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). Updated with latest swap rates in chart.
MORTGAGE RATE CHANGES
The Police Credit Union cut its reverse mortgage rate by -39 bps today to 7.25%. All current mortgage rates are here. And note, you can compare mortgage offers with our new calculator that takes into account other costs and cashback incentives, here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Heartland Bank raised its 7 and 11 month rates to be attractive. . All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
A -45 BPS RATE CUT
BNZ has trimmed its Business Overdraft Base rate from 11.40% to 10.95%.
AN ABRUPT SHIFT
Despite these retail rates cuts, the pressure in the wholesale markets are going the other way. Liquidity pressure are rising because those foreign investors who supply the funds for swap transactions are suddenly scarce. Here is a bank economist's view.
NZ ONLINE SCAMS CODE LAUNCHES
Commerce and Consumer Affairs Minister Scott Simpson says the launch of the New Zealand Online Scams Code on Monday is a key action from the NZ Anti-Scam Alliance, launched last year. It sees Tech New Zealand partnering with Google, Meta and TikTok in a Code featuring 38 "concrete commitments" to combatting online scams, spanning blocking, reporting, takedowns, advertising, email/messaging, law enforcement, intelligence sharing, consumer communications, and future-proofing. The Code is based on Australia's Online Scams Code, developed by Australian industry association Digital Industry Group Inc. The Code is voluntary and open to any digital industry organisation to adopt for its own use, with the aim of improving digital protection for consumers. Simpson says the Government will be monitoring the code’s success, and will make adjustments if needed.
TAKE A BREAK AND DO OUR QUIZ
Our quiz has been updated for this week's edition. You can do it here. And a new one will be added every Monday.
NEW FARM APPETITE FOR BORROWING
January data released by the RBNZ today for rural lending shows lower seasonal appetites, but still elevated demand for dairy and livestock meat farmers. But lending to horticulture was notably low. January lending to dairy farmers was up more than +80% above year-ago levels, to sheep & beef farmers up +55%. But to horticulture it was down a sharp -4%. The +$300 mln new dairy lending was a record high for a January. The +$200 mln for sheep & beef farms was also a record high for a January. (but to be fair, these C70 series don't go back too far.)
LESS TRANSPARENCY
The 'new' Dawn Meats controlled Alliance Meat company has said it will no longer publish its buying schedule. It will still have one, it just won't make it available to farmers of the wider market. Alliance suppliers are going to have to shop around the quotes they get from Alliance buyers to make sure they don't get taken advantage of. They said "We will no longer be issuing a schedule in the North or South Island. Our livestock representatives have the updated schedules for the week ahead and details of the fixed contracts that are available. Please contact your livestock representative to discuss pricing."
NZX50 DUMPED
As at 3pm, the overall NZX50 index is down -3.0% so far today. That leaves it down -4.0% over the past five working days, and down -1.1% from six months ago. From a year ago it is now up +4.7%. Market heavyweight F&P Healthcare is down -1.7% so far today. Sharp NZX50 declines leave Goodman Property & Serko as only gainers while Tourism Holdings, Hallensteins, Fletchers and Air New Zealand top the losers.
BROKERS & ACCOUNTANTS
In Australia, Commonwealth Bank has reported two mortgage brokers and a string of accountants to police as it works to unravel a gigantic loan fraud using fake documents and international funds that could extend to AU$1 bln, the AFR is reporting.
INFLATION RETURNS
China's CPI inflation rate jumped +1.0% in February from January to be up +1.3% from February a year ago. That takes them to a three year high. These were much sharper rises than expected and rises were expected. If both the US and China are now in a sharp-rising inflation period (and this data preceded the Iran crisis), then there is little chance New Zealand will be avoiding this pressure. Their beef prices are up +9.6% from a year ago, lamb prices up +6.6%. Dairy prices there are down -1.1% on the same basis however.
DEFLATION FADES
Meanwhile China's producer price pressure eased in February, down just -0.9% from a year ago after their third [small] consecutive rise in month-on-month.
MORE WORK, MORE OVERTIME PAY
And here's something we don't normally look at. Business is picking up in Japan, enough that there is a notable rise in overtime pay there, the most since 2022.
SWAP RATES JUMP
Wholesale swap rates are almost certainly rising aggressively today as risk premiums explode again. 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 2.48% on Friday. Today, the Australian 10 year bond yield is up +14 bps from this morning at 5.00%. The China 10 year bond rate is up +1 bp at 1.79%. The Japanese 10 year bond is up +6 bps at 2.22% today. The NZ Government 10 year bond rate is now at 4.70%, up +19 bps from this morning's open. The RBNZ data is now 'prior day' with Friday rate up +4 bps at 4.49%. The UST 10yr yield is up +7 bps from this morning, now at 4.21%. All eyes are still on the US credit spreads which are rising on top of this.
EQUITIES TURN DOWN AGAIN
The local equity market has now fallen -3.3% in Friday trade, so far. The ASX200 is down -4.2% in afternoon trade. Tokyo has opened on Monday down -7.1% in its opening trade. Hong Kong is down -3.2% and Shanghai is down -1.6%. Singapore is down -2.9%. Wall Street will open tomorrow much lower. The S&P500 futures market is pricing it a -2.1% drop at this time, but that is shifting fast too.
OIL LEAPS, ESPECIALLY IN THE US
American oil prices have leapt to match the international brent price. WTI is up +$24, now at just under US$115/bbl, while the international Brent price is now just under US$114.50/bbl. This is going to have a dramatic impact on US pump prices later today (not to forget ours). These prices are now at the same level they were on June 6, 2022 in the middle of Russia's war on Ukraine.
CARBON PRICE FIRMISH
There have been a few good-sized trades today on the secondary market, and the price is up +$1 at $45/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DROPS
In early Asian trade, gold has fallen from this time morning, down -US$102/oz or -2% and now at US$5070/oz. Silver is down to US$82/oz.
NZD DROPS AGAINST THE USD
The Kiwi dollar is down -40 bps from this this morning against the USD, now at just on 58.6 USc. Against the Aussie we are unchanged at 84 AUc. Against the euro we are also unchanged at 50.9 euro cents. This all means the TWI-5 is now just over 62.4 and down -30 bps from where we opened this morning.
BITCOIN EASES FURTHER
The bitcoin price is now at US$66,143 and down -1.1% from this morning's open. Volatility has been modest, at +/- 1.8%.
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53 Comments
Oil up, NZD down. Glad I'm driving an EV.
Norway has by far the highest incidence of EVs in the world when measured as a share of new car sales and on a per‑capita basis. The irony being of course that Norway has derived much of its wealth from O&G.
Countries like Japan have an extensive electrified public transport network, which means that h'holds and individuals can function in society without a car - Osaka to Kyoto is only approx 6 kiwi pesos, even though this is city to city.
So even as a country that relies on oil imports, this is a good thing. But interesting to note that Japan's distribution system is largely road (+80%) and uptake of EVs is not as high as you might expect. Very little freight is delivered by train.
Official data reports that 12% of China's vehicles are now EVs, with fuel sales plunging 5.7% in 2025. China now generates 40% more electricity than the US and EU combined.
Umm, what you think has been happening to electricity prices in this country?
Well I have solar so I’m partially hedged on that front. At least most of the electricity consumed in NZ is produced here.
And electricity is a lot cheaper per than petrol to start with. According to AI:
- Charging an EV at home costs the equivalent of roughly $0.40 per litre of petrol.
.
Charge them for the lice
Extra for the mice
Two per cent for looking in the mirror twice
Here a little slice
There a little cut
Three percent for sleeping with the window shut
Petrol price is cost + excise plus distributers profit plus retail profit +15% gst, solar at home cuts out a few middlemen and those bastards in the middle east, but as PDK will tell you solar panels cost oil to make and distribute to NZ...
Everybody raise a glass to the master of the house!
Yep, its good to be rich in times of strife... just like it always has been?
In the middle, DC?
At the start, surely?
He knows when it's going to end 😉
Middle of the start
Can report June 2022 was paying $2.839 diesel and from $3 to $3.10 for 95. by August 2022 diesel around $2.40+ and 95 $2.62.
Winter before Covid I was paying $1.56 in QTown and thinking that was expensive.
are we running out of this shit? Still you can refill diesel at Twizel and -2c in 3 mins..... and get to Otaki with the aircon on.
There will still be those who fiercely insist that this war is something other than a scrap over energy resources.
Scratch the surface, and those folk will have a personal narrative requiring that the energy-depletion, energy-drives-money reality, has to not be true.
Thus the 'this is to avoid the Epstein files', and similar rubbish. Netanyahu talked Trump into this, but Netanyahu is smart enough to know there is no alternative to fossil energy - and that most of it is under Islamic floorboards.
And we're into the last doubling-time.
Guyana oil stocks the last hurrah?
there is oil between Timor and Aussie still to be found
"And we're into the last doubling-time. "
That we are
It may have just dawned on the Alliance Freezing Company farmer shareholders that it has only just dawned on the new owners Dawn, that their due diligence for their purchase did not sufficiently explore or understand the longstanding complexities of the procurement of livestock for the NZ meat industry. A disturbing and unpopular feature of Alliance’s policies in this segment has been the distortional influence of undisclosed intermediaries. As such with this new system being implemented, looking more covert than overt, it is hard to see this as being a productive development for the company.
Most companies are secretive with pricing now, which is annoying for smaller farmers. Unlike milk, logs, kiwifruit etc there is preferential payment to certain suppliers.
Exactly Hans and there is nothing like that suspicion of a “preferred payment” to arouse resentment and distrust. I believe it was a Southland farmer years ago who coined the phrase of the “shiny arses” making the deals. Would suggest there is enough hidden already in the sector without deliberately hiding more.
Goodness, that is a coded comment Foxglove.
Could you please explain 'distortional influence of undisclosed intermediaries'. Without naming names!
If it isn't a good move for the company. Do you expect farmers to change their allegiance?
Don’t need to. There has been plenty of reporting on that particular feature, concerning lets say a corporate aspect, by the regular rural columnists on here.
Gaspy: for 95 petrol a 50cents/litre price increase between Petone ($2.58) & Newtown ($3.08) today. 13.5kms/20mins +$30 for a 60lt tank = $90/hr rate
“These prices are now at the same level they were on June 6, 2022 in the middle of Russia's war on Ukraine.” - was that when the NZ Labour government caused global oil prices to go crazy (according to many commentators)
If you have rising oil prices AND the RBNZ have a stimulatory monetary policy position AND you keep massive fiscal spending going at the same time, inflation is going to go up significantly.
And if you are the Labour government in charge of the economy at the time, and you can't see that you need to significantly reduce deficit spending when these conditions occur, then you are an economic idiot.
But nice strawman argument.
So are we going to see National significantly reduce deficit spending, and the RBNZ raise the OCR this time around if fuel prices do increase? That will make for a very interesting election.
I don't know - I'm not Nicola Willis.
But what we don't want to be doing is dropping rates (or even keep them steady), while oil prices skyrocket, and do a massive deficit spending program that lasts months/years after it is needed (Labour may do this if elected). Unless of course we want the CPI back above 5% (again) and the OCR back up again 5% (again).
Another lever we should/could be looking at is using taxes to control inflation instead of or in conjunction with the OCR. Increasing taxation reduces aggregate demand and thus consumer inflation. But nobody seems to want to go there even though it might be a very good option for us as a nation. Instead our voting base seem to just want the RBNZ to cause a lot of pain for mortgage holders by raising the OCR to contain inflation if/when it shows up.
It’s hard to find the stats but from what I can tell the 2025 deficit is pretty similar to the 2023 one. So in theory National are stimulating the country to a similar level as Labour were in their last year. In fact it all looks pretty similar, except this time our economy isn’t growing much to start with, so any kind of demand reduction will really hurt.
I’m not sure how raising taxes to reduce demand would hurt less than raising the OCR?
If we raise taxes, any extra money from taxes is available for the government to spend on useful things. Rather than the banks choosing.
And affects all income earners rather than differentiate between mortgage holders and others
And when they get lowered the governments screwed. Imagine what would have happened in that decade after the GFC!
Savers do well when the OCR is increased, it doesn’t really go to the banks.
Incorrect. Taxes simply delete money created by govt so increasing taxes alone doesn’t free up more money, however it could be argued to allow greater govt spending. If we have a stagnant housing market, consumer spending low and soon to be lower with increased transport costs eating into disposable incomes as well as the flow ok hike in food costs and other essentials (line charges up again 1/4/2026 in my area) how do we stimulate or spend our way out of this? The answer is simple: GDP is a very flawed measure, we relied on housing to bolster our economy for decades and we are far too reliant on imported energy. We need greater solar subsidies, long term thinking in govt vs 3 year numpties and most importantly, a more educated public.
Regarding taxation....it is possible to better 'share the pain' of inflation across the economy. At the moment inflation hits mortgage holders the hardest/the people with the most debt (rightly or wrongly) ie mostly young FHB's who have the most debt and thus interest rate risk/exposure.
Using taxation, the government could reduce the deficit by keeping spending the same, but increasing taxation on other parts of the economy. Eg those who are mortgage free and are well off. It wouldn't be politically popular though with that group of people but at least it would spread the pain across the economy more - instead of it really hitting a smaller group of people especially hard.
Re deficit spend. Yes both sides should do better on spending. As Buffet said that any politician who spends more than 3% of GDP should automatically be disqualified from re-election. I 100% agree with this. Doing what we did in 2020 where we massively overspent and simultaneously dropped rates to 0% and imported high oil and shipping costs from abroad was the recipe for economic self sabotage.
I agree with low deficit spending too (although 2020 was quite different to any normal year!) Luckily both National and Labour have a good track record of keeping debt fairly low, except for post Covid. Remember it was Cullen that got our debt down to such low levels in the first place.
A tax instead of OCR would need to reduce demand, so it probably can’t just be on the rich. Most of it would probably be paid by the middle class, the same ones hit by interest rates. And keep in mind you can avoid almost all interest rate hikes by splitting and fixing long. But I do agree it has got merit and should at least be considered.
"while oil prices skyrocket"...wouldn't much higher fuel prices do part of the job for the RBNZ anyway, if oil stays elevated then that will take more discretionary spending out of households, in turn that surely takes a fair chunk of spare capacity out of the economy? Interesting times ahead.
YES but the CPI is based on price not purchasing volumes...
be quick..... to fill up the car
they reckon at 150-200$ oil it starts causing demand destruction.
I actually did fill up today (thirty cents a litre higher than last week)...also watched a great reel where the joker explains all the effort to get oil and that even at $4 a litre its cheap compared to paying $14 for a pint and how easy it is to brew beer compared to syphoning dinosaur juice out of the ground, refining it and then carting it across the ocean...demand destruction (maybe not destruction more decline) for hospitality, retail and construction is on the cards if brent sticks at $110-$120 considering the NZD factor as well? Again, interesting times.
at my gull last week a local farmer had 1000L diesel tank on back of trailor...
it was not unexpected and you use it anyway
You could say that about all inflation, it will fix itself by reducing demand. Unless it doesn’t, then you’re Turkey etc.
Yep, but I am guessing broader hyper inflation is different to a supply shock due a stretch of water being shut...fair shout though.
In my view mortgage rates are going to be heading back to where they were early 2025 in the coming weeks unless a miracle occurs that drives swap rates back down. Watch this space.Given where oil prices are they may then head even higher over the coming months as we import that inflation (oil/shipping costs) and it works its way through the economy.
Swaps are hitting 12 month highs (and going vertical) now so back at early 2025 levels. Banks will need to manage that interest rate risk to balance their asset/liability positions - hence mortgage rates will be on the rise.
Trump reckons the war will be over any day now. Let’s hope he’s right.
He was also going to end the war in Ukraine in 24hrs. Wishful thinking - this current mess is in my opinion going to take months or even years to resolve itself. Iran could be completely destabalised for a long time and until that uncertainty is resolved, and a new order is established in the country (that Trump and Netanyahu approve of), oil prices will likely remain elevated.
Best case might be months in my opinion. Say some form of resolution mid-year. But this could easily drag on for 12 months or more as its probably going to require a civil war in Iran for Trump and Netanyahu to achieve their aims (removal of the current leadership) - as they won't want to put troops on the ground so they will supply weapons to whatever local group (Kurds?) they think might be in their best interests. Could get really ugly and not just destabalise Iran but politically could destablise the US even more (living costs go up via imported inflation and people don't want to be involved in another conflict)
High chance that he'll claim victory early and downplay the rest
This war has ages to go
no one has said
We will turn them into a glass parking lot
yet
Willis not going to drop fuel tax. I think that’s sensible. https://www.stuff.co.nz/politics/360948836/ministers-dismiss-calls-cut-…
Not .... yet. but if this drags on she will because it will be a vote winner.
its like a bonus prize she can return for votes.
When demand is greater than supply, the last thing you want to do is artificially lower the price! That is literally throwing fuel on the fire.
You mean like offering interest free money for student loans?
I think most people who were not paying attention will at $3 L petrol and a 10% kiwi saver drawdown, not that there is anything Cant-get-a-break-Luxon can do, this show of force is aimed at China not NZ. This is a show of power, hit Taiwan and this will happen to you in the Taiwan strait.
The more this mess continues the more toxic debt unsupported by income (speculation) will become. Private equity is already choaking on its greed. Anything that moves via oil is next....
🔥
Market Summary > E-mini S&P 500 Futures
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USD−107.75 (1.60%)today
9 Mar, 1:57 am GMT-5 • Disclaimer
CME_EMINIS: ESW00
Its not open yet i would be more focused on trading european futures right now
I think tonight US bombs the shit out of oil facilities in IRAN
If the UAE keeps getting hit they may also step into fray
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