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
None here either.
RISING SHARE BUT TOUGHER OUTLOOK
CoreLogic says investors' share of the residential property market is now the highest since 2016. It also says it's looking increasingly likely residential property investors will face tougher lending restrictions and new tax rules on capital gains.
FMA SLAMS NZX OVER IT ISSUES
The Financial Markets Authority says the NZX did not accept responsibility for known systemic issues in its IT systems and was slow to act when its problems first surfaced.
TOUGHER EMISSIONS STANDARDS
The Government has committed to introducing its 'Clean Car Import Standard' this year, giving importers until 2025 to slash the emissions profiles of the passenger cars they bring into the country.
CASCADING REACTIONS
Another Infratil asset dons the 'for sale' sign. Trustpower (TPW) says it is 'testing market interest' in its retail energy business that has over 230,000 customers. Infratil (IFT) started this chain reaction, putting its large holding in Tilt Energy up for sales. Now two Aussie infrastructure investors are trying to buy Infratil itself.
"THE FUTURE IS MÄORI"
The RBNZ today released an intensive review it commissioned BERL to do on the Māori economy. It is as at 2018. Although it is a few years old now, it is still a fascinating read. It details an asset base in 2018 of $69 bln and a production GDP for this economy of $17 bln. Most of the financial assets are in the agribusiness sector, and real estate. But the other eleven sectors seem to have much higher productivity levels. On a Production GDP basis it represented a 6.5% of the national economy. On a Income basis, it is 8.3%. On an Expenditure basis it is 14.9% on the national economy. The breadth of investment is impressive and it grew a remarkable +37% between 2013 and 2018, far faster than the overall economy. The Māori workforce is increasing fast and skill levels are rising. The Māori asset base is increasingly diverse and healthy. Māori employers are increasingly prominent.
TAKING A POINT OFF
Ratings agency Fitch has rated Heartland's AU$75 mln wholesale Notes as BBB-, just within investment grade. Heartland Group is rated BBB. Fitch says this lower rating is "reflecting a lack of sufficient bank holding company senior debt and group junior debt buffers."
BIGGER SURPLUS, MORE DIVERSIFIED
Our trade balance ended 2020 with a bit of a whimper. The December surplus was just +$17 mln, compared to +$380 mln in December 2019. In 2018 the December balance was +$9.3 mln. For the whole year, merchandise exports were $59.9 bln, unchanged from 2019. Imports were $59 bln, so there was an annual surplus of +$2.9 bln, the first year we have posted an annual trade surplus since 2011. Our surpluses with China and Australia were little-changed in 2020 from 2019, but we turned a -$795 mln deficit with the USA into a 2020 surplus (of +$1.1 bln), and a -$732 mln deficit with Japan into a +$331 mln surplus. It has been a year of diversifying markets with the China share of our exports slipping slightly to 27.7%.
NOT QUITE AS POPULAR
The new slimmed-down NZ Govt bond tenders are not as popular as they have been recently, if today's event is any indication. They attracted $1.3 bln in bids for the $450 on offer. This is the first time in a long time less than $1 bln has been left unsatisfied. The May 2024 $200 mln tranche attracted 32 bidders with 11 successful at 0.29% pa yield, actually slightly lower than the prior event two weeks ago. The April 2027 $150 mln tranche attracted 42 bids with only 7 successful. This one yielded 0.58% pa, similar to last time. The final $100 mln May 2041 tranche had 39 bids with 16 successful at 1.90% pa, slightly higher than the 1.86% two weeks ago.
NEW BOND SCAM
ASIC is warning investors of a rise in imposter bond investment offers. Scammers pretend to be associated with well-known domestic and international financial service firms and offer high yield bond investments to investors.
AUSSIE CULTURE WARS TURNING EVEN
In Australia, a new poll detects a sizeable recent shift. 59% of Australians want January 26 known as Australia Day but a sizeable minority of 41% wants it known as Invasion Day. It is increasingly the old and male vs the young.
GOLD PRICE DOWN
Gold is trading in Australia, and soon in Asian markets. So far today it is down -US$13 from this time yesterday to US$1839 which is -US$9 below the closing New York price and -US$7 below the afternoon fix in London.
EQUITIES UPDATES
The S&P500 ended its session today down an ugly -2.6% as it sunk progressively as the day wore on. The ASX is down -2.4% in early afternoon trade in a mirror. The NZX50 Capital Index is down -1.9% in late trade. In Shanghai, they have opened down -0.9%, Hong Kong is down -0.9%, but the Tokyo market is down -1.3% all in very early trade.
SWAP & BOND RATES SOFT
We don't have today's swap rate movements yet. If there are material changes when the end-of-day swap rates are available today, we will update them here. The 90 day bank bill rate is unchanged at 0.29%. The Australian Govt ten year benchmark rate is down -1 bp at 1.05%. The China Govt ten year bond is also down -1 bp at 3.19%. But the New Zealand Govt ten year is up by +3 bps at 1.09% and above where the earlier RBNZ fix was, at 1.07% (up +4 bps). The US Govt ten year is soft at under 1.03%.
NZD SUFFERS
The Kiwi dollar is now at 71.5 and almost -1c lower than at this time yesterday as commodity currencies lack favour in the current risk-off mood. On the cross rates we are marginally firmer against the Aussie at 93.5 AUc. Against the euro we are soft at 59.1 euro cents. That all means our TWI-5 is down to 73.1.
BITCOIN SINKS
The bitcoin price hasn't recovered today after the overnight drubbing. It is very down -4.0% from this time yesterday at US$30,935.
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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40 Comments
probably just a slap for our trade minister telling them how to do business with China ! foot in mouth or what did he miss the fact the aussies are kind off just a little bit important to us - not just from a trade perspective -- but the amount of family linkages ?
Australia is, if nothing else, decisive. They make decisions and get on with it. All their police are armed, no mucking around. Isolation and Quarantine guests are locked up in a room for 14 days. During lock down 2 people who defied the lock-down were fined $19,000 each in instant fines. Many others fined smaller amounts. no mucking around. How many fined in NZ? AU extends the border closure by 72 hours. NZ froths at the mouth
And why on earth are new arrivals into NZ, then permitted to jump onto green flights to Australia?
The intent of the quarantine free flights from NZ to Aus was to allow safe NZ residents who have lived in NZ for a reasonable period to travel to Aus for extended stays in Aus. Not then to also jump to HongKong etc via Australia.
Obviously people are just hopping around the world as they like.
The Auckland case had returned from travelling around Europe - so much for the ‘returning kiwis who have been living abroad’.
Trying to shut down Wallstreetbets
https://www.youtube.com/watch?v=quARRzz0pnE
Not working, it's a movement like BLM and it's here to take down the elite.
Looks well organised, Reddit was getting 800-900k new sign ups to Wallstreetbets just today. Unstoppable force?
"Just translated something from german wsb. And was asked to post this as a discussion.
The most important thing is actually until Friday there will be another price battle in which the short sellers will try to keep as many calls as possible outside the price so that they cannot be executed and the broker does not have to buy them on the market to cover them .
It is particularly critical because monthly and weekly calls expire, as far as I know the highest monthly call was 60c 1/29 and 115c 1/29 (left out the new 200c).
The MM will try everything to push the course below 60 , our goal to get to 115 . Until then, expect massive short attacks , it will probably be even more blatant than yesterday. Since a price limit is harder to keep higher up, don't be surprised if there is a red tag up until then or the lower limit is 60-80.
For those of you who don't know what is meant, 100xLimit orders at $ 60 are $ 6000
These are truly glorious times. I hate to say but than a few of the kids will get wrecked. They're having a stellar run though.
What's more, we all bought into the idea that the algos are unbeatable and that's true to a large extent. But it's quite amazing what basic modern tech and understanding the basics of momentum trading can do to cause havoc. The ruling elite have few answers yet beyond banning private citizens from trading. Similar rhetoric used with the crypto space.
I did't realise it was a coordinated attack rather than just about the money.
I'm starting to understand the sheer size of this movement, it's no longer a few Robinhood kids, it's organised, intelligent and it's trying to take hedge funds down by beating them at their own game. Probably with a lot of inside information.
'Now, CNBC and all of the MM's and corrupt media will fool you into thinking Melvin Capital has already covered their shorts or some other bullshit, but don't believe it. It takes DAYS to do so!
The only numbers you should be looking at is the short ratio. If it's getting smaller, then the squeeze has begun. If it's still at fucking 138-140% like it is now, NOTHING EVEN HAPPENED YET.'
Tomorrow going to be an interesting day, sorry for all the Zero hedge articles
https://www.zerohedge.com/markets/we-have-some-bad-news-gamestop-shorts
A number of people are up millions already and are refusing to sell so it's more than the money alright. Great to see people banding together to get one over the big institutions for a change. It was interesting watching the after hours price movements. I don't think it worked :).
if there are %140 shorts still out there its just a matter of time till the banks providing leverage step up and shut them down.
'Remember yesterday we saw exactly that , price dumping at its finest, although almost no short position was powered.
Should we be able to hold the $ 115 by Friday , the banks (! Not the shortsellers) would have to buy an additional 8 million shares to cover the demand for the calls. To achieve this there is really only the possibility '
Pretty powerful movement going on and highlights the ambition.
"An Open Letter to Melvin Capital, CNBC, Boomers, and WSB
Discussion"
"I was in my early teens during the '08 crisis. I vividly remember the enormous repercussions that the reckless actions by those on Wall Street had in my personal life, and the lives of those close to me. I was fortunate - my parents were prudent and a little paranoid, and they had some food storage saved up. When that crisis hit our family, we were able to keep our little house, but we lived off of pancake mix, and powdered milk, and beans and rice for a year. Ever since then, my parents have kept a food storage, and they keep it updated and fresh.
Those close to me, my friends and extended family, were not nearly as fortunate. My aunt moved in with us and paid what little rent she could to my family while she tried to find any sort of work. Do you know what tomato soup made out of school cafeteria ketchup packets taste like? My friends got to find out. Almost a year after the crisis' low, my dad had stabilized our income stream and to help out others, he was hiring my friends' dads for odd house work. One of them built a new closet in our guest room. Another one did some landscaping in our backyard. I will forever be so proud of my parents, because in a time of need, even when I have no doubt money was still tight, they had the mindfulness and compassion to help out those who absolutely needed it.
To Melvin Capital: you stand for everything that I hated during that time. You're a firm who makes money off of exploiting a company and manipulating markets and media to your advantage. Your continued existence is a sharp reminder that the ones in charge of so much hardship during the '08 crisis were not punished. And your blatant disregard for the law, made obvious months ago through your (for the Melvin lawyers out there: alleged) illegal naked short selling and more recently your obscene market manipulation after hours shows that you haven't learned a single thing since '08. And why would you? Your ilk were bailed out and rewarded for terrible and illegal financial decisions that negatively changed the lives of millions. I bought shares a few days ago. I dumped my savings into GME, paid my rent for this month with my credit card, and dumped my rent money into more GME (which for the people here at WSB, I would not recommend). And I'm holding. This is personal for me, and millions of others. You can drop the price of GME after hours $120, I'm not going anywhere. You can pay for thousands of reddit bots, I'm holding. You can get every mainstream media outlet to demonize us, I don't care. I'm making this as painful as I can for you.
To CNBC: you must realize your short term gains through promoting institutions' agenda is just that - short term. Your staple audience will soon become too old to care, and the millions of us, not just at WSB but every person affected by the '08 crash that's now paying attention to GME, are going to remember how you stuck up for the firms that ruined so many of us, and tried to tear down the little guys. I know for sure I'll remember this. In response, here is a list of CNBC sponsors and partners. They include, but are not limited to, IBM, Cisco, TMobile, JPMorgan, Oracle, and ZipRecruiter. Their parent company is NBCUniversal, owned by Comcast and GE.
To the boomers, and/or people close to that age, just now paying attention to these "millennial blog posts": you realize that, even if you weren't adversely effected by the '08 crash, your children and perhaps grandchildren most likely were? We're not enemies, we're on the same side. Stop listening to the media that's making us out to be market destroyers, and start rooting for us, because we have a once in a lifetime opportunity to punish the sort of people who caused so much pain and stress a decade ago, and we're taking that opportunity. Your children, your grandchildren, might have suffered as I described because of the institutions that we're fighting against. You really want to choose them, over your own family and friends? We're not asking you to risk your 401k or retirement fund on a single GME bet. We're just asking you to be understanding, supportive, and to not support the people that caused so much suffering a decade ago.
To WSB: you all are amazing. I imagine that I'm not the only one that this is personal for. I've read myself so many posts on what you guys went through during the '08 crash. Whether you're here for the gains, to stick it to the man as I am, or just to be part of a potentially market changing movement - thank you. Each and every one of you are the reason that we have this chance. I've never felt this optimistic about the future before. This is life changing amounts of money for so many of you, and to be part of a rare instance of a wealth distribution from the rich to the poor is just incredible. I love you all.'
https://www.theguardian.com/business/2021/jan/27/gamestop-stock-market-…
Good explanation of what's happening for those of us not fluent in this concept!
Sorry- accidentally reported comment. The button is where I expect reply on my phone.
Cost benefit analysis is hard.
"The Government’s multi-billion dollar plan to build Auckland light rail – likely the most expensive infrastructure project in New Zealand’s history – didn’t analyse value for money when its final stage Cabinet paper was drawn up early last year.
This was despite the Government spending more than two years investigating light rail proposals and $5 million on a process to work out who should even build it."
https://www.stuff.co.nz/national/politics/300214856/government-didnt-lo…
The whole thing was very odd. Instead of government deciding what should be built they let the NZ super fund decide. They decided we need a $10 billion grade separated option instead of the $3 billion surface level option that Labour was elected on. Its hard to see how the underground option could have $7 billion more benefits than the surface level.
I think Wood will be going back to the drawing board, I doubt we will see the $10 billion dollar proposal again...
If social media is regulated for the issue of 'misinformation' re stocks, should Granny Herald be shut down for running the opinion pieces (emotional hooks and half truths) of Ashley Church and High Priestess Bindi about property? At the end of the day, it's the same: Trying to influence behavior with the lure of a quick buck.
Fritz....Rumour has it (unsubstantiated mind) that Mr Mosque has held a very significant chunk of his portfolio in Christchurch properties for several years. If that is indeed correct, it would provide us with a pretty good indication of his true property investing expertise. Without checking I would assume that, over the past decade, there are almost no NZ cities of over 35 000 that have performed worse.
Interesting poll. Indigenous people of Australia show greater support (73%) for retaining Australia Day name cf. to general population (59%). For all those non-indigenous culture warriors I would like to ask a couple of things: If you would like to change the name to invasion day please follow through with your actions and reverse the invasion by kindly departing and also, please give the indigenous people total control over current and future immigration policy (aka invasion policy) in order to limit further increase of invaders.
Sorry if I offended you oldbloke. I’m happy to change my wording if it helps build better engagement (woke is now gone). I prefer not to comment too much on culture war stuff but the survey was included on this site and the term “culture war” was used too. I was also commenting on the data which shows that most of those supporting the name "invasion day" are non- indigenous (ie not aboriginal or Torres strait islanders). As Mäori I am often perplexed by the cognitive dissonance displayed by those who champion such causes as changing the name of a day without following through with actions that may result in consequences that they weren’t expecting or that don’t fit with their narrative.
Kauri...I know this name change relates to Aussie but I feel we so often get entangled in similar issues in NZ while ignoring the issues that will really assist our indigenous people. IMO we need to spend our time focussing on what matters most ie how to get more indigenous people into their own home or find a way to ensure they are not paying 35%+ of their income in rent.
Why is changing the names of stuff often given so much attention and importance and yet there is complete inaction (words is not action) around ensuring everyone in our society can provide decent food, clothing and long term accommodation for their families. Let's put our energy into the things that really make a difference. Changing names of stuff does not absolve the Govt of its responsibility to ensure Maori are not over represented in our lower socio-economic group.
In the Te Ōhanga Māori – The Māori Economy 2018 report it claims "the Māori population totalled 775,800 in 2018, an increase of 30 percent since 2013".
I'm wondering how is that possible if Maori fertility rate is something like 2.3. For comparison the country of Niger which has one of the highest fertility rates (6.9) increased by about 21% in that period.
Wikipedia claims this about Māori population growth in that period :
"The large increase between the 2013 and 2018 census was mainly due to Statistics New Zealand adding ethnicity data from other sources (previous censuses, administrative data, and imputation) to the 2018 census data to reduce the number of non-responses."
So this "growth" is not necessarily what it seems at first glance at all.
Inflation is coming, fasten your seat belt. https://www.rt.com/shows/keiser-report/513743-lawrence-lepard-national-…
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