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
Kiwibank raised their offset floating rate by +10 bps to 5.75%. 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
Southern Cross Partners trimmed their rates by -25 bps today to 5.50%. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
PAYOUT COMING FOR ASB CUSTOMERS
Following ASB's [somewhat surprising] $135.6 mln agreement to settle class action relating to home and personal loans between 2015 and 2019, the funds will be distributed tomorrow into customer accounts. Although their customers will be pleased to receive this, they must remember that ASB has acknowledged that the funds were taken inappropriately in the first place. This is the same case that ANZ is still fighting. (By the way, injecting $135.6 mln into customer bank accounts in March, if it is used to spend because of inflation pressure, could have as much as a +1.2% impact on March retail sales.)
LONG FLAT TRENDS EMERGE
The REINZ released its February sales data today. The data in that describes a flat housing market. February sales volumes and selling prices were unchanged year-on-year. In fact the national median selling price is little-different to what it was in December 2022, after the pandemic run-up/down. Sales volumes are very similar to what they were in February 1995.
MINIMAL GAINS
StatsNZ released its February retail sales tracking via electronic cards today. That shows retail spending bounced in February, rising +1.4% over January when seasonality factors are accounted for. That reversed the large -1.1% unexpected fall in January. Year on year, the February level is +1.5%. Which might be positive until you realise this data is not inflation-adjusted. Worse is that, given the global geopolitical situation inducing general risk aversion, March is hardly likely to show an improvement.
DIGGING INTO HOW US TARIFFS MIGHT AFFECT US
And the RBNZ has been doing work exploring the implications of changes in US tariff policy for the New Zealand economy, and have published their analysis. Among the things they found were that over time the tariff shock is disinflationary in the short run as it leads to trade diversions and appreciation of our currency which lower import prices. The disinflationary pressure induces lower interest rates supporting the domestic economy. But overall, despite the weaker export sector, the effect on domestic real GDP is relatively modest. Over a longer timeframe however, global supply chains become more inefficient contributing towards higher import prices, creating some inflationary pressure by around 2030.
SERVICE SECTOR SLUMP
Even less positive was the BNZ/BusinessNZ release of their February services PSI. It unexpectedly contracted. BNZ economists say these service sector figures are 'are real disappointment' and suggest 'the economy is growing at a slower pace than we might have expected'.
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.
NZX50 DECLINES AGAIN
As at 3pm, the overall NZX50 index is down -0.3% so far today. It is heading for a +0.3% rise over the past five working days, and is down -0.7% from six months ago. From a year ago it is now up +8.1%. Market heavyweight F&P Healthcare is down -1.9% so far today. There were 29 gainers led by EBOS, Chorus, Freightways, and Infratil. There are 49 decliners, led with Kathmandu, SkyCity casino, AirNZ, Vista and Serko.
HURRELL TO STEP DOWN
The Fonterra group CEO has handed in his [required six month] notice. Miles Hurrell says Fonterra is 'entering the next phase in its strategic implementation', which 'marks a natural turning point for a new leader to step in while I consider what’s next for me'.
COST OF DOING BUSINESS
Meanwhile in Australia, the New South Wales Supreme Court has ordered Macquarie Securities to pay a AU$35 mln penalty for multiple systems-related failures that caused the misreporting of tens of millions of short sales over several years.
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SWAP RATES HIGHER
Wholesale swap rates are likely to be higher today (especially for rates 2+ years) as the general tone remains negative. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was up +2 bps at 2.52% on Friday. Today, the Australian 10 year bond yield is up +4 bps at 4.98%. The China 10 year bond rate is up +2 bps at 1.83%. The Japanese 10 year bond is unchanged at 2.24% today. The NZ Government 10 year bond rate is now at 4.74%, up +6 bps from this time Friday. The RBNZ data is now 'prior day' with the Friday rate unchanged at 4.66%. The UST 10yr yield is down -3 bps from this morning, now back at 4.26%.
EQUITIES MIXED
The local equity market has fallen -0.4% in Monday trade so far. The ASX200 is down -0.3% in afternoon trade. Tokyo has opened on Monday down -0.7% in its opening trade. Hong Kong is up +0.3% but Shanghai is down -0.8%. Singapore is up a minor +0.1%. Wall Street futures are giving the signal that the S&P500 will open its week tomorrow up +1.3% because they expect a relief rally after some [as yet unexplained] 'good news'..
OIL STAYS ELEVATED
American oil prices have stayed high but barely changed with the WTI benchmark still at just over US$98.50/bbl, while the international Brent price is up +US$1 to just over US$104/bbl. There are still no ships transiting the Straits of Hormuz, other than a handful of ships with Indian LNG - with Iran's blessing.
CARBON PRICE UNCHANGED
There have been a few larger trades so far today on the secondary market, but the price is unchanged at $44/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD SOFTER
In early Asian trade, gold has eased again from this morning, down another -US$6/oz and now back at US$5012/oz. Silver is down -50 USc to US$80/oz.
NZD LOWER
The Kiwi dollar is up +20 bps from this morning's open against the USD, now at just under 58.1 USc. Against the Aussie we are up +10 bps at 82.8 AUc. Against the euro we are up +10 bps at 50.7 euro cents. This all means the TWI-5 is now just over 61.8 and up +20 bps from where we were this time this morning.
BITCOIN FIRMS
The bitcoin price is now at US$72,739 and up +1.9% from this morning's open. Volatility has been modest however, at +/- 1.6%.
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29 Comments
Interesting overview about the pitfalls of Elon Musks upcoming SpaceX IPO
https://youtu.be/8rS3fTbC7TE?si=ofTx9nE4DxRWkcFv
The short story is:
- merge the social media service formally known as Twitter with XAi. Twitter has falling revenues and falling user bases
- Merge XAi with SpaceX. XAi has about 3% of the AI market, so will unlikely come out on top of that race
- Claim SpaceX's potential userbase is 1 billion customers for Starlink. Which exceeds the amount of people that can afford it, who don't have access to a faster service.
The cherry on the cake is that various super funds will likely hop on board.
Personally I wouldn't touch anything Herr Musk has to offer with an extra long barge pole. He's not getting 1c from me to fund his efforts at political and social engineering.
'Over a longer timeframe however, global supply chains become more inefficient contributing towards higher import prices, creating some inflationary pressure by around 2030.'
I wonder what a fully-informed (about the real world) report would say?
The next resource-grab: BREAKING: PMs of Norway, Canada, Denmark, Finland, Iceland & Sweden Speak in Summit | AC1Z - YouTube
That the world is fragmenting into various poles.
Diplomacy and rules have given way to might is right. There is little to no international policing, so expect many more conflicts brew up in coming years. As well as more political violence, and potentially civil wars.
Industry will have to re-adjust to shifting alliances and access into some areas but not others. Some things will be in short supply or not at all. The stock market will rationalize and many people's savings and pensions will fly away.
Or
LIMITS TO GROWTH
Which turns out wasn't due to physics, but our own incapacity to aim for balance rather than more for infinity.
Record us equity futures selling on Friday
Record us equity futures selling on Friday
Yet ratty and the important cryptos are flying. Since strikes on Iran, BTC Bitcoin is up roughly 4-7% and taken the thunder from gold.
Of course capital flight is an obvious explanation (using System 1 thinking).
Talk of Dubai freezing capital flight
No doubt. Capital will no doubt be more difficult to release, depending on respective corporate structures.
What is the balance in a complex poorly understood biological system that we live in? The number of flies, ants, fish, birds, people etc in ecosystems with changing boundaries and climate zones?
It's certainly not continued consumption of way more than is needed to survive healthily.
You don’t think we’re about to see some massive growth from AI and robotics? I’m certainly more productive thanks to AI.
Using what energy-source and processing which remnant resource-stock?
Just stay with finance - it doesn't require knowledge of reality.
What did you do? And what do you do now? You strike me as parasitic - a screen-starer rather than a physical contributor.
Surely a parasite is one that takes more from the state than they put in, and that definitely isn’t me.
You don’t think we’re about to see some massive growth from AI and robotics?
I think that'll be overshadowed by what'll unfold over the next 5-10 years.
Are you talking energy crisis, war, civil unrest, unemployment? Maybe all of the above, but which is the cause?
Pa1nter.Some portray the world sliding into a dark new chapter where the rules based order that supposedly regulated conflict and moderated excesses, is suddenly collapsing. These pipe dreamers appear to not be aware of the widespread unilateral and often brutal projection of hard and soft power over our century by powerful states. As tycoon Leone Helmsley famously observed 'only the little people pay taxes'.
Yep WW1 dismantled and swept aside much of the European royal houses and attendant aristocracy to be replaced by those of the tycoons, banking, oil, industrialists, you name it, and of course ushered in the USA , on the world stage, the rising super power with many and many of those sort of characters in their ranks. Out with the old and in with the new in other words and the latter knew full well how to buy political power and reward. You might though speculate how it might be now if a counter movement under a red flag of hammer and sickle hadn’t roared into action simultaneously like a hungry bear.
You can be conscious that nations have not totally behaved themselves, but also identify a shift in behaviour. These rules did not totally eradicate the actions you have mentioned, but were roughly adhered to in a way that allowed for much more peace than the centuries leading up to their adoption.
There is now less restraint and little opposition. The way these things tend to work out is the conflict spreads, and rarely retreats.
"I wonder what a fully-informed (about the real world) report would say?"
Stock up on canned beans?
USD ~2 Billion a day, pretty soon they'll be talking about real money...
https://www.csis.org/analysis/iran-war-cost-estimate-update-113-billion…
KKN. Cheap vs the eventual cost of confronting a violent nuclear armed regime intent on dominating the Middle East !
Be careful, the Israelis won’t be happy about you portraying them that way.
Good comeback. Proxy forces don't count.
Bollocks.
The (energy) cost of re-accessing the energy under the Iranians. That's the real cost.
The Iranians wouldn't be interested in weapons at all, if they didn't have to stave off the threat.
pre-held self-interest biases are easy to spot...
Yep, mirrors can be useful for that.
Not so sure about that? Religious maniacs of all stripes are never happy unless they can convert non believers, by force and genocide if neccessary.
Yes but before taking them to the wall, subject suspected apostates to aggressive party political broadcasts to give them an opportunity to recant.
Wow. Some of the world’s strongest industrial moats belong to 100+ year-old marine engine companies in Japan.
Japan Engine and Mitsui E&S. Japan Engine’s share price has risen a whopping 30x in three years, while Mitsui E&S is up roughly 16x since 2022 on strong demand for large-vessel diesel engines and related shipbuilding investment.
That's outperforming Nvidia and other AI high fliers.
You're not going to hear about this at the water coolers / BBQs in Aotearoa. Or from Granny Herald or Sam Stubbs.
https://asia.nikkei.com/business/markets/equities/japan-shipbuilding-re…
The price isn't rising for very nice reasons.
But good to see you're still chasing rainbows.
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