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A review of things you need to know before you go home on Thursday; some mortgage rate cuts, business confidence up, dwelling consents up, swaps up, NZD up, & more

A review of things you need to know before you go home on Thursday; some mortgage rate cuts, business confidence up, dwelling consents up, swaps up, NZD up, & more
ID 22702269 © Daniaphoto | Dreamstime.com

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

MORTGAGE RATE CHANGES
Avanti Finance cut its "Near Prime" floating mortgage rate today by -20 bps to 3.95%. TSB also cut its 3, 4 and 5 year fixed mortgage rate offers to match the best of their main bank rivals.

TERM DEPOSIT RATE CHANGES
No changes to report.

DEFLATION RISKS VANISH
The ANZ Business Outlook survey's preliminary results for February show business activity is rising, but a sharp lift in costs is dampening profitability. At some point it will inflationary - if those costs increases persist.

TOWNHOUSES THE GROWTH STORY
The number of new dwellings consented hit an all time high in the fourth quarter of last year as residential construction continues to rocket ahead. But the consent rate per 1000 population is still below 8. Stand alone houses new-build levels are not changing much, but new townhouse construction is where all the action is.

LANGUISHING
Although consents for other types of building rose in December, it is just making back some sharp weakness earlier in 2020. Infometrics notes: "The unequal impact of COVID-19 remains apparent in non-residential building consents, with those build types most affected by the lack of international tourism continuing to show weakness. Furthermore, the acceleration in the shift to online shopping is apparent, as storage and distribution centres show strength, while [consents for building] retail properties have been weak."

REBALANCING?
There has been a change in the top management team at ANZ. Mark Hiddleston, the head of business and agri lending is off to what he hopes will be greener pastures. He is being replaced by Lorraine Mapu. The 9:3 male:female mix of top managers at NZ's largest bank is about to become 8:4. (Change is also happening at one level lower.)

BOND ISSUE VIA SYNDICATION
The Treasury has today announced that $3.5 bln of nominal 15 May 2026 New Zealand Government Bonds have been issued via syndication. The bonds, which carry a coupon of 0.50% pa, were issued at a spread of 16 basis points over the 15 April 2025 nominal bond, at a yield to maturity of 0.745% pa. Bids as measured by the pre-allocation book size were $7.5 bln for a coverage ratio of 2.1x.

A NEW PUBLIC HOLIDAY
It has been announced that the new additional public holiday, Matariki, will be celebrated on Friday, June 24, 2022. Not this year, next year. That will take us from eleven public holidays a year to twelve. Australia has eleven. The US has eight, with some religious days optional. Japan has 15, including Golden Week. The UK has nine. (At the same time they should have canned the archaic birthday of some foreign monarch ... but they didn't.)

YEAR OF THE OX
The Chinese Lunar New Year Holiday officially starts Thursday the 11th and runs for seven days. This is important for New Zealand because it affects how we export to our largest destination.

WEAK RISE
Australian exports for both goods and services rose +3% in December from November, their imports fell -2% on the same basis. Year on year for December however, these are -7% and -13% respectively. For the calendar year 2020 they are -12% and -15% respectively. This mix change did enable them to post much larger trade surpluses.

GOLD PRICE DOWN FURTHER
Gold is trading in Australia, and soon in Asian markets. So far today it is down another -US$16 from this time yesterday to US$1825/oz. That is -US$8 below the New York closing price and -US$9 below the afternoon London fix.

EQUITIES UPDATES
The S&P500 ended its New York session with virtually no change. In late afternoon trade, the NZX50 Capital Index is down -0.5%, and the ASX200 is down-0.6%. At its opening, the very large Tokyo market is down -0.5%, Hong Kong is down -0.3%, and Shanghai is also down -0.3%.

SWAP & BOND LONG RATES JUMP YET AGAIN
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. But rates at the long end are moving steadily higher. The 90 day bank bill rate is unchanged at 0.28%. The Australian Govt ten year benchmark rate is up +4 bps to 1.22%. The China Govt ten year bond is up +1 bp at 3.23%. And the New Zealand Govt ten year is up by another +3 bps at 1.38% and above where the earlier RBNZ fix was, at 1.35% (up another +8 bps for a second straight day). The US Govt ten year is up +4 at 1.15%.

NZD STAYS UP
The Kiwi dollar is now at 72.1 and unchanged from this time yesterday. On the cross rates we are also lower against the Aussie at 94.4 AUc and giving back some of yesterday's rise. Against the euro we are up to 59.9 euro cents. That all means our TWI-5 is up to just under 74. The last time it was this elevated was briefly in December 2018.

BITCOIN FIRMER AGAIN
The bitcoin price is now at US$38,325 and +6.5% above where it was this time yesterday.

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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44 Comments

BTC on the way to $40k and above by the weekend

I wouldn't be surprised, cashed up momentum traders have to land somewhere. BTC is quickly gaining the respect it deserves.

There's an argument that BTC is too passive for the WSB community. They like to operate more like gamers looking for the quick kill. In the crypto space, that is for trading.

There are over twice as many gme shares as there will ever be bitcoin. Very likely btc will go ballistic, but a certainty it will end up as electrons on the floor.

The emperors new clothes....

Just another dumb idea that only works if you have a bigger fool to sell it to, there are plenty about and a lot will get hurt.

But you know what they say about fools and money...

Don't forget Ethereum. It was $130 a year ago, now new ATH at $1650 or so

Yes. ETH is my best performer. Reinvesting gains into BTC, but would now like to have a big stack of ETH. We're now at a point where most people will never own a full Bitcoin. Owning one or more puts you into a small proportion. 22 million people own less than a full Bitcoin. They're classified as 'shrimps' by Glassnode.

Any thoughts on Polkadot. It looks like an interesting project.

It's got tons of potential since it is designed to work alongside many of the other protocols. Invested a couple of weeks back and have made some huge gains already. Up 22% in last 24 hours in fact.

I understand the whales are using this stock to flow model for BTC projections. Looks like some great upside if it holds.
https://medium.com/@100trillionUSD/bitcoin-stock-to-flow-cross-asset-model-50d260feed12

The model has worked for me. That being said, you don't have to be a whale to prescribe to it.

shhh everytime I say that, it corrects itself

One mo' Paid Holy Day = One click Less Productividy....

12
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It's a great initiative.
Something that celebrates our indigenous culture, unlike most of our holidays which are western traditions.

Why should we celebrate the Moriori culture?

Why should we celebrate the Moriori culture?

Moriori arguments and references are usually introduced out of ignorance.

It sadly seems we still have an awful lot of ignorance and bigotry in this country J.C., and it's not only confined to immigrants like Yvil. Many NZ born people are ignorant too, many willfully.

What the fuck are you on about?

Feel free to work if you don't want to partake in it Yvil.

Tautoko. However I would have liked to have seen queens birthday ditched in it's place. Even better to ditch all religious public holidays and replace with extra annual leave (although I doubt I'd be very popular for saying that)

I wonder if they will think about dropping the Royal Birthday when the Queen dies? Seems like a more diplomatic time to do it. NZ has a long history with Lizzie, but none with Charles.

GN you are one of the few on this site brave enough to suggest it, but I agree 100%.

Oh no!!!!

You can add new public holidays, but you cant take them back!

Just change it from Queens birthday to commonwealth day or something like that

dumbest idea ever!

xmas holidays work out well for business shut downs because everyone does it at the same time

Er Sure but for the rest of the world it is the Subaru https://www.subaru.co.nz/news/subaru-stories/the-subaru-guide-to-matariki or taurus which has been in European culture, including the celts, and other ancient cultures for over millennia. Calling it something different does not make it unique. https://en.wikipedia.org/wiki/Pleiades#Folklore_and_mythology It is just another astrological holiday, be sure to pick up more branded cheap knick knacks at the gift shop https://www.google.com/search?tbm=shop&q=Pleiades+&oq=Pleiades+ oh look therre are face masks already. We could literally make up new astrological holidays for every constellation and practically have. The fact it celebrates the bull and this is the year of the bull just adds a whole new layer of irony in how bullheaded this govt is to ignore the housing crisis & employment inequality and its effects on those most vulnerable in NZ. They are creating a public holiday in which those who need hope the most will never get to celebrate at home with this govt.

Wow, more ignorance.

Fritz. NZers keen for a new holiday cared not a bit for the maori element. They just wanted another day off.
Nothing cultural about it.

Speak for yourself.
Some of us, maybe many of us, welcome ONE public holiday that celebrates our indigenous Maori culture.

Works for me, near an important personal date so winning:-)

12
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The ANZ Business Outlook survey's preliminary results for February show business activity is rising, but a sharp lift in costs is dampening profitability.

We manufacture farm equipment, received this notification from our steel supplier of increased steel prices, we are being told by government sources that inflation is minimal, who do you believe?

Effective 15 March 2021 we will increase the following prices by;
Structural Steel +10%
Hollow Sections + Galv. pipe +14%
Line Pipe + 12%
Valves and fittings +5-10%
Merchant Bar +20%
Reinforcing products +14%
Wire/fencing +5%
Stainless Plate/Sheet + 10%
Stainless Bar, Angles +6%
Stainless Tube +12%
Engineering Steels(selected products) +5-15%
Plate(TBC imminently) – Expected +12%+
Coil + Sheet(TBC imminently) – Expected +10- 15%+
Fasteners 8-14%
Other products + 2-6%

Im seeing costs rise where I work too. Oil has quietly ticked up from high 40s to mid 50s. I feel like inflation will go from zero to a hundred like an arial atom.

Still I'm conservative and cautious by nature. Maybe I'm wrong.

Oil is always the one to watch; has been this last 15 years.

It is a litmus for energy generally, given that nothing happens without it.

But debt is widening the wedge between do-able and bets on do-able. Even with the debt distortion, if the global economy (which is the trading of processed planetary parts, no more, no less) demands more work to be done, the 'price' will rise to recession-triggering levels. That is the cleft stick we are in - and have been since 2005/6.

Our offshore raw material suppliers were initially talking 4% to 7% increases in October, have now withdrawn and revised to 8% to 12% respectively.
.

At the same time they should have canned the archaic birthday of some foreign monarch ... but they didn't

We don't want to get rid of any public holidays do we? I'd celebrate almost anything for more holidays. Chinese New Year, Diwali..

Also the Queen isn't all that foreign, I see her face on the $20 note in my wallet.

Building consents. Looking at Stats NZ dwellings data, albeit estimates based upon census, how many of these newly built homes become dwellings with households . Clearly there is a difference , where an existing home owner may add a holiday home to the mix, particularly given their new found wealth, adding to the overall number of private dwellings , but adding nothing to homes that support households or population on a permanent basis. Similarly, most walks around an Auckland block will see an existing home removed and two if not three or four perfectly squeezed and often ugly homes in their place. The net effect , being an addition to the dwelling stock, less than what the consents may suggest.

None of the banks have really been outstanding over this last year in terms of shareholder results. Every bank is talking about digital this and self-service that but ultimately they all disappoint when it comes to driving profitability. Every one is playing it safe so no one is justifying their pay cheque.

The industry needs a good shake up as it's clear that management are falling asleep at the wheel. Where is New Zealands N26?

This huge upward pressure on bond yields - look at that 10 year: I lost more yesterday than any previous day ... okay, so RBNZ either is not concerned or has lost control, but when does this pressure make it's way to increased mortgage rates?

Or do the banks do their usual trick of simply lowering term deposit rates to further screw their savers?

MH - there is a reason for everything. Both you and the RBNZ, are being outflanked by events beyond your control. But both of you could have done due diligence; they even had a societal obligation to.

Yes, oh Oracle.

Still stalking me I see.

Sat three hail-Mary's and short silver

:)

After a less volatile day trading, GameStop ended up 2.68% sitting at USD $92.41 - the bleeding seems to have stopped after yesterdays sell off.

Former Amazon Web Services Engineering Leader Matt Francis joins GameStop as its new Chief Technology Officer alongside two new further executive hires.

With GameStop's Day's Range of USD $85.25 - $113.40 buyers have clearly been able to 'Hold the Line'. GME holders will be hoping this weeks shack out has put stock in stronger hands. Ammunition (buyer's capital) may be running low; However with the cost to reload under USD$100 - longs running-at-a-lose might choose to 'double-down' and some profit takers are sure to see current price levels as a good reentry point.

Shorts seem to be painting-the-tape down in After Market and Before Market Trading, but this is war.. shorts wanting to exit the GME trade want to minimize their losses as much as possible - getting out before margin calls force their shorting peers to buy stock at any price.. triggering another Gama Squeeze.

Shorts are hoping for continued retail selling and minimal ammunition reloads. The war has spilled over into the US media landscape, but This IS War and market propaganda/puffery from both sides is allowed.

Yes Zack - watching this with interest. Interesting that Robinhood have finally increased their buy level for this stock. RH have purchased a Super Bowl ad spot and WSBs are crowdfunding for a counter-ad spot.

So are we going to keep getting frowns and head tilts from our PM and stupid comments from our trade minister, or will our 'leaders' actually show some backbone on China for a change? https://www.theguardian.com/world/2021/feb/04/us-is-deeply-disturbed-by-...

No our dear leaders are spineless and also without morals because if condoning concentration camp based supply lines does not keep them up at night then nothing will. Ah but they can use the term good germans, or rather in this vein good kiwis, being kind.