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Dairy prices rise to season high; US cold snap disporting fuel prices; US extends housing pandemic relief; Japan adjusts to quake impacts; German sentiment improves; UST 10yr at 1.28%; oil down and gold slumps; NZ$1 = 72.2 USc; TWI-5 = 73.6

Dairy prices rise to season high; US cold snap disporting fuel prices; US extends housing pandemic relief; Japan adjusts to quake impacts; German sentiment improves; UST 10yr at 1.28%; oil down and gold slumps; NZ$1 = 72.2 USc; TWI-5 = 73.6

Here's our summary of key economic events overnight that affect New Zealand, with news we had another good dairy auction - but our currency retreated in its shadow.

The overnight dairy auction has brought higher prices again, up +3.0% in US dollar terms and up +2.1% in New Zealand dollar terms from the prior event. That makes the gain since the start of this current dairy season last year at +25% in US dollars and +14% in Kiwi dollars. Today's auction was led by the +4.3% rise for WMP prices on Chinese demand. This means that ten of the past eleven auctions have brought price rises and that will underpin farm gate milk payout forecasts - even have analysts considering further boosts.

There was not a lot of economic data released overnight, but the one key piece from the US, the New York Empire State factory survey, was very positive indeed. It reported a good recovery and expansion led by a strong growth in new orders. Two features are worth noting; the rise and rise in input prices, and the renewed commitment to capital expenditure.

But the big US news is the sharp winter chill that has descended on the country - and the extreme rises in gas heating prices.

Meanwhile, as part of their pandemic support, the White House said it would extend a ban on home foreclosures for federally backed mortgages through June 30 and expand assistance for people behind on payments.

In Japan, the consequence of the weekend earthquake we reported are starting to be felt with industrial production being shuttered in some key firms and factories.

In Germany, while business sentiment about current conditions remains poor, there has been a noticeable improvement in future expectations.

New York equity markets restarted after their holiday positively but have given all those early gains to be flat in early afternoon trade. Overnight European markets were generally lower. Yesterday, Hong Kong returned from holiday and posted a +1.9% gain. Tokyo was up +1.3%. Shanghai remains closed for their holiday. The ASX200 rose +0.7% yesterday while the NZX50 Capital Index was up +0.8%.

The latest global compilation of COVID-19 data is here. The global tally is still rising but at a slower pace, now at 109,285,000 and up +315,000 in one day. The pandemic seems to be easing in some places now although that may just because it is the weekend and counting systems are delayed. Global deaths reported now exceed 2,412,000 and +9,000 since yesterday.

More countries (93) have started their vaccination programs. About 178.1 mln doses have been given so far (+17.4 over the weekend). There is clear evidence the vaccines are working to reduce or even eliminate deaths for those who have taken it.

The largest number of reported cases globally are still in the US, which rose +56,000 over the past day for their tally to reach 28,325,000. The US remains the global epicentre of the virus although there is clearly some easing. The number of active cases fell sharply overnight and is now just on 9,454,000 and -92,000 fewer over the weekend, so less new infections again than recoveries. Their death total is up at 498,000 (+1000) in one day. The US now has a COVID death rate of 1500/mln, and that compares to the disastrous UK level (1735) where deaths are also still rising (118,000) but a bit more slowly now their vaccinations are rolling out.

In Australia, their community control continues to impress. Their all-time cases reported is now 28,905 and only +7 more cases overnight, +2 in the community and the rest new arrivals and all in managed isolation. 43 of these cases are 'active' (+2). Reported deaths are unchanged at 909.

The UST 10yr yield is sharply higher as the reflation trade gathers steam. It is now up +7 bps to 1.28% which means that from the start of the month it is up a cumulative +20 bps. Their 2-10 rate curve is sharply steeper at 160 bps, their 1-5 curve is also steeper at +48 bps, while their 3m-10 year curve is much steeper at +125 bps. The Australian Govt 10 year yield is up another +5 bps at 1.38%. The China Govt 10 year yield is unchanged at 3.26%, while the New Zealand Govt 10 year yield is up another +6 bps at 1.44%.

The price of gold will start today down -US$25 at US$1795/oz. All other precious metals are down similarly, except rhodium.

Oil prices are down about -US$1 and are now at just over US$59.50/bbl in the US, while the international price is just under US$62.50/bbl.

And the Kiwi dollar opens today marginally softer at 72.2 USc. Against the Australian dollar we are still at 92.9 AUc. Against the euro we are at 59.6 euro cents and unchanged. That means our TWI-5 is little-changed again, now at 73.6.

The bitcoin price is little-changed from this time yesterday and is now at US$48,641. However at 1:30am this morning it did push up through US$50,000 very briefly to a new record high of US$50,585, but it fell back just as quickly. The spike looks like a manipulated trade however. Volatility remains high at +/- 3.7%. The bitcoin rate is charted in the exchange rate set below.

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

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83 Comments

"That makes the gain since the start of this current dairy season last year at +25% in US dollars and +14% in Kiwi dollars"

2 litres of anchor brand at our local dairy is still 4 bucks and is the cheapest anywhere.

Just buy the budget brand milk. It's exactly the same. Went on a tour of the Fonterra bottling plant when at uni. Literally same milk in a fancy "light-proof" bottle.

Better still switch to Oat milk

What's it worth per litre?

18
up

Has anyone seen AndrewJ online recently? I'm missing his insightful farm gate comments.

He got censored permanently.

How do u mean... censored.??

If you go back over the period of September 2020 through January 2021, AndrewJ was using interest.co.nz as a proxy for a Parler.NZ web-site

Crikey he fell down that rabbit hole then ah?

Yup. The insight to nonsense ratio was getting out of hand.

the levels of censorship globally and in NZ are getting out of hand -- removing historical statues and un PC opinions - its not that many steps to Myanmar, Hong Kong and burning books

Are u saying he used interest.co content for his own website.?
( Parler is a social media site.? )

14
up

I don't recall any of his posts being offensive, far from it usually.

That would be interesting :) if it were true. The MSM generally missed what Trump represented, as they do 'terrorism' and 'ethnic cleansing' and a lot of labels besides. What is happening is that 8 billion people are consuming at a rate that is killing our planet, and ultimately will kill us. Those who benefit most - the front-end of the First-World, followed by the rest of the First World - consume the most, and need to avoid this discussion the most. Thus the MSM accept that the Chch gunman was a 'terrorist' whereas he - like the KKK in the Delta - can equally be seen as ' disenfranchised white trash'; it's the disenfranchisement (and its ramifications) they don't want to address.

Thus I ask not Who Trump? but Why Trump? Not Who Hitler? but Why Hitler? Not who 'terrorism'? but 'Why 'terrorism'?

We are in a very dangerous position, media-wise, at this time. CNN lost patronage when Trump went - it was therefore in their commercial interest for him to stay. Think that one through..... And they're all dependent on clicks, readership, ratings. Meaning the truth is less and less likely to be the goal. That, in turn, influences public thinking, which in turn influences clicks, readership, ratings - that's a fair-sized rabbit hole all on its own......

Agree with this: "..it's the disenfranchisement (and its ramifications) they don't want to address.". Trump is a symptom of a bigger problem, not the cause.

10
up

disenfranchised ? You mean like New Zealanders who could have a vote on how local councils set up wards. Then when it was found they voted the "wrong" way, will have their referendums abolished.
We all have been disenfranchised over that one.

Apart from his farm weather reports can you recall anything that involved original thinking on his part. He subscribed to nearly every right-wing incendiary site in america from which he received a daily update, which in turn he sprayed much of it on interest.co.nz. On many days his posts comprised 50% of the total posts and did not amount to helpful info about the article

If AndrewJ is right wing then so what, if he has been banned for expressing those views then that is a form of censorship. However I did note that a lot of his links were to zerohedge, which may have contained dubious sourced articles, but I hope he was cautioned before being given the red card.
Surely the value of this site is the dialogue on both sides of the issue.

Xingmowang comes to mind..

Never said he was right-wing. However, he was running a cut-and-paste Pro-Republican-Trump crusade here on interest.co.nz

Strangely enough whenever I encounter the bombastic opinionating , propaganda and straight out lying that issues from The CCP of China and disciple(s,) I can’t help but reflect on the similarity to those of Trump. A bit ironic isn’t it.

Yes agreed - very similar. So why do we let one away with it whilst the other censored?

So because you don’t like Trump everyone must agree with your view or be quiet????????????????????????

Well I guess with Aunty Jacinda giving out $100m to the media, you are not going to see interest.co.nz wanting to promote Andrewj if they want some funding.....of course this type of post will most likely be censored for its "conspiracy theory" content and pointing out these "alternative facts".

The Bitcoin waffle has been well down last week or so, I just noticed. Have they been cut off too ??

Price has been hovering around $48k-49k USD over past couple days

Look at that soil moisture deficit from last year!

NIWA certainly were getting nervous about running out of red ink for their charts.

The contrast will look sharper tomorrow when yesterday's heavy downpour in eastern North Island is included.

The pond is almost full. 120mm of blessed rain should see us right for trees and garden water for this season. This time last year we were down to the last drops ~ HappyInKawakawa

For how long can the Reserve Bank stem the rising tide of the international bond market with unconventional monetary policy?

That Chris Hedges essay is so good. Stunning. Thanks.
Oh, and there's this:
https://nypost.com/2021/02/11/read-the-column-the-new-york-times-didnt-w...

That's a good article too.

pdk,

Thanks for the chris hedges link. A well written and argued piece. It encapsualates why i joined the free speech coalition after Massey University cancelled Brash's speech and I am no fan of Don Brash.

"...there is clearly some easing." - WHO lowered the cycle threshold for PCR tests so that will be reflected in positive test levels.

"This number of amplification cycles needed to find the virus, called the cycle threshold, is never included in the results sent to doctors and coronavirus patients, although it could tell them how infectious the patients are.

In three sets of testing data that include cycle thresholds, compiled by officials in Massachusetts, New York and Nevada, up to 90 percent of people testing positive carried barely any virus, a review by The Times found.

On Thursday, the United States recorded 45,604 new coronavirus cases, according to a database maintained by The Times. If the rates of contagiousness in Massachusetts and New York were to apply nationwide, then perhaps only 4,500 of those people may actually need to isolate and submit to contact tracing."

https://thecoloradoherald.com/2021/who-lowers-pcr-cycle-count-causing-le...

https://www.nytimes.com/2020/08/29/health/coronavirus-testing.html?fbcli...

And in the meantime Australia's true colours are again flying from their flag pole as they cancel the citizenship of a woman who has lived in Australia since she was six. On RNZ this morning a lady from the NZ Muslim association called as it was, albeit in my view a little too politely, that Australia has a significant problem in that the shooter came from Australia (actually he is Australian), and now this. The bully of the South Pacific is throwing it's weight around again! JA is correct in calling them out for their actions and identifying that they are exporting their problems. This is a fairly rare piece of directness from our politicians with respect to Australia.

Question is - what can we do about it?

What can we do about another country asserting their sovereignty over who does and doesn't qualify for citizenship? About the same as when everyone was piling into National for not doing something about 501s. These things seem to be so much simpler in opposition.

10
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Murray. Reading these news items it is useful to note what is left out.
No name? Why?
No way for media to independently check details. We have to rely on the PM without context information.
Was this woman born in New Zealand?
What is the actual ISIS history.
How did that develop?
Frankly without those how do we know what is right. Outrage without knowing does not work for me

12
up

Australia introduced the law in 2013 to prevent Australians travelling to ISIS hot-spots
Australia rubbed out the NZ Jihadi bride's Australian citizenship in 2019
She wasn't the first to have their Australian citizenship cancelled
She knew what she was doing and the risks involved
The Turkish border-patrol picked her up in 2021
Ardern suddenly expresses outrage

22
up

Wasn't a convicted drug smuggler granted NZ residency while serving his sentence in prison under JA?

Her moralistic government wants to give everyone a fair shot at a decent life in NZ, except young Kiwis looking to buy a house.

18
up

She's full of virtue signaling.
Phoney.

20
up

Advisor... well said. For some (not so) strange reason she seems fixated on her international image while throwing poor and marginalized NZers under the bus.

Janai Safar, the 24-year-old jihadi bride from Melbourne — who boasted that she would only return to Australia when it was “part of the Islamic State” — begged to return home.

More ....
https://www.news.com.au/national/australian-jihadi-bride-janai-safar-say...

Active enforecement in 2015
"Australia police prevent 230 suspected militants, including three teenagers, from travelling to Middle East to fight for Isis" Somehow Safar got through the screening
https://www.independent.co.uk/news/world/australasia/australia-police-pr...

What actions did NZ undertake? Anything

I'm generally ok with Australia deporting Kiwi's who have committed crime there, however this is very different.

My understanding is this female arrived in Australia (from NZ I assume) at the age of 6 and became an Australian citizen. She was radicalised in Australia, she travelled to Syria on an Australian passport and all her family lives in Australia meaning she has no family or support network in NZ. Australia and NZ were working together on how to manage her when Australia unilaterally cancelled her citizenship and made her our problem. We could have cancelled her citizenship first, but we didn't. I understand why Ardern is seething on this as it is bullying, uncollegiate arrogance from a country that has an appalling human rights track record. Add to this in recent days the the Morrison Govt tried to silence a rape incident by one of his Liberal Party colleagues gives you an insight into what you are dealing with,

Cheers Te. I too don't have much issue with Australia tossing out crims, but more than a few they have kicked out to NZ have tenuous at best connections with NZ, and at least one had never actually been here. They also kicked out one guy who had never committed any crimes, but had some friends in gangs. and don't forget the Christchurch shooter was Australian. So the Aussies are clearly racist, xenophobic and entitled and have a long history of throwing their weight around as far as NZ is concerned.

Australia get's a free pass on it's treatment of indigenous people and use of Manaus and Nauru as concentration camps for refugee's. This is a country that only gave aborigine the vote in 1962 and had a white Australia policy until 1966. Australia exports 40% of the worlds coal as well - free pass.

Of course there are some great Aussies, but beneath the facade our neighbours are a pretty average bunch.

In 2006 Australia crimminalised the motorcycle gangs
That's no secret
Should you choose to go to Australia and hook up with one of those gangs do not be surprised if you get turned around and sent back here. You cant plead ignorance of the law

I'm not defending criminal behaviour, I agree they should be returned to NZ. This is about an Australian citizen who travelled on an Australian passport and who was radicalised in Australia.

I see a name now. Suhayra Aden.
NZ citizen. Born here ? Family origin ?
We need to know the history before getting outraged.

We could cancel her citizenship too, problem solved.

Can we? Legally? This is the actual question of 'leaving someone stateless' that people were trying to emotively conflate with Kiwis who have lived permanently overseas for 5 - 10 years+ not being able to return to a country they hadn't lived in or paid taxes in for years with during a global pandemic. I don't think you can just yank citizenship from someone if they have don't hold dual citizenship with anyone else and I think our hands are tied if she was born here.

There is a convention against leaving someone stateless, in practice you can do whatever you want.

I wonder if you could refuse the two children's entry to NZ though as they are not NZ citizens.

Yeah, I have zero sympathy for anyone with terrorist connections, but...there does seem go be a legal issue here.

14
up

What we can do is the same as Japan and Singapore does, for all of our citizens.
Those who want an Aussie passport (or any other passport) surrender their New Zealand citizenship in return. That way if you become an Aussie at 6 ( or whatever age you swear allegiance to Australia) you just have one 'home'.

Give all current multi passport holders say, 5 years to pick their enduring citizenship, and after that if New Zealand isn't the chosen one, citizenship lapses for them.

Everyone just has one home state of choice or birth - not both.

(NB: This is in effect what Australia did to British Passport holders in the late 90's - and Kiwis shortly thereafter. Before that, holding a British Passport gave you equivalent rights in Australia. After then, if you hadn't taken out Aussie citizenship, no matter how long you'd been there, your automatic right to residency lapsed)

Tend to agree. The piss tends to get taken on the dual passports.

Interesting the sentiment against dual passports on here. I reckon NZ must have one of the highest rates of multiple passport holders.

We need to stop the citizen / permanent residence mirage. People come here, gain those and depart. Only to use New Zealand in future to their own advantage.
For example. The hundreds who could not get into Australia (covid rules) who then came here, sat in our paid for MIQ, and almost immediately departed to Australia.
Is our government going to give us the profiles of who that was. No. We might form informed opinions.

Sorry bw can’t have that sort of thinking (I hold two passports) but it seems so logical to do as you say.

If her kids are still young we should take them (for adoption) but cancel her citizenship. In the long run it would be giving her kids more of a chance at a decent life.

Don't we have enough problems of our own to deal with?

No new cases overnight. So L2 now almost certain over the next few days. How many more incursions will we see before the wider population is vaccinated, and how long will we be able to keep riding our luck of avoiding long-chain transmission?

GV... if we go back to L1 part-timers earning $50 a week will be devastated that they cannot rort the system again (by claiming $350). Of course this Govt will have done nothing to rewrite the rules preventing some people from profiting from the lockdown. I have a couple of good friends with businesses. They both say they made more money during lockdowns than ever.

I had a customer yesterday telling me how he was going to rort the system to get the govt payout for this lockdown.

Tax avoidance and taking the piss is a national sport in many circles.

"In typically toasty Dallas-Fort Worth, minus 17C broke a record set in 1903 of minus 11C."
One can imagine the headlines and hand wringing if Dallas broke a heat record by 5 degrees C!

“We’re blowing records that are more than a hundred years old out of the water,” Phil Grigsby said.
https://apnews.com/article/us-winter-weather-latest-update-10907c7a52d20...

..it’s like leaving the freezer door open. The freezer defrosts, the room gets cold. The ice caps are melting.

Freezer door is still shut.
"The Antarctic continent has not warmed in the last seven decades, despite a monotonic increase in the atmospheric concentration of greenhouse gases."
https://www.nature.com/articles/s41612-020-00143-w#ref-CR12

LOL. The Antarctic mainland is being insulated by an increase in Southern Ocean winds + the ozone hole. Why didn't you mention the Arctic, which does affect US weather. If you look at the current temperature anomalies you will see the extreme cold is the southern US coincides with extreme heat in the Arctic. https://climatereanalyzer.org/wx/DailySummary/#t2anom

What about the Arctic, Profile?

You'll cope mate.
"Less Ice In Arctic Ocean 6000-7000 Years Ago.
Recent mapping of a number of raised beach ridges on the north coast of Greenland suggests that the ice cover in the Arctic Ocean was greatly reduced some 6000-7000 years ago. The Arctic Ocean may have been periodically ice free."
https://www.sciencedaily.com/releases/2008/10/081020095850.htm

I assume your point is to question climate change?
If so, year to year fluctuations need to be ignored, it's long term trends that count. And on that count temperatures are rising.
An analogy is a sharemarket. It will have dips, but it's trend is upwards.

One would would expect the trend to be upwards since the Little Ice Age. I question politicians omnipotent ability to stop climate change using tax that could be better spent elsewhere - perhaps eliminating child poverty? Blowing 16-32% of our annual GDP on net zero policies is fanciful grandstanding that will have net zero effect on these trends.

https://www.mfe.govt.nz/sites/default/files/media/Climate%20Change/NZIER...

http://news.bbc.co.uk/2/hi/8511670.stm

And to add to the analogy, short term volatility is the sign of an unstable system, whether climatic or economic

The last 10,000 years have been very benign. Our ancestors have coped with far more variability. Must have been some good witch doctors around 10,000 years ago to settle things down - now all we have is politicians and the odd tech billionaire.

"Note the relatively stable, small temperature changes reflected in the ice core δ18O values over the past 10,000 years when continental ice volume has been near modern levels, indicating the modern warm period known as the Holocene. In comparison, climate during the last ice age (between about 18,000 and 80,000 years ago) was much more variable. The abrupt warming and gradual cooling oscillations during this period of Earth’s history are know as Dansgaard-Oeschger cycles, or D-O cycles (Dansgaard 1984).

Although the D-O climate cycles have now been found in many other climate proxy records around the globe (Voelker 2002), the reason why Earth's climate was so much more variable during the last ice age is still unknown."
https://www.nature.com/scitable/knowledge/library/abrupt-climate-change-...

Air NZ needs to raise $1.5 billion in capital

What a surprise....
https://www.nzherald.co.nz/business/air-nz-needs-to-raise-15-billion-in-...

It'll never fly

And in Bitcoin reporting:
Michael Saylor coming out with a second round of speculative attack on the USD buy doing another $600m Senior note offer. This will be used to purchase Bitcoin. Remember the last offer for $450m at 0.75% was over subscribed and ended up taking $600m. Bets on the rate(0.3-0.5%), share conversion price (this would have to be at least $2000 surely, considering their share price was $1200 a week ago), and how much they end up taking in (a billion could be pushing it but would be epic to see)
https://twitter.com/michael_saylor/status/1361651387457748995?s=20

Bitcoin is flying off exchanges, liquidity crunch incoming:
https://twitter.com/CitizenBitcoin/status/1361374399325167621?s=20

And MSM CNBC in disbelief that Bitcoin is at $50k
https://twitter.com/BTCization/status/1361681759486812163?s=20

Just made the plunge. DeFi is very interesting space.

Good job mate, theres a lot to learn, just about Bitcoin alone. Ultimately learn from my mistakes and dont trade your Bitcoin for shitcoins, use your fiat for that.
And watch out for gas fees haha https://www.gasnow.org/

I've started by putting orders on DOT, LINK and ADA at this point. Yea my thinking was to return all profits to BTC down the track. Yea I'm sceptical of touching ETH for that reason lol until I understand it better.