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 no rate changes to report today. 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
BNZ has changed (raised) its BusinessFirst on call rates today. Update: ANZ has changed its Serious Saver account by cutting its standard rate by -35 bps and increasing its bonus rate by +40 bps. That will get then you a potential 1.55% bonus saver rate. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
BUSINESS CONFIDENTS PLUMMETS, INFLATION EXPECTATIONS SURGE
ANZ's Business Outlook survey for the March month captures a rapidly darkening mood across the economy as realisation dawns the Middle East crisis won't be short lived.
PROPERTY MARKET IMPLICATIONS
How will this souring outlook affect the residential and commercial property markets? We may get our first indications tomorrow. The starting place isn't very positive. QV says it saw flat overall housing values flat overall in Q1 this year but there were big regional variations.
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.
SOME VERY LARGE CASH TRANSACTIONS
Fonterra said today that its $4.2 bln sale of the Mainland brands to Lactalis is now settled. The way is now clear for Fonterra farmer shareholders to receive a $3.2 bln payout in two weeks' time.
PAYOUT FIRMS
And speaking of the dairy industry, Westpac has raised its current season payout forecast to $9.80/kgMS, above the Fonterra interim forecast, and above all other main dairy analysts. You can find them all compared here (at the bottom of that page).
STILL BORROWING FOR HOUSES
Households borrowed +$1.27 bln more in February than in January for housing, the smallest net rise in a year.
MAKING FEW CHANGES, MARKING TIME
The average household term deposit size rose marginally in February to just under $90,000, little-changed from the same value a year ago. Meanwhile household bank deposits were also little-changed with an early suggestion that current account cash balances are again getting priority. In fact, the small +3.7% annual rise to February for household deposits was the lowest since 2010.
NZX50 TURNS UP
As at 3pm, the overall NZX50 index is up +0.5% so far today. It is heading for a +0.9% weekly rise, but down -3.6% from six months ago. From a year ago it is now up a net +4.5%. Market heavyweight F&P Healthcare is back up a chunky +2.7% so far today. Air NZ, Investore Property, F&P Healthcare, and Heartland gain while Tourism Holdings, Fletchers, Channel Infrastructure, and Vulcan Steel are the top decliners.
VERY BIG LGFA OFFER COMING
New Zealand Local Government Funding Agency is offering up to $850 mln unsecured, unsubordinated, fixed rate sustainable financing bonds maturing on 15 May 2034 to institutional and retail investors. The offer includes $150 mln of Sustainable Financing Bonds reserved for subscription by the LGFA. (If the full 'oversubscription' allocation is taken up, this may be the largest issue ever for the LGFA, and by some margin.)
FOREST OWNERS IN TOUGH SQUEEZE
Things are going to get tricky for forest owners trying to harvest and sell their logs. Forest owners need higher prices as harvesting costs jump significantly. But domestic demand is turning very uncertain. Export markets may get less supply without higher prices. Fortunately a lower NZD helps them, but not local buyers
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INFLATION JACKS UP AU RATE HIKE PROSPECTS
Suddenly, financial markets now see the RBA moving purposefully to try and tamp down Australian inflation impulses. From juts one hike priced in yesterday, today markets are pricing in three +25 bps hikes and taking their policy rate to 4.85% in 2026. In any event, rising Australian rates will have an impact on us. Also see this.
IGNORING SHORT TERM INFLATION HERE?
New Zealand analysts are now considering how the RBNZ will respond to the deteriorating signals. Financial markets are currently pricing in no change to the OCR next week, less than half a chance of a +25 bps rise in May, but a full change of a rise in July, again in October, and again in December, which would end 2026 with a 3.00% OCR - and more in 2027. But events are fluid ...
LUCKY COUNTRY
War impacts aren't bad for every government. Consider this Westpac summary about the Australian federal budget impacts. "Higher‑than‑assumed commodity prices are expected to deliver the Federal budget a windfall of almost $60bn over the five years to FY30. Around $20bn of this uplift reflects the impact of the Middle East conflict, particularly via higher coal and LNG export prices. This more than offsets the $2.6bn cost of halving the fuel excise for three months. The run‑up in gold prices since FY24 is estimated to add around $19bn to Treasury revenues over the next five years. This broadly aligns with Department of Industry forecasts showing gold export receipts rising by around $40bn in FY26 relative to FY24. Higher inflation and the cyclical upswing are boosting nominal incomes, consistent with the March monthly statements showing income and indirect tax revenue were around $7.0bn and $2.5bn ahead of MYEFO estimates, respectively. The inflationary impulse from the conflict is expected to provide further near‑term support to revenues."
SURCHARGING BAN TO START IN OCTOBER - OVER THERE
RetailNZ's rearguard lobbying against banning card surcharging in New Zealand may have worked (temporarily?), but the Aussies have seen through the flimsy reasoning, and are now on track to ban retail surcharging there by October 2026. Then they are going after similar rorts for mobile wallets, three-party card networks, ‘buy-now, pay-later’ services and e-commerce platforms.
SWAP RATES LITTLE-CHANGED
Wholesale swap rates are likely to be little-changed again today as markets weight the chances of Trump cutting & running. 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 2.54% on Monday. Today, the Australian 10 year bond yield is down -7 bps at 5.01%. The China 10 year bond rate is unchanged at 1.81%. The Japanese 10 year bond is down -1 bp at 2.35% today. The NZ Government 10 year bond rate is now at 4.78, down -3 bps from this time yesterday. The RBNZ data is now 'prior day' with the Monday rate up +1 bp at 4.78%. The UST 10yr yield is down -7 bps from this time yesterday at 4.33%.
EQUITIES FIRMER
The local equity market has risen +0.6% in Tuesday trade so far. The ASX200 is up +1.0% in afternoon trade. Tokyo has opened on Tuesday up +0.4% in its opening trade. Hong Kong is up +0.2% and Shanghai is up +0.5%. Singapore is also up +0.5%. Wall Street ended its Monday trade on a down note with the S&P500 slipping -0.4%.
OIL EASES BACK
American oil prices have dipped -US$1.50 with the WTI benchmark now at just under US$101.50/bbl, while the international Brent price is down -US$10 at US$105/bbl. But that was before news of a large Kuwaiti oil tanker now on fire in the Persian Gulf after being hit by Iran.
CARBON MARKET QUIET
There have been no transactions we can find so far today on the secondary market, so the price is holding at $41.50/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD RISES
In early Asian trade, gold has rised +US$138/oz and now back up at US$4610/oz. Silver is up +US$6 at just under US$72.50/oz.
NZD HANGING IN THERE
The Kiwi dollar is unchanged from this time yesterday against the USD, still at just on 57.3 USc. Against the Aussie we are down -25 bps at 83.4 AUc. Against the euro we are up +10 bps at 49.9 euro cents. This all means the TWI-5 is now just under 61.3 and little-changed from yesterday..
BITCOIN RISES
The bitcoin price is now at US$67,966 and up +2.1% from this morning's open. Volatility has remained modest at +/- 1.7%.
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25 Comments
Crap weather crap economy
hopefully Easter weather a bit better
It will rise again on the 3rd day?
I note the original writer of that was dubious, thus: 'according to the scriptures'.
Sounds like economics scribes reporting economists...
sounds like WellyFHB on here....
The latest forecast from "profile" is a greening planet. Enjoy the new climate paradigm. La Nina means gloom and swamp for much of NZ and we seem to be getting them more often.
That is not a forecast, it is empirical.
https://www.nature.com/articles/s41467-025-64305-1/figures/1
Only doomsters do forecasts.
https://www.latimes.com/opinion/story/2026-03-17/paul-ehrlich-wrong-eve…
“...Perhaps the most remarkable thing is not that Ehrlich turned out to be so wildly wrong, but that he was so obviously wrong from the beginning. My old boss Ben Wattenberg battled Ehrlich throughout the 1970s and 1980s. His feud began with a 1970 article for the New Republic titled, “The Nonsense Explosion,” in which Wattenberg explained that even as Ehrlich was writing about soaring birthrates, birthrates were already declining.
...Simply put, his pessimism was simply too big to fail.
...The battle to feed all of humanity is over. In the 1970s and 1980s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now.”
“If I were a gambler, I would take even money that England will not exist in the year 2000,” Ehrlich prophesized during a speech in 1971. He also said that the U.S. would be rationing water by 1974, and food by 1980. That smog in L.A. and New York would cause some 200,000 deaths per year. That Americans born after World War II wouldn’t live past 50.
...England still exists. Life expectancy in the U.S. just set a record high of 79 (in Europe it’s 81.5). There is no country in the world with a life expectancy under 50. Air and water quality are much better today than they were in 1968. Global food production has exploded. Famine is rare, and almost always a product of war or the backward command-and-control economic thinking Ehrlich supported. And fertility rates are worrisomely declining throughout the developed world, and far beyond. Slightly more than half the world’s nations have sub-replacement birthrates. We have not run out of any resources and America has more forests than it did a century ago."
We have not run out of any resources and America has more forests than it did a century ago."
Standard spin - cherry picking.
Try raising your game.
Clue for the clueless: America might have more forests than it did - but does the planet?
No.
But it seems it's worse than that: United States Deforestation Rates & Statistics | GFW Deforestation in the United States - Wikipedia
So more spin - the deforestation was old-growth, the recent plantings are not much more than seedlings.
From Claude re: What would the RBNZ need to do:
The core problem you've identified
The model framework you're describing — essentially a New Keynesian structure where the output gap drives inflation through a Phillips Curve relationship — creates a deeply asymmetric problem when dealing with cost-push shocks. The simplified relationship looks something like:
π = πᵉ + α(Y − Y*) + ε
Where ε is your exogenous supply shock (oil prices). To neutralise ε, you need to drive (Y − Y*) sufficiently negative. But here's the brutal arithmetic: the Phillips Curve is flat.
Modern estimates of the slope coefficient α for small open economies like NZ are typically in the range of 0.1 to 0.25. So if a sustained oil shock adds, say, 1.5 percentage points to CPI, the output gap required to offset it mechanically is:
Output gap needed = −1.5 / 0.2 = −7.5%
That's GFC-scale or worse. It's a completely unacceptable policy outcome — you'd be engineering a severe recession to fight inflation that originated in a Riyadh pipeline, not in Auckland spending.
Why the model misbehaves here
The model is essentially built around demand-pull dynamics. The output gap is a good predictor of domestically-generated inflation — when the economy runs hot, firms have pricing power, wages rise, and inflation follows. But the transmission runs in one direction: you cool demand, you cool domestic inflation.
Cost-push inflation from oil doesn't respond to the output gap in the same way because:
- The cost increase is at the input stage, before the output gap has any relevance
- Firms facing higher energy costs will raise prices even as demand is falling
- You end up with the worst of both worlds — stagflation — where the model's iterative process keeps trying to resolve an equation that has no clean solution within its framework
What the model likely does in practice
Most central bank models handle this through a "wedge" or exogenous price term that is partially or fully excluded from the core inflation measure the policy rule responds to. The RBNZ, like most inflation targeters, would in practice:
- Strip out the direct energy price effect and examine "non-tradeable" or "domestically generated" inflation
- Run the model on the assumption the shock is temporary, letting the oil price path mean-revert
- Focus the iterative cash rate optimisation on whether second-round effects are materialising in wages and non-energy prices
The exchange rate channel matters more here
Interestingly, for a small open economy like NZ, a rate hike in a supply shock scenario works better through the exchange rate than through the output gap. A higher OCR strengthens the NZD, which mechanically reduces the NZD-denominated price of imported oil — providing direct relief on the very inflation source causing the problem. That's a more efficient transmission than trying to suppress domestic demand enough to offset global energy prices.
Your underlying point is correct
The model, applied mechanically, would produce an absurd result — recommending a cash rate hike that forces GDP deeply negative to fight oil inflation, causing enormous unnecessary damage. This is precisely why central banks maintain judgement overlays and why "looking through" supply shocks is well-established doctrine. The model is a framework for thinking, not a calculator to be followed blindly. The RBNZ's policy committee would recognise that the output gap channel is simply the wrong tool for this particular inflation driver.
Note there's nothing - NOTHING - in there about actual truncation or cessation of supply.
Would have thought a "deeply negative GDP" is what we need to fit and survive on a round planet?
Chuckle - 20 years ago I joined in the conversation here, because I saw the need for zero - and then below - interest-rates.
It was the only pattern which fitted overshoot/degrowth.
:)
The model, applied mechanically, would produce an absurd result — recommending a cash rate hike that forces GDP deeply negative to fight oil inflation, causing enormous unnecessary damage.
Sounds like we need to raise to OCR..... s/
Claude is good, I love the way you can put its opinion in front of your boss in a way that would be unacceptable if you wrote it yourself.
Hello,
As you will be aware, the ongoing volatility in global fuel markets is directly affecting freight, shipping and other supply chain costs across the country.
Our own costs related to delivery of equipment, consumables and supplies have been progressively increasing since 16 March 2026, when our transport partners began introducing higher charges. In addition, increasing fuel costs are also affecting our costs for on-site servicing. To continue delivering reliable supplies and service, we need to pass these costs on, and the changes will be reflected from your next invoice.
We know this comes at a challenging time for all New Zealanders. Fuel prices remain unpredictable due to changing global conditions, which means the adjustment on your invoice may vary over time. Please be assured we will continue to review these charges regularly and make updates as market conditions shift.
We understand that any cost changes can have an impact, and we have not made this decision lightly. We value your support and appreciate your understanding as we work to minimise disruption while continuing to deliver reliable service. If you have any questions or would like to discuss this further, please feel free to please contact us, our team is here to help.
Inflation wave inbound. Just got this at 4pm.
I remember getting those quite regularly when I was in retail. "Freight adjustments", "Fuel surcharge", "Unable to hold prices"........ Don't really care now. I'll just spend nothing until rate increases have bankrupted me and I can move to a park bench.
The market may interfere with your plans.
Unlimited demand for said park bench may push it out of your price-range
I'm willing to share. Shopping trolly storage thrown in.
I could provide a 1000 spaces, but the council will not let me
Do you expect to get the opposite if fuel returns to the old prices? I suspect they may forget that one...
Increasing the cost of debt via the OCR will prevent them passing through these price increases contributing to inflation though eh?
Aotearoa darling Allbirds sold for $39 million - 99% value destruction from peak to exit.
Nov 2021 - shares open at $21.21, surge 91% on day one, close at $28.64. Market cap touches $4.1 billion. Time magazine had already called them "the world's most comfortable shoes." Every tech bro had a pair. They would claim "We're a tech company that happens to sell physical products."
Fidelity, T. Rowe Price, Tiger Global, and Franklin Templeton had poured $253 million into the company before it ever went public. The IPO raised another $303 million. Total capital absorbed: over half a billion dollars.
The acquirer, American Exchange Group, owns Aerosoles, Ed Hardy, Rampage, and White Mountain - brands that live in outlet malls, not the most comfortable shoes ever.
https://www.bloomberg.com/news/articles/2026-03-31/allbirds-to-be-bough…
But still probably good for NZ Inc cause most of the original investment came from outside the country and most of the original shares were held by Aotearoans?
Great use of a great NZ Product
Tim Brown received an early research grant from the wool industry at a time of weak merino demand, which helped develop the original wool shoe concept.
But you're right. Not much damage to NZ Inc.
No.
The skill to build shoes is something which will be in demand well after the global bottleneck-traverse (which we are entering).
The skill to keystroke money, won't be quite so valued, nor will the proxy.
We'd have been better to have retained Hannahs, Frames, McKinlays
but but but..... time in the market BS?
NO NO NO TIMING the market Grasshopper!!!
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