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A review of things you need to know before you go home on Thursday; Crown accounts edge back into surplus in December month, median age rises, bond yields rise, swaps firm, NZD slips, & more

A review of things you need to know before you go home on Thursday; Crown accounts edge back into surplus in December month, median age rises, bond yields rise, swaps firm, NZD slips, & more
ID 22702269 © Daniaphoto | Dreamstime.com

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

MORTGAGE RATE CHANGES
There are no changes to report here.

TERM DEPOSIT RATE CHANGES
None here either.

FAR LESS WORSE THAN FORECAST
The six month crown accounts were released today and they seem to signal that the pandemic deficit spending ended in December. Total borrowings are now up to $159.9 bln and the 2020/21 OBEGAL is -$3.8 bln for the six months. But for December alone, they managed a +$358 mln surplus consistent with the October to December trend of fast decreasing deficits as the year progresses and far less than the PREFU forecasts.

PANDEMIC SEES TAX TAKE RISE FASTER
One of the more interesting data items that comes out of the Crown Accounts to December is that in those six months that covered the pandemic, tax collected from individuals was +$1.86 bln more than in the equivalent 2019 period (+9.6%). The Government tax take did not suffer in the pandemic and it became the basis for paying some of the support measures. Not only that, GST collected in those same six months was another +$1.0 more (+8.8%). These 2019 to 2020 increases were noticeably higher than the 2018 to 2019 rises.

OLDER FROM TWO TRENDS
New Zealand’s total fertility rate in 2020 was down to 1.61 births per woman, its lowest recorded level, and well below the population replacement rate of 2.1, Stats NZ said today. Births fell -3% in 2020, deaths fell -5%. Without immigration, the median age of our population is rising again, now up to 37.6 years and back to where it was in 2013. 37.6 years was a record high and we are back there again.

G.O.A.T?
New Zealand's largest mortgage bank is reporting boom conditions. ANZ Banking Group CEO Shayne Elliott says bank's NZ staff have 'been really run off their feet' meeting record demand for mortgages.

AIAL GROUNDED
The country's largest airport (and owner of the Queenstown airport) sees no two-way, quarantine-free, trans-Tasman travel before the end of June. It is forecasting a -$55 mln loss for its financial year to June 2021.

LET'S NOT GO BACK THERE
The Parliamentary Commissioner for the Environment doesn't want tourism to return to its pre-pandemic structure. Simon Upton wants four new policies to tackle the impact of tourism on the local environment.

INVESTORS GET HIGHER RISK-FREE YIELDS
Today's NZGB tender brought noticeably higher yields, but investor demand was lower than recently. The April 2025 $200 mln attracted $270 mln in bids and the winning yields averaged 0.60% pa, almost double those of three weeks ago or 0.34%. The April 2029 $150 mln offer attracted bids of $390 mln and the winning yields averaged 1.25% pa, well above the prior 0.81%. The final $100 mln for the April 2033 offer attracted $268 mln in bids and the yield was 1.67%, a jump from the prior 1.18% three weeks earlier. Overall there were 91 bids, but only 19 succeeded, and that left $578 mln unsatisfied, the lowest in a long time.

WESTPAC PAYS MORE
Westpac NZ's five-year bond issue raised $650 mln priced at 55 basis points over the swap rate, or about 1.44%. Recall they sought $100 mln "plus unlimited oversubscriptions". It is interesting that the Westpac bond raising is about what the NZGB tender left unsatisfied. So investors could get 1.44% from Westpac for 5 years or 0.60% from The Treasury.

NEW BUSINESS WELFARE
The new Resurgence Support Payment benefit will soon be available to eligible businesses. In order to qualify businesses must show a -30% drop in revenue over a seven day period compared with a typical similar revenue period in the six weeks prior to the Alert Level rise. Or if it is a seasonal business applying they must show a -30% revenue drop compared with a similar week the previous year. The payment includes a core per business rate of $1500 plus $400 per employee up to a total of 50 FTEs. That is a maximum payment of $21,500. Businesses can apply for the payment from Tuesday, February 23 via the IRD website.

EXTENDED
The IRD has extended its temporary Working from Home rules regulating employer reimbursement for employee's extra costs when they work from home. The extension is from March 17 to September 30, 2021. By then they hope to have permanent rules in place.

+29,000 MORE JOBS
The Australian unemployment rate has fallen to 6.4% from 6.6%, surprising economists and leaving their labour market just shy of its pre-COVID-19 level.

GOLD MIXED
Gold is trading in Australia, and soon in Asian markets. So far today it is at US$1782, down -US$8 from this time yesterday, but +US$6 above where it ended in New York and back closer to where it ended in London last night.

EQUITIES UPDATES
The New York markets were unchanged again today. The NZX50 Capital Index heading for a modest -0.2% slip in late trading. The ASX200 is up an even more modest +0.1% in early afternoon trade. Tokyo is up +0.2% in opening trade. Hong Kong is down -0.7% but the Shanghai exchange has roared back in its first post-holiday session gaining +1.2% in early trade.

SWAP & BONDS TAKE A BREATHER
Yesterday the long swap rates continued their climb, with the 10-year now its highest since February 2020. If there are movements again today, we will note them here later when we get the data. But they are likely to be retreats. Today the 90 day bank bill rate is down -1 bp at 0.28%. The Australian Govt ten year benchmark rate is -4 bps lower to 1.37%. The China Govt ten year bond is up +6 bps at 3.32%. But the New Zealand Govt ten year has also got the correction vibe, down -5 bps today to 1.49%. That is however still above where the earlier RBNZ fix was, at 1.51% (+9 bps). After rising to 1.33% earlier today, the US Govt ten year has since fallen away and is now at 1.27% and -3 bps below where it was this time yesterday.

NZD HOLDING WEAKISH
The Kiwi dollar is weaker today and now at just under 71.9 USc and a ten day low. On the cross rates we are soft at 92.7 AUc. Against the euro we are also firmer at 59.7 euro cents. That all means our TWI-5 is holding at 73.4.

BITCOIN HIGHER
The bitcoin price has made a fourth run at US$50,000 and it has stuck this time. It is now at US$52,207 and +4.7% higher than this time yesterday. Volatility over the past 24 hours has been +/- 3.6%.

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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55 Comments

23
up

Unsurprising birth rates have fallen off a cliff, housing stress at an all time high. Who is having babies when they can't secure a place to raise them?

Who cares about housing stress when we can just import more people?

13
up

Who is having babies? Mostly Pacific families, many babies, wether they can afford them or not

17
up

True. My neighbour is a PI lady who had her 2nd child a year ago and took maternity leave. She was unable to pay her rent for 6 months (fortunately she has a friendly family landlord). She would have had no problem if she hadn't named the father and admitted to being in a relationship with him - that simple admission cost her over $300pw. Now she is back to work earlier than she would have liked and is paying $311pw for pre-school. She earns just above average salary and her partner earns less (self-employed). The system kicks the honest in the teeth. Pls bring back simple universal generous child benefit. I don't mind my taxes going up if the money went to pre-schoolers - our best investment for the future. BTW a beautiful toddler.

Yes, shame upon the empathetic Jacinda for failure to turn Working for Families on its head, and bring back nonjudgmental universal child benefits, and wraparound free child care and education. The only way to raise the birthrate to replacement level so that New Zealand is not dependent on immigration is to treat child-rearing as a national taonga.

Assuming we want/need that population. What is the 'ideal' NZ?

I’d say about 10 million to be internationally relevant.

10
up

So I'd rather not be internationally relevent. Every city high street looking like every modern city in the world lets a globalist feels at home. 10 million is still less than Manila or Jakarta; China already has 6 cities larger than 10 million.

What's 'internationally relevant? Countries like Norway do pretty well with small populations.
If international relevance is judged by population, we would need at least 20 million.

Ugh, accidentally reported, sorry.

An important question, for sure, but that doesn't mean you can realistically price it out of range of most people, or turn a blind eye to the costs involved. You might find that people have different expectations of what it is reasonable to be taxed if the idea is that they can't raise a family in the country they were born in and the State is OK with that, or actively condones it.

I thought there would have been a baby boom 9 months after lockdown

Especially with all that booze being consumed

I thought the opposite and predicted that the drop in births would occur. Baby booms happen when people are optimistic about the future.

yep, i've got so many friends in the nearly 40 range who dont have children, wouldnt bring them into the world without secure shelter...
if you dont have kids its much easier for any hiccups in the relationship to allow you to go your own way... its only yourselves to concern yourselves about.. and then your chance of having planned children goes down rapidly...

Also... I am a supporter, but are still getting lots of ads. I thought I wouldn't get any as a supporter? Anyone else also have this?

You could just turn on your adblocker for this site?

Oh then the site complains bitterly. I am also a supporter and have ads, but I gather there is a minimum level of support to be ad-free.

On the subject, there were some militia-type fatigues (complete with faux US flag imagery) being obtrusively advertised to me earlier today. I wonder if that tells you something about the conspiracy-theory penetration of the interest.co.nz readership...

Ads you see are specific to YOU, we all see different ones. Basically web designers give ad providers an advertising window on the page you see and get paid a percentage or flat rate of ad revenue gathered from it. So at the moment, I am seeing telescopes, because I googled about them a little while ago (google collects this info, associates it with you, then shows you relevant ads in that ad window, based on people paying google to advertise that product to them).

haha exactly. Sherlock Holmes here has discovered he was actually a conspiracy theorist himself all along!

Doesn't work - they pick it up

blobbles
I had the same problem - this was just after monthly renewal of sub.
Logged out and logged in again using PressPatron and problem immediately disappeared.
Seemed to be a hiccup between PressPatron and interest.co

Interest.co well worth $10 monthly sub and well worth having no gashtly pop-up ads.

Yep, this worked after arsing around a bit and clearing cookies/cache...

blobbles
Meant to mention that I got the problem at exactly the same time on both my laptop and iPhone so more to do with the account rather than cookies on the device.

You might want to remove all cookies. Sometimes accepting cookies from other sites will see those affecting your ad free status here. Bear in mind, you'll need to re-login to all the websites you frequent. Also agree as above, then re-login via Press Patron.

Damnit does anyone have a Chrome extension that will disable the 'report' button. I swear I'm clicking it about three times a day by mistake.

You could try blocking the first part of the URL (seen in bold) with a wildcard on the end?

https://www.interest.co.nz/flag/flag/report_this/ 1292990?destination=comment/reply/109120/1292990&token=Kg-LRn5nd3f2VBT2kB7yEds0PNTbzyLOKX2FGI1iwgE

"In order to qualify businesses must show a -30% drop in revenue"

Actually you don't need to show anything at all, you just apply online and tick the box that says "Our business has suffered a 30% drop in revenue. How easy is that?

Then they wait for your 2021 accounts

This. IRD is highly integrated with many data sources. They will have lots subsidy bad people reports by now.

Nah. They are not going to check as if they catch anything it will make them look bad as well. That's a classic civil service thinking.

Good thing our stat accounts don't get broken down week-by-week then.

WOW last time I was edited to this extent on interest.co.nz Bernard Hickey contacted me - what I posted proved to be true in the history of time - please where is my post???

What ?

I'll take this one editors... if you are just posting up a random web page video with no explanation about it's link to the article (indeed it appears to be some sort of conspiracy link to the capital riots, which isn't mentioned in the article), you can fully expect to be censored. Particularly if it's pointed to a person who appears to have been banned for exactly the same reason.

Check the commenting policy here: https://www.interest.co.nz/node/65027
"We also reserve the right to remove comments we view to be of little relevance."
"We like valuable links, but not numerous ones with little relevance, or endless ones promoting commenters' hobby horses."

14
up

Andrewj has been banned?! That's a shame. Didn't always agree with him but enjoyed his updates on life on the farm.

I guess we should call him BANdrewj... Sorry

13
up

Surely not. Maybe I missed something? His posts were always very informative and relevant. Be nice to know.

Well, I don't know for sure, but it's what someone else suggested not long ago.

What's this rubbish Stevell? Interest is (mostly) a serious site, no need for for this kind of nonsense

Thank you

I have an open mind and support no particular side - I watched this then reviewed the media reports....

....I'm just looking for some truth, you can call it rubbish... I would love to call that as well.... it troubles me that it is so compelling....

If it's crap - take it down - no problem from me - but we need to know either way

10
up

"Compelling"?!
You could probably narrate over any emergency situation and make it look like it was staged. How many people would need to be involved to pull it off? What are the odds they'd all stay quiet?
It's just click bait. Avoid the rabbit hole.

I didn’t watch the whole thing but I’m guessing it was supposedly the Democrats that staged the riots? Why would they when they had already won the election?

That was very entertaining...what to think?.?

The six month crown accounts were released today and they seem to signal that the pandemic deficit spending ended in December.

Crown settlement accounts at the RBNZ were substantial at $28.268bn on Dec 30 2020 and $36.434bn on Jan 31 2021

Does anyone care how much money bid for govt bonds was "unsatisfied"?

I miss Andrewj. Interesting to hear whats going on on his farm. Maybe he is on holiday.

Pretty crazy that he might have been banned! Was def one of the most top quality posters.

This month will see the biggest rise in house price as investors are rushing to buy before LVR.

ALL BECAUSE GOVERNMENT WANT THIS BEFORE ARE FORCED TO INTRODUCE LVR.

Just been looking at some interesting Covid stats:
A) China has had less Covid deaths per capita than NZ
B) 8.5% of Americans have been diagnosed with Covid.
C) The US has had 500,000 Covid deaths which is 13 years worth of their road toll.

If you believe the Chinese and US numbers. Both have now been found to be falsifying data.

Interesting how stable grain prices have been given the very low temperatures across the northern hemisphere:
https://www.reuters.com/article/idUSL1N2KM0NS

Hi David Chaston, re FAR LESS WORSE THAN FORECAST the "released" link directs to Interim Financial Statements of the Government of New Zealand For the Four Months Ended 31 October 2020, Prepared by the Treasury 3 December 2020.

The correct tag is https://www.treasury.govt.nz/system/files/2021-02/fsgnz-6mths-dec20.pdf
Note Total borrowings $166,917 bln