What happened Monday

Economy / news

A review of things you need to know before you sign off on Monday; TSB cuts home loan rates, service sector struggling, rent growth vanishes, paid parental leave rises, swaps stable, NZD stable, & more

16th Jun 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
TSB has cut its 1, 2 and 3 year fixed rates. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Heartland Bank has trimmed TD rates for almost all terns to 18 months. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

'SERVICE WITH A SLUMP'
The latest survey of the service sector is not good. Activity dropped sharply and slumped to levels last seen in June 2024 at the start of the recession. BNZ says there are 'clear warnings the New Zealand economy has hit a brick wall'.

LANDLORD INCOME GROWTH VANISHES
Residential real estate investors are seeing no rental growth for residential rents as they flatline. Tenants have plenty of properties to choose from keeping, a lid on rents.

PRESSURE ON GROCERY PRICES LOW & STABLE
The pace of supplier cost increases to Foodstuffs supermarkets remained steady in May, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index showing an average +2.0% increase in what suppliers charged in May, compared to a year earlier. This is the third month it has been at this level. In May 2024 they were rising at a +2.9% rate.

PAID PARENTAL LEAVE
New parents can expect more support to take time away from work to care for their children from 1 July, with an increase to the maximum weekly rate of paid parental leave up from $754.87 to $788.66 per week (+4.5%). The minimum parental leave payment rate for self-employed parents will increase this year from $231.50 to $235 gross per week (+1.5%) to reflect the minimum wage increase on 1 April this year. Eligible parents can receive payments for up to 26 weeks.

NZX50 TURNS UP
As at 3pm, the overall NZX50 index is firmer far today helped by a chunky takeover bid. It is up +0.5% from Friday, up +0.6% for the past week. It is down -3.5% since the start of the year although up +7.9% from this time last year. Tourism Holdings surges on the takeover approach with other gains from The Warehouse, Kiwi Property and Contact. These are balanced by declines from Vulcan Steel, a2 Milk, Sky TV and Serko.

TWO-TRACK BUSINESS LENDING
Based in RBNZ Dashboard data, we have looked at the weakening bank appetite to lend for business purposes and find that after the scrum got screwed by Basel III, the desire cooled; and post pandemic two major banks quietly pulled back much further on supporting the business sector.

TURNING TOWARD INDONESIA
The Government has signed a new halal cooperation arrangement with Indonesia which is expected to create new opportunities for the red meat and dairy exporters. Indonesia is an important growth market, currently worth over $1.1 billion in exports last year. With a population of 280 million and a large middle-class Indonesia is a market getting added attention.

'REPEATED & SERIOUS FAILURES'
In Australia, ASIC today announced an Inquiry into ASX group, focusing on governance, capability and risk management frameworks and practices across the listed group.

THE DISPARITY EXTENDS
Chinese electricity production was only up +0.5% in May from the same month a year ago, maintaining the weak gains that started in November 2024. This is hard to square with their data claim that industrial production was up +5.8% on the same basis.

BETTER THAN EXPECTED RECOVERY
China also reported that its May retail sales rose a very healthy +6.4% from a year ago, well above the +5.0% expected and the +5.1% gain in April. It is a 15 month high. At face value this is a surprisingly strong gain.

STILL STRUGGLING
In their housing markets, China reported that new house prices fell -3.5% and the least year-on-year fall in a year. Month on month they says more gains are now showing. Prices for resales were down more year-on-year, and there are now major cities where they are rising.

SWAP RATES MAY FIRM SLIGHTLY
Wholesale swap rates are likely a touch higher today, and more at the longer end. Keep an eye on our chart below which will record the final positions closer to 5pm. Notice it isn't falling. The 90 day bank bill rate was down -1 bp at 3.30% on Friday. The Australian 10 year bond yield is up +8 bps at 4.24%. The China 10 year bond rate is down -4 bps at 1.64%. The NZ Government 10 year bond rate is up +8 bps at 4.64% and was up +5 bps at 4.59% in the earlier RBNZ fix today. The UST 10yr yield is now up +1 bp from this morning to 4.42%.

EQUITIES MIXED
The NZX50 is up +0.6% so far today on some local support. The ASX200 is unchanged so far in afternoon trade. Tokyo is up +0.9% in early Monday trade. Hong Kong is down -0.1% at its open while Shanghai is up +0.1%. Singapore has opened down -0.4%. Wall Street sentiment has turned positive and the S&P500 futures suggests it may open tomorrow up +1.1%.

OIL HOLDS HIGH
The oil price is up another +US$1 from this morning at just under US$74/bbl in the US, and just under US$75/bbl for the international Brent price.

CARBON PRICE HOLDS
The carbon price is up +25c at NZ$57/NZU on very few trades. The next official carbon auction is on Wednesday, June 18, with a $68 floor price. So it will fail. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD HOLDS HIGH
In early Asian trade, gold is up +US$5/oz from this morning at US$3435/oz and almost at the record high reached on April 22.

NZD STILL HANGING IN THERE
The Kiwi dollar is unchanged from this morning at 60.2 USc. Against the Aussie we are up +20 bps at just on 92.9 AUc. Against the euro we are up +10 bps at 52.2 euro cents. This all means the TWI-5 is now at 67.9 and little-changed.

BITCOIN STABLE
The bitcoin price is now at US$105,780 and virtually unchanged from where we were this morning. Volatility has been low at just over +/-0.7%.

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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20 Comments

by Foxglove. | 16th Jun 25, 4:25pm 1750047951

The New Zealand economy has hit a brick wall.At least according to the BNZ ,as above, it has. Yet, Newstalk etc ZB’s website today, Mr Bridge opines that a corner has been turned and things are on an up. Perhaps then the economy has bounced off one brick wall and is just having a go at another one? For someone, decidedly not in the real know, the economy hardly appears vibrant in so much that it as flat and torpid as has consistently been post pandemic.

by Independent_Observer | 16th Jun 25, 4:54pm 1750049649

Suicidal optimism seems to be a contagion in NZ. While being excessively optimistic in the face of bad conditions it is best to call anyone else who sees trouble ahead and disagrees with you a Doom Gloom Merchant (DGM).

If enough of the herd believe the titanic is unsinkable then it must be reality and those who warn of the danger just need to have a more positive attitude (this has been my experience dealing with NZ in the government/business and social environment the last 10-15 years).

The benefit of never seeing of denying anything bad on the horizon means you don’t have to take responsibility for avoiding such events/planning contingencies/dealing with negative outcomes as in the aftermath of the train wreck you just claim ‘who could have possibly predicted this could happen’ - of course after years of ridiculing and silencing those that tried to raise the alarm bells years in advance eg don’t listen to that guy he’s just a negative DGM, ‘such events could never happen in NZ’).

by IT GUY | 16th Jun 25, 5:57pm 1750053420

Trade accordingly ….

by Phoenix (FKA JC) | 16th Jun 25, 6:02pm 1750053730

of course after years of ridiculing and silencing those that tried to raise the alarm bells years in advance eg don’t listen to that guy he’s just a negative DGM, ‘such events could never happen in NZ’).

He is a bank serf though. Banks like BNZ don't usually have any need for DGM personalities in Aotearoa. They're not big enough.

Perhaps he's on his way out.

by Phoenix (FKA JC) | 16th Jun 25, 5:08pm 1750050532

While everyone seems to be focused more on the weaker-than-expected rise in China industrial production, the important news today is that growth in consumption was much stronger than anyone expected, and the highest growth rate in well over a year.

Fingers crossed.

https://english.news.cn/20250616/2b40924c30974a07acf144fe39183daf/c.html

by Phoenix (FKA JC) | 16th Jun 25, 5:18pm 1750051100

"My biggest fear is the impact that all Angelenos will begin to feel when the labor of immigrants is absent. We'll feel it in the construction industry. We'll feel it in hospitality. We'll feel it at grocery stores. People will begin to notice."

"You think about the mothers who have nannies and housekeepers. They will feel it when there's nobody to do childcare and there's nobody to take their kids to school. You know, you will feel it when your gardener goes away, and you don't know where he or she is. So Angelenos will feel the absence of immigrant labor."

- Karen Bass

Aotearoa, Aussie, Canada, U.S.,....economies cannot operate without cheap, exploitable labor. If you want your upper middle-class+ existences.

https://www.foxnews.com/media/la-mayor-bass-worries-ice-raids-leave-nob…

by IT GUY | 16th Jun 25, 5:59pm 1750053586

Who is this gardener you speak of?

hell I have to mend fences , broken water troughs , fallen trees etc

by Phoenix (FKA JC) | 16th Jun 25, 6:04pm 1750053847

Winter holidays to Fiji then. Courtesy of cheap labor from South Asia.

by Phoenix (FKA JC) | 16th Jun 25, 5:45pm 1750052709

Abu Dhabi National Oil Company is offering to buy Australian energy giant Santos for $8.89 a share in hard cash.

https://michaelwest.com.au/mega-deal-santos-takeover-a-tester-for-jim-c…

by profile | 16th Jun 25, 7:28pm 1750058930

That other carry trade.

"Japan onsold at least 600 petajoules (PJ) of Australian LNG to overseas markets, and potentially 800PJ, in 2024, more than Eastern Australia's annual domestic gas consumption."

https://ieefa.org/articles/churn-and-earn-how-japan-cashes-resales-aust…

by kiwikidsnz | 16th Jun 25, 5:50pm 1750053042

"Now give the Luxon Government credit. It is the only Government to have ever decreased the size of the public service. "

https://www.kiwiblog.co.nz/2025/06/a_small_trim.html

...& they're not being replaced with consultants

https://www.beehive.govt.nz/release/cuts-consultant-contractor-spend-ex…

by powerdownkiwi | 16th Jun 25, 8:29pm 1750062561

Someone's doing Slater's old job.

Quite obvious...

And who said we want less public service? Actually, that's a deal between citizens and elected government - or should be. We want health, education and amenity, and are happy for it to be publicly paid.

Only those who don't want to contribute to a community - usually they feel they are above such folk, often they are rentiers doing nothing useful - spin this line. Luxon's rabble do win one prize though - they are the least representative of New Zealanders, and the most touting for business (irrespective of sustainability, usefulness or other ethics). They most resemble pimps.

Stanford the possible - but too naive and uninformed - exception.

by Phoenix (FKA JC) | 16th Jun 25, 6:31pm 1750055496

Japan’s government has issued rare and explicit warnings about risks in its government bond (JGB) market, highlighting rising yields and significant shifts in debt ownership. This marks a notable departure from the usual tone in official policy documents and underscores growing concerns over financial stability as the BOJ reduces its market presence.

We've been warned.

https://profit.pakistantoday.com.pk/2025/06/15/japan-warns-of-bond-mark…

by Foxglove. | 16th Jun 25, 6:59pm 1750057180

Best not play with dominoes in the dark then. But hazard a guess that is not exactly either uncommon or unheard of nowadays and that does not exclude those involved in the highest echelons of financial manoeuvring globally.

by IT GUY | 16th Jun 25, 7:43pm 1750059793

it feels like that slowly then all at once type scenario?

by Foxglove. | 16th Jun 25, 8:01pm 1750060866

Hemingway? Gradually, then suddenly.

by IT GUY | 16th Jun 25, 8:22pm 1750062128

Yeah , he was smart

I drink to make other people more interesting...

I drove down to Key West once in a V8 red convertible, great place.

by Foxglove. | 16th Jun 25, 8:37pm 1750063065

Hadn’t come across that one before - tks. He had little time and patience for those that ill suited him. In that regard it is interesting that one of his greatest consistent long term mates was Tom Heeney, the ex NZ life saver come boxer who unsuccessfully fought Tunney for the heavy weight title. Hemingway was not interested in those with something to prove. Instead he settled for those that already had something proven.

by Averageman | 17th Jun 25, 7:36am 1750102600

Damn. Helen AND Adern add circa 90% of govt servants. How the he'll did we survive prior to that....

Oh wait, we did.

by kiwikidsnz | 16th Jun 25, 9:21pm 1750065669

I went out to dinner over the weekend with some old friends. One has a kiwi relative who's been in the USA midwest for decades, married to a respectable US citizen, has PR, adult kids & up to now a settled life.

My friend talks regularly with the relative & they are probably both politically aligned (long Leftish) however I was told that now any discussion of USA politics is a real no go zone for the relative & is shutdown quickly. There is a real fear of speaking out of turn & crossing an unknown line that a 3rd party might note for some "official" action.

This is very similar to how my Asian friends & inlaw relatives have usually behaved outside close family (in eg. Thailand Malaysia, Singapore, HK/China).

No longer really the "land of the free & home of the brave" it seems