this respect. Until the underlying cause of this mess is resolved (a perpetual shortage of housing due to unrelenting population growth pressures), or at least acknowledged as being a major factor affecting renters, then neither party is doing anything useful in my view.
Immigration is a peripheral factor with housing. If you asked some in 2021 if they felt Labour had made renting better than it was in 2017, it'd still be overwhelming negative.
The bigger issue for labours brand is the wage supressive nature of the immigration they condone.
There's been a lot of policy changes that seem to have come directly from interest groups that have the ear of the Nats: landlording, tabacco, soon to be firearms, PPPs. Changes like the tabacco and AK-47 ones are just egregious.
But you know they will all bounce back again at some time between 3 or 6 years away. Seems kinda futile.
The Government is now no longer an 'honest' referee between tenants and landlords in the property 'game'.
Well at least the Government are not borrowing money for struggling Landlords claiming interest .....hang on...just checking that this was part of National election promises?
Seems to me successive governments for a long time have failed to impose differentiation between residential property owned and inhabited by a household, and otherwise. In fact the last government to seriously address that was Norman Kirk’s third Labour government with its relatively basic “Property Speculation Tax.” That was so effective and workable that Muldoon even left it in place until into his second term, when he finally bowed to the lobbying of that time. That failure plus the uncertainty of alternative investments such as equities, given the collapse of the like of Equiticorp, Broadbank, Securitibank, and the folding of such as Fortex, Feltex has caused property to become an obvious safe haven investment. The extraordinary push over the pandemic/lockdown to offer unnecessarily low interest rates, incentivised and propelled all manner of new entrants into property investment and hugely exacerbated the situation. A CGT or whatever, to discourage property speculation and profiteering sounds like just as good a concept as it did some 50 years ago.
as a KPG shareholder the government has gone after you as they have removed the ability to claim deprecation from commercial buildings meaning KPG will now pay more tax, lowering net profit, smaller dividends for shareholders, or did you miss that detail
Inland Revenue has published a scathing review of the Government’s proposal to make commercial and industrial property owners pay about $575 million more tax a year.
The Government is planning to prevent building owners from deducting depreciation as an expense from April 1 to bolster the balance of its books.
However, the tax department believes the change will hurt businesses and hamper productivity, which the Government says it’s committed to improving.
Inland Revenue also reckons the change will distort the tax system -
One of Australia’s biggest manufacturers Qenos bites the dust. 700 high-paying jobs to go.
One Planet Consulting CEO Helen Millicer says the downstream impacts of losing Qenos would be “astronomical" to the Australian economy and to “our modern way of life”.
“Qenos is the fundamental building block … the foundation for many supply chains in this country,” she told Sky News business editor Ross Greenwood.
“They supply the most diverse range of products into the Australian and regional market of any polyethylene manufacturer in the world.
https://www.2gb.com/another-shut-down-huge-aussie-manufacturer-bites-th…
I think Qenos is owned by China National Chemical Corporation. CNCC isn't going anywhere and will no doubt want to supply the Qenos customers. Prior to CNCC buying them, I had something to do with the prior version of Qenos. They have always had a difficult time making any money with aging plants. It was always difficult justifying investment in those businesses given Australia has only a small installed customer base for their products. I think closure was inevitable. At least the prior owners got paid out, leaving CNCC holding the losses. I doubt the downstream costs to Australia will be that high. Perhaps high for some (consultants), but Qenos will be forgotten relatively quickly. Just part of 'creative destruction'. Better alternatives are already in the market - which was its problem.
".....Kiwibank said its card activity analysis reveals a contraction of -7% in the March quarter, year-on-year up +4%. However, the volume of spend however reveals "a bleaker truth"....."
However the linked document says "Credit Card and Debit Card". So presumably does not include eft/pos. so that may screw the results.
I have noticed increased numbers of merchants warning folk that if they use pay wave it will cost them. While many don't care about the 2% extra many do, so can pay in real cash or use eft/pos. Or insert rather than wave.
Banks would dearly love to get rid of 'free eft/pos and have everybody pay credit card fees. But there is resistance.
Meanwhile, China's producer prices shrank by -2.8% in March from the same month a year ago. This was the expected drop and compares to February's drop of -2.7%. It was the 18th straight month of contraction in factory gate prices and the steepest decrease since last November, highlighting the persistence of deflationary forces in their economy.
Inflation has not fallen in a single month since Biden's term began (the closest was July 2022 when it was unchanged), which leaves overall prices up over 19% since Bodenomics was unleashed. And prices have never been higher. Link
The SEC is going after decentralized crypto exchanges. This is the big one and a declaration of war.
The SEC has launched a fatwa against Uniswap, the largest decentralized exchange in the world with over $2 trillion in total volume since launching in 2018.
Today Uniswap Labs received a Wells Notice from the SEC, which typically happens before a lawsuit.
Uniswap Labs has received a notice from the Securities and Exchange Commission that it could soon be charged with violating federal securities laws, its CEO Hayden Adams said in a post on X Wednesday.
“I am confident that the products we offer are legal and that our work is on the right side of history,” he wrote. “But it’s been clear for a while that rather than working to create clear, informed rules, the SEC has decided to focus on attacking long-time good actors like Uniswap UNIUSD, -5.96% and Coinbase.”
https://www.marketwatch.com/story/uniswap-says-it-has-received-sec-well…
Just got a newsletter from Warecare in Auckland. A whole series of red herring stories followed right at the bottom by we may be increasing our charges up to 25.8% in July. This wont do much for the CPI.............The council rates only up around 7.8% (maybe). Smoke and mirrors here, its obvious the main rates need to increase by at least 10%. The landlords don't pay the water rates............
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.