A review of things you need to know before you go home on Thursday; ANZ raises TD rates & cuts a card fee, less concrete poured, farmers uniquely productive, key downgrades, swaps up, NZD holds

A review of things you need to know before you go home on Thursday; ANZ raises TD rates & cuts a card fee, less concrete poured, farmers uniquely productive, key downgrades, swaps up, NZD holds
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Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
ANZ has raised two key TD rates, making them more competitive.

CHRISTCHURCH MAKING A COMEBACK?
Ready-mixed concredte production in the final quarter of 2019 sagged, down -1.4% from the same quarter a year ago. It was a weak end to a year where the overall production was flat. In Auckland, 2019 was +4.8% higher than 2018 although ended weakly too. In Wellington 2019 was up less than +2%. And in Christchurch that annual pour was down -5%. But Christchurch did manage to end strongly with Q4 up +5.6% and the first such rise since 2015.

ONLY FARMERS ARE MORE PRODUCTIVE
New Zealand’s labour productivity rose +0.5% in the latest analysed year, Stats NZ said today. (Labour productivity measures the quantity of goods and services (output) produced per hour of labour.) The improvement in multifactor productivity was all driven by the rural sector. Unfortunately this data is only to March 2019, although things are not likely to have improved since then.

FEE CUT
In a sign of having to respond to pressure, ANZ has told customers it is removing the card fees for its low rate Visa credit cards. This is a sector that is under challenge by Buy Now Pay Later services. ANZ says "This means that you’ll no longer be charged your annual card fee of $35 p.a., and if applicable any additional/joint cardholder fees of $10 p.a."

COMING CLEAN(ER)
There was a huge 'revision' of the number of COVID-19 virus infections, up from 45,200 earlier today to now 60,200. And the death toll has also been revised higher, from 1115 to now 1366. Its a move that has shaken the idea that this will be over soon. And it stabs at the heart of Chinese credibility. UpdateThis is the explanation the Provinial Authorities have given for the revision.

DOWNGRADE
Synlait Milk has been dumped on equity markets with its share price down -18% so far today on sharply lower guidance on their likely earnings. (That announcement didn't address their milk payout price.)

WARNING SLAP
Vodafone has been warned by the Commerce Commission for misleading consumers about account credits. Vodafone has also been warned for representations made in a loyalty discount promotion that were likely misleading.

JUST ANOTHER PERSONAL LOAN LENDER
Peer-to-peer lender Harmoney, the country's first and largest licensed peer to peer lender is pulling out of the P2P market in favour of all wholesale funding of its lending activities.

HIGHER DEAMAND FOR LOWER YIELD
The latest $250 mln government tender for the May 2031 bond has brought an average yield of 1.58%, a drop from 1.67% the last time for this bond. That represents a turn down in yields investors will accept from the original offer. It was very popular however, attracting bids worth $853 mln.

"CAN'T BE DONE"
Fletcher Construction has told MFAT that the repairs to the NZ Convention Center are unlikely to be completed before APEC 2021.

INVESTORS REASSESS
Earlier today, the S&P500 closed up +0.7% on Wall Street. But since then, the COVID-19 virus numbers have been revised in a major way (above). Asian markets have opened more subdued as they absorb the implications (if there are any). Locally, the ASX200 is up just +0.2% and the NZX50 Capital Index is unchanged since yesterday, held back by some of the items reported above by Synlait and Fletcher.

LOCAL SWAP RATES UP
Wholesale swap rates are up further, with the two year tenor up +1 bp, the five year up +2 bps and the ten year up +4 bps. The 90-day bank bill rate is unchanged at 1.22%. Australian swap rates fell today by about -1 bp across the board. The Aussie Govt 10yr is up +2 bps to 1.09%. The China Govt 10yr is now down -2 bps at 2.86%. The NZ Govt 10 yr yield is also up +6 bps at 1.42%. The UST 10yr yield is unchanged 1.61%.

NZ DOLLAR HOLDS
The Kiwi dollar is just a little softer against the greenback at 64.5 USc and holding on to most of yesterday's rise. Against the Aussie we are also softer at 95.9 AUc. Against the euro we up at 59.4 euro cents. That means the TWI-5 is little-changed at 70.4 after wobbling on the China virus revisions.

BITCOIN SAYS UP
Bitcoin is little-changed since this time yesterday at US$10,385. The bitcoin price is charted in the currency set below.

This chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Our exchange rate chart is here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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71 Comments

Comment Filter

Highlight new comments in the last hr(s).

Very interesting about Synlait. The infant formula market in China is crucial for NZ and Australia.

Yes. Though the in country regulation and re ordering of rules, ensures exporters to disadvantage.
This follows a theme where in country value add and in country investments (sales office aside) are road to ruin.
Seems to confirm previous notes, that we can be sure the $80 per can margin stack firmly remains in country.

15k increase in a day and still not coming clean. How much will the Fed and others pump into their respective markets this time arround..... and can they keep the PM 's down as well at the same time.
Do the other countries start to report higher as well to come into line...
I'm picking bubbles popping hard!

The official explanation is the authority starts using more percise methods like CT imaging to determine if someone is infected. The interesting part is the ccp head of hubei province was removed on the same day. What a coincidence.

The squeaky wheel gets the axe

15k plus scans in a day and that was only the positive ones.. so 50k plis scans. Yep that's a good one.

https://www.zerohedge.com/economics/hong-kongs-largest-mall-owner-cuts-r...

Something you should really know....eh!.

Just think if NZ cut its rents by 50%....the same as Hong-Cong... we would be laughing all the way to the Bank...
Landlords, might be weeping...however.

I hope you are fine with your house being worth half the price as well.

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Younger generations looking to raise a family viably in NZ will likely be okay with houses being half the price.

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Probably the 48% of adults living in rentals will give it a thumbs up.

A hell of a lot of people who go broke won't be happy. Those poor millenials......

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Why would they go broke....if over LEVERAGED tough titties. If my house halfed in price tomorrow life would go on....you sound like a entitled rentier.

A realist of what happens when prices devalue.
So it's fine for some to loose so other can profit. Isn't that's what happening now?

Losing what..a paper profit....keep digging?

Yep owe $400k on a house now worth $250k.
Yeah not that funny for that person or the bank who will then try to recover the dollars off everyone by higher interest rates.

Profit is only realised when you sell. So your going to sell your home and live where exactly?

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As a home owner if property prices across the country halved I'd call it a win. Medium term pain for longer-term better social and economic outcomes. It's time the property Ponzi was deflated.

People will go broke and people will buy up and it'll all start again.
The interest rates will go up sharply as the banks will need to recoupe their losses.
Lots of down sides you aren't taking into account.
To buy a house you have to knuckle down, work hard and go without. There will always be a good portion of the population that will not get their own house as they can't get their stuff together.

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Not if proper land and capital gains taxes are applied, deflate it and hold it down! But then I'll have to pay capital gains on my home they cry! You won't have to pay anything if house prices stay static princess.

Residential property is for housing people so they can have a roof over their head and live their lives not profiteering. We need to snap out of this zero sum game/circle jerk that is property speculation and spend our time, effort and money on productive activities and investments.

Get Jacinds on to it, she'll sort it out quick smart.....
Isn't cheaper housing, housing the masses what she promised... ? Two and a half years in and going backwards, is about where that is at.

Well let's give her 9 years and see what she can do e up with.....sounds fair?

She'll be lucky to see the election the way shes going. Unfortunately for her results matter.
9 years... funny...

So you will be voting for Soyman then I take it?

I'll vote for who can deliver. Not some pie in the sky dream that costs me in tax for nothing.
It's a fact if you do not proform you are cut and the next person gets a go.

What tax are you referring too?

Tax it's what you pay when you make money.

I'd say. She's a nice person and well intentioned but that's about sums it up as far as labour is concerned unfortunately.

Yep and that dosen't cut it in the real world in her position.

I'm a leftie, but I agree.
As far as I'm concerned, the current Labour gov't is a 4/10 if I'm being generous.... but National have, somehow, even less to offer.

Depressing times no?

Hopefully TOP can get some traction now they've managed to un-tangle themselves from Gareth Ego Morgan...

I'll never look at TOP without thinking of GM.

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My parents did not knuckle down, go without, or work hard. Mum stayed at home...Dad cruised 9 to 5 and played bowls with his mates ...had six kids as well. Brought a house...like the rest of the neighbourhood. No one talked about house values at bbqs each weekend while drinking lion red. We lived in great neighbourhoods at enjoyed the community.

Mine worked long hours every day and I was pulled in as well for the greater good of the family and there were beers as well but mainly work.
I work bloody hard as well and I'm sorry if I don't agree with others riding me when they don't go without.

Was your father in one of the unions that paid exorbitant rates of pay and if you got one of the cushy "jobs for the boys" they were made for life. That was old zealand

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Yep I'm with you. I owe a home and one rental. For all I care half both. Rather have people owning homes, happy and forming strong communities.

Very wise comment Ahuhyeah!

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My house is worthless...I ain't ever going to sell it.

It is what is called....a home.

If housing prices more than halved I would still be in the same house. But my adult children wouldn't be sharing it with me. Sounds good to me. Can we make it a 75% drop - that would still leave my kids with $250k to share when the the wife and I snuff it.

In 2003 , the RBNZ after a period of no movement cut the OCR three times from 5.75 percent to 5.0 percent. At the time GDP was running over 4 percent, inflation at 2.5 percent, NZD comparably lower alongside high migration, high residential investment and rising house prices.and credit growth. SARs , drought and electricity output were the primary reasons . Having wandered past three well established Chinese restaurants today, all shuttered , all citing virus, how long will it be before the RBNZ moves. .

Their last few moves were perhaps premature and not really warranted – really, where was the so very dangerous fire they thought they had to put out – basically reacting to a poorly calculated CPI that wasn’t meeting some meaningless and no longer relevant mandate.

Now not a lot of dry gunpowder left – and we may actually have a real issue on our hands.

Heaven forbid what manner of unorthodox conjuring they’ll pull out of the box in the hope of looking as if they have it under control.

Charlie Munger puts his DGM hat on and let's it all out about excess. Perhaps it's time for him to retire and move to cheerful NZ.

https://www.cnbc.com/2020/02/12/charlie-munger-warns-there-are-lots-of-t...

And we still don't believe the numbers....
Run for the hills... as someone once said...

I oscillate between thinking the virus is very significant and serious, to being MAJOR.
After reading this, I move more to the latter.
Clearly, it's far from peaking.

Same here, one minute I'm 'I'll get a house and do it ups and flick it on' or get something and subdivide, then I read some more info and decide to sit back and wait. I'm not good at sitting back and not doing squat.

Chinese data is bollocks, but outside of china it is tracking a very consistent exponential growth curve:
https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594...
in a few months there will be millions or 10's of millions infected outside of China unless we adopt very strong quarantining measures- and maybe even if we do.

No one in the Gov't that can call something that big and get it done.
Even if they could the economic downward could potentially be just as bad. Other countries would not be impressed and declare us scaremongers and our exports would drop off massively.

Story updated with a link to the explanation of why the Chinese virus numbers were revised today. (To read it in English, you will need to right-click and use Google Translate.)

thanks. That contextualises the massive increase in cases, but not deaths.

the propaganda corps had to try an make the data look vaguely realistic, and so worked out how many deaths they had to report given how many cases they decided to acknowledge.

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I haven't believed anything (or anyone) coming out of China since 1988.

Meantime the RBNZ already have the OCR set at previously considered emergency levels – when up until now there wasn’t even any real sign of an emergency.

Chickens, or bats, coming home to roost.

By way of contrast.
Governance, leadership & administration.

https://www.bbc.com/news/amp/world-asia-51480613

https://www.pmo.gov.sg/Newsroom/PM-Lee-Hsien-Loong-on-the-Novel-Coronavi...

We have faced the new coronavirus (nCoV) situation for about two weeks now.

The Ministerial Task Force, advised by DPM Heng Swee Keat, has been leading the Government’s response to this outbreak. They have been dealing with new developments every day, and holding regular press briefings to keep Singaporeans informed every step of the way. Today, I want to speak to you directly, to explain where we are, and what may lie ahead.

And for us, nothing.
https://www.beehive.govt.nz/portfolio/labour-led-government-2017-2020/pr...

We'll see how prepped the COL is when the tide goes out. No prizes for guessing that there is little to no prep done.

But there will be plenty of 'empathy'....

Dump de do

https://www.odt.co.nz/star-news/star-christchurch/coronavirus-life-quara...

Health officials think they can track down the estimated 4000 people - including some in Christchurch - who haven't registered with the new coronavirus healthline by tomorrow.

One Feb 3 traveller
... he hasn't registered on Healthline because when he first called asking about isolating himself, the system wasn't set up - and so far, no one has contacted him.

its incredible that we dont have a confirmed case here yet with how transmittable this virus is, considering it was around a couple of months before things got shut down.
we are either very very lucky or it is already here but not spread to vulnerable people yet so has not become known.
you only have to look at the measles outbreak to see how unprepared we were

Interesting talk this morning, on National Radio , on the actual damage of an event like the virus , vs the damage caused by the fear of the Virus , the latter been far greater .
China's got over 1 billion people , has 9,596,960 sq km. Has anyone worked out the odds of someone coming from China having actually been exposed to the Virus ? Obviously focus on anyone been is that region , but the chances of someone on the other side of China having the virus ?

And yet it matches on spreading to other countries.

Millions of Chinese went home for New Year...some from Wuhan some from around the World and they spread the deed from pillar to post and then came back again. They did not all wear masks, that is even in dispute as some say it cannot be contained in that regard.
Take the inundated cruise ship as a factor....it spreads when crowded together...not to be sneezed at, not to shake hands about, not to have eye contact, not to be tabled with others...it is a mutating virus, the numbers game is so huge in China, it does not bear thinking about...
But one should and then go wash your hands, anything others may have touched, or exported, or traveled with. Especially as it is an Airborne contagion too. And lasts for days, how long is another unknown factor.

Then maybe kiss yer friends bye-bye.....or yer relative need for a hug. If you truly know where they have been. That is?.

This is an easily spread and unknown quantity event, that is just coming to light after nearly 3 full months......after self denial by their Leaders... Ours are not much better, but we must not upset our Markets, Animal, Vegetable nor mineral....Oh and Housing...is a major factor to contend with.....cos National sold out to the Chinese in times gone Buy....and they did.

The key phrase here is the animal markets....

So much chatter about the NZ government not doing enough..yet we have no cases here? Either we are lucky or someone is doing their job? How about helicopter drops of phamplets and masks would that shut you up?

Given our geographic isolation, I put all my chips on luck

Lol Frazz, yeah mate Jacinda is all over it punching tickets and taking names. Shes off to feed the masses in Affrica after that, no need for a plane shes going to walk.

Lol at the piss poor gains in labour productivity. I would love to see this as a key indicator of economic progress rather than the GDP. Shows we aren't really investing in productive technology and instead creating low value jobs (for immigrants}.

To be fair, I think immigrants can increase productivity without bringing in any flash technology or massive amounts of capital.
I think of the wondrous efficiency with which they run kitchens in my suburb, which is flush with Indian restaurants that produce good food at a price no one could match before their arrival. The practical knowledge they bring, in this case, surely counts as 'productivity'?

Absolutely, I agree with you. I should have clarified, we are bringing in low-skilled, low-cost people across a range of industries to bridge gaps of our inefficiencies. Whereas if we were to invest in technology/automation/productivity we wouldn't have to open the gates so wide. It would also see kiwis better off.

Rural NZ is only place where productivity gains are realised - why? Same reason as always - labour costs and labour shortages, which are a perennial provincial problem, force farmers to invest in productive tech. Meanwhile the govt keeps pumping people from offshore into our cities and we wonder why productivity lags.

Winner winner chicken dinner.

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