What happened Tuesday

Economy / news

A review of things you need to know before you sign off on Tuesday; no retail rate changes, QV sees intrigue in 2025 housing markets, Tower warns on climate risk, dairy payout has upside, swaps on hold, NZD eases, & more

11th Feb 25, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).

MORTGAGE RATE CHANGES
No changes today. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

SNAKES ON THE HOUSING LADDER
QV says 2025 will be 'an intriguing year' for the housing market. It is seeing some small value increases creeping into the housing market.

ACTION NEEDED TO AVOID CALIFORNIA-STYLE INSURANCE CRISIS
Tower Insurance warns the Government it needs to clarify climate adaptation funding to avoid California-style insurance crisis amid rising natural disaster risks.

BUYING MORE, PAYING LESS
NZ Post reports that online shoppers are buying less expensive items more often. They spent $1.7 bln online in the October to December quarter according to their Q4 Review. That meant +14% more items were bought online in Q4-2024 than Q4-2023, but buyers only spent +9% more in $ terms. Online had good growth, but in-store had none. The average spend-per-transaction fell -4% to $95.

BOND OFFER TSUNAMI
As we reported yesterday, the Treasury Debt Management Office sought $3 bln in a syndicated tap of the May 2023 NZGB. They got offered $21.5 bln in the book build. They decided to take $5.5 bln, priced at a YTM of 4.65%.

PAYOUT FORECAST HIGHER & MAY STAY HIGH
Westpac analysts have been reviewing their farmgate milk payout price estimates. They have revised the 2024/25 season estimate up +30 bps to $10.30/kgMS, which makes it the highest estimate of any main analysts. They have also launched an estimate for their 2025/269 season at $10/kgMS. We have more on this change here. You can compare all current analysts positions here (at the bottom of that page).

NZX UPDATE
The NZX50 is up +0.2% in 3pm trade, but not quite making back yesterday's dip. There are 40 gainers today, led by Tower (+4.0%), Oceania (+2.6%, and Vulcan Steel (+2.0%). Market heavyweight F&P Healthcare is up +0.7%. There are 27 decliners today and they are led by Gentrack (again)(-3.2%), SkyTV (-1.9%), Rakon (-1.6%) and Spark (-1.7%).

'FINAL GENERATION' THREAT REAL
The social-media-recorded pushback during the Covid lockdowns in China that "we are the final generation" is continuing to echo, and echo loudly there. After rising slightly in 2023, marriages fell sharply in 2024 and to their lowest since China's public records began in 1986. This means the public efforts to stop the sharp fall in births are not working. (And yes, if you try to follow the link to the data, you may well find yourself blocked. But it is the source data for this item.)

MIXED SENTIMENT
In Australia, the Westpac-Melbourne Institute consumer sentiment survey reported no improvement in January from the flat levels that have been around for the two prior months. But the NAB Business Sentiment survey is reporting that their responders are finding a more positive mood.

SWAP RATES HOLD FIRM
Wholesale swap rates may be slightly higher today, so keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -1 bps on Monday at 3.87%. The Australian 10 year bond yield is unchanged at 4.43%. The China 10 year bond rate has also held at 1.63%. The NZ Government 10 year bond rate is up +1 bp at 4.67% while today's RBNZ fix was 4.63% and also up +1 bp. The UST 10yr yield is now just on 4.49% and up +1 bps from this time yesterday. Their 2yr is down -1 bp at 4.28%, so that positive curve is slightly steeper at +21 bps.

EQUITIES MIXED AGAIN
The NZX50 is up +0.2% in late Monday trade. The ASX200 is also uo +0.2% in afternoon trade. Tokyo is unchanged in early Tuesday trade. Hong Kong is down -0.3%, as is Shanghai at its open. Singapore has opened down -0.4%. Wall Street closed its Monday trade with the S&P500 up +0.7%, pretty much as the weekend futures market signaled.

OIL FIRMS AGAIN
The oil price is up +US$1 from this time yesterday, now just under US$72.50/bbl in the US, and at US$76/bbl for the international Brent price.

CARBON PRICE STAYS IN RANGE
The carbon price is still within its tight range, today still at NZ$63/NZU. The next release of units at the official auction is on March 19, 2025. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD UP
In early Asian trade, gold is up +US$68 from this time yesterday, now at US$2936/oz and a new ATH. Chatter about $3000 is growing.

NZD SLIPS AGAINST THE AUD
The Kiwi dollar has hel from this time yesterday, still at 56.4 USc. Against the Aussie we are down -30 bps at 89.9 AUc. Against the euro we are down -10 bps at 54.7 euro cents. This all means the TWI-5 is now just under 67.1 and down -10 bps.

BITCOIN FIRMS
The bitcoin price is up +2.6% from this time yesterday, now at US$98,121. Volatility of the past 24 hours has been modest at just under +/- 1.5%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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60 Comments

by Officebound | 11th Feb 25, 4:05pm 1739243140

NZ Electricity Spot price has gone through the roof the last couple of weeks, currently $300mw/h around the country.

https://app.em6.co.nz/

by kraken | 11th Feb 25, 4:08pm 1739243327

Sounds Inflationary.

https://www.rnz.co.nz/news/business/540613/real-risk-of-double-digit-in…

by mfd | 11th Feb 25, 4:10pm 1739243444

Any thoughts on why? The lake levels don't look bad

https://www.transpower.co.nz/system-operator/notices-and-reporting/week…

by IT GUY | 11th Feb 25, 4:28pm 1739244489

school load?

this is not going to help growth, growth, growth.

by E46 | 11th Feb 25, 5:03pm 1739246634

We've tried nothing and we're all out of ideas.

- Gubermint

by Nzdan | 11th Feb 25, 5:10pm 1739247015

Privatization in action?

by solardb | 11th Feb 25, 6:00pm 1739250050

South island hydro production way down. As you say lakes are pretty full. Makes no sense. And they have been burning coal on days when there was plenty of other sources avaliable.

Me thinks they are trying to make thinks look worst, why I don't know.

by Midnight Singer | 11th Feb 25, 6:59pm 1739253588

Looking at Meridan lake data. No spilling and lake levels are heading lower. Te Anau is going below lower limit.

Less snow melt?

No recent rain in quantity?

by nigelh | 11th Feb 25, 7:14pm 1739254440

If Meridian have to cut back Manapouri generation and can't supply Tiwai, do they not have to buy it from the market to maintain their contractual agreement with Tiwai? Perhaps that is what causing a bump in the price.

by Sparrow1 | 11th Feb 25, 8:42pm 1739259769

Was down there last week walking the Milford. Blue sky’s everyday. Locals saying haven’t had much rain for ages and lakes are low at present

by Justa comment | 11th Feb 25, 4:11pm 1739243466

Air-con ?

by WellingtonInvestor | 11th Feb 25, 4:37pm 1739245032

Frank energy sent me a notice that both daily rates and unit prices are being hiked. Looks like my power bill is rising by far more than inflation.

by a watchman | 11th Feb 25, 4:49pm 1739245788

Our prices from Frank from 1 March have gone up over 17%. Rather more than inflation I believe

by KH | 11th Feb 25, 6:54pm 1739253276

Loving my solar. Total combined bill for two houses (only one with Solar) is $100 per month at the mo. Mostly the $100 is line charges.

I have not noticed any offers of increase in what they pay for the feed in. Funny that.

by powerdownkiwi | 11th Feb 25, 6:59pm 1739253592

$100 more than me.

Doesn't pay to have an umbilical.

by RookieInvestor | 11th Feb 25, 7:57pm 1739257066

mine is $200, so you save 100/month, or 1200/year.

what's your payback period? 12 years?

by Hans Brink | 11th Feb 25, 8:06pm 1739257596

Yep like wise we are totally off grid. Don't ever think about power prices.

by mfd | 11th Feb 25, 9:22pm 1739262158

I've paid $5 for power over the last two months, pretty satisfying.

I almost feel bad for Meridian locking in power prices for 5 years with 60c daily charges. Going to be a shock coming off that.

by Speedmax | 12th Feb 25, 1:44am 1739277889

Yep same here. Really should install a battery and disconnect from grid

by nigelh | 11th Feb 25, 7:18pm 1739254695

Same. Holding back before deciding to switch till late February as in New Plymouth Powerco is the lines company and their annual increase is from 1April. Don't know if they've already given a heads up to the retailers on the increase. I'll be checking Powerco's website end Feb as well.

by J.C. | 11th Feb 25, 4:17pm 1739243844

In early Asian trade, gold is up +US$68 from this time yesterday, now at US$2936/oz and a new ATH. Chatter about $3000 is growing.

Water cooler bros smell bubble and reckon Jamie Dimon will restore order and smash it down with his paper. Probably right.

Hard to keep away from the conspiracy theories though because the gold has nearly doubled since WSJ declared that the metal had lost its reserve status in September 2022.

https://www.wsj.com/articles/this-should-have-been-a-great-year-for-gol…

by J.C. | 11th Feb 25, 4:13pm 1739243609

Another bit of trivia. Proxy for gold miners GDX up 22% in 2025 alone and 54% in past 12 months, but still 33% down from its ATH in 2011.

Outrageous.

by kraken | 11th Feb 25, 4:21pm 1739244104

Why is gold going up, I thought inflation was within target?

Blanket tariffs on commodities?

Deficits?

Climate change?

by rastus1 | 11th Feb 25, 4:28pm 1739244504

Peter Schiff knows.

by kraken | 11th Feb 25, 4:31pm 1739244715

The timing is perfect for gold to rise during a recession when most people can't afford it.

by J.C. | 11th Feb 25, 4:42pm 1739245376

The timing is perfect for gold to rise during a recession when most people can't afford it.

Why would IFAs and the media be promoting gold to the hoi polloi? They don't make a commission off it nor are their customers (advertisers) selling gold. In many ways, gold is a difficult subject for them.

by rastus1 | 12th Feb 25, 9:13am 1739304793

Silver seems to be an more opportunity at present. Catch up time coming..?

by Baywatch | 11th Feb 25, 4:53pm 1739245985

If you bought 1 ounce of gold in 2003 for $672NZD it would be worth $3,135 NZD today.

Minus Storage or insurance costs (if applicable) would reduce the net profit

by J.C. | 11th Feb 25, 5:10pm 1739247039

Your data source is a bit outdated. XAUNZD is worth 5,177 kiwi pesos today.

Avge price of gold in 2003 would be 363 Kiwi pesos.

by Baywatch | 11th Feb 25, 6:11pm 1739250680

I used AI ...

by kraken | 11th Feb 25, 6:16pm 1739250976

by kiwikidsnz | 11th Feb 25, 6:09pm 1739250562

Coincidentally, I did actually buy a couple of gold ounces around that time for around that amount (travel souvenirs in Oz & Singapore)

I put them away & forgot about them for quite a while...

by J.C. | 11th Feb 25, 6:29pm 1739251764

I put them away & forgot about them for quite a while...

Lost in a boating accident

by J.C. | 11th Feb 25, 4:30pm 1739244658

Central bank buying and abandonment of US Treasuries seems to be a key narrative. Lord Orr wouldn't touch gold with a barge pole though. Bar the US, the Anglosphere has little interest in gold (consistent with the respective Ponzis being the be-all-and-end-all). Unlike Asia, emerging economies, Russia, Central / East Europe.

by IT GUY | 11th Feb 25, 4:38pm 1739245100

If the US revalues its holdings it IMHO puts a floor under the price, assuming they would buy if it drops below the floor?

by J.C. | 11th Feb 25, 4:40pm 1739245230

For sure. Absolute madness that it's not marked to market.

by kraken | 11th Feb 25, 7:22pm 1739254929

I found it interesting that you believed negative interest rates were more likely than mortgage rates hitting 10%. Wouldn't a gold revaluation be easier in a deflationary environment like China’s, rather than an inflationary one like Argentina’s?

Edit: I shouldn’t have brought up China and Argentina. My main point was that in a deflationary environment, where asset prices drop and interest rates rise (which is what happens when treasuries sell off), gold wouldn’t need to be revalued as much.

by J.C. | 11th Feb 25, 4:49pm 1739245772

No idea how China values its gold on its public balance sheets. It's the US that is pondering gold revaluation.

by kraken | 11th Feb 25, 4:54pm 1739246057

Revaluation would be agreed on otherwise, it creates an arbitrage.

by J.C. | 11th Feb 25, 5:16pm 1739247392

No it doesn't create an arbitrage as gold owned by the US govt is not on the market. At present, because US gold is marked at USD40 does not create arbitrage opportunities.

by kraken | 12th Feb 25, 12:15am 1739272502

by Squishy | 11th Feb 25, 4:37pm 1739245071

The social-media-recorded pushback during the Covid lockdowns in China that "we are the final generation" is continuing to echo, and echo loudly there. After rising slightly in 2023, marriages fell sharply in 2024 and to their lowest since China's public records began in 1986. This means the public efforts to stop the sharp fall in births are not working.

China's youth revolution is getting very interesting. As for demography you can already see that the next generation is going to be less than half the size of previous ones. A number of countries are in real demographic trouble now but seems unable to take any steps to pull out of it.

In terms of trading opportunity though I look at debt and have to ask who is going to pay it given there will be far fewer taxpayers in future to shoulder that burden. Chinese 30 year should be junk unless you believe in miracles.

by IT GUY | 11th Feb 25, 4:41pm 1739245280

Chinese women are demanding very high bride price payments and you have to own a property to be considered.

They are playing a dangerous game as once they turn 30 they are considered leftover stock.

IMHO they have massive problems coming.

by Squishy | 11th Feb 25, 4:50pm 1739245820

It's funny boys used to be the Chinese preference, to the point of infanticide. Now having a girl is more likely to carry on your family lineage.

by J.C. | 11th Feb 25, 4:48pm 1739245682

Over in Aussie,

A new study reveals that university students in degrees such as arts, history, economics, business and teaching face total costs of more than $160,000 to graduate when living expenses such as accommodation, food and transport are included.

No idea why people are not gravitating towards trades, train driver qualifications, or lollipop gigs.

https://www.afr.com/work-and-careers/education/an-80-000-debt-is-only-p…

by RickStrauss | 11th Feb 25, 4:53pm 1739246002

Crikey, there's good coin to be made off the following generations!

by Chaosinflesh | 11th Feb 25, 5:03pm 1739246614

Students are spending $700/week on living?

I cannot see how that is anything but excessive lifestyle choices.

by Nzdan | 11th Feb 25, 5:17pm 1739247436

Ms O’Brien, from Lorne on the NSW Mid North Coast, lives in Basser College, for which she pays over $550 a week.

Is it really excessive lifestyle choices? I mean, excessive is a word that certainly does come to mind.

https://www.unsw.edu.au/accommodation/colleges/basser-college

Room Type: Single $566.00 p/w
Meals: Catered (Breakfast, lunch, dinner)
Bathroom: Shared (an extra $53 per week for your own bathroom).
Cleaning: Yes
Average room size 10 to 12 square metres

by J.C. | 11th Feb 25, 5:25pm 1739247911

Is it really excessive lifestyle choices?

University used to be a lifestyle choice in Aotearoa. Not anymore. Not anywhere in the Anglosphere. In fact, it's morphed into something potentially damaging if you don't want to take on debt at an early age.

And the boomers believe the same people are going to be paying a premium for their assets?

Absurd if you think about it.

by IT GUY | 11th Feb 25, 5:31pm 1739248271

And paying for their retirement and their own.... you are right its just not all going to happen. Boomers probably be on there own here.

by J.C. | 11th Feb 25, 5:38pm 1739248712

And paying for their retirement and their own.... you are right its just not all going to happen.

It doesn't make any sense. You don't even have to do back of the envelopes to realize how absurd it is.

by Chaosinflesh | 11th Feb 25, 5:34pm 1739248464

University aside.. paying for a fully-catered dorm is a choice. Paying a premium for location is a choice.

Perhaps the students taking on debt to live in these locations are not the universities target demographic - perhaps they want rich kids whose parents/grandparents are paying for it, and oh well if you're dumb enough to take on 10s of thousands of dollars of debt a year too, guess you'll do in a pinch? Let alone the internationals on work oops I mean student visas.

by Baywatch | 11th Feb 25, 6:15pm 1739250923

Smashed Avo every morning is that what you mean?

by IT GUY | 11th Feb 25, 5:29pm 1739248190

was reading of a husband and wife in USA, both MDs he now an ED specialist and her a cardio specialist, combined debt of 880k usd, 30 and 32 years old. healthcare is not going to get cheaper anywhere in the world....

by JimboJones | 11th Feb 25, 6:35pm 1739252140

Went to a skin specialist the other week, $500 for a half hour consultation. Southern cross paid, but still that’s bloody good coin. A fully booked 8 hours nets you $8k, and a 5 day week is 40k.

by KH | 11th Feb 25, 7:01pm 1739253709

Friend worked in a flash dental practice. The operator was one of those 'ists' that dentists get promoted into. He was grumpy if he did not bill out $50,000 in a day. Mind you it took six people to support him in the work.

by Norm | 11th Feb 25, 7:45pm 1739256316

JJ... That's a bit misleading. They don't just sit there and consult. There's admin related to each consult, staff wages, ongoing continuing education, overheads, etc.

by RickStrauss | 12th Feb 25, 9:26am 1739305582

And the Porsche in the carpark

by rastus1 | 12th Feb 25, 9:17am 1739305068

The cause of high fees is steering us in the face...and we can't see it.

It's the access to free and then very low credit.

If it were market rates, fees would be forced down.

The Universities etc have no need to cut costs, their customers need no money to access their services.

What party has the balls? None.

by Wrong John | 11th Feb 25, 6:35pm 1739252126

For many years I help support a very strong NZ woman who ran orphanages for abandoned female babies in China. These babies would miraculously appear at her doorstep in the very early hours of the morning. If my memory serves me she had about ten or so of these homes/places in southern China . When she couldn't keep going due to age & health issues, she had helped raise over 550 young Chinese women, one of whom she adopted. She was one great women, in my eyes. I understand most of the homes are still operating in one form or another, however, it's been a decade or longer since I last saw her, in rented accommodation in one of our better provincial cities.