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 over coming months into customer accounts. Update & correction: ASB's distribution of these funds is a rolling process that began in February. The background claim is a similar one 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%.
Daily exchange rates
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91 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.
If you have kiwisaver you may find you have no choice....such is the manipulation.
I don't have Kiwisaver. Funnelling my money to the biosphere eating global economic super organism is also against my principles.
'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.
No, in physics terms a parasite is one who takes from the energy/resource-streams, without actually parttaking. Without actually doing anything. Without producing anything.
All sales people are in that camp, as are anyone in an office; all parasitic.
Hiding behind a money framework - as you so fiercely do - doesn't negate that. Do you grow your own food? Harvest you own energy? Deal with your own wastes?
I very much doubt it.
And do you have children or grandchildren? Every litre of fuel we burn - they cannot. Ever. Yet we aren't addressiing the results of that burn; we're leaving that to them to deal with - but without the energy to do anything to do the mitigating.
There was an academic (a professor, so a first-world incomer, a user of resources at a rate never seen) who advocated 'putting aside a stock of money, for future generations to deal with ramification of 'now'. I regard that statement as unbecoming a professor...
All sales people are in that camp, as are anyone in an office; all parasitic
This is a tad naive.
I’m in engineering not finance. But yes in front of a screen.
I don’t use much energy compared to many people, but I’d like to use less, I’d like everyone to use less. But I don’t think us all living on a farm with a septic tank and solar would actually achieve that.
'I don’t use much energy compared to many people, but yes I’d like to use less."
Not a criticism, rather an observation. The system you utilise is parasitic.
How many (what proportion) non productive people can any society support sans energy? That is productive in the actual work sense.
How do you define being productive without being parasitic?
Producing more than you consume.....without ensuring there is nothing left for the future.
What is production though? Everything's already here, we're just manipulating things for our own needs.
The necessaries of life are short lived, some more short lived than others, but food spoils, clothing wears out, shelter degrades and needs maintainance as does all the infrastructure that supports the afforementioned.
All requires energy (read actual work) to maintain/ replace.
Reduce the available energy and you reduce the carrying capacity of non productive.
Why wouldn't we just live like the Australian Aborigines. They have managed to live for 10s of thousands of years without significantly impacting their environment.
Or a Janaist
There is every chance (some of us) will be
There's a few extinct species that would protest
But way less than disappeared when the crackers turned up.
Since we are getting definitive...What proportion of non productive individuals do you think a society can support?
Depends how much the productive ones are producing.
It does...but remember the qualifier...without f**cking the future.
We have been drawing down stored energy to make up for our inability to provide the energy we require for current demand....reduce or remove that stored energy and what happens?
without f**cking the future.
How do we define that though? Not using any non-renewables?
Using renewables at a sustainable rate....greatly less than current.
While transitioning, using non renewables (or long dated) energy wisely to ensure they are available throughout the transition.
If you search for Georgescu-Roegen, you'll find a graphic - essentially a box within a circle.
There are two input and two output arrows. If one is directly connected with the flow of wither across the box, I'd say non-parasitic.
Indirectly; parasitic.
The stocks (left) the flows across the box, and the wastes, are the real framing of our activities - and our pending predicament.
Reduce it down in scale then. The hermit by himself on the mid ocean rock island living off fish, seals, wild guavas and whatever else edible scroungable, burns his fire 24 hours a day consisting of driftwood and whatever scrub and woodland reachable. How long can it go on for and would the identity not qualify pretty will high up in the ranking of global emissions per head per nation. The point being there are billions of humans doing first and foremost, out of necessity or ambition, whether by choice or chance, just what suits themselves and their ain’t no magic wand that is going to sway them from doing exactly that.
"....
and their ain’t no magic wand that is going to sway them from doing exactly that."
There is....loss of access to energy.
There is a reason why the young are so important....they have energy, theres that word again.
They (generally) produce more than they consume.
The capturing of and profiting from human energy long ago, but for all the time before it was globally outlawed, was slavery. For instance the glory of Rome, the wonder of moderns today lauding the great achievement of such as the Colosseum, nicely ignore just how it actually came into being. Said that to someway demonstrate how human nature at its worst, is always more than capable of exploiting the less fortunate and the more there are of us the worse it is looking. The older generation’s lack of empathy or consideration, despite the fact that they were young once, as to what they are formulating for those that follow. Hence in my opinion, generally speaking, not to be swayed from what’s good for them right now.
The wealthy (not the old(er)) may not be swayed but that is a gamble they choose....for the greatest non productive members of society are the wealthy who consume multitudes beyond their production.
As someone once said...we cant afford the rich.
If the whole argument is about energy, probably the only non parasites are the ones that design or build renewable energy sources. Many sitting behind a screen no doubt. The rest of us are various degrees of parasite, PDK included I suspect.
I'm energy-positive and do my darndest to slow/halt the resource-stream (spent today volunteering at a recycling centre).
Planted a forest with this in mind, over 30 years ago. Captured solar energy.
Yet when I say we should invest in renewables like solar you like to remind me that they are made from fossil fuel so that would achieve nothing.
Do you own your land? How did you get the money to buy it? It feels like you’ve set yourself up nicely but expect the rest of us to live in a declining economy with negative growth and mass unemployment. Boomer I take it?
Depends on the energy source, and the drawdown rate. The ratio is of 'surplus energy' - over and above survival energy. Obviously less people per sunlit acre is a better social proposition than more (making the standard economics 'more is better' belief a falsehood of grotesque proportions.
Surplus Energy Economics | The home of the SEEDS economic model – Tim Morgan
Beyond a certain acre/person ration, it was all artificial, thanks to the fossil injection. Which is temporary. Cities of over 1 million didn't exist before FF,so it's a reasonable assumption they are in trouble post FF.
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?
All of the above.
The causes are multiple, it's more the barriers are disappearing.
AI will likely murder more people than it'll lift out of poverty.
AI will likely murder more people than it'll lift out of poverty.
In the long term maybe. I suspect it will struggle at the moment.
It would be interesting to have a proper wager on 10 years from now. PDK would be stupid to take part as by then the world would be over. Maybe you’re in the same camp now Painter.
Interesting choice of words.
Associate PDK with 'stupid' and I can therefore discount what he says.
And no, I have NEVER said the world will be over. I have pointed out that the pursuit of exponentially-more consumption of a finite planet is madness, not that the world will be over.
But it will be very different - and I teach the skills to negotiate the bottleneck.
"Associate PDK with 'stupid' and I can therefore discount what he says. "
Pot/kettle: Anyone you disagree with is typically abused & libelled as a party hack (whether or not they're actually commenting on your own posts).
If it makes you feel better I don’t think you’re stupid at all, and you will probably be right, humans may indeed run out of energy one day (if we survive that long). I just don’t think it will be any time soon. And I don’t think you or I can stop humanity wanting to grow either. Mother Nature is pretty good at sorting things out, already we’re seeing a reduction in births.
I would say though that if you aren’t interested in money, finance, interest rates, GDP, etc this may not be the site for you.
That exactly why I came here - not for self-reinforcement but to point out the fallacies, where they were being discussed.
But you're just shoe hornng the subject you've obsessed over for 40 years into any subject, no matter how tenuous.
That's more religious than a process of reason.
Mother Nature is pretty good at sorting things out, already we’re seeing a reduction in births
And likely, increases in deaths also.
The range of potential outcomes is too broad.
Plus we have Trump as an accelerant currently. Impulsive and strategy lite, hopefully things will slow down after he's gone.
There will be more calculated versions in the 2030s.
Unfortunately rich stupid people aren't going to disappear with Trump.
Here's a classic idea from ex presidential hopeful, Newt Gingrich,
"Instead of fighting over a 21-mile-wide bottleneck forever, we cut a new channel through friendly territory. A dozen thermonuclear detonations and you’ve got a waterway wider than the Panama Canal, deeper than the Suez, and safe from Iranian attacks."
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.
FG. A perspective few fully weigh when fulminating against yankee imperialism. We are both children of the Cold War era and thus our thinking was manipulated by US propaganda. But at its core lay the truth you express and which history has since proven - the existing alternatives were far far darker.
Ayup. I have stood in both Koreas. South Korea is hardly a bastion of western democracy, but the alternative is fing grim.
And in Khmer Cambodia, they worked out the most cost effective way to dispatch someone was a hammer to the side of the head.
Our current framework needs improvement though.
Students of 2800 will learn from their AI tutor implants of trivial Royal Wars that set the stage for the Oil Wars and later Soil and Foil wars (named for the foil headress soldiers wore to protect from then primitive microwave weapons of the period) culminating in the sacking of New York in the former United States by Kingdom of Greenland's cyborg revolutionary guard who went on to control 3/4 of the rocky inner planets by the 25th Century
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.
Pa1.Only adhered to, to the extent those with UN veto power desired. The breaches were numerous, the RBO routinely disregarded. The only hollowed out purpose remaining was as a set of baselines to which disputes could be referenced by those with little power. If any of us even slightly giggled at the biggus dickusses ruling the imperial empires, the outcome was clearly understood.
Pa1.Only adhered to, to the extent those with UN veto power desired
This overlooks the spirit of the post war world and the deterrence factor of people at least attempting to be seen to working with the rules, and also assuming there'd be some sort consequences for their actions. The US for instance would only attack one Soviet/Russian ally a time, usually once per decade (or vice versa, if you'd like). We've just had 3 in a year.
Ye, there's no doubt the old order that contained the element of restraint on western powers, has significantly deteriorated in recent times. And we have become acclimated to increasingly unpredictable manifestations of the new world order to an extent that worries me. The bizarre is becoming increasingly normal.
Yep, that's my point, the every steepening slippery slope. Until near peer adversaries meet.
"I wonder what a fully-informed (about the real world) report would say?"
Stock up on canned beans?
Learn how to grow them, more like...
:)
And to cultivate a community of people with real skills - food-production, energy-production, maintenance and triage (tools) around you. And get a skill which will be really useful, so you can contribute.
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.
I suspect your lifestyle choices pre-dated your defense of same - just saying. It's the usual.
I did it the other way around; read the Limits to Growth in 1975, and kept learning ever since - including the denial literature. You end up being able to spot spin; if a truism goes into the front end of a book - say from Lonborg or McAfee or Alamby - you know it will come out the other end 'spun'. Like - climate is happening, but we don't have to do anything about it, or the best thing we can do is make more money. Somewhere in the body of the work, usually more than half-way through so the majority never get there - there will be a 'flip'; a piece of cherry-pick narrow enough to facilitate a reversal.
This is unsurprising; how else do you turn a truth into a self-justification not to take responsibility? But it is universal.
No need for mirrors; just to start with the widest possible lens, as dispassionately as possible.
While patronising assumptions these days mostly just amuse me I am regrettably still occasionally irritated by sanctimony. A hangover from being subjected to endless moralising lectures during my formative years.
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.
Ahhh, humanity. It's one of the reasons I loathe deliberate government policy to grow population. Humans are at their best in small communal settings around the Dunbar number. The bigger the population, the more the nuts gather critical mass.
Yeah, with you there Palmy. But doesn't stop me being fascinated by the planets heaving metropolises. Concurrently horrific and a marvel.
And yet
The bulk of people are drawn to cities
The wonders of marketing in a financialised society, accompanied by sinking baseline syndrome.
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.
Having spoken to a marine engineer in the last wee while, the cost he explained for parts, or a new engine from Europe was insane to me, and this was only for a medium sized commercial fishing boat. Japan will surely be the better option cost, and reliability-wise. If not cost, then at least reliability which will reduce long term costs.
A new generation of investors doesn’t want to wait for the traditional market open while the tradfi bros are out on the golf courses. The crypto bros are stealing their thunder.
Crypto exchange Hyperliquid offers 24/7 perpetual futures for commodities. The cumulative volume on Hyperliquid’s oil futures surged to $7.3 billion on Thursday from $339 million on Feb. 28.
The ability to trade highly volatile assets with leverage 24/7 carries real market risk, leading to large liquidations during sudden price moves.
https://www.wsj.com/finance/commodities-futures/oil-futures-perpetual-c…
One year swap now >50bps above the OCR. And with 3 weeks until the next OCR announcement, its quite possible there could be a >75bps difference (or even more) between the 1 year rate and the OCR at that time.
A gap that the RBNZ will be getting very uncomfortable about if swaps keep on rising (which in my view will continue to happen while the situation in Iran is uncertain).
The larger this gap becomes, the more likely it is that they may need to start hiking in 50bps increments. Especially if the government is not intending to do anything to reduce the impacts of imported inflation.
edit: going through the RBNZ wholesale interest rate close (B2) dataset, it looks like the last time this situation occurred was in August 2021 and we all know what happened next. (They allowed the 1 year swap to go up above 1% while they left the OCR at 0.25%....risky business. Gambling that things outside their control will fix the issue, instead of using the one tool they have to take corrective action to maintain their mandate).
How will raising the OCR reduce inflation from higher oil prices IO ? All a higher OCR will achieve is to hurt consumers that are already hurting from higher petrol, food, goods and service prices (becaue of higher transport costs) even more.
That's what the OCR does. It hurts mortgage holders to decrease the disposable income and thus change spending behaviors and slow the velocity of money. A blunt and outdated tool based on a time when a greater percentage of the population had mortgages, thus reducing it's effect today.
A while back, pre paid comments subscription stuff, someone mentioned a method of blocking comments from some ‘contributors’ from showing on the thread they were reading. Does anyone remember what that might have been?
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