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A review of things you need to know before you go home on Tuesday; a few retail rate cuts, ASB uses FLP for climate change loans, foreigners selling, KiwiSaver performs well, long rates rise again, NZD soft, & more

A review of things you need to know before you go home on Tuesday; a few retail rate cuts, ASB uses FLP for climate change loans, foreigners selling, KiwiSaver performs well, long rates rise again, NZD soft, & more
ID 22702269 © Daniaphoto | Dreamstime.com

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

MORTGAGE RATE CHANGES
ICBC took its one year fixed rate down to 2.25% and 18 months and 2 years to 2.35%. The Police CU and Kāinga Ora/HNZ also trimmed rates.

TERM DEPOSIT RATE CHANGES
Christian Savings trimmed some term deposit rates.

ASB TO USE RBNZ'S FLP FUNDING FOR LOW EMISSION LOANS
ASB was the first bank out of the PR starter gate following the release of the Climate Change Commission's advice to the Government. ASB says from March it'll offer discounted lending to customers taking positive steps to manage their emissions. The initial focus will be helping business customers "embrace the change needed to move NZ to a lower emissions, more resilient future." And ASB says it'll use the 0.25% funding offered via the Reserve Bank's Funding for Lending programme to "pass the benefit on to customers through this discounted lending." Environmentally focused ASB customers should thus be anticipating some very generous loan offers. Climate Change Commission chairman Rod Carr is an ASB director.

CARS SELL WELL IN JANUARY
In an interesting item of irony (given the weekend's Climate Change Commission report), January new car sales, and new commercial vehicle sales (especially utes) were quite strong in January, bouncing back from the December lull and coming in with year-on-year gains.

SELLING UP
According to Stats NZ data out today, foreigners selling their New Zealand residential properties now outnumber foreign buyers by two to one.

A GOOD KIWISAVER QUARTER
Morningstar's quarterly KiwiSaver review says the top performers over the quarter against their peer group includes Milford Conservative +3.1% (Multisector Conservative), Aon Russell Lifepoints Moderate +4.9% (Multisector Moderate), CareSaver Balanced +8.1% (Multisector Balanced), Juno KiwiSaver Growth +11.0% (Multisector Growth), and SuperLife High Growth +12.3% (Multisector Aggressive). They say over the past 10 years, the Growth category average has given investors an annualised return of +9.9%, followed by Aggressive (+9.5%), Balanced (+8.3%), Moderate (+6.6%), and Conservative (+6.1%).

VARIABLE SPEED FAST FOOD
Restaurant Brands (RBD) reported their 2020 revenues in New Zealand -4.3% lower, Australian revenues +2.0% higher and Hawaii revenues up +7.7%, all on a same-store basis. Their new 69 store California investment is reported to be up on a year-on-year basis.

RBA REVIEW IMMINENT
The Reserve Bank of Australia is reviewing its policy settings today and will release its decisions at 4:30pm. No changes are expected. Update: It didn't change the interest rate, but it decided to purchase an additional AU$100 billion of bonds issued by the Australian Government and states and territories when the current bond purchase program is completed in mid April. These additional purchases will be at the current rate of $5 billion a week.

BACK IN RECESSION?
Overnight we will get the EU GDP result for Q4, 2020. It is likely their are taking another step back into recession with a Q-on-Q decline of -1%, but that is after a +12.5% rise in Q3. Two consecutive quarterly declines represents a recession. Year-on-year their GDP is expected to shrink from -4.4% in September to -5.3% in December. What might help them is that the UK is no longer dragging them down. The UK posted a Q3 rise of +16% but a Q4 fall of -6.2% is expected when it reports on February 12.

'HONEST BROKER'?
The South China Morning Post (Hong Kong) is suggesting that New Zealand could broker a reconciliation between China and the US, based on its 'good relations' with both. But they also point out the extreme risks for New Zealand if things don't go well.

GOLD PRICE UP
Gold is trading in Australia, and soon in Asian markets. So far today it is up +US$6 from this time yesterday to US$1859. But that is -US$2 lower than the New York closing price and -US$4 below the afternoon London fix. Silver is up almost +4.5% so far today but is now slipping after reaching US$29/oz in New York. It is now down to US$28.20/oz and -2.8% below that 24 hour peak.

EQUITIES UPDATES
The S&P500 ended its New York session up +1.6%. In late afternoon trade, the NZX50 Capital Index is down -0.3%, and the ASX200 is up +0.9%. At its opening, the very large Tokyo market is up a very modest +0.6%, Hong Kong is up +1.6%, and Shanghai is up +0.6%.

SWAP & BOND LONG RATES FIRMER AGAIN
Update: Long swap rates, for terms of five years and longer, are certainly on the move higher today. The 2-10 spread is up to 95 bps. 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 down -1 bp at 0.28%. The Australian Govt ten year benchmark rate is up +7 bps at 1.18%. The China Govt ten year bond is little-changed at 3.20%. And the New Zealand Govt ten year is up by +5 bps at 1.22% and above where the earlier RBNZ fix was, at 1.19% (up +4 bps). The US Govt ten year is unchanged at 1.08%.

NZD SOFTER
The Kiwi dollar is now at 71.6 and noticeably softer than this time yesterday. On the cross rates we are also softer against the Aussie at 93.8 AUc. Against the euro we are unchanged at 59.3 euro cents. That all means our TWI-5 has slipped to 73.3.

BITCOIN FIRM
The bitcoin price is now at US$33,701 and +3.8% above where it was this time yesterday. (In between it reached US$34,716 before slipping.)

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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15 Comments

Time for the RBNZ to up its ante, or it might get left behind!

(The RBA will) spend about $5 billion a week, every week for six months, until it has unloaded $100 billion.

https://www.msn.com/en-au/money/markets/from-100-billion-on-bonds-to-a-n...

First, yield curve control, then QE for $100 billion last November at $5 billion a week and now another $100 billion when the former finishes in April.

Will it ever end., or is this the outcome?

In my opinion, yes. But, hey. I've been wrong before :(

"NZ's biggest builder wins consent to buy 20ha Riverhead site for vast housing project"

https://www.nzherald.co.nz/business/nzs-biggest-builder-wins-consent-to-...

“In December, The Herald reported local MP Chris Penk saying recurring haphazard development had mired Auckland's north-west in grinding traffic jams and classroom shortages.”

Nothing new or location specific to see here - why not just simply replace the word “development” with “immigration” – might be closer to the mark.

Something about cause and effect….

And 'vast' is a huge exaggeration. The author probably has Fletcher shares.
Will be lucky to get 300 homes out of that land.
In my book, 'vast' is thousands of houses.

Could be 'compensation' (full details suppressed?) for having to walk away from Ihumātao? The Government solves a problem and Fletcher's till get to do building stuff.

Yeah could be.
Such an average company.

The average house price in New Zealand has eclipsed $800,000, and a property expert says consistent government messages about the need to protect property wealth mean prices will continue to grow. Property research firm CoreLogic's house price index rose 2.2 percent in January, with the average house price now sitting at $806,151.

average-houses-eclipse-800k-and-growing

Jacinda will be practicing her frowns in the mirror tonight.

We need to keep well away from this situation: "The South China Morning Post (Hong Kong) is suggesting that New Zealand could broker a reconciliation between China and the US, based on its 'good relations' with both. But they also point out the extreme risks for New Zealand if things don't go well."

Agree.
We are only in this position because of our pathetically cowardly response to China's crimes against humanity.

Sharesies:

"You can only place sell orders for Gamestop Corporation
Our US partner DriveWealth has stopped taking buy orders for Gamestop Corporation. This is due to the regulatory requirements placed on their clearinghouse.

Any pending buy orders will be cancelled. You’ll be able to place a buy order when the investment’s status is no longer ‘Sell only’. We can’t confirm when this might happen.

If you own shares in Gamestop Corporation, you can still place sell orders.

This is not a decision made by Sharesies. When we can provide access to buy this investment again, we will.

For more info about our process for US investments."

Start the class action lawsuit. Hope Sharesies will demand a broker and clearing house that believes in a free market. The system is clearly stacked against the retail investor!

Actually I may have jumped the gun. Just read the ceo of DriveWealth statement on linked in seems like he is ‘all for free markets’. Must be some bigger fat cats pulling the stings. I like the stock.

There is heaps of pent up demand for 'short traded "meme" stocks'. Hedge funds are trying to ladder down their short position using neo-buying-holts, only allowing sales - obviously that would put downward pressure on any stock. I tried to buy more Bed Bath and Beyond, it too has been restricted.

The reality is when you lose at naked shorting - you often go bankrupt - that's the price MANY funds/people HAVE paid. They got too greedy and sloppy, now they're calling in favors all over the show.

It's inevitably going to benefit Bitcoin, obviously because Bitcoin is the antithesis of cronyism.

Mem stocks are a battle, Bitcoin is the war.