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 to report today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Heartland Bank has trimmed its term deposit offer rates for most terms of 5 months and longer. No other changes but note that we have added Go Lend to our coverage.. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
JUST SURVIVING VERY SEVERE STRESS
The RBNZ has released the results from the 2024 General Insurance Industry Stress Test. The exercise assessed insurers’ responses to a major earthquake and severe but plausible cyber-risk incidents. The seismic scenario was based on a magnitude 8.7 earthquake along the Hikurangi Subduction Zone off the east coast of the North Island. The scenario was designed to simulate an event well beyond solvency requirements to enable testing of insurers’ preparedness and recovery plans. This scenario would result in widespread damage and a sharp decline in GDP. Participating insurers modelled property losses of $62 billion, which rose to around $100 bln if extrapolated out to cover the whole market. In both cases the policyholders would have been protected per their cover. But the companies themselves would have suffered severe shocks. More here.
BIG STEP DOWN
There was a big drop in the number of new homes completed in Auckland in February, with them slumping -43% from the same month a year ago.
KIWISAVER SURVEY RESULTS
Consumer NZ’s annual KiwiSaver survey reveals satisfaction rising but questions remain. Results from the nationally representative annual KiwiSaver satisfaction survey highlight the strengths and weaknesses of different retirement savings scheme providers. They said the top KiwiSaver providers were Generate – 80%, Milford Funds – 75%, followed by Simplicity – 69%, and those suffering the biggest gripes were ANZ, Smart, and Mercer - not so much for their returns, rather for fees and communication issues.
GOOD COMMODITY PRICES HOLD
The ANZ World Commodity Price Index was flat in April, with dairy and meat price rises offset by falls in forestry and aluminium. The NZD Commodity Price Index fell -1.0% in April from March.
NZX UPDATE
As at 3pm, the overall NZX50 index is little-changed so far today. That means it is up +3.2% for the past week, down -5.0% since the start of the year, and up +5.0% from this time last year. Infratil, Port of Tauranga, Ryman, and Tower lead the gainers as SkyCity casino, Vista, The Warehouse, and Investore lead the decliners.
AVANTI MORPHS UNDER OHLSSON
Non-bank lender Avanti Finance is ... changing its logo. Not in itself notable, but it is an opportunity for them to remind the world how large they have become. "Avanti has grown into a multi-channel, multi-product lender operating across property, auto, personal and business lending. The company has scaled to over 270 employees, supports a network of advisers, dealers and brokers across New Zealand and Australia, and has surpassed $2.8 billion in assets under management – helping more than 300,000 customers to date." It is still essentially owned and controlled by Glenn Hawkins, and is now run by ex-ANZ executive Fred Ohlsson.
THE NZME BOARD STOUSH COMING TO A HEAD
Chairman Barbara Chapman has engineered Stephen Joyce to be nominated for a board position in the incumbent board's battle with Canadian raider Jim Grenon and Caniwi's Troy Bowker.
NO EXPANSION IN MARCH
Household spending in Australia slipped in March from February, to be +3.5% higher than March 2024. Of special note was the very sharp -1.3% dive in Queensland.
RETREAT IN MARCH
There was an even sharper retreat in building consents in Australia in March with a big -15% dive in consents for building apartments.
EXPANDING LESS
In China, the Caixin Services PMI expansion eased back in April, down from March’s three-month high to be below analyst forecasts. This is now the softest expansion in their services sector in seven months. But this Caixin version reported a slightly faster expansion than the official version.
SWAP RATES LIKELY STEEPENING
Wholesale swap rates will likely be little-changed today at the short end but higher for longer durations. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was unchanged at 3.40% on Monday. The Australian 10 year bond yield is up +6 bps at 4.37%. The China 10 year bond rate is up +1 bp at 1.63%. The NZ Government 10 year bond rate is up +5 bps at 4.59% and was up +5 bps to 4.52% in the earlier RBNZ fis today. The UST 10yr yield is on 4.31%, down 1 bp.
EQUITIES MIXED AS CHINA RETURNS & WALL STREET FALLS
The NZX50 is unchanged today, as is the ASX200 in afternoon trade. Tokyo is up +1.0% in early Tuesday trade. Hong Kong is back after its holiday, up +0.6% while Shanghai is up +0.8% in its return. Singapore has opened unchanged. Wall Street ended its Monday trade down -0.8% on the S&P500.
OIL RECOVERS SOME
The oil price is down another +US$2 at US$58/bbl in the US, and US$61/bbl for the international Brent price.
CARBON PRICE FIRMISH
The carbon price is has risen again, up +$1.25 to NZ$51.25/NZU and this time on modest volumes. The next official carbon auction is on Wednesday, June 18, with a $68 floor price. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD RISES
In early Asian trade, gold is up +US$89/oz from yesterday at this time to US$3360/oz, still volatile.
NZD HOLDS
The Kiwi dollar is down -10 bps from this time yesterday, now at 59.6 USc. Against the Aussie we are unchanged at 92.4 AUc. Against the euro we are up +10 bps at 52.8 euro cents. This all means the TWI-5 is now still at 67.0, and little-changed from this time yesterday.
BITCOIN BECALMED
The bitcoin price is at US$94,383, which is virtually unchanged from the price this time yesterday. Volatility has been low at +/- 0.8%..
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17 Comments
Looks like the peaceful Putin government is denying any form of peace unless it's 100% on their terms. He probably can't now, his economy is borked if he tries to move away from a war economy, and peace without much to show for it will be very politically unpopular.
And Trump has worked out Ukraine won't give in even if he withdraws support
It's a pickle
The reality is though ever since the invasion started the Russian advance has been slowed but not stopped. That is despite horrendous Russian casualties and evidences to date that Russia can carry on with doing what it wants to do regardless of any outside intervention , either in the armament of Ukraine, or sanctions, or whatever. The only thing that Putin recognises and respects is force and at present, as Russia remains as the superior force in the conflict, Putin has no obligation to even pay heed to any foreign influence. In other words - you want me to stop, you want me to give back occupied territory? Well make me then! What have you got, and don’t forget I’ve got a red button.
I'd probably rule Putin out as being suicidal, but anything's possible.
But Ukraine can hold Russia back using surplus 1980s gear.
And the EU has 8x the money of Russia
Assuming EU can commit, it's only a matter of time
Yep, I'd say an arms race is starting. Collectively Europe has to do something like Germany achieved in the 1930s.
Sweden for one seems to be setting the pace.
they need to pivot to drone parts big time
Ukraine is making a couple million drones a year, including engines, cameras, etc.
Sorry I meant Germany etc
Hmmm, they probably don't need to if Ukraine are already making that many.
They need a larger amount of modern traditional weapons, without air superiority for instance you just have static trench warfare, with drones.
Amongst the ongoing devastation and tragedy there is a degree of Shakespearean comic relief in so much as Putin’s rather derisive handling of the omnipotent Trump, basically as “don’t ring me I’ll ring you.”
The Commerce Commission has filed criminal charges against Woolworths NZ for alleged inaccurate prices, and misleading specials.
https://www.stuff.co.nz/business/360679585/criminal-charges-against-woo…
A reminder for those who haven't worked on DCF analyses since Uni Finance 101: discount rates really matter. It seems that the Govt is now making it a lot easier to justify spending other peoples money (also = future generations debt).
The Gov't has kept this change very quiet: I wonder if Willis actually understands the implications (I do know that project DCFs were mandatory & ubiquitous in Luxons Unilever career).
"Until last October, projects and initiatives were to be evaluated at a 5 per cent real discount rate – rather lower than the rates historically used in New Zealand, but not inconsistent with the record low real interest rates experienced around the turn of the decade (recall that the discount rates did not attempt to mimic a bond rate, but took account of the cost of both debt and equity). " Now separated into Non Commercial proposals (everything the Govt wants to do but can't justify) starting at 2% & Commercial proposals (everything the Govt doesn't want to do but could justify) at 8%.
Bad advice on public sector discount rates | croaking cassandra
there are no limits to the fu.kery
Wow, 2%!
I think they had only just dropped it to 4%?
It's just to play the game where the Benefit Cost Ratio needs to get to 1.0
But if societal WACC is higher than 2% then they will still be destroying wealth
Just read the linked article. Govt advice also suggests a horizon of 100+ years for the analysis in which case 1% discount rate can be used (used to be 40?)
So future benefit streams can be grown at high assumed growth rates (hard to verify), and discounted back to present value at only 1%. These dudes are klever !
Yes, that little slight of hand combined with going into urgency on this pay equity issue (i.e., no budget for those potential liabilities, so had to 'can' the claims altogether) makes me very nervous - and meanwhile, Judith Collins is on a spending spree?
I doubt we'll ever see those replacement rail ferries and there will be a return to coastal shipping. With one ferry down, it might happen a lot sooner than we think should our forecast revenue positions continue to fall short.
Turbulent times ahead and no work whatsoever on the big ticket items (super and accommodation subsidies).
When do we start saying: worst finance minister ever?
We’ve gone from lolly scramble Robbo, who pilfered the Covid borrowings for govt pet projects, and was dishonest with the public and lacked any accountability for his actions, to Willis, who seems hellbent on saving and cutting in a recession which is the opposite of what should be done.
Roy Morgan’s New Zealand Poll for April 2025 shows the National-led Government (National, ACT & NZ First) on 49% (up 2% points) and the Labour-Greens-Maori Party Parliamentary Opposition on 47% (down 0.5% points) with both failing to muster a majority of support.
New Zealand Government Confidence Rating jumped 17.5pts to 97.5 in April
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