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A review of things you need to know before you go home on Thursday: Westpac cuts TD rates, GHG emissions slip, NZGBs very popular, metals prices rise, swaps unchanged, NZD firm, & more

A review of things you need to know before you go home on Thursday: Westpac cuts TD rates, GHG emissions slip, NZGBs very popular, metals prices rise, swaps unchanged, NZD firm, & more
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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
Westpac has cut all its term deposit rates. NBS has also cut rates for their term deposit and at-call offers.

A BRAKE ON THE INFLOW
NZ's managed isolation capacity is nearly exhausted. The number of returning kiwis who can stay in managed isolation is limited to less than 7000, as no new facilities are being brought on for now. For a 14 day managed isolation, that is under 500 new arrivals per day.

MINOR FALL IN GHGs
Approximately two-thirds of New Zealand’s regions recorded decreases in their total greenhouse gas emissions, while one-third of regions saw increases between 2007 and 2018, Stats NZ said today. The regions with increases were Canterbury (+11%), Bay of Plenty (+12%), Southland (+6%) and Otago (+7%). Auckland recorded an overall -8% reduction over the period all from factories (-25%) - households added +18% to the problem. The largest reduction was in Taranaki (-11%). Nationally in this twelve year period, greenhouse gas emissions fell just -1.2%.

'NZ WANTS ALL THE BENEFITS WITHOUT ANY COSTS'
Industry lobby group Irrigation New Zealand is downsizing by "restructuring" to put renewed focus on solving the tension between the fundamental need for irrigation in a post-COVID New Zealand, and the sector’s increasingly restricted licence to operate. It's been bleeding funds in its battle to sell the benefits of irrigation and is shifting to a more usual Wellington-centric model.

HEAVY BIDDING
Three tranches of NZ Government bonds were tendered by Treasury today and the were very popular. The April 2023 bond sought $450 mln and was bid $1.63 bln. However the yield achieved was 0.32% which was identical to the previous tender for this bond. The April 2029 tranche sought $350 mln and attracted $1.013 bln in bids at 0.72% yield, lower than the previous 0.84% event. The final bit offered was for $150 mln on April 2033 bonds and these brought bids of $407 mln. The yield here was 0.98% and lower than the prior 1.09%. All up $950 mln was offered attracting more than $3 bln in bids. The new holders all know that the RBNZ stands in the secondary market to purchase these bonds in their LSAP program if they wish to sell.

KEEPING A PROMISE
An estimated 2.9 mln people from Hong Kong will be able to apply to resettle in Britain from January 2021. The historic change is a response to Beijing imposing a national security law in the City. New Zealand isn't assisting those who wish to leave formally, probably in fear of China's reaction. We are more about trade than human rights.

METALS PRICES ON THE MARCH
We all know that gold (+5%) and silver (+27%) prices are rising, but they aren't the only ones. Copper prices are up +10% from the start of the month and iron ore prices are up -14% in the same period. Unfortunately, aluminium prices haven't shared in the spoils, up just +3% in that period.

RAPID REVERSAL
In Australia, their federal government has delayed its Budget update until October, and today revealed it ran a deficit of -AU$85 bln in the 2019/20 fiscal year (a year that started out with claims it was in surplus). Their deficit is projected to grow even further this financial year, with the Government forecasting a blowout of more than -AU$184 bln in 2020-21. If that eventuates, it will be -9.2% of GDP, but it is likely to be worse and closer to -10% of GDP. They are also predicting their unemployment rate will exceed 9% by the end of this year.

EQUITY UPDATES
The huge Australian deficit hasn't hurt the Australian stock market with the ASX200 up +0.2% in afternoon trade. The NZX50 Capital index is almost unchanged in late trade. Shanghai has opened down a sharp -1.6% while Hong Kong up +0.2% and Tokyo is down -0.6% in opening trade. Earlier, Wall Street closed higher with the S&P500 up +0.6% at the end. Last night, European markets all closed about -1% down.

SWAP RATES UPDATE
Swap rates were probably unchanged today. We don't have final wholesale swap rates movement details yet but we will update this later in the day if they show a significant movement. The 90-day bank bill rate is down -1 bp at 0.30%. The Aussie Govt 10yr is unchanged at 0.88%. The China Govt 10yr is down by -4 bps to 2.93%. However the NZ Govt 10yr yield is up +3 bps to 0.86%. The UST 10yr is little-changed but soft at 0.60%.

NZ DOLLAR FIRMS AGAIN
The Kiwi dollar is staying elevated and it is now at 66.6 USc. Against the Aussie we are firm at 93.4 AUc. Against the euro we are unchanged at 57.6 euro cents. And that means the TWI-5 is now just over 70.5.

BITCOIN FIRM
The price of bitcoin has risen by +1.5% today to US$9,518 on top of yesterday's +2% gain. The bitcoin price is charted in the currency set below.

This soil moisture chart is animated here.

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

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End of day UTC
Source: CoinDesk

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46 Comments

15
up

I wonder how the other 60+ million inhabitants of those crowded British Isles feel about an invitation given to a further 2.9 million?

I wouldn't be happy.

No worries! That is less than we have invited to these Islands to re-settle and work.. per head.

I would be happy.

11
up

“New Zealand isn't assisting those who wish to leave formally”

Sorry – but I don’t really see why we should.

It'd keep the property prices surging up though!!

21
up

Absolutely. And it would really propel the economy forward in leaps & bounds too. Yeah right! The Key dynasty has already proven that importing people to pump up the economy is a no win game (for New Zealand). Someone's gotta pay for the added infrastructure; and ordinary New Zealanders can't compete in the housing market with Shanghai, Hong Kong or Mumbai price levels.

We've also been recently reminded by the government that, from past data, we can conclude high net worth migrants are mainly interested in building their holiday home / doomsday bunker in NZ.
A bunch of speculators leaving us worse off on housing is no reason to tickle the Chinese dragon.

I think the (acerbic) comment referred to how NZ will trade with China but won't stand up for human rights abuses perpetrated by the CCP. We used to be a lot more principled.

“ Auckland recorded an overall -8% reduction over the period all from factories (-25%) - households added +18% to the problem.” Households added +18%, yes due to the pollies allowing too many people into NZ. They obviously are happy to boost GDP at the expense of climate change goals.

Disagree.

If you think 30 years into the future, it's likely half of those industries won't exist (which is good), and the other half will still be considered unsavoury.

The progressiveness of each entity and person in our society sets the pace at which we progress. As a shareholder and stakeholder, I'm pleased Kiwibank are pushing the dial towards fast. I also think it's good business.

I think Shane is mostly whistling to back up Winston calling out 'woke culture' the other day.

12
up

The only problem with following the “woke” culture is it will mean you will run out of business customers. There is always someone ready to find an issue they will crusade against.

Which corporate or SME customers do you think are going to move their business in support of these industries?

Also, do you think 20 years from now, taking an early (relative to competition) stand against those dying industries will seem like a good, or bad idea on reflection? Or do you think those industries are here to stay? Genuinely curious :)

Your question probably over his head..he really just wanted to use the word "woke" to be hip with the cool kids

That , and get the soundbite , and go for the 5% threshold. There are a certain number who will vote for a party , because they utter such phrases, and none of their potential votes that would be against it . so easy pick up of a few votes , and they need all they can get .

Its just virtue signalling, who really cares, the bank customers? They will still drive their IC vehicles and maybe over time will change. Do the bank directors and bank managers drive electric, would like to know.

With a little effort , you could have included "woke" and "politically correct" to win the trifecta.

Add leftie for the quadfecta.

If Kiwibank got 50% of the banking trade not involved in these industries they would be growing mightily. Plus individuals who feel like the directors trade will make them the biggest bank in NZ. Plus they don't shovel their profits straight over to Aussie as quickly as possible, like my old bank did. And if Shane Jones says they have gone bonkers, they must be doing the right thing.

Probably just the "Adult Entertainment" he concerned about..... https://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=1...

Not again Shane. My money's with Kiwibank figuratively and literally.

11
up

Dropping TD rates IMO are just going to push older people with savings in the bank who live off the interest, into either property or shares, both which already seem very highly priced.

Dairy farms are looking fair value, maybe retirement village farm.

Some. Others will just draw down on their bank savings. Might be the best strategy given the threat that the greens have just made.

I can't see Labour ever agreeing with that policy, and the Greens won't be able to govern alone. Plus I don't think it was recommended by the a tax working group.
Those in their 60's, who may live for anther 20-30 years won't be been on drawing down on their savings. TBH, it is a bit of a kick in the teeth for saving. Seems to be far more incentive to borrow big to buy a house IMO. But it could come back to bite us badly if lots more kiwis lose their jobs. Job loses do seem t be on the books. NZ though has still done rally well to eliminate Covid, because it could have been far worse. Oz is in trouble, and we are just a cork on the ocean.

My position exactly, Screw being a saver i might as well buy a house with the essentially freee (after inflation) money i can borrow from the bank. and have my flatmates pay my mortgage for me. Just waiting a few months to see how the covid shock plays out.

20
up

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12350414

Suggestions that a car crash was deliberately caused, killing two people on their way to parliament to present an anti-CCP petition. Reckon the driver coming the other way was Chinese, in a big 4wd with a 5 star safety rating?

It's long odds, but there is a chance this story has real legs.
In any case, it's good to see a more common narrative in the MSM that foreign interference is a real thing, and happening in NZ.

Fiendishly clever.. Makes the French look like amateurs ala Rainbow.

That's because they were...

To nitpick - Tokyo stock exchange is closed today so the -0.6% is yesterday's close

The flooding in China is going to get everyone's attention soon

https://twitter.com/i/status/1286109654788038656

For anyone who wants some background https://www.youtube.com/watch?v=erONP33MBlA
Great vid

From yesterday, all nationally chartered banks in the U.S. are now legally allowed to provide custody services for cryptocurrencies. That means that they can have access to the keys of those assets. This is quite a major development.

https://www.nasdaq.com/articles/banks-in-us-can-now-offer-crypto-custody...

I know this is about custody, but XRP and banks go together.

Gold up - US$ down - and Kiwi on it's way to 71.5c to US$ in coming weeks. Just watch!
It's all in that graph above (if you know how to read it).

"AIG has announced it will close all 53 of its AMI stores and its remaining State store, culling 65 branch manager jobs."
A fair number of those managerial jobs are going to have a mortgage reliant on them. Tough times ahead for middle management across the country....

Yes. This is big. However, it makes sense for this business not to have such a large bricks and mortar footprint.

Good time for AA to start it's own insurance company again.

Bit surprised this hasn't had more coverage. It will be front page of the Herald once it's lazy 'journalists' understand it's implications...

https://i.stuff.co.nz/national/politics/300064493/government-moves-to-en...

Yay they are actually doing something!

Lots of NIMBYs will be outraged.

As are national by the looks of it. You would think they would be happy to cut red tape!

Good stuff

Hmmm not sure how i feel about this. Having been involved in many inner residential land development jobs in Wellington i have found that carparking is often at the Council's discretion. Know of several apartment buildings have gone up that have zero parking, as well as townhouse developments. Depends on location. The only locations that the council enforce car parking requirements are outer residential areas or places that have parking problems, and these really do have a parking problem already given our topography. This change may come across as helpful and as though the goverment are doing something, but is it really. There will still be other restrictions that have more impact and cost.

You do know right that this is much more than carparking? It's directing councils to zone for 6 storey development within walking distance of train stations and CBDs / metropolitan centres. It's massive.

Days to the General Election: 23
See Party Policies here. Party Lists here.