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
TSB cut fixed rates today, especially its one year fixed rate to 5.35% and a market leading level. Details here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
TSB also cut TD rates for terms 90 days to 18 months. ICBC cut its TD rates recently too. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
POPULATION EXPANDS SLOWER, AGES
Our population rose to 5,356,700 as at December 2024, according to a Stats NZ release. That is a rise of +48,500, of which +21,400 was from a natural births/deaths net increase, and +27,100 frim migration. The total annual growth is equivalent to adding one of Whanganui, or Upper Hutt, or Timaru, or Queenstown. Or at least that is what StatsNZ claims based on changes from the 2018 Census. They haven't yet started using the 2023 Census base. We should also note that while the 65+ aged cohort is holding, the data shows continuing falls for most younger groups. So the median age is at a record high of 38.2 years,
MUCH OLDER MOTHERS
The same updated population data shows that the median age of women giving birth reached 31.5 years in 2024. That is its highest since records began in 1962. The lowest median age recorded was 24.8 years in 1972. By 1994, the median age had risen to 28.5 years.
DAIRY AUCTION PROSPECTS
There is another full dairy auction tonight. The futures market suggests the WMP price will slip slightly, having passed its peak two weeks ago. But the SMP price should rise again according the futures pricing, and back up to its November level, and its highest since October 2023. However, a firming NZD will tend to take the top off any USD gains.
RUNNING LATE
For readers looking for our report of the February results from REINZ, you should know we haven't received any indication about when they will arrive. (If they are weak, releasing them tomorrow while we are all diverted by the RBNZ rate cut might take the glare off them.) It is usual to get them about the 15th. Last year, the January 2024 results were released on February 14, 2024. Update: An hour after we posted this, the REINZ said they will be releasing these results at 9am tomorrow (Wednesday).
VEHICLE LOANS CAUSE A HEARTLAND STUMBLE
A weak NZ economy and more proactive and prescriptive approach to loan arrears (calling in the debt collectors) leads to an almost $50m impairment for Heartland. It's shares tanked about -15% on the update to shareholders.
STILL HOPING
Retailers are actually feeling confident about their businesses’ staying power in 2025, despite not meeting sales targets over the 2024 Christmas season. With a tough year behind them, almost half of retailers are taking a cautious approach to forecasting what lies ahead. Until consumers feel confident about their job prospects, and inflation and interest rates ease, they will continue to see discretionary spending limited.
NZX UPDATE
The NZX50 is down -0.1% in 3pm trade, up +1.1% over the past week, but down -0.3% over the past month. There were 40 gainers today, led by Synlait (+10.9%), a2 Milk (+2.8%), Ryman (+2.5%) and Infratil (+2.0%). There are 42 decliners led by Heartland (-13.9%), Freightways (-2.6%), Oceania (-2.0%), and Spark (-2.0%).
WHAT HOUSEHOLDS THINK
A survey conducted for the RBNZ shows that the current perception of inflation has fallen back to 5.0% from 6.0% in November, but that the one-year ahead expectation of inflation has risen from 3.0% to 4.0%. Expectations of inflation over two to five years hasn't shifted in this survey. Looking more broadly at household expectations, the chances on not making a rent or mortgage payment have not changed and remain very low, while the chances of losing a job, or finding a new one, are also stable. More here.
MORE RENEWABLES CAPACITY
Meridian Energy has received consent from the Environment Court for the new Mt Munro Wind Farm, south of Eketāhuna. When ready, the 90 megawatt wind farm will produce around 300 GWh per year, which Meridian says is enough to power 42,000 homes with renewable energy.
NEW DAIRY SUSTAINABILITY INCENTIVES
Fonterra said it will pay dairy farmers more if they achieve their climate targets. The new incentives will be funded through separate agreements with Mars and Nestlé, who have been working with Fonterra to make progress towards their individual sustainability goals by supporting farmers to reduce emissions. This includes a new Co-op Difference Payment of between 1 and 5 cents/kgMS for qualifying farmers. Plus there are funding incentives to improve emissions efficiency, and based on last season’s achievements, 87% of farmers would’ve been eligible. In addition, there is a contestable 10-25 cents per kgMS Emissions Incentive payment for farmers who achieve the Co-operative Difference and have one of the lowest emissions footprints in the Co-op. That could be paid to about 350 dairy farmers.
THE LOWEST COST PRODUCER
Rabobank has reviewed the main dairy exporting countries and found there has been a structural uplift in global dairy production costs. It is not only us. But they also found that New Zealand was still the lowest-cost producer in 2024. Even so, only higher farm-gate prices squares the circle, although it may be easier in New Zealand. Cost and profitability pressures in rival countries will undermine production prospects.
EV TECH OPENS UP FLEXIBILITY
Electric vehicle batteries bring energy flexibility opportunities, including supporting the grid, and now the NZ government wants to enable the technology. Meanwhile, Chargenet said that although EV sales rose +11% in 2024, demand for its charging network was up +29%, and on some days they delivered over 3000 user sessions.
EYES ON THE RBA
Join us at 4:30pm when we will cover the RBA's policy rate review announcement. Markets expect a -25 bps rate cut to 4.10%. And the self-interested are cheering them on. It isn't certain however. Update: Here is the decision.
SWAP RATES PROBABLY FIRMED
Wholesale swap rates are likely to be up very slightly, but 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 3.81%. The Australian 10 year bond yield is up +1 bp at 4.50%. The China 10 year bond rate is up +3 bps at 1.71%. The NZ Government 10 year bond rate is up +2 bps at 4.70% while today's RBNZ fix was at 4.66% and up +5 bps. The UST 10yr yield is now just on 4.50% and up +1 bp from yesterday. Their 2yr is also up +1 bps at 4.27%, so that positive curve is still at +24 bps.
EQUITIES MIXED
The NZX50 is down -0.1% in late Tuesday trade. And the ASX200 is down -0.5% in afternoon trade. Tokyo is up +0.4% in early Tuesday trade. Hong Kong is up +0.8%, but Shanghai is down -0.2% its open. Singapore has opened down -0.1%. Wall Street was closed for Monday trade, and the futures market suggests it will open tomorrow up +0.5% - and that would be a new all-time record high.
OIL MARGINALLY FIRMER
The oil price is up +50 USc from yesterday, now just on US$71/bbl in the US, and at over US$75/bbl for the international Brent price.
CARBON PRICE DIPS
The carbon price is still within its range, but today is down -50c at NZ$62.50/NZU. The next release of units at the official auction is on March 19, 2025. But that auction's floor price is $68/NZU, so it is heading for a failure. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD HOLDS
In early Asian trade, gold is virtually unchanged from this time yesterday, still at US$2895/oz.
NZD SOFTISH
The Kiwi dollar has fallen -40 bps from this time yesterday, now at 57.1 USc. Against the Aussie we are holding at 90.1 AUc. Against the euro we are down -10 bps at 54.6 euro cents. This all means the TWI-5 is just under 67.2 and down -20 bps.
BITCOIN LITTLE-CHANGED
The bitcoin price is down -0.2% from this time yesterday, now at US$96,331. Volatility of the past 24 hours has still been low at just on +/- 0.9%.
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