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A review of things you need to know before you go home on Wednesday; no retail rate changes, dovish MPS, Methanex retreats, swaps little-changed, NZD firms, bitcoin drops, & more

A review of things you need to know before you go home on Wednesday; no retail rate changes, dovish MPS, Methanex retreats, swaps little-changed, NZD firms, bitcoin drops, & 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.

A DOVE SPEAKS
In its Monetary Policy Statement today, the RBNZ says "The economic outlook ahead remains highly uncertain, determined in large part by any future health-related social restrictions. This ongoing uncertainty is expected to constrain business investment and household spending growth." More here.

HOUSING RESULTS STRUGGLE IN TERM 2 ALSO
The Government continues to struggle delivering affordable homes. Funding to community housing providers sees only 12 families benefit from progressive home ownership thus far.

VACCINE UPDATE
This week we have received 76,000 doses of the Pfizer/BioNTech vaccine, following last week's first shipment of 60,000 doses. By the end of March, about 450,000 doses will be here, enough to vaccinate 225,000 people with a two-dose course.

CLOSURE TO ADD TO GLOBAL CO2 EMISSIONS
Canadian company Methanex is mothballing a Taranaki facility at Waitara Valley after being shut out of gas supply. It is likely to result in the loss of jobs. It also operates facilities at Motunui and Port Taranaki. The company said, as a result the production lost from New Zealand is likely to be replaced by methanol made from coal generating significantly higher emissions.

RETURNING KIWI LANDS WESTPAC TREASURY ROLE
Westpac NZ has appointed recently returned New Zealander Ben Turner as its Treasurer. Turner succeeds Jim Reardon who left the bank last year and now runs a consulting business. Westpac says Turner has spent nearly 20 years in the banking and financial services sector in NZ and Europe, including Treasury roles at Union Bank of Switzerland, Lloyds Banking Group and most recently Goldman Sachs. Turner recently returned to New Zealand from London with his family.

AU BANKS READY TO LOSE LIBOR
Ratings agency S&P says Australia's banks are on track for a smooth shift away from interbank offered rates (mainly LIBOR) to alternative risk-free reference rates by the end of 2021.

BEIJING TRIES TO SEPARATE WELLINGTON OUT
Chinese media propaganda is calling the Five Eyes intelligence-sharing group, of which New Zealand is a member, a "racist, and mafia-styled community". But it was careful to exclude New Zealand from its general criticism, saying we are "unwilling to get too involved in international conflicts". This is a clear warning to Wellington for us not to risk using our voice to call out China's human rights abuses. Both Labour and the Greens have human rights lawyers in their caucuses and it would be interesting to know their position on the Uighur disaster unfolding in China.

HUGE STIMULUS
China is launching a wave of infrastructure projects totaling NZ$5.3 tln as part of a broader effort to stimulate consumption and growth. This new and enormous program is getting little attention in the West but it is world-scale stimulus and is more than double the US Biden plan of US$1.9 tln (NZ$2.5 tln).

GOLD HOLDS
Gold is trading in Australia, and soon in Asian markets. So far today it is at US$1807 and down -US$5 from where it was this time yesterday, and similar to where it closed in New York earlier today.

EQUITIES UPDATES
The S&P500 recovered at the end of the Wall Street session and ended up a minor +0.1%. All Asian equity markets are lower at their opening with Tokyo down -0.5%, Hong Kong down -0.1% and Shanghai also down -0.1%. The ASX200 is down -0.6% in early afternoon trade while the NZX50 Capital Index is down -0.4%.

SWAP & BONDS RATES TAKE OFF AT LONG END
We don't have today's closing swap rates yet. If there are movements today, we will note them here later when we get the data. It is likely there will be little-change from yesterday. Today the 90 day bank bill rate is unchanged at 0.28%. The Australian Govt ten year benchmark rate is unchanged at 1.62%. The China Govt ten year bond is down -3 bps at 3.27%. But the New Zealand Govt ten year is up +3 bps at just on 1.68%. That is now well below where the earlier RBNZ fix was, at 1.63% (-6 bps). The US Govt ten year is down -2 bps from this time yesterday at 1.35%.

NZD RISES
The Kiwi dollar has built on its new recent higher level and is now just under 73.5 USc. On the cross rates we are firmer at 92.8 AUc has the AUD makes gains. Against the euro we are also firmer at 60.4 euro cents. That all means our TWI-5 is up at 74.4.

BITCOIN DOWN -11%
After dipping as low as US$44,964, the bitcoin price is rising again and is now at US$47,454 which is a sharp -11% lower than this time yesterday. Volatility over the past 24 hours has remained an extreme +/- 10%.

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End of day UTC
Source: CoinDesk

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27 Comments

Bitcoin shows sympathy for RBNZ doves regaining 50000, as NZD TWI( 17) responds and cruises thru 2018 high.

Given the green hypocrisy on Methanex/global CO2 why would it be interesting to know they position on global politics? Especially given their members form defending genocide in Rawanda.
https://www.stuff.co.nz/national/politics/99305306/green-mp-golriz-ghahr...

You obviously don't understand the role of lawyers,nor politics in Africa but what it has to do with Methanol , i don't know .
Methanol is not going to be made from coal , when natural gas from fracking is abundant , and cheaper. I suspect that is the real reason they are pulling out of NZ.

Rwanda was too many people in too little space. Avoid the uncomfortable truth by calling it something else (as the MSM did) but that's what it was. That they sided ethnically is hardly surprising, but totally a secondary point. Profile is easy; always wrong, you only have to ask where?

But I'm more interested in this: "part of a broader effort to stimulate consumption and growth."

You can't have that without it displacing someone else, now. And you can't have Biden's money finding a home at the same time. There already isn't enough underwrite.

If overpopulation is the trigger for genocide, you should be watching Tokyo carefully. Machetes any time now....

Nope, resource consumption is part of it; Japan imports heaps (and a long time ago, tried to set it up so they didn't pay) so the footprint per citizen is just 'elsewhere'. We do it too - not one litre of foreign-sourced fossil energy is counted by our RMA........

This is the same nonsense we heard on 'The Detail' last night (RNZ). They obviously have zero understanding of what it is they are consuming, how much of it there is, where it comes from, and how much there won't be in the future.

Sorry mate, unless you’ve lived in Africa for awhile and spent a considerable amount of time in Rwanda, you will never even hope to understand Rwanda. Your overcrowded theory is an absolute myth.

Rosenstein. Your point that overpopulation is not by itself a trigger for genocide is valid. Japan however a poor example. There are many examples of desperately poor countries with intense completion for scarce resources that don't descend into the fratricidal horror of Rawanda. The causes of the longstanding ethnic rivalries were more complex than simple resource competition; incompetent Belgian administration was a primary cause of the descent into calamity.

Sure, methanol is not going to be made from coal. Enlighten me - what are norms for lawyers taking selfies with convicted genociders?

"Ningxia Baofeng Energy Group Co. Ltd. has commissioned the world’s largest single-train methanol plant as part of its new 600,000-tonnes/year coal-to-olefins complex at Ningdong Energy Chemical Base in Yinchuan City, Ningxia Province, China."
https://www.ogj.com/refining-processing/article/14178664/chinese-operato...

lawyers and genociders? perhaps the question could be posed to giuliani and the DUMBster (trump). Im sure you would get a totally 'honest' answer...they would just need a few monents to pull their pants up....

PLEASE do not start copying inane MSM and saying "all you need to know"

silly me, and I thought that the articles on msn were mostly a copy of articles from a multitude of networks, because it says the source of the article at the start of each one and there are hundreds of outlets quoted.
I must immediately change to listening to only fox entertainment and newsmax so I can be sure of getting unbiased and truthful news. Case in point...I just observed one article on fox where the conspiracy theory is that Bill Gates, Fauchi and Biden were in cahoots to drop all that recent snow and ice on Texas and that it is actually in fact fake, and lots of people died. It is their retribution for texans being stupid and voting for the DUMBster (trump). Thank you for enlightening me mike.

12
up

At the BBQ, A Orr is cooking the steaks, flames leaping a metre into the air
Says one guest: "Hey mate, you might wanna turn that down."
Orr: "I'm unsure as to whether tomorrow's steaks will have enough gas to be cooked properly, so I'll stick with the gas settings as they are."
"Yeah but, you're burning the steaks."
Orr: "Yes, isn't it great we can eat steak."
"I'm good, I'll grab Maccas or something."
Orr: "Lock the gate. You f*cking eat these steaks you understand? Hold him down... Get.... it..... in......ya"

12
up

So you're saying we have a high steaks economy?

If the man cooking the steaks was any higher - he'd be in Montego Bay

"The economic outlook ahead remains highly uncertain”

For goodness sake Adrian – just get over it.

If you look hard enough and often enough – you’ll probably always find uncertainty, it's not hard – it’s the nature of the beast.

So in the end they overshoot and they undershoot – because they really just don’t know.

Nope. The Limits to Growth are inexorable, planetary, and a once-off.

They may not know (they're economics-trained) and the media who regurgitate them may choose not to know, but the knowledge is all there....

I understand where you’re coming from and basically agree with the premise.

However – I think that in the next 6, 12 or 24 months we are going to see an economic recovery within developed economies that will well and truly surprise on the upside.

There will be so much pent up demand, pent up optimism and willingness to get on with it that it will be something of a post war type recovery.

Sadly, one way or another – the limits to growth are going to be postponed.

So what you're saying is that printing $30T+ USD which can never hope to be paid off, is going to lift the west out of trouble? Sounds like a tui ad.

Yes - in the short/medium term I think it will.

As far as the world's debt is concerned - it's probably never going to be paid off.

And to some extent - there's really no intention of ever paying it off - it simply can't be done.

I'm not saying it's right - it's just that's where we've got to - ridiculous really.

You know the old saying about doing the same thing and expecting a different result - insanity. Every single time in history a country pursued QE they got rekt. And every single time, their central banks started thinking they wouldn't.

No, you can't postpone physical limits, or up-end the Laws of Thermodynamics. They just ARE.

So what will happen is that more and more debt will be issued (it's the only tool in the idiot-shed). China alone carries trillions more than the GFC debt - there is no physical home for it. Pent up willingness in beings who command about 100 Watts apiece, ain't gonna do anything about fossil energy being down to fracking options, and heading further down every move. There's an equally-idiotic cohort who think they will EV their way around the problem.

Fat chance.

I don’t think many really believe debt of the current magnitude will ever be paid back – so a non-issue in the grand scheme of things.

You can postpone physical limits by adaptation and management.

Fossil energy is short term noise.

However, I think planet earth is tired, exhausted, needs a rest and needs better looking after – simplistic I know, and if so, guilty as charged.

Ratings agency S&P says Australia's banks are on track for a smooth shift away from interbank offered rates (mainly LIBOR) to alternative risk-free reference rates by the end of 2021.

They are getting ahead of themselves: Insufferable SOFR, Suffering
When they close the Eurodollar Futs and Opt's I will take these news items seriously.

SOFR and DTCC are testing the FED zero boundary RRP 0.0% interest rate floor.

Auckland CBD apartment rental availability still nudging higher, at a time when availability would usually plummet with universities starting.

Any real surprise there Fritz?

Does anyone have a theory as to why S&P thinks NZ deserves a better credit rating now than before the Pandemic.