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
There are changes to report today from TSB and the Co-operative Bank. There are changes also from China Construction Bank, WBS, and the Police Credit Union. We have a review of the situation and prospects here. 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
There are changes to TD rates today by the Co-operative Bank, WBS and the Police Credit Union. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
DOUBLE WHAMMY
There was a sharp reversal in home loan affordability for first home buyers in February, after a double whammy rise of lower quartile house prices and mortgage interest rates in the month.
BETTER
Fonterra has raised its farmgate milk price again and announced an increased profit. It is now forecasting a milk price for farmers of $9.70 and sees dividends totaling 40c a share. Interestingly, Fonterra's payout indication is above every main bank economist forecast now.
WORSE
Fitch has adjusted its credit rating outlook on New Zealand's sovereign situation to Negative from Stable but it reaffirmed its underlying rating at 'AA+'. They say driving the shift is because meaningful debt reduction is becoming 'more difficult to envisage' and the upcoming election adds uncertainty.
STABLE (?)
MBIE is now reporting fuel stock and fuel shipment data two times a week. Updates are published on Monday and Wednesday afternoons. The latest Monday one is here for Wednesday, March 18.
DONE OUR QUIZ YET? NO? DO IT NOW
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 LOWER
As at 3pm, the overall NZX50 index is down -1.0% so far today. It is heading for a -2.3% weekly drop, and down -2.1% from six months ago. From a year ago it is now up a net +6.1%. Market heavyweight F&P Healthcare is up +0.9% so far today. There are only 21 gainers across the whole NZX equity board, led by the Warehouse, EBPS, Vista and F&P Healthcare. But there are 64 decliners, led by Gentrack, Ryman, Genesis and AirNZ.
ALMOST $90 BLN TRADED IN ONE WEEK
Last week, the NZGB secondary market turned over $86.9 bln, the most in 2026, and the fourth highest week ever. (The highest weeks were the three weeks November 28 to December 12.)
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SWAP RATES JUMP
Wholesale swap rates are likely to be sharply higher today on building global uncertainty and not helped by the Fitch downgrade. We have seen rises of +10 bps for the one year, so far, and more for two and three year terms. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was up +1 bps at 2.52% on Monday. Today, the Australian 10 year bond yield is up +10 bps at 5.10%. The China 10 year bond rate is little-changed at 1.83%. The Japanese 10 year bond is also up +4 bps at 2.31% today. The NZ Government 10 year bond rate is now at 4.88%, up +12 bps from this morning. The RBNZ data is now 'prior day' with the Friday rate up +5 bps at 4.73. The UST 10yr yield is up +22 bps from this morning at 4.42%, but +16 bps from Friday.
EQUITIES VERY NEGATIVE
The local equity market has fallen -0.7% in Monday trade so far, now to a seven month low. The ASX200 is down -0.9% in afternoon trade. Tokyo has opened on Monday down -3.5% in its opening trade. Hong Kong is down -2.9% and Shanghai is down -1.7%. Singapore is also down -1.6%. Wall Street futures are confusing about how the S&P500 will open tomorrow.
OIL FIRMS
American oil prices have firmed slightly, up +50 USc with the WTI benchmark now at just under US$98.50/bbl, while the international Brent price is holding up at US$112/bbl. Things are still fluid and confusing in the Persian Gulf.
CARBON PRICE HOLDS (LOW)
There have been few trades so far today on the secondary market, the price is holding at $40/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DROPS FURTHER
In early Asian trade, gold has fallen another -US$87/oz and now back at US$4403/oz. Silver is down to US$66.50/oz.
NZD FIRMS
The Kiwi dollar is down less than -10 bps from this morning against the USD, now at just over 58.2 USc. Against the Aussie we are up +20 bps at 83.2 AUc. Against the euro we are unchanged at 50.4 euro cents. This all means the TWI-5 is now just on 62 and essentially unchanged from this morning..
BITCOIN EASES AGAIN
The bitcoin price is now at US$67,896 and down -1.2% from this morning's open. Volatility has been modest at +/- 1.7%.
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26 Comments
US-Iran war could make markets plunge 25 per cent this week, says BCA Research’s Juan Correa
Some AFR Contributors are more DGM then the DGMs on here.... I mentioned that chart wise the S&P500 would have decent support around 5,000, that's 23% lower.
About 93% of all U.S. household stock and mutual fund wealth is owned by the top 10% of households by wealth [https://finance.yahoo.com/news/wealthiest-10-americans-own-93-033623827…]
Majority of the world doesn't give a rats if the markets get smashed. I'm just hoping Armageddon doesn't arrive before next weekend.
Yip wealth inequality in the US is back where it was in the 1920's just before the great depression. These aren't normal times we've been living through.
Yes. Big difference this time is that we can simply create more moolah out of thin air.
Makes you kind of bullish on scarce assets over the near and medium terms (assuming we we aren't in a nuclear winter).
The wealth inequality has probably well exceded that of the 1920's?
At the bottom end net wealth of people living under bridges probably hasn't changed much, but at the top end, inflation adjusted 100+ x as wealthy.
The land owning hereditary aristocrats are replaced with bankers. The bottom is still the bottom with the rest on top. So status has not changed but net wealth at the bottom has improved. My (right of centre) mother insisted the Jarrow hunger marchers in 1936 had faces drawn with hunger. No poverty protest in NZ, UK, USA, etc shows hunger. Today we are lectured that obesity is a poverty indicator. It must be tough at the bottom of our society but it used to be worse.
How much the market value declines this week is going to be irrational, just like the irrationality of over valued share markets now, and likely that correction will be fast imo. Eventually after investors have been sufficiently financially punished by large losses a consensus will emerge about what price to earnings multiples are going to give annual returns at least equal to the rate of inflation or a little better for different business types, what they offer to customers, and their business track record.
Further you go down the age demog scale, the less Aotearoans will care. Boomers more at risk than anyone. Millennials / Gen Z barely have 2 sticks to rub together.
"Millennials / Gen Z barely have 2 sticks to rub together. "
I know why that is: for the first time since Covid, I was out for a meal in Courtney Place on a Friday night a couple of weeks ago. Every restaurant, bar & nightclub packed.
The modern house up the back of my shared drveway was rented (~$800/wk) by a group of 3-4 young guys working from home (I think Weta digital). Every night, 7 days a week Uber Eats delivered.
Uber Eats, iPhones, avocado on toast.
Architects of their own demise.
No, Nigel.
This is an era of permanently-diminishing 'returns'.
Work the rest out from there...
There are always a few winners in a fight over resources.
by Independent_Observer | 10th Dec 25, 9:06pm
Well if swaps keep going with the current trend, we will be back to 50bps rises at each OCR review, starting at the first meeting next year.
Can imagine it now, swaps keep going vertical the next few months, and then Q4 2025 CPI data released in January comes in above 3%, banks keep shifting mortgage and TD rates higher. Inflation starts becoming more entrenched again, while the economy continues to stagnate (stagflation).
RBNZ completely change tune and say they are focused on mid-point 2% of CPI band so need to start raising rates aggresively to stamp out any risk of this inflation becoming any more embedded. We then have rising rates, shrinking GDP/economy, falling house prices.
Be great for retirees - might see 8% + term deposits the next few years on their massive pile of cash many of them have sitting in cash funds. They'll be creaming it for zero risk.
by Nifty | 10th Dec 25, 9:17pm
Wake up from your fantasy dream IO...
Where is Nifty these days? Must be living in a nightmare. And this isn't a fantasy dream that is playing out - this is the worst case scenario given the foolish policies of the past few decades and our extremely high private debt to GDP ratio.
Be great for retirees - might see 8% + term deposits the next few years on their massive pile of cash many of them have sitting in cash funds.
How can this be the reality if the wider economy is on its knees and asset prices in the toilet? There would a huge disconnect to the OCR and what banks lend at. What's more, don't assume that gets shared with the boomers.
Have you been paying attention to what the Mad King has been saying?
My experience dealing with boomers is that they don't seem to care if the economy is on its knee's as they have got their house and rental, got their RV and e-bikes and got their superannuation (obviously not all see it this way, but this is a common trend - and of course there are exceptions - LouB is a good example on this site).
"How can this be the reality if the wider economy is on its knees and asset prices in the toilet? There would a huge disconnect to the OCR and what banks lend at."
Not sure I follow your reasoning here. There would only be a huge disconnect to the OCR is you believe they won't raise rates. I believe they needed to start raising rates last year when wholesale rates started rising, CPI outside mandated band and trend rising for 4 consecutive quarters.
You believe in the ponzi too much - that it is completely bullet proof. I do not. We were told the world would end in 2021 if the OCR went to 5%. It went to 5% and we are all here to talk about it - the world did not end as a result. Nor would it end if the OCR goes back up above 5% again in the coming months/years - and I think it could spent quite a lot of time above that in the years/decades ahead as the last 40 years of trends reverse themselves back to some form of equilibrium.
You believe in the ponzi too much - that it is completely bullet proof
Depends what Ponzi you're referring to. I don't believe they are bullet proof. They all come with trade-offs: destruction of purchasing power and the value of of labor; socio-economic equality; etc.
The Aussie and Aotearoa Ponzis in housing have been among the best. You cannot deny that. Does that make them anti-fragile? Not necessarily. But I don't know what the catalyst is. The current global climate looks to be their greatest threat yet.
"Be great for retirees - might see 8% + term deposits the next few years on their massive pile of cash many of them have sitting in cash funds"
I really think IO is looking at the wrong data here. What really matters are REAL interest rates (interest rates minus inflation) and these are rapidly approaching "0" (zero). Term deposits are going to lose value at an increasingly fast rate with fiat currencies collapsing due to gargantuan amounts of money printing coming. (wars are not cheap)
Your assumption is that interest rates aren't going to rise higher than the inflation rate. Which seems to be a crazy assumption to make.
Memory of a gold fish Yvil! As that is what we just had to live through to tame the 'transitory inflation' a few years ago. And is the strategy central banks always go to.
Swaps are going vertical and TD rates (and bond yields) will follow in the coming weeks.
You should have a look at the 1970's oil shock and inflation.
Money printing in those conditions is the worse possible thing you can do in that situation!!! It will only create more inflation (central banks buying bonds creates aggregate demand, and to tame inflation where demand is high but supply is low, the solution is to reduce aggregate demand, not increase it).
Anyway I warned people back in 2021 what was probably going to happen then with 5% + OCR and not transitory inflation and got laughed at (told it was impossible 'as the housing market wouldn't surivive'). I could be wrong but happy to be laughed at again.
Well done for foreseeing higher swaps, higher inflation and lower growth IO. I do still disagree with your final conclusion of much higher upcoming interest rates though:
"RBNZ completely change tune and say they are focused on mid-point 2% of CPI band so need to start raising rates aggresively to stamp out any risk of this inflation becoming any more embedded."
Tell me how the RBNZ "raising rates aggressively" will lower inflation caused by more expensive imported oil prices ?
Tell me how we fixed our imported deflation problems of the past few decades by lowering rates? (we didn't but we kept lowering rates as we imported deflation using cheap foreign labor, while destroying our own manufacturing and production jobs/trades/companies here in NZ, while extending far too much debt against the housing market as we dropped the OCR and mortgage rates).
So the past 3 decades we've imported deflation, lowered the OCR, extended more debt against the housing market (so that private debt to GDP is way above 100%), destroyed companies and jobs locally and gave them to workers in foreign countries (rinse and repeat this for years/decades as globalisation was encouraged/employed - good or bad - well that is another entire thread....).
But then if we import inflation we are like 'hey hell no we can't raise rates!! Think about the poor mortgage holders!!!'. But completely miss how we got into this mess.
You can't agree to lowering rates because we import cheap stuff, but then refuse to acknowledge that the OCR needs to go up when you start importing more expensive stuff. You can't have it both ways. Otherwise it means the system the RBNZ is running is not about inflation targetting using the OCR to keep it steady, its about maximising the amount of debt retail banks can't lend against the housing market.
SInce you totally avoided answering the question, let me re-pose it again:
Tell me how the RBNZ "raising rates aggressively" will lower inflation caused by more expensive imported oil prices ?
The very experienced Robert Reich posted a piece a couple of days back that has since been published on several sites:
The genuine reason Trump is trapped — and why Americans are up a creek | Opinion
Yeah sorry, this is on MSM with all their adverts.
Sure, RR is no doubt part of the swamp that Trump wanted to drain in his first term (but has actively been filling at every opportunity since 2016) but he at least an intelligent opposing voice. He also bangs out videos on YouTube like a young 'un.
Brilliant Ponzi journalism. Resonates with the Great Gatsby,
Melbourne’s affluent buyers strike, forcing 25pc drop on premium homes
A buyer ‘strike’ has devastated Melbourne’s luxury property market, with some $6m homes now selling for 20 per cent less than their peak value.
https://www.theaustralian.com.au/business/melbournes-affluent-buyers-st…
Coming up, "Fuel strike". To be followed with "Food strike".
WSJ takes on the gold price apocalypse.
Gold is usually sensitive to real, inflation-adjusted interest rates, too. Treat it as a safe inflation-proof asset, and what you give up by holding gold is the after-inflation yield available on the benchmark safe inflation-proof assets, Treasury inflation-protected securities. Gold should fall in price, therefore, when the yield rises, since that makes gold relatively less attractive.
And the yield has risen. Investors are pricing in more near-term inflation and expecting the Federal Reserve to keep rates on hold this year or even raise them. That is a big change from the two or even three cuts expected a month ago, lifting the 10-year TIPS yield.
This does justify a lower gold price, but isn’t a good explanation for its declines at the moment. The price used to move fairly consistently in the opposite direction of TIPS yields, but the link broke down as the gold price soared. For a year gold has tended to rise as yields rose. Day-to-day moves during the war show a link has returned, moving inversely in 11 out of the past 15 days. But, as with the dollar, that can explain only a small part of gold’s fall.
Instead, the best explanation is that gold is a crowded trade. As with stocks, what went up the most in the months preceding the war fell the most as investors pulled back.
Some of this was about traders who had borrowed to juice their positions. When they cut risk they sold stocks they owned and bought back those they had sold short—leading to unusual swings in stocks popular with hedge funds.
It’s impossible to know how much investors borrowed to buy gold. But it had clearly attracted a lot of speculative money over the past year. This was reflected in heavy buying of the main gold exchange-traded fund, SPDR Gold Shares. Last autumn it got so extreme that the gold price and stocks popular with day traders moved in tandem.
As speculators pull in their horns, gold should naturally suffer.
https://www.wsj.com/finance/commodities-futures/war-and-inflation-are-s…
I'm realising most people are still stuck in the recency/confirmation bias of 1980s - 2020. Where the answer to all our problems is lower interest rates. "And that interest rates will start heading back down again soon" is the common paradigm.
People should have a closer look at the world from 1946 - 1980s and see how that worked out.
In retrospect the 80 year long cycle might well be from 1946 - 2021. But hard to tell until 10-20 years retrospectively of the turning.
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