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A review of things you need to know before you go home on Friday; another bank draws on the FLP, better jobs data all about the public sector, confidence up, swaps firm, NZD recovers, & more

A review of things you need to know before you go home on Friday; another bank draws on the FLP, better jobs data all about the public sector, confidence up, swaps firm, NZD recovers, & more
ID 22702269 © Daniaphoto |

Here are the key things you need to know before you leave work today.

No changes to report today.

BNZ cut their "RapidSaver" bonus saver rates, reducing the potential rate from 0.40% to 0.25%.

Yesterday, $100 mln was drawn on the RBNZ Funding for Lending program, a facility that gets banks liquidity at the OCR rate of 0.25%. That is the third such draw on this facility. The first $40 mln was by the Cooperative Bank. The second $1 bln can only have been by one of the four big Aussie banks (and two of them have denied it was them directly). At this stage we don't know who this latest $100 mln draw is. However, given it will support only about 250 $400,000 mortgages, it is unlikely to be one of the majors.

Filled job numbers rose nearly +38,000 in December from November, but year-on-year they are only up +13,000 month. This is far below the +/- 50,000 rise we normally see at this time of year. On the flip side, it does mean the unemployment rate is nearing its peak, at a much lower level than was feared in the early stages of the pandemic. Job gains have been led by Government employment, especially in the health sector, and new jobs in Wellington accounted for a third of all net job creation. Most private sector employment is atrophying. Those living off taxpayers are doing well; those paying the tax not so much.

Consumer confidence lifted +2 points to 114 in January in the ANZ-Roy Morgan poll, led by optimism about the future. Consumer confidence is now not far off its historical average of around 120. The proportion of people who believe it is a good time to buy a major household item lifted another +3 points. Inflation expectations lifted slightly, and are historically elevated.

As it is the last business day of the month, we normally get access to RBNZ debt data for the banking system. But because of their security failure, this data release has been suspended for an indefinite time, probably about three or four weeks.

The RBNZ is hiring KPMG to review what went wrong with their data delivery system, one that has been shut down after a hack of contractor Accellion. The RBNZ wasn't specifically targeted, Accellion was, but data in the pipeline to the RBNZ was breached - as was data between banks and regulators in other jurisdictions. This is not the first time in recent months RBNZ security has been breached. See this. Deloitte got the lucrative gig to review that November one.

We have been given all-clear to travel this weekend (a public holiday in the north half of the North Island). All close contacts of three community cases have returned negative tests, but 39 Pullman Hotel leavers are yet to return negative tests.

On Sunday afternoon the Climate Change Commission is releasing a major report on what New Zealand needs to change to meet its climate commitments and goals. It has been classified as "market sensitive" so the presumption is it will promote highly disruptive solutions. We will have full coverage on Sunday.

We get labour force data for December on Wednesday, February 3. The current 5.3% unemployment rate is expected to have risen to perhaps 5.6%, but most analysts suspect this will be the peak of the current cycle. (Famous last words?) We also have another dairy auction next week with expectations of further price rises. There are strong prospects for demand from foodservice customers; if the COVID vaccine rollout is successful and effective in major markets, adding demand from foodservice could raise prices significantly for dairy products starting in mid to late 2021.

The top half of the North Island has a public holiday on Monday, February 1. We will be publishing normally that day.

Gold is trading in Australia, and soon in Asian markets. So far today it is up +US$3 from this time yesterday to US$1842 which is -US$1 below the closing New York price and -US$11 below the afternoon fix in London.

The S&P500 shed some of its earlier gains from midday in New York but still ended +1.0% higher on the day. In early afternoon trade in Australia, the ASX200 is up +0.6%, while the NZX50 Capital Index is up +0.7% in late trade but sliding. The ASX200 is heading for a weekly for a -1.6% fall for the week, while the NZX50 Capital Index is closing in on a -0.8% fall. Tokyo has opened today up a minor +0.1%, while Hong Kong is down -0.3% in very early trade and Shanghai is unchanged.

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 up +4 bps at 1.09%. The China Govt ten year bond is also firmer, up +2 bps at 3.21%. And the New Zealand Govt ten year is up by +4 bps at 1.13% and above where the earlier RBNZ fix was, at 1.10% (up +3 bps). The US Govt ten year is back up +3 bps at 1.06%.

The Kiwi dollar is now at 71.7 and slightly firmer than this time yesterday. On the cross rates we are marginally firmer against the Aussie too at 93.6 AUc. Against the euro we are little-changed at 59.2 euro cents. That all means our TWI-5 is up to 73.3.

The bitcoin price has recovered today after the drubbing of the past few days. It is up almost +10% from this time yesterday at US$34,014. This time last week it was at $30,335 and all that weekly +10% rise has come in the past 24 hours.

This soil moisture chart is animated here.

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

Daily exchange rates

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End of day UTC
Source: CoinDesk

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Gordon Campbell on the GameStop Saga and Fox News post-Trump;

To review:

- Politics is to be manipulated only by K Street.

- The stock market is to be manipulated only by Wall St.

- Dissemination of information is to be manipulated only by corporate media outlets.

Those are the rules.

Exactly. What a world.

No not really - it is the world the human race has created.

The content on that link is the epitome of why social media and influencers (like that grinning, top-heavy street corner escapee) is such a scourge.

Ironically there is probably some bloody good money to be made right now by shorting GameStop!

Unfortunately the only people who can short a stock are generally FM's not the average Joe

I'm not sure that is right even though I am in possession of a NASDAQ series 7 exam pass.

But if one wants to open a margin stock trading account at a US broker there is a requirement to sign an exemption for the broker to lend purchased stock held on account.

Great link. Thank you.

The second the owners of RobinHood pressed the red "Stop!" button, and prohibited traders wanting to buy GameStop up any futher - only allowing them to sell, - they knew it was probably "Game Over" for their business.
Who in their right mind would use RobinHood - or Sharesie, now, for that matter - if at the whim of the site owners, trading can be stopped or manipulated, leaving traders stranded? No one.
So the questions to be answered are:

"How much were they paid/compensated to press that button; what immunities from any subsequent fall-out/prosecution were they promised and by whom".

And in crazy crypto news, the meme coin Doge has gone on an absolute tear. Turned my initial 100 investment into about 3k today. cant complain ae

Well, if I owned Doge, I wouldn't be gloating or talking about it in public. However, you're posting under a pseudonym so I guess it's OK.

Nothing wrong with throwing a bit of chump change at a coin that reliably pumps every cycle. Emotional attachment doesnt make you money in trading.

People will be queuing up to buy my farts next.

Not just Parler now.... Reddit next?

The organization Coalition for a Safer Web filed a lawsuit, in which the Telegram leadership is accused of the fact that the messenger does not in any way fight against calls for violence and messages with extremist content. In particular, the situation with the breaking in of the US Capitol in early January is mentioned. The lawsuit says it violates Apple’s App Store Terms of Service.

For fuck's sake, releasing the climate change report on a Sunday, the day before a major public holiday? So cynical.

It’s not a public holiday in Wellington though is it?
Will be an interesting report by the sounds of it. I wonder if it will state the obvious that we can’t pretend to be green while having the highest ownership of cars in the world, driving everywhere, and declaring a climate emergency while spending $12 billion on new roads.

Maybe it will recommend we recycle just more than 1 and 2 plastic

I'm willing to bet that there is little mention of the only real way of averting climate/resource disaster - doing/using less stuff. The problem with that solution as we all know is that that means no economic growth = failing/falling markets = house price crashes = job losses = "poorer" standard of living (although not necessarily unhappier). What a position we've got ourselves in to! No easy way out now...

"This is where society will ultimately come down, of course, uniting to denounce $GME as financial Trumpism, even though it actually comes closer to being an updated and superior version of Occupy Wall Street. It’s likely not any evil manipulation scheme, but ordinary people acting — out of self-interest, but also out of sheer enthusiasm for one of the best reasons to do just about anything, because you can — on a few simple, powerful observations."

"They’ve seen first that our markets are basically fake, set up to artificially accelerate the wealth divide, and not in their favor. Secondly they see that the stock market, like the ballot box, remains one of the only places where sheer numbers still matter more than capital or connections. And they’re piling on, and it’s delicious, not so much because they’re right, but because the people running for cover are so wrong, and still can’t admit it."

Looking at that angry red drought last year , I guess we are better off this year , but early days yet .

Yeah so far in Auckland at least there had been a bit of rain quite often. Not enough to ruin summer or fill a water reservoir but enough to stop the lawn dying.

BNZ "RapidSaver" - tagline: hang on for dear life as your money shoots the rapids*.

* an unspecified amount may be washed out to sea and never be recovered.

Lot of pain being in bonds right now. And I think inflation is the narrative so RBNZ and highly indebted households maybe in for an unpleasant surprise.

And bonds are often not rallying anymore on sharemarket falls, as in US on share sellofff right now. So the 60/40 portfolio might also be consigned to history.

And the real problem remains for the risk averse close to retirement: after 12 years of monetary stimulunacy on steroids there is nowhere to get a return for commensurate risk. So it’s just chew through your capital and hope it doesn’t run out before you shuffle off.